With demand for renewable power increasing by the day, Siemens is experiencing low demand for gas turbines. Therefore, the Company plans to lay off 2700 people in its gas and power units. As a result of this job cut, about 1400 will be rendered jobless in Germany itself.
The German engineering company feels that its gas and power business is a drain on its resources, and savings to the tune of € 500 million were required to ensure a competitive edge. This round of downsizing was apparently essential in response to the market changes. The layoffs will impact not only the projects and power transmission businesses, but the support functions also. The Company is keen to conduct the layoff in a responsible manner in consultation with its employee representatives.
Siemens is reportedly experiencing a drop in profits with each passing year. This is mainly because globally there has been a huge shift in demand from fossil fuels to renewable energy. As a result, takers for power plant equipment are falling in number.
Earlier in June, Siemens had announced its intention to cut costs by € 2.2 billion in the next four years through job cuts. It had revealed its plan to lay off 10,400 employees, primarily in the administration and support functions.
With the planned restructuring, savings to the tune of € 200 million are expected. An additional € 200 million will be saved by downsizing support functions. With a new regional structure in place, another € 100 million will be saved.