Austerity measures Siemens will cut 6,000 jobs

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The poor figures from the past year have noticeable effects on the Siemens Group: 6,000 jobs are to be cut worldwide, about 2,850 of them in Germany. The factory automation sector is particularly affected by this.

The German Siemens Group has announced plans to cut 6,000 jobs worldwide. In Germany specifically, it is expected that 2,850 jobs will be eliminated, according to various news reports. Most of these job cuts are expected to affect the struggling Digital Industries business unit, particularly the automation division contained within it.

In Germany, sites in Bavaria are particularly affected

Already last year, Siemens identified factory automation as a particular concern for the company in light of declining sales figures. High inventory levels at customers, combined with weak demand, have led to production lines in the automation sector not running at full capacity for some time.

Accordingly, by September 2027, 5,600 of the announced 6,000 jobs in this sector are to be cut. Of these, approximately 2,600 are expected to be in Germany. A large part of these cuts will likely affect sites in Bavaria, as many plants in the Digital Industries sector are located there.

The charging station business is also not running smoothly

Furthermore, an additional 450 jobs in the electric vehicle charging solutions business are to be cut by the end of September, 250 of which are in Germany. Siemens cites strong price pressure and limited growth potential in the segment of low-power charging stations as reasons. In the future, the company intends to focus on fast-charging infrastructure for fleets and on-the-go charging. In the medium term, Siemens seems to plan to spin off this business area from the company.

Siemens recently reported generally good figures for the current year: In the first quarter of the current fiscal year ending in December, the group reported a profit of 2.1 billion euros. However, changing conditions in key markets necessitated adjustments, according to the company: "The German market, in particular, has been declining for two years. Therefore, capacities in Germany need to be adjusted." Overall, the workforce in Germany will "tend to remain constant" as Siemens is recruiting in other growing areas.

Employees annoyed

There was criticism from the employees' side. "We have no understanding for the planned measures at the DI and are surprised and angry at the massive planned job cuts," said Birgit Steinborn, chairwoman of the central works council and deputy chairwoman of the supervisory board. "If the One Tech Company is supposed to be a growth program, then we demand that jobs be created sustainably instead of being cut for the sake of profit margin," she said. Under this title, Siemens announced a program last year aiming, among other things, to bring units closer together.

There is also a bad mood in the union. The second chairman of IG Metall, Jürgen Kerner, who is also on the Siemens supervisory board, criticized the plans as well. "On the one hand, designing the future-oriented vision of a One Tech Company, and on the other hand, cutting thousands of jobs, cannot be communicated to the employees. The trust that employees will be taken along the way through transformation and into the new setup is quickly shattered by such measures and then difficult to repair," said Kerner. "Transformation is not managed through cutbacks, but through positive change – especially development and qualification." In his view, redundancies for operational reasons are excluded by site and employment security. "The question is rather how one wants to achieve the fundamentally changed company structure of the future through a radical shrinking process. From our point of view, that cannot work."

During the 2020 coronavirus crisis, Siemens, under then-CEO Joe Kaeser, ordered widespread short-time work but excluded job cuts despite weak business. However, in the ensuing period, the factory automation area apparently did not recover to the extent hoped for. The now announced job cuts are a consequence of the poor business year 2023/24, which affected many German companies in the automation and automotive industries. (sg) With material from dpa