BERLIN, July 8: Engineering giant Siemens, Germany’s third biggest company, unveiled 16,750 job cuts on Tuesday in a giant restructuring plan that is set to pit boss Peter Loescher against trade unions.

The group, which employs 400,000 people around the globe, confirmed figures that had circulated widely in German media, sparking a heated response from one union leader.

Of the total number of cuts, almost one third, or 5,250, would affect posts in Germany, a statement said.

Siemens employs around 130,000 people in the country.

Around 12,600 administrative and management posts were on the line worldwide, while “restructuring projects” would eliminate another 4,150, the company said.

Specific measures would be discussed soon with employee representatives and personnel director Siegfried Russwurm did not rule out direct redundancies “as a last resort.”

Siemens chief executive Peter Loescher, who took over just a year ago, said the wide-scale restructuring was needed to make up ground lost to rivals like the US conglomerate General Electric.

He had already set a target of reducing administration and management costs by 1.2 billion euros ($1.9 billion) by 2010, but did not say Tuesday how much the restructuring would cost the 160-year-old company.

Loescher, an Austrian, worked previously at General Electric and is the first Siemens boss named from outside the company, which makes products from light bulbs to power stations and trains.

He has worked hard to take the group beyond a corruption scandal centred on the acknowledged practice of paying kickbacks to obtain lucrative foreign contracts.

Slush funds of 1.3 billion euros used for dubious business practices have been identified by Siemens, which has become the object of a US probe as well since the company listed shares in New York.

Loescher has also said previously that the group had to revise how it managed some of its huge contracts.

“The speed at which business is changing worldwide has increased considerably and we’re orienting Siemens accordingly,” he was quoted Tuesday as saying in the statement.

“Against the backdrop of a slowing economy, we have to become more efficient,” he added.

But the plan quickly drew fire from the trade union IG Metall’s Bavarian chapter, with union leader Werner Neugebauer slamming it as unacceptable.

“Siemens is in good shape, the order books are full,” Neugebauer said in a statement.

“Against that background, the planned job cuts are neither comprehensible nor acceptable and cuts of this order are totally excessive.”

Loescher’s approach since taking over has rankled some within the company, in particular after he said in a press interview that Siemens was “too German.”

Senior managers have balked meanwhile at plans to trim the group’s top ranks.—AFP