German lighting maker Osram Licht AG, spun off from engineering group Siemens earlier this year, expects to pay shareholders its first dividend for its current year as it widens a sweeping restructuring program.

Osram, the world's No.2 lighting maker after Philips, is in the midst of a restructuring, having been slow to adjust to a shift in demand from traditional light bulbs to newer technologies such as light-emitting diodes (LEDs).

It said on Tuesday it was now cutting an overall 8,700 jobs, or 21 percent of its workforce, in addition to shuttering a quarter of its 43 factories, to generate gross savings of 1.2 billion euros ($1.6 billion).

The company had previously said it planned to cut 8,000 jobs to save 1 billion euros.

Osram's stock has gained 68 percent since its stock market debut on July 8 in a sign that investors have faith in the company's ability to turn around its business, but the group still faces major challenges.

Semiconductor-based LED technology is rapidly gaining in popularity as it is more energy efficient, longer-lasting and more flexible in its design than traditional types of lighting.

Osram, the top supplier for automotive and display lighting, is now racing its peers to adapt to the changed market.

So far, only two of its remaining 36 factories make LEDs, but it is building a new plant in China at a cost of over 100 million euros to boost its presence in the fast-growing Asian market.