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Tuesday, 10 April, 2001, 14:57 GMT 15:57 UK
Siemens cuts 2,000 jobs
Siemens trainees
Siemens workers on short term contracts to go
German telecoms group Siemens is to cut about a quarter of the workforce at its three German mobile handset plants because of slowing growth in the sector.

The 2,000 job cuts would be achieved by not renewing fixed term contracts and there would be no compulsory redundancies.

Siemens took on extra production staff on short contracts last year to cope with booming demand from mobile phone companies offering customers heavily subsidised handsets as part of prepaid packages.

"We have to judge the market realistically and we wanted to act flexibly to meet these extremely high growth rates," said Siemens spokesman Alex Heim, adding that demand had flattened.

The job cuts would be at plants in Kamp-Lintfort and Bocholt near the Dutch border in north-western Germany and Leipzig in eastern Germany.

Mobile fears

Like its main rivals, Siemens, the world's fourth-largest mobile handset maker, has forecast a slowdown in growth of mobile sales this year against a backdrop of slower global economic growth.

Heinrich von Pierer, Chief Executive, Siemens
Pierer predicted slowing growth
Last month Siemens chairman Heinrich von Pierer predicted that global sales of mobile handsets would total no more than 450m units in 2001, compared with industry forecasts of 500 million.

That is in contrast to last December when Siemens reported a full year net profit of 2.64bn euros ($2.32bn) and said it expected double-digit sales growth and strong profits for 2001.

Since then there have been a string of profit warnings from the leading mobile phone makers including Motorola in December, Nokia in January, and Ericsson in March.

Last month Motorola slashed 7,000 positions worldwide, including up to 700 at its Swindon operation in the South of England.

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