Siemens AG, Europe’s largest industrial manufacturing company, and world’s one of the largest business conglomerates have announced that they will fire 10,000+ employees in the next few years. These include 4,900 cuts at digital industries, 3,000 at smart infrastructure and 2,500 at its central corporate unit.
The company said late Tuesday that it would spin off its division that makes power turbines to increase the division’s entrepreneurial freedom, while embarking on a sweeping cost-cutting effort at its remaining operations.
The gas and power division has been under pressure due to a broader trend toward renewable energy such as sun and wind power. Competitors in the power business such as Boston-headquartered General Electric and Japan’s Mitsubishi have struggled as well.- Energy Economictimes
Siemens said it would keep a significant stake of less than 50 percent in the spun-off company and would bundle in a majority stake its renewable energies company. That would create what Siemens CEO Joe Kaeser called “a powerful pure play in the energy and electricity sector” that could offer products across the entire scope of the energy market from a single source.
Kaeser also announced sweeping cost cutting aimed at increasing profitability at the company’s remaining businesses, which range across factory automation, energy infrastructure such as power grid control and automation and high-speed trains.
The company plans to take out 2.2 billion euros in costs by 2020, in the course of which it will drop some 10,400 positions. The company says it expects growth to create some 20,500 new jobs by 2023, for a net gain of around 10,000. When it comes to job cuts, Siemens said that “all measures worldwide are to be implemented in as socially responsible a manner as possible.”
Will Indian Employees Be Impacted?
Most probably No, Siemens have 3.6 lakh employees, all over the world, and their Indian subsidiary: Siemens Technology and Services has around 5000 employees. Job cuts at Siemens will largely impact their oil, gas and power divisons, as they will be spun off into new companies to reduce cost. Siemens will hold less than 50% share in the new spun off company, while the rest will be sold off. – Track.in
The reason is that, Siemens has been incurring huge losses in oil, gas and power business, as the attention and focus of global investors are on the renewable energy. General Electric and Japan’s Mitsubishi have also experienced huge losses due to the same reason.
In India, Siemens is mainly focussing on technology and consulting related projects, and have carved a niche in this space. Hence, it is very highly unlikely that Siemens India will have any job cuts due to this business restructuring.