Close to 8,000 positions will be eliminated at Siemens in their communications division as part of a reorganization which allows the company to shift from being a hardware vendor to one that produces software. Over the past five years the performance of off the shelf computing products has increased to the point that hardware in the communications space has become commodotized.
In such a market shift, when the music stops, you don’t want to be stuck carrying products that require steel and silicon.
While this reorganization is taking place, the company is also divesting itself of a number of worldwide call centers as well.
As global telecom markets become more competitive, this move should help the communications division as it will have less overhead to deal with. They will now have more pricing power and be a stronger global player.
That is always the goal of such cuts anyway.