Hard blow to the employees of Siemens !
The German giant has just announced wanting to cut nearly 7000 jobs in the next few years, half of which are in Germany.
Despite a net profit of 6.2 billion euros for its 2016-2017 fiscal year, Siemens is considering new savings measures within its Power & Gas division that would eliminate thousands of jobs. In addition to the site closures and staff reductions planned by Germany, the plan includes 1100 job cuts in the rest of Europe, and 2500 out of Europe, with 1800 in the United States.
Indeed, the Power & Gas activity is confronted with a global decline in the use of large turbines, in which Siemens has specialized, to produce electricity, also in a context of reducing the investments of the major oil groups in the face of lower oil prices. It suffered a 41% decrease of its orders in the second quarter of this year and a decrease of 23% -stronger than expected- of its profit.
In any event, the group intends to avoid the lay-offs by “transferring as far as possible the persons concerned” through restructuring to its 3200 vacancies and further stipulates that it will “continue to invest” in growth activities and it is going to hire.
What we should know is that this measure is good news for some but bad news for others. On the one hand the production of renewable energies is gaining ground and is increasingly competitive. On the other hand thousands of people are likely to lose their jobs because of this measure.
So, is the group headed by Joe Kaeser aiming for a profitability objective by producing more renewable energies or a simple restructuring following the declining demand for fossil fuels ?