Siemens to lay off 6900 employees working in energy businesses
Siemens has planned to layoff 2% of its global workforce by 2020. With this decision, over 6900 Siemens employees will lose their jobs. Most of the job cuts will be made in Power and Gas division.
According to the last quarter's report, Siemens made big losses in its wind power venture called Siemens Gamesa. Process Industries and Drives division was the least profitable business unit in last quarter's reports. The company is planning to shred the operations to remodel itself as an industrial software company.
The rapid growth in the renewable energy has severely hit power generation, oil and gas industries business of Siemens. The company is likely to cut a large number of jobs in its Power and Gas division as well as Process Industries and Drives division, which manufactures large mechanical drives for oil and gas extraction.
Lisa Davis, the management board member of Siemens said, "The power generation industry is experiencing disruption of unprecedented scope and speed. Today's action follows a nearly three-year effort to right-size the business for this changing marketplace." The wind power unit, Siemens Gamesa reported the profit margin of just 2.9% in the last quarter.
About half of the job cuts will be made in Germany. The decision to layoff the large workforce will be not welcomed by the political representatives in Germany. Brigitte Zypries, the German economy minister has requested the company to treat employees fairly. She said, "The workers are very concerned and uncertain about their future. I hope that Siemens works closely with the unions to find fair solutions for the affected sites."
The company employs about 16000 people in power generation in Germany. The last quarter's results were not so bad for the company to make the decision of laying off such a large percentage of its workforce. Siemens's supervisory board member said, "Job cuts of this magnitude are totally unacceptable given the company is in an outstanding overall position."
- Rajat Kabade