Siemens to Cut 7,000 Jobs at SEN Unit – Source

MUNICH, Feb 25 (Reuters) – Germany’s Siemens plans to cut 7,000 jobs or two-fifths of the workforce of itscorporate telecoms unit, which it has been trying to sell foryears, a source with knowledge of the matter said on Monday.

The source said the engineering conglomerate would publiciseits plans for the loss-making unit, Siemens Enterprise Networks,after a meeting of its economic advisory committee on Tuesday.

SEN’s results are reported under "discontinued operations"in the group’s financial statements. Siemens valued the unit at567 million euros ($840. million) at the end of its lastfinancial year at end-September.

SEN, which specialises in communications systems for largecorporations, has suffered from the rise of Internet telephony.

"From a valuation point of view this is negative news," DZBank analyst Karsten Oblinger wrote in a note. "We guess thatthe latest news flow reflects value destruction of approximately1 euro per share in our SOP (sum of the parts).

Siemens shares traded up 1.2 percent at 88.70 euros by 0918GMT, broadly in line with the German DAX index.

"The positive aspect is that CEO Loescher is clearlyexecuting the restructuring of the group," Oblinger added.

Peter Loescher, who took charge amid a corruption scandal atSiemens in mid-2007, has reorganised the conglomerate’s formerdozen units into three major business areas — industry,healthcare and energy.

In Germany, where SEN employs 6,200 staff, Siemens will axe2,000 jobs and transfer a further 1,000 to a possible partner orbuyer, sources close to the company said.

Sources with knowledge of the matter have told Reuters thatSiemens is negotiating with competitors Alcatel-Lucentand Nortel as well as financial investor Cerberus abouta possible sale or merger of SEN.

(Reporting by Jens Hack; Editing by Quentin Bryar)

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