Siemens Energy announces job cuts
Germany, Munich: The executive board of Siemens Energy has announced the plan to cut 7,800 jobs in its gas and power segment by 2025.
Image source: Siemens Energy
Germany, Munich: The executive board of Siemens Energy has announced the plan to cut 7,800 jobs in its gas and power segment by 2025.
According to the company’s press release, the measures are designed to improve competitiveness by enhancing the long-term cost structure. The measures designed to optimise the company’s portfolio range from cost reductions related to external service providers, purchasing and logistics, to streamlining the IT landscape.
Siemens Energy has made the reduction of its material expenses a high priority and the majority of reduction measures are related to those costs. However, optimised processes, leaner structures, the reduction of overcapacities and portfolio adjustments will result in the reduction of approximately 7,800 jobs around the world in the gas and power segment – around three-quarters of which will be made in management, administration and sales.
In an interview with Bloomberg Christian Bruch, chief executive officer at Siemens Energy AG, emphasised the challenge they are facing to balance the need to keep jobs safe with maintaining profitability in declining markets, while coping with their exit from coal. Bruch said: “Because of the changes in the energy market, we have areas where we do not earn money and we need these financial strands to invest in new technologies to really drive the transformation.”
The proposed measures impact approximately 3,000 in Germany, 1,700 in the United States, and 3,100 at other locations around the world.
The reductions are planned by the end of the 2025 financial year, with a large part to be implemented by the end of the 2023 financial year. The company is negotiating with employee representatives to reach an agreement on the proposed measures as soon as possible.
The strategy set a clear Adjusted EBITA margin and stated the goal of “operational excellence initiatives targeting more than $360 M (€300 M) additional annual gross global cost savings on top of the already announced $1.2 B (€1 B) savings target until fiscal year 2023, when compared to the cost base of fiscal year 2018”.
Source: ESI Africa