Question by xClippersx: What do you think about Siemens cutting jobs to boost profits?
Siemens is a German-based transnational corporation: It describes itself as “a global powerhouse in electronics and electrical engineering, operating in the fields of industry, energy and health care as well as providing infrastructure solutions, primarily for cities and metropolitan areas. Recently Siemens’ management announced a major cost-cutting move to boost profits. It aims to increase profits from 9.3 percent to 12 percent in 2014. To do this will involve selling its solar power division, reducing its labor force, closing plants and opening new ones to take advantage of lower factor costs (mainly labor). Overall, it plans to cut 6 thousand million Euros by 2014 (7.7 billion dollars). About 10,000 jobs will be lost. In 2009, a similar cost-cutting move by Siemens resulted in the destruction of 17,000 jobs.
Critics charge that Siemens is ignoring other “stakeholders” [its employees, the communities where it is located, its customers], and concentrating only on management and its share holders, putting its long-term opportunities at risk. Instead the company would be better off if it concentrated on increasing market share, and preserving jobs at the expense of short-term profits. What do you think about this? is this a wise idea for Siemen’s or not?
Answer by Aleconomixt
I presume that, this simply cannot happen. The global trend and practice is to sell off less preferred units.
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