Siemens plans to cut 1,100 jobs in Germany as part of a €6 billion cost-cutting drive designed to close a profitability gap with competitors.

The cuts will mostly affect Siemens’s fossil power generation business, which supplies gas and steam turbines, power plants, generators and controls. About a quarter of the cuts will occur in its oil and gas unit. The firm will seek to avoid compulsory redundancies.

These are among the first major job announcements since Siemens outlined a cost-cutting plan in Berlin last month to help it catch up with rivals such as General Electric. At the time management declined to specify an overall number of job cuts.

Siemens took action when an expected recovery in demand in the second half of this year failed to materialise. – Copyright The Financial Times Limited 2012