Siemens energy faces mass layoffs amid growing German industry crisis
Siemens Gamesa, a Spanish company belonging to Siemens Energy - the German giant operating in the renewable energy market, is in big trouble. The situation is so serious that it plans mass layoffs, Reuters reported, which may affect up to 4,100 employees. Many companies from Germany have made similar decisions since the beginning of the year.
The possible layoffs were announced to the employees by the company's CEO in an internal letter, which Reuters obtained. Businesses across Europe are facing problems, announcing restructurings and sharp cuts.
When it comes to German companies, the list is long. Since the beginning of 2024, decisions about layoffs have been announced by, among others, Bosch, Continental (tyre manufacturer), ZF (automotive parts manufacturer), Deutsche Bank, SAP (software provider), Vodafone (mobile operator), Bayer (pharmaceutical and chemical giant), Evonik (chemical company), and Thyssenkrupp Steel (steel manufacturer).
A terrible year for Siemens Energy
Siemens Gamesa manufactures wind turbines. Formally, it is a company registered in Spain, but it belongs to the German conglomerate Siemens Energy. It has branches in Spain, Germany, and Denmark. The layoffs may affect employees in all these countries and - according to Reuters - affect 15% of the workforce.
A Siemens Energy spokesperson said last week that the company would announce the scale of the layoffs after completing consultations with all interested parties.
Our current situation requires actions that go beyond organisational changes, explained CEO Jochen Eickholt, who is expected to resign from the position at the end of July.
The company assured that it wants to maintain stable employment levels, among other things, through job transfers.
"The management and I are aware that today's information is difficult, especially considering the challenges you have faced over the past year," wrote Eickholt. "However, I want to emphasise that our business, including onshore wind energy, has a future," he added in the letter, quoted by Reuters.
As energetyka24.com recalls, 2023 was not a favourable year for German Siemens Energy. Financially, the company has had a dramatic year due to losses incurred by its Spanish subsidiary, Siemens Gamesa.
Its problems, however, resulted from numerous technical blunders and defective turbine constructions. The site indicates that the need for repairs and financial penalties for delays in order fulfilment resulted in a record loss for Siemens Energy last year, amounting to £3.9 billion.
German businesses lay off and relocate production
German companies have long struggled with serious problems. A few months ago, the tyre manufacturer Continental announced it would lay off over 7,000 employees by 2025. The reason? Savings.
The giant explains that it is about reducing costs and also making decisions faster and more efficiently in the future. Last autumn, when the first reports of mass layoffs at Continental appeared, the media reported that the company wanted to reduce its annual costs by as much as £340 million.
In April, the largest German steel producer, Thyssenkrupp Steel, announced plans to reduce employment and production at its biggest plant. The reason? Difficult market conditions - rising costs and the weakness of the German economy.
At the beginning of 2024, automotive parts supplier ZF announced it plans to close two production plants and eliminate up to 12,000 jobs, which is 1/4 of its entire workforce in Germany. The reason? Cost-cutting. As the media reported, the company plans to move its research and development and production activities to countries with lower costs, such as Eastern Europe, India, and China.
As we have repeatedly written on money.pl, Germany has been struggling with serious economic problems in recent years. As reported by local media, due to high energy prices, excessive bureaucracy, overregulation, and a lack of skilled workers, more and more companies are deciding to move production abroad.
