Siemens is to restrict its loss-making IT services arm to industries that the wider group operates in.

In an internal memo seen this week by Heise.de, the German online publication, employees were told: "SBS (Siemens Business Systems) will only be accepting a few specific new projects in industries that Siemens does not serve after an intensive analysis."

"From now on, SBS will be working in industries that Siemens also serves. In particular, new customers are to come from the automotive industry, chemicals and pharmaceuticals, energy providers, and telecommunications. But current customer relations will be maintained.

"The goal of all of these steps is to turn around SBS and post sustainable profitable growth with competitive costs."

SBS is also folding its IT Outsourcing and IT Solutions divisions into one organisation. Last December, SBS offloaded its product business to Fujitsu Siemens Computers.

SBS and "struggling" always seem to go together in reports about this business. It is unlikely that it will meet group targets for profit margin and return on capital anytime soon. It has also been up for sale for a long time. But why no takers? An IT services group this size should be an attractive target for an IBM or an HP or an Accenture. The fact that it has not been sold suggests there may be a lot more job cutting - never easy in Germany - to go. ®