Fujitsu Siemens Computers is firing 700 employees in Germany to increase its profitability in a move it says is not connected to Fujitsu's buying out of Siemens AG's 50 per cent holding in FSC.

FSC is jointly owned by Siemens and Fujitsu, but Siemens is selling out, receiving €450m ($580.5m) for its half share as it wants to increase its own profitability. When the deal was announced on November 4 it was said that no layoffs were planned. Subject to government approval the deal will formally take place on April 1 2009, otherwise known, ironically enough, as Erster April in Germany - April Fool's Day.

In a statement issued to the German press on Thursday November 27, FSC said that competitive pressures and the generally poor economic situation meant that the layoffs were necessary to ensure its profitability.

FSC began talking to the IG Metall union on Thursday regarding the planned cuts. German law requires that layoffs must be agreed with worker representatives on the FSC supervisory board. The layoffs represent 12 per cent of FSC's 5,850 or so employees in Germany. There are about another 4,700 employees outside Germany, mostly in Europe.

It is generally reckoned to be harder to sack workers in Germany than other European Union states. If FSC is laying people off in Germany and not taking the apparently easier option of doing it elsewhere then the situation must be dire and there will be concern in FSC operations elsewhere in Europe that an axe is poised over them too. ®

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