SIEMENS AG, Europe's biggest engineering company, has agreed with work councils to cut about 1,200 jobs in Germany to reduce the workforce at the enterprise communications unit.

Almost 300 employees will be offered part-time pre-retirement contracts, while the remainder will be able to join a transfer company financed by Siemens, the Munich-based company said yesterday.

The transfer company, which will operate for as long as two years starting in July, will aim to find jobs for employees both within and outside Siemens.

"We've made the necessary personnel adjustments as socially compatible as possible," Labor Director Siegfried Russwurm said.

The company said in February it would cut as many as 6,800 jobs at the unit after failing to find a buyer for the division in almost two years. Siemens said it planned to eliminate about 3,800 jobs directly, while about 3,000 would be cut by selling factories or setting up partnerships, said Bloomberg News.

Siemens was seeking a deal with a "strategic buyer" or a "financial investor who has some operational experience in that market," Chief Financial Officer Joe Kaeser said on February 26.

Siemens rose 1.05 euros, or 1.6 percent, to 68.95 euros (US$109.30) at 11:18am in Frankfurt yesterday, giving the company a market value of 63 billion euros.

The company said in February as many as 2,000 jobs at the unit in Germany will be cut as part of its overhaul. The number announced yesterday is only the workers affected "in the short term," Siemens said. Additional cuts depend on which company buys the division.

The unit sells technology for call centers, messaging and teleconferencing as well as an Internet-based communication system.