Siemens Walks a Tightrope: IT Job Cuts in Germany, Samsung Chip Pact, and US Factory Build-Up

Siemens closes German IT subsidiary Evosoft while deepening chip partnerships and ramping US production, as shares trade near 52-week highs.

Siemens is executing a playbook that balances cost discipline with strategic expansion as its shares trade near 52-week highs. The Munich-based industrial giant has announced the closure of all German sites at its IT services subsidiary Evosoft by the end of 2027, eliminating 377 positions, while simultaneously deepening a partnership with Samsung Foundry and ramping up production capacity in the United States. The contrasting moves highlight the tensions at the heart of the group's strategy: pruning overheads without blunting long-term growth.

The job cuts at Evosoft fall hardest on Nürnberg, where roughly 340 of the affected employees are based. Siemens is negotiating social plans and pointing affected staff toward internal transfers elsewhere in the group. The decision reflects a broader industry trend — according to the EY CEO Pulse Survey, 36% of large companies are planning headcount reductions or cost-cutting programs as weak economic conditions and tight budgets force difficult trade-offs. For Siemens, the move signals a sharper separation between commoditised IT services and the high-value digital products the company wants to anchor its future around.

In contrast, the company is also investing heavily in new growth avenues. The recently expanded collaboration with Samsung Foundry integrates Siemens' EDA software into the Korean chipmaker's manufacturing processes, aiming to accelerate silicon design cycles. The partnership positions Siemens as a key enabler in the semiconductor ecosystem, leveraging the "digital twin" concept to help customers validate designs faster and cut development costs. It is a clear bet that the industrial software division can command premium margins even as standardised IT work migrates abroad.

Alongside the software push, Siemens is building out its physical footprint in the United States. Together with partner Jabil, the group is expanding production of electrical equipment in Virginia, targeting the red-hot data center market. The boom in AI-driven computing infrastructure is fuelling demand for reliable power distribution components — a segment where Siemens' Smart Infrastructure unit can capitalise on local manufacturing to shorten delivery times and secure access to the world's largest economy.

The market has largely rewarded the dual strategy. Siemens shares closed Friday at €269.05, down 0.96% on the day but still showing a 10.04% gain over the past 30 days. The stock has risen 11.69% since the start of the year and 26.46% over twelve months, trading comfortably above its 200-day moving average — which sits roughly 12% lower — and just 2.4% below its 52-week peak. However, the classic factory automation business is still feeling the drag from customer destocking, making the diversification into software and chip-enablement all the more critical.

Looking ahead, three factors will be on investors' radar in June. The commercial launch of Simcenter PhysicsAI could sharpen Siemens' pitch for industrial artificial intelligence, boosting efficiency for product development clients. The mobility division, buoyed by a book-to-bill ratio of 1.10, faces pressure to convert its strong infrastructure pipeline into new major rail orders. And the data center investment wave remains a vital demand driver for Smart Infrastructure.

For investors, the key question is whether the Evosoft restructuring adds credibility to margin targets in the core industrial segments or, alternatively, raises doubts about the group's long-term commitment to digital competencies. Siemens insists the move is about focus, not retreat. The market will test that claim in the weeks ahead, watching closely for further details on the future shape of the IT services unit and for signs that the cost savings flow cleanly into the bottom line without undermining innovation.