Siemens Plans Recast Of India Arms

Siemens, the German electronics-to-power conglomerate, plans to embark on a massive downsizing exercise in India which will involve 2,000 job lay-offs; mergers among businesses; and a possible reduction in manufacturing activity.

A final decision on the proposed rehaul is expected at a meeting of the board of directors of Siemens AG, the parent company in Germany, early next week, sources said.

The proposed lay-offs will prune the German major's workforce in India from the current 8,000 to 6,000, top executives of the company said. Siemens plans to come out with what functionaries called a "selective and attractive voluntary retirement scheme" for its employees.

Siemens has already managed to reduce staff strength by some 1,300 through a VRS announced last year. Most of the employees who opted for the scheme then were office and administrative staff, sources said; while this time around Siemens wants to try and trim the workforce in its factories.

Siemens also plans to kick off a merging exercise among its companies as part of the rehaul plan. Under the programme, Siemens-Nixdorf Information Systems, an computer manufacturer, and Siemens Private Networks, a division of Siemens India Ltd, will be merged into Siemens Public Communication Networks Ltd.

SPCNL is a 70:30 Siemens AG-Siemens India joint venture. Siemens India is 51 per cent owned by Siemens AG.

Siemens India owns 51 per cent of Siemens-Nixdorf, while the remaining 49 per cent is held by Siemens AG.

The German major may also demerge its power business from Siemens India by floating a 100 per cent-owned subsidiary here. About 70 per cent of the company's Rs 512 turnover last fiscal came from the power business, sources said.