German industrial equipment maker Siemens will cut some 10,000 jobs in a major restructuring move that will involve spinning off its oil, gas and power generation business and creating new areas of growth. 

The company stated that it would spin off its division that makes power turbines to increase the division's entrepreneurial freedom, while embarking on a sweeping cost-cutting effort at its remaining operations. 

Siemens said it would keep a significant stake of less than 50 percent in the spun-off company and would bundle in a majority stake in its renewable energies company. As per Siemens CEO Joe Kaeser that would create "a powerful pure play in the energy and electricity sector'' that could offer products across the entire scope of the energy market from a single source. 

The move comes as the gas and power division has been under pressure due to a broader shift toward renewable energy such as sun and wind power. Other competitors in the power business such as General Electric and Japan's Mitsubishi have struggled as well. 

The major cost-cutting is aimed at increasing profitability at the company's remaining businesses, which range across factory automation, energy infrastructures such as power grid control and automation and high-speed trains. 

The company plans to take out 2.2 billion euros in costs by 2020, in the course of which it will drop some 10,400 positions. These include 4,900 cuts at digital industries, 3,000 at smart infrastructure and 2,500 at its central corporate unit. However, the industrial equipment maker expects growth to create some 20,500 new jobs by 2023, for a net gain of around 10,000. As far as the job cuts are concerned, Siemens said that “all measures worldwide are to be implemented in as socially responsible a manner as possible.”

Siemens AG stated that its net profit fell to 1.92 billion euros ($2.15 Bn) in the first three months of the year, from 2.02 billion euros a year earlier, when earnings were boosted by 900 million euros by a share transfer. Revenue rose 4% to 20.93 billion euros. 

Last year as well, the German engineering company had announced an efficiency drive involving as many as 20,000 administrative jobs to cut costs as part of its bigger plan, Vision 2020 strategy that aims to simplify the sprawling structure of the company.