Earlier in the week, in a major restructuring that involves spinning off its gas, oil, and power generation business and creating new areas of growth, German industrial equipment maker Siemens AG announced that it will be cutting nearly 10,000 jobs.
According to a statement released by Siemens AG on Tuesday, May 7th, it said that in a bid to increase the divisions’ entrepreneurial freedom, it will dissolve its division that makes power turbines, while also simultaneously taking measures to cut costs in all its remaining operations.
Additionally, given a growing trend towards renewable energy such as sun and wind power, Siemens AG’s gas and power division has also been facing tremendous pressure.
According to a statement released by Siemens, the company said that it would keep a significant stake of less than 50 percent in the spun-off company while focussing a majority stake in its renewable energies company. Doing so, according to Joe Kaeser, CEO of Siemens AG would create “a powerful pure play in the energy and electricity sector” that could offer products coming from a single source across the entire energy market
By the year 2020, Seimens AG plans to take out 2.2 billion euros in costs, in the course of which it will reportedly eliminate some 10,400 positions. Furthermore, the company said that expects that by the year 2023, the growth witnessed will create some 20,500 new jobs, for a net gain of around 10 000. Speaking about job cuts, Siemens said “all measures worldwide are to be implemented in as socially responsible a manner as possible.”
Meanwhile, on Wednesday, May 8th, Siemens AG revealed that for the first quarter of the year its net profit fell to 1.92 billion euros ($2.15 billion) in comparison to 2.02 billion from a year earlier, although it did receive a boost in its earnings by 900 million euros via a share transfer. Revenue for Siemens AG rose 4% to 20.93 billion euros.