MUNICH- Siemens is starting what could be its largest round of job cuts in at least two years and may close several sites as part of a reorganization plan, according to people familiar with the matter.
The retrenchments will fall in the German company’s power- and-gas division and the process industries-and-drives unit,said the people, who asked not to be identified as the plans haven’t been announced. There could be thousands of positions cut in the power and gas business, which makes turbines, while eliminations in process industries will be substantial, one of the people said.
Bloomberg News first reported significant job cuts were planned for the power and gas division in August, and that a historical Berlin site would be particularly affected. Manager Magazin reported on Thursday that 11 of 23 power-and-gas sites could be shut or sold off, including one in the east German city of Erfurt.
The announcement, which will probably come in early November, could be the largest reorganization by Siemens since Chief Executive Officer Joe Kaeser initiated 4,500 job cuts in May 2015. Since Kaeser was appointed CEO in 2013, over 15,000 retrenchments have been announced, although a final tally is hard to calculate as numbers are negotiated down by unions after initial announcements.
“Siemens is systematically and successfully implementing its Vision 2020 strategy. Among other things, we’re continually thinking about the right strategic setup for our businesses,” spokesman Philipp Encz said in an emailed statement Thursday. “This may include consolidating individual activities if market conditions make this necessary.”
The cuts are expected to receive widespread opposition from Germany’s powerful labor groups and workers’ representatives. It’s “unbearable” that thousands of employees are being unsettled by rumors, Hagen Reimer, an IG Metall spokesman, said in emailed comments.
“If Siemens is to actually plan massive cuts in locations and employment, IG Metall will not accept this without resistance, but will work with the works councils and workforces to provide counter-defense,” he said.