UPDATE 2-Weak demand prompts nearly 2,000 Siemens job cuts

* Nearly 2,000 jobs in Germany to go

* Talks ongoing on possible job cuts abroad

* Shares down 0.37 pct, lag DAX gain

(Adds comment, background, shares)

FRANKFURT, Jan 28 (BestGrowthStock) – Siemens (SIEGn.DE: ), Europe’s
biggest engineering group, will cut nearly 2,000 jobs in Germany
at its bread-and-butter Industry Sector and is in talks about
more reductions abroad amid falling demand from factories.

Siemens management board member Heinrich Hiesinger told
reporters that short-cycle businesses had stabilised at low
levels but there was a declining trend in other branches.

“We expect that we have to position ourselves on a low
market level in the long term,” said Hiesinger, who heads the
Munich-based group’s industrial business.

“You see all indicators are stagnating at low levels
especially at the high-end markets in Europe, with an industrial
capacity utilisation now at 65 percent to 71 percent among our
customers,” he said on Thursday.

“That means that for factories with capacity utilisation of
below 80 percent, our customers are not ordering new production
lines and building new plants,” he added.

Siemens, which had cut around 17,000 jobs in administration
and sales last year, is the largest maker of industrial
robotics, with products such as motion-control components used
in the mechanical engineering branch.

The news came as German unemployment rose less than expected
in January, adding evidence that a recovery in Europe’s largest
economy is intact despite a harsh winter. [ID:nLDE60R0WS]

German engineering industry association VDMA has said orders
fell 12 percent in November year-on-year and forecast a drop of
20 percent for all of 2009. [ID:nLU072004] [ID:nBAF003931]

Siemens shares fell 0.37 percent to 66.73 euros ($93.69) at
1239 GMT while the German blue-chip index (.GDAXI: ) was up 0.64


Hiesinger said he expected the drive technologies industry
could see output fall by a third in Germany in the long term.

Engineering union IG Metall, Germany’s largest, has urged
robust steps to prevent the loss of close to a million jobs in
the country’s bellwether industry. [ID:nLDE60O13W]

Siemens presented the job cut plans to labour
representatives on Thursday and said these would be implemented
without mandatory lay-offs.

The Munich-based company employs more than 400,000 people
worldwide, including 128,000 in Germany.

Siemens, which posted robust first-quarter growth thanks to
cost cuts, had said on Tuesday adjustments were unavoidable
because it would take time before production returns to
pre-crisis peaks of 2007-2008. [ID:nLDE60P0LP] [ID:nLDE60P0E9]

Siemens said short-cycle businesses in its industry sector,
which account for around 50 percent of group sales, were slowly
seeing the trough but those which take longer manufacturing
times were starting to get lower levels of new orders.

Rival General Electric (GE.N: ) said last week it was on track
for flat earnings this year after October-December profit fell
19 percent and revenue dropped 10 percent. [ID:nN22235838]

Stock Market

(Reporting by Jens Hack and Marilyn Gerlach; Editing by Sharon
($1=.7122 Euro)

UPDATE 2-Weak demand prompts nearly 2,000 Siemens job cuts