Siemens AG and employee representatives have reached agreement on a reconciliation of interests regarding the workforce adjustments that have been announced for Siemens IT Solutions and Services.

Under the agreement, a comprehensive package of voluntary measures will ensure that the reduction of 2,000 jobs in Germany is implemented in a socially responsible manner. The negotiated reconciliation of interests still requires approval by Siemens' Central Works Council. This approval is expected next week.

Among other measures, the reconciliation of interests is to include offers for the voluntary termination of employment, ranging from partial early retirement to employment termination agreements. The planned instruments also include continuing education measures and internal reassignments.

In addition, a Siemens internal transfer company is to be established for the employees affected. Layoffs due to operational requirements are to be avoided in connection with workforce adjustments.

For all other employees, who will be transferred to the new, separate SIS, a three year protection against termination is to be agreed. This protection will not apply to employees who contest their transfer to the new company.

The adjustment measures became necessary after revenue in SIS's personnel intensive business declined to EUR 4.7 billion in fiscal 2009, a decrease of more than 12% over the prior year and because of the reorganization of the IT service provider. In the third quarter of the current fiscal year 2010 alone, SIS reported a loss of EUR 81 million on revenue of EUR 1.1 billion.