German industrial major Siemens (ETR:SIE) intends to reduce its headcount by roughly 6,900 in several years, mainly at its power and gas (PG) division, as the rapid growth of renewables is “putting other forms of power generation under increasing pressure.”
In a press release on Thursday, the Munich-based group said the PG unit will bear the brunt of the job cuts. About 6,100 will be affected at the division, which makes large gas turbines for electricity generation. Thus, Siemens will align the division’s operations to meet global demand for gas turbine generators of over 100 MW to the expected 110 units a year. The manufacturing capacity of Siemens’ power and gas workers globally is around 400 turbines.
The move will affect workers globally, but especially those in Germany. There, Siemens plans to slash 2,600 jobs and close its Goerlitz and Leipzig factories. Several options are being examined for its facility in Erfurt, including a sale.
As for the rest of Europe, the restructuring will lead to the elimination of 1,100 jobs, while a further 2,500 will be affected in countries outside the continent. This includes 1,800 people at Siemens’ production plants and administrative facilities in the US.
“The power generation industry is experiencing disruption of unprecedented scope and speed,” said management board member Lisa Davis, adding that Siemens has been trying for almost three years to “right-size” its business amid the changing market environment. The undertaken measures will ensure that the industrial group remains competitive in the long term, added Janina Kugel, chief human resources officer and management board member.
The power generation services (PS) and process industries and drives division (PD) will also be affected by the job cuts, Siemens added, saying that the goal is to adapt the respective businesses to the expected market volume and consolidate production volumes at locations with competitive costs.
The German company will try to transfer as many people as possible to open job positions, which total 3,200.
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