Siemens to Disband Business Services (SBS) and Cut Jobs in Communications

News is emerging that the troubled Siemens Group is set to disband their loss making Business Services Group (SBS) having tried and failed to attract a buyer.

Siemens Business Services is an international IT service provider. The Group offers services all along the entire value chain – from consulting to systems integration, right through to the management of IT infrastructures.

Their web site says that “Thanks to its comprehensive know-how and sector-specific expertise, the company provides measurable added value for its customers.”

It adds that with regard to outsourcing, Siemens Business Services is among the top ten providers worldwide. With around 39,000 employees, the Group posted sales in fiscal 2005 (ending 30 September 2005) of EUR 5.4 billion, 75 percent of which was achieved outside the Siemens organisation.

Unfortunately not enough customers saw the value add and Siemens posted a loss of 690 million Euros on these sales.

Siemens however said it has no plans to break up its loss-making business services (SBS) unit, rejecting a report that appeared in the German press. ‘This report has no basis in fact,’ a Siemens spokesman said.

Earlier Focus magazine issued a pre-release from this Sunday’s edition stating that Siemens plans to dissolve the unit after failing to attract interest from potential buyers.

It said under the plan, SBS’ 34,000 employees (5000 down on the web site claims), including 12,000 in Germany, would then be transferred to the parent holding company.

At the same time it was also feared that another 1000 jobs are to go in Siemens Communications (COM) on top of the 1500 losses previously announced. Like SBS, COM is losing money and failing to attract a suitor willing to take on the whole division. Talks with both Nokia and Avaya failed to get close to a deal whilst Motorola, believed to be currently in talks with Siemens, is also unlikely to swallow the division whole.

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