Siemens, the electronics and industrial group, will cut 16,750 jobs worldwide as it tries to bolster itself against the economic downturn and rising costs.

The move is also part of a drive to streamline the conglomerate, which makes goods ranging from medical equipment and high-speed trains to light bulbs.

The cuts, 5,250 of which will be in the group's German homeland, amount to about 4 per cent of its total workforce. In Europe excluding Germany, 5,000 jobs will go. The group employs 20,000 people in Britain.

The cutbacks come as Siemens is trying to cut €1.2 billion (£954 million) of costs within the next two years. It has already restructured its operations into three main divisions: healthcare, energy and industry, which includes transport.

The industry division will bear the brunt of the job losses, with 6,350, while energy will shed 3,950 positions and healthcare 2,800.

Peter Löscher, who took over as chief executive last year, said: “The speed at which business is changing worldwide has increased considerably. Against the backdrop of a slowing economy, we have to become more efficient.”

In March, Siemens shares suffered a battering when the group issued a profits warning.

So far this year, the shares are down 35 per cent. Its direct competitors have also lost significant value, with General Electric stock falling 27 per cent and Philips 29 per cent.

IG Metall, the large German union that covers engineering and heavy industry, condemned the cuts as too extensive and said that it would not rule out taking action.

Werner Neugebauer, head of the union in Bavaria, where Siemens is based, said: “Siemens is looking good economically, the order books are full. That makes the planned job cuts neither comprehensible nor acceptable, and they are excessive in extent.”

The union will wait until talks with the management have ended before deciding on any action.

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