Siemens aims to slash up to 1 billion euros ($1.32 billion) in costs this year at its loss-making mobile phones unit as it restructures the business to make it more attractive to a possible buyer or partner. Lothar Pauly, head of Siemens' telecoms division Com, said on Tuesday he wanted to save an extra 400 million euros ($530.1 million) at mobile phones on top of 500 million to 600 million already planned for the fiscal year to the end of September.
The extra cuts would be made less by cutting jobs and more by reducing the unit's marketing budget, pulling out of non-strategic markets such as Israel and stopping building special mobile phones for the United States, Pauly said.
By 1320 GMT, Siemens shares were 0.43 percent down at 62.03 euros, slightly underperforming Germany's benchmark DAX index, as investors expressed disappointment that a much-flagged complete solution for the unit was not yet in view.
"Nobody can really be impressed because I think the expectations have been for a much more clear-cut decision," Bear Stearns analyst Axel Funhoff said.
Siemens has said that the mobile phones business has to be fixed before it can consider a sale or partnership. The company has not ruled out keeping the business or closing it completely, although it says the latter is the least attractive option.
Mobile phones made an operating loss of 143 million euros last quarter, while the operating profit of 240 million euros made by Siemens Com as a whole - the company's biggest unit - was almost solely due to a one-off gain from a stake sale.