Energy company Siemens Energy is cutting 7800 jobs worldwide


Energy company Siemens Energy is cutting 7800 jobs worldwide

The German energy group Siemens Energy is cutting further jobs. In order to save costs and improve profitability, 7,800 jobs are to be cut in the Gas and Power division, 3,000 of them in Germany, the company announced in Munich on Tuesday. There should not be any site closings. The dismantling is part of efforts to cut costs in the fossil fuel business by at least 300 million euros.

Siemens Energy announced this goal at its capital market day last September. The dismantling is to take place by the end of the 2025 financial year (as of the end of September); Around three quarters of the affected jobs are reported to be in management, administration and sales.

Change towards renewables

With the dismantling, Siemens Energy is responding to the change in the energy market towards renewable energies. The company had already announced that it would no longer take part in new tenders for coal-fired power plants. In addition, business with so-called aeroderivative gas turbines – which are modeled on aircraft engines – is being scaled back. Siemens Energy had to make high write-offs on the business last year.

CEO Christian Bruch had made it clear at the capital market day that he was not satisfied with the profitability of Siemens Energy and announced measures. He wants to slim down the structure of the company and remove complexity. The measures that have now been decided range from savings with external service providers and in purchasing to optimized logistics and a significant simplification of the IT landscape. Siemens Energy confirms its goal of achieving an adjusted operating margin (Ebita) of 6.5 to 8.5 percent by 2023.

Power plant business is weakening

The costs for the financial years 2020 to 2023 should amount to a mid to high three-digit million euro amount. The outlook for 2020/21 remains unchanged. In the past few years, the technology group Siemens subjected the power plant business, which had been ailing for a long time, to tough austerity measures and cut several thousand jobs. Siemens spun off the energy business last September and brought the majority to the stock exchange.

In the first quarter (to the end of December) Siemens Energy returned to profitability. After taxes, the company earned 99 million euros, after a loss of 195 million euros in the same period last year. The energy company, to which the majority of the wind turbine manufacturer Siemens Gamesa belongs, had already presented preliminary figures at the end of January. Sales rose by 2.6 percent to 6.5 billion euros. The growth came from the good development at Siemens Gamesa, the wind turbine manufacturer had already presented figures last week. Siemens Energy's adjusted Ebita margin improved to 5.6 percent, after minus 1.2 percent in the previous year.

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