Siemens has announced that it will be cutting 6,900 jobs worldwide, half of them in Germany, largely due to falling gas turbine demand amidst growing market for renewables.
It noted that global demand for large gas turbines (generating more than 100 megawatts) has fallen drastically and is expected to level out at around 110 turbines a year. By contrast, the technical manufacturing capacity of all producers worldwide is estimated at around 400 turbines.
The power generation business will account for 6,100 job losses. In Germany, plans call for an adjustment of around 2,600 jobs and the closure of the Görlitz location (currently about 720 jobs) and the Leipzig location (around 200 jobs). In addition, the solutions businesses (Solutions) of the Offenbach and Erlangen locations will be combined. These three measures will lead to the elimination of 1,600 jobs in total. For the location in Erfurt, several options are under review, including, for instance, a sale. Around 640 jobs are to be cut in Mülheim an der Ruhr and about 300 in Berlin.
Outside Germany, the restructuring measures will eliminate a total of just over 1,100 jobs in European countries. In countries outside Europe, another 2,500 jobs will be affected, including 1,800 jobs in the consolidation of production facilities and administrative functions in the United States.
“The power generation industry is experiencing disruption of unprecedented scope and speed. With their innovative strength and rapidly expanding generation capacity, renewables are putting other forms of power generation under increasing pressure. Today’s action follows a nearly three-year effort to right-size the business for this changing marketplace,” stated Lisa Davis, member of the Managing Board of Siemens AG. “Our plan is to execute these changes in a fast and prudent manner while also investing in future-oriented technologies. We’re committed to growing this business and to being a capable and reliable partner for our customers in order to help ensure their long-term success,” she added.