Osram to cut 4,700 jobs in bid to save €1 billion

Osram is planning to reduce its workforce by 12 per cent following its spin-off from Siemens in the new year, in a bid to save €1 billion by 2015.

The company, which has already cut 1,900 jobs worldwide in the past year, said the additional reduction of 4,700 will be made by 2014, mostly by selling off plants.

Parent company Siemens had initially planned to float Osram in an IPO, but earlier this year announced that it would spin the company off to existing shareholders instead, citing "volatile" market conditions. The spin-off is subject to approval by shareholders at a meeting on 23 January 2013 and is likely to be completed by the middle of the year.

CEO Wolfgang Dehen (pictured) said the newly announced job cuts and plant closures "are aimed at plants with products at the end of their product life cycle or the closure of smaller plants with lower sales. At the same time, Osram is aiming to restore profitability with efficient structures in production, research and development and sales as well as in central functions".

Meanwhile, staff numbers in "future-oriented business fields" will be increased, and the company plans to invest hundreds of millions of euros in its LED assembly plant in Jiangsu, China, which will employ 1,700 people. But growth in such areas will only "partially compensate" for the losses in traditional areas, it said.

Siemens' annual report for 2012 showed that while Osram's revenue was up from €5 billion to €5.4 billion, it made a loss of more than €100 million amid "ongoing market challenges". The business suffered a pre-tax hit of more than €400m this year as a result of the abandoned IPO, because of depreciation, amortisation and other costs that were not accounted for last year.

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