 | « Back to article | Print this article |
German technology giant Siemens plans to place one-third of its 30,000 software development operations in low-wage countries including China, India, Russia, and central and eastern European nations, the Financial Times has reported.
The technology major plans to cut costs by shifting about 10,000 jobs to these low-cost countries.
"We have to follow the trend, as all of our competitors are doing the same, and move some of our activities eastwards," Johannes Feldmayer, head of Siemens' corporate strategy, was quoted by FT as saying.
"We are not happy with the conditions in Germany in comparison with conditions in the strongest growth countries," FT quoted Feldmayer as saying.
Feldmayer said the trend for outsourcing would put pressure on Germany to change.
"In the end Germany should benefit from this trend as it will make us more competitive," he said, according to FT.
Siemens has a research and development workforce of 50,000 worldwide.
Siemens is also planning to move part of its production and accounting operations offshore, said FT.
In Germany, economic circumstances and rigid labour laws are encouraging drastic streamlining measures, and moving labour offshore is becoming an increasingly popular way to cut costs quickly, reported FT.
Siemens follows other big German technology groups like SAP, which are relocating development activities, accounting operations and customer services to Eastern Europe, India or China, the financial daily said.
The Munich-based conglomerate is already moving its back office operations for Europe in a pilot project to the Czech Republic, said FT.
On Monday, The Wall Street Journal reported that IBM, the world's largest computer company, plans to shift over 4,000 jobs to India and China.
IBM will replace 4,730 of workers at IBM facilities in Southbury, Connecticut, Poughkeepsie, NY, Raleigh, North Carolina, Dallas, Boulder, Colorado, and elsewhere in the United States, said the WSJ.