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© alexey utemov dreamstime.com Electronics Production | November 17, 2017

Siemens to lay off 6’900 – half of them in Germany

Siemens is feeling the competition and changes within the industry and is responding to this with a consolidation plan for several of its divisions.
The consolidation plan includes the Power and Gas Division (PG), the Power Generation Services Division (PS) and the Process Industries and Drives Division (PD). The plan aims to increase capacity utilisation at production facilities, while driving efficiency and enhancing expertise by bundling resources.

"The power generation industry is experiencing disruption of unprecedented scope and speed. With their innovative strength and rapidly expanding generation capacity, renewables are putting other forms of power generation under increasing pressure. Today's action follows a nearly three-year effort to right-size the business for this changing marketplace," stated Lisa Davis, member of the Managing Board of Siemens AG in a press release.

The plan now is to execute these changes in a fast manner, and at the same time also investing in future-oriented technologies.

"The cuts are necessary to ensure that our expertise in power-plant technology, generators and large electrical motors stays competitive over the long term. That's the goal behind the measures we're taking. However, we can reach this goal only if we find answers to the worldwide overcapacities and the resulting price pressure," said Janina Kugel, Chief Human Resources Officer and member of the Managing Board of Siemens AG.

According to the plans presented to the employee representatives, a total of around 6’900 jobs worldwide are to be cut in the affected Divisions over a period of several years.

Global demand for large gas turbines (generating more than 100 megawatts) has fallen drastically and is expected to level out at around 110 turbines a year. By contrast, the technical manufacturing capacity of all producers worldwide is estimated at around 400 turbines. PG already began responding to the changed market conditions three years ago.

Specifically for PG, a total of about 6’100 jobs will be impacted at PG worldwide. In Germany, plans call for an adjustment of around 2’600 jobs and the closure of the Görlitz location (currently about 720 jobs) and the Leipzig location (around 200 jobs). In addition, the solutions businesses (Solutions) of the Offenbach and Erlangen locations will be combined. These three measures will lead to the elimination of 1’600 jobs in total. For the location in Erfurt, several options are under review, including, for instance, a sale. Around 640 jobs are to be cut in Mülheim an der Ruhr and about 300 in Berlin.

To more effectively protect and leverage expertise in the construction, operation and servicing of power plants, the creation of centres of excellence is planned. This is to be implemented at locations that offer core expertise and advantages in the value chain of research and development, manufacturing, testing and logistics and can enable long-term, competitive development.

Outside Germany, the restructuring measures will eliminate a total of just over 1’100 jobs in European countries. In countries outside Europe, another 2’500 jobs will be affected, including 1’800 jobs in the consolidation of production facilities and administrative functions in the US.

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December 13 2017 10:15 PM V8.9.2-1