Osram, the world’s second largest lighting manufacturer based on sales, will cut 4,700 jobs—that’s more than 10% of its workforce. The company will also close factories to better compete with its Asian rivals and improve profitability, company officials said Friday. Of the 4,700 job cuts, 4,300 will be outside Germany, the headquarters of its parent company, Siemens AG.
“Given the accelerated transformation of the lighting market to semiconductor based products, Osram is pushing forward with reorganization,” company officials said.
Bloomberg.com reported that the majority of lighting positions will be lost by selling factories abroad, mainly smaller plants or facilities making products that have reached the end of their life cycle. In Germany, three sites will be affected, including in Berlin and Munich, where Siemens is based. Of the planned savings of 1 billion euros, about 25% will be staff related, while the majority will come from lower purchasing costs and productivity gains, Osram spokesman Constantin Birnstiel said.
The move comes as Osram prepares to be spun off from Siemens this coming spring.
Siemens plans to sell off 80.5% of Osram with Siemens retaining interest in the other 20%. The parent company had tried to sell shares in Osram to the public earlier before deciding in favor of the spinoff
Osram, which has annual sales of $6.5 billion (US), plans to save more than EUR $1 billion in cost savings over a three-year period, half of which will come from improving its procurement process.
Osram has more than 39,000 employees and has reportedly cut another 1,900 jobs this past year.
Tagged with tED