Mobile communication group plans to broaden its restructuring program
Date:
Topic Corporate News
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Eur 1 billion in cost reductions, 2,300 jobs to be cut
August 4 2003 /Wi-Fi Technology News/-
Given the sustained weakness of the market, Siemens mobile, the mobile communications arm of Siemens AG, intends to take steps to increase its productivity. These steps call for an additional ? 1 billion in cost reductions throughout the entire group by year-end 2004. The intended adjustments to its resources also include a reduction in force. Some 2,300 jobs, including 500 in Germany, are slated to be cut by the end of the coming fiscal year. Details are currently being discussed with the appropriate committees and other bodies. At the same time, the group intends to expand its market share in mobile communication networks through further investments in UMTS. ?The world market for mobile communication networks had already declined by 15 percent last year.
This year, the market will contract by up to 20 percent. Moreover, sales in the mobile phone market are stagnating, in spite of higher volumes. Business at all players is under considerable pressure on margins. We have to take these developments into account if we are to emerge from the crisis even stronger,? explained Rudi Lamprecht, a member of the Managing Board of Siemens AG and the head of the corporate group?s mobile communication operations.
Siemens mobile?s market is characterized by declining prices, overcapacities and investment hesitancy on the part of mobile operators. In order to continue to operate profitably, costs will therefore have to be reduced by ? 1 billion over the course of the coming 12 months. Cost reduction programs had already been put in place during the past and current fiscal years. This also included cutting 2,000 jobs each.
In spite of the contracting market, in 2001 and 2002 Siemens mobile succeeded in winning market share in mobile communication networks and mobile handsets.
The company now intends to respond to the further weakening of the market by broadening its productivity program. Further investments in the GSM, EDGE and UMTS mobile communication technologies are intended to expand the company?s market position, especially in the growth markets of Eastern Europe, Asia and Latin America.
In the growth market of Brazil, all GSM mobile operators have recently become Siemens customers. And the majority of the major Indian mobile operators, as well, have been able to be won as customers. There are also successes in Eastern Europe and in sales of mobile communication networks based on EDGE technology. Siemens mobile has succeeded in moving up to a position of leadership in UMTS mobile networks: 7 of the 12 UMTS networks that have been launched to date come from Siemens and its UMTS partner NEC.
The Siemens Information and Communication Mobile Group (Siemens mobile) offers the complete range of mobile solutions including mobile devices, infrastructure and applications. Devices include mobile phones, wireless modules, mobile organizers and cordless phones as well as products for wireless home networks. The infrastructure portfolio includes GSM, GPRS, EDGE and 3G mobile network technologies from base stations and switching systems to intelligent networks, e.g. for prepaid services. Mobile Applications cover end-to-end solutions for Messaging, Location Based Services or Mobile Payment. For fiscal 2002 (September 30), Siemens mobile recorded sales of EUR 11 billion and employed approximately 28,600 people worldwide.
http://www.siemens-mobile.com
Source: Siemens mobile
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