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© Siemens Electronics Production | September 25, 2018

2’900 German jobs to go as part of Siemens €500M savings plan

Siemens and the company's Central Works Council have signed a reconciliation of interests based on the framework agreement reached in May.
The goal is to increase the competitiveness of the Power and Gas Division (PG) and the Process Industries and Drives Division (PD). At PG alone, costs are to be reduced – as originally planned – by about EUR 500 million worldwide, with EUR 270 million of this amount to be saved in Germany, the company states in a press release.

Around 2’900 jobs will be cut in Germany instead of the roughly 3’400 announced last November. This reduction in job cuts is due, above all, to the continuation of the location in Görlitz, Germany, and the retention of activities at the Dynamowerk, a Siemens production facility in Berlin.

However, the measures are not restricted to capacity adjustments alone. Instead, they are primarily designed to achieve structural improvements and systematically sharpen the company's focus on the technologies of the future.

"The market for fossil power generation has contracted substantially. Against the backdrop of this structural change, the agreement we've reached is critical to improving our competitiveness. We now have to implement the measures quickly," says Lisa Davis, member of the Managing Board of Siemens AG, in the press release.

"In the past few months, market forecasts have again worsened considerably. The job cuts agreed upon with the employee representatives are only one of the measures urgently necessary to improve our cost position," adds Janina Kugel, Chief Human Resources Officer and member of the Managing Board of Siemens AG.

The Görlitz location, for instance, will be retained and expanded to become the global center for the company's industrial steam turbine business. To increase competitiveness and close the existing cost gap, plans call for reducing the location's workforce by about 170 jobs.

The gas turbine plant and the Dynamowerk in Berlin as well as the factory for large steam turbines in Mülheim, Germany, have been impacted particularly strongly by the market's structural transformation. Consequently, these plants will be restructured, and the competencies of each will be bundled.

Berlin will become the worldwide center of competence for large gas turbines. Mülheim will become the center of competence for large steam turbines and specialize as well in the production of large electric motors. In the future, the small generators that have been produced in Berlin will be manufactured in Erfurt, Germany. In Berlin, a total of about 270 jobs will be cut at the gas turbine facility and a further 430 at the Dynamowerk. Around 600 jobs will be cut in Mülheim.

The Erfurt location will undergo fundamental restructuring. To create a future-oriented portfolio, the location will concentrate on small generators. Other product lines will be discontinued or moved elsewhere. In total, these measures will result in a reduction of about 200 jobs.

For the factory in Leipzig, Germany, a sale is now the preferred option.

Duisburg, Germany, will be established as the European headquarters for Dresser-Rand activities and expanded to become a central service location. Due to the difficult market environment,

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October 15 2018 11:56 pm V11.6.0-2