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Tough Times at Siemens

Ray Le Maistre
2/27/2008

5:00 AM -- Times are tough in the enterprise communications market. (See Ericsson Sells PBX Business.)

Having already spun out its carrier business into joint venture Nokia Networks , German giant Siemens AG (NYSE: SI; Frankfurt: SIE) is now revamping its Enterprise Communications division, which sells its HiPath range of PBX and other gear to all sizes of corporate users. (See Siemens Delivers FMC, Siemens Lands Major UK Deal, and Siemens Targets VOIP.)

Siemens is cutting 3,800 of the division's 17,600 staff and looking to offload another 3,000 to a "third party," which would either partner with Siemens or buy some of its enterprise operations.

Siemens plans to get the Enterprise Communications unit into shape by transforming it from a "hardware supplier to a software and solutions provider to fit changed market conditions," and then offload it as a debt-free operation. See this Bloomberg report for more details and background.

Siemens has been trying to sell the unit for a while, and has reportedly been in talks with Alcatel-Lucent (NYSE: ALU) and Nortel Networks Ltd. , but hasn't found a buyer. (See Siemens Eyes Unit Sale.)

— Ray Le Maistre, International News Editor, Light Reading

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