BenQ Job Cuts
October 20, 2006
The drastic cuts were necessary in order to keep the business running beyond the start of next year, BenQ administrator Martin Prager told a news conference in Munich.
The cuts would affect all areas of BenQ Mobile, from administration, marketing, sales and production, with more than 1,100 jobs to be axed at the site in Kamp Lintfort and around 850 to be cut in Munich.
The remaining company would develop and manufacture mobile phone handsets under license for other makers.
The shake-up would help safeguard the remaining 1,150 jobs at the insolvent handset maker, Prager said.
"Only chance to save the company"
"After three weeks of intensive scrutiny, it's clear that this is the only chance to save the company as a whole," Prager said, adding that the company had made losses worth 850 million euros ($1 billion) in the past 12 months.
He said that he wanted to bring BenQ "out of the red" by the end of the year in order to find investors to rescue the ailing mobile phone maker.
Quoting a BenQ spokesman, Bavarian public radio reported Thursday that the affected 1,900 employees had been asked not to report to work starting Monday and would be given the chance to take part in retraining schemes.
BenQ Mobile, formerly the mobile phone business of electronics giant Siemens until it was taken over by Taiwan-based BenQ last year, filed for insolvency at the end of September.
Siemens under fire
The closure has triggered fierce debate in Germany. Since Siemens also effectively paid BenQ last year to take its loss-making mobile phone operations off its hands, many observers laying the blame at Siemens' door.
IG Metall, Germany's large metal workers' union, said on Thursday that Siemens had to take greater responsibility for the massive loss of jobs resulting from BenQ's insolvency.
"A world-class company such as Siemens should not be allowed to steal out of bearing responsibility for people," said Bavaria's IG Metall boss, Werner Neugebauer.
The trade union wants Siemens to create a 200-million euro emergency program for the affected employees.
Siemens however has defended itself in the face of growing criticism.
"So far we've been the only ones to contribute substantial aid to the affected employees, without it being legally binding on us to do so," said Siemens spokesman, Marc Langendorf.
He pointed to the special fund worth 35 million euros that Siemens had created to support employees who lose their jobs as well as a job center to help employees find work in future.