6,100 jobs go at Siemens power division as ‘market burns to the ground’

Siemens is to release two per cent of its global workforce, mainly in Germany, as its power and gas division continues to suffer from the onslaught of clean energy expansion.

6,100 jobs are to go before 2020 in the power division alone, with a further 800 in other departments. “The market is burning to the ground,” Siemens board member Janina Kugel who is in charge of group human resources, told journalists in a call following the announcement.
Siemens building
The company’s lucrative $9bn order for its Egyptian mega-project shielded the company from a much worse situation, as its traditionally strong gas-fired turbine manufacturing business continues to suffer in the shadow of renewable energy revolution.

à‚ “The power generation industry is experiencing disruption of unprecedented scope and speed,” Siemens management board member Lisa Davis said. “With their innovative strength and rapidly expanding generation capacity, renewables are putting other forms of power generation under increasing pressure,” she added.

Aside from loss-making wind power venture Siemens Gamesa, Process Industries and Drives was Siemens’s least profitable business last quarter, with a profit margin of just 2.9 percent.

Half of the expected job cuts will be made in Germany, and the timing couldn’t be worse for the country, with talks currently ongoing to form a new government. German Economy Minister Brigitte Zypries urged Siemens to treat employees fairly. “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.”

She said particularly sites in structurally weak regions should be preserved.

Both Siemens and rival GE are having to contend with overcapacity in the gas turbine market, where supply outstrips demand by a ratio of three to one, and prices have dropped 30 percent since 2014.

Demand for power plant-sized gas turbines has tumbled and is expected to bottom out at 110 turbines a year, compared with total global manufacturing capacity of around 400 turbines, Siemens said.

General Electric on Monday announced a halving of both its dividend and its 2018 earnings outlook, largely due to its flailing turbines business, which it acknowledged it had mismanaged as it underestimated the scale of the problem.à‚ 

Siemens says Egyptian power problems ‘solved’ by landmark megaproject
Kaeser targets power division in Siemens overhaul

No posts to display