FRANKFURT: Siemens will cut about 6,900 jobs, or close to 2 per cent of its global workforce, mainly at its power and gas division, which has been hit by the rapid growth of renewables.
Most of the cuts, about 6,100, will be made before 2020 at Siemens’s Power and Gas division, which once thrived on supplying large gas turbines for electricity generation but has been overtaken by the global surge in solar and wind capacity.
“The power generation industry is experiencing disruption of unprecedented scope and speed,” Siemens management board member Lisa Davis said. “With their innovative strength and rapidly expanding generation capacity, renewables are putting other forms of power generation under increasing pressure,” she added.
Siemens’ Process Industries and Drives division, which makes large mechanical drives for oil and gas extraction and turbines, will also be hit, Siemens said, not ruling out forced layoffs as part of the plan.
Aside from loss-making wind power venture Siemens Gamesa, Process Industries and Drives was Siemens’s least profitable business last quarter, with a profit margin of just 2.9 per cent.
Siemens said roughly half of the job cuts would be made in Germany, a move likely to be unpopular with politicians currently trying to form a government. It did not specify the costs of the layoffs.
IG Metall, Germany’s largest trade union, lashed out at management, accusing Siemens of having been to late in responding to the crisis in conventional power generation and demanding no forced redundancies be implemented.
“Job cuts of this magnitude are totally unacceptable given the company is in an outstanding overall position,” said IG Metall board member Juergen Kerner, who also sits on Siemens’s supervisory board.
— Reuters
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