Siemens Staff Cuts Include Process and Drives Division

Citing structural changes in global power generation markets, Siemens AG, Munich, Germany, today announced a staff reduction of 6,900 people worldwide. The company said the consolidation plan for its Power and Gas Division (PG), Power Generation Services Division (PS) and Process Industries and Drives Division (PD) aims to increase capacity utilization at production facilities, drive efficiency and enhance expertise by bundling resources. Siemens said 1,800 of the job cuts will come from 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,” Siemens managing board member Lisa Davis said in a Siemens release. “Today's action follows a nearly three-year effort to right-size the business for this changing marketplace. 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.”

Roughly half the cuts are expected to happen in Germany.  The measures involve adapting the global capacities of PG and PS to the expected market volume, bundling key expertise in centers of excellence and consolidating manufacturing volumes at locations with competitive costs.

Specific to the Process Industries and Drives Division, Siemens said the customers in the commodity industries are reluctant to invest while competition is intensifying substantially due to the arrival of low-cost producers. “Whether in mining, steel production or shipbuilding, demand for large electrical motors and generators has fallen considerably due a lack of capacity increases by process industry customers. A recovery in these fields is not expected in the foreseeable future. This situation has resulted in substantial overcapacities in the existing manufacturing landscape for these technologies,” said the release.