The German engineering firm Siemens AG announced on Tuesday that it would cut 6.800 jobs from its telecommunications equipment division, in its attempt to orientate the business toward software, more than other domains.

The Munich based company said in a statement that it plans to cut 3.800 jobs worldwide, including around 2000 in Germany. In addition, Siemens announced that it wants to reduce another 2000 jobs through outsourcing and partnerships, 1.200 of which from Germany.

The 430.000 worldwide employees company has been beset by the competition coming from Chinese companies, since the workforce is much cheaper there, despite the fact that it used to be one of the leaders in telecommunication equipment, as it posted sales of 29.7 billion dollars ten years ago. Since then, however, Siemens went downhill.

Amid the fast changing and developing in telecommunication, Siemens saw itself forced to rethink its strategy and to restructure its divisions. According to The New York Times, Siemens sold its mobile handset division in 2005 and has transferred thousands of telecommunications equipment jobs to Nokia in a 50-50 joint venture in 2006. Also, the company is now down to 17.500 telecommunications workers currently, which means that the 3.800 jobs cut will represent almost two fifths of its current jobs.

The German industrial conglomerate also announced that it would like to sell its loss making unit, while sources told Reuters that it is already in talks with Alcatel- Lucent and the financial investor Cerberus about a potential merger of SEN. The transaction will allow Siemens to focus on energy, healthcare and factory automation, according to the report.