Business
Massive job cuts planned by Siemens may benefit Hungary
The retrenchments will fall in the German company’s power-and-gas division and the process industries-and-drives unit, Bloomberg cited sources who asked to remain anonymous as the plans have not been announced.
There could be thousands of positions cut in the power and gas business, which makes turbines, while redundancies in process industries will be substantial, one person said.
The announcement, which will probably come in early November, could be the largest reorganization since Chief Executive Officer Joe Kaeser initiated 4,500 job cuts in May 2015. Since Kaeser was appointed CEO in 2013, over 15,000 retrenchments have been announced.
Power and gas, Siemens’ largest division, has about 48,700 employees and accounts for 20% of revenue. The business, once one of the company’s biggest drivers for earnings on big contracts like a power plant in Egypt, has slumped recently due to a lack of major follow-up orders. Process industries and drives, which accounted for just over 10% of sales, also supplies other company units.
Bloomberg News first reported significant job reductions were planned for the power-and-gas division in August, and that a historical Berlin site would be particularly affected. Manager Magazin reported on Thursday that 11 of 23 power-and-gas sites could be shut or sold off, including one in the east German city of Erfurt.
In June this year, Siemens laid the foundation stone of a new plant that would expand its gas and steam turbine blade plant in Budapest. The state-of-the-art technology investment in the Power and Gas unit is to absorb 10 billion forints (EUR 32.5 million). Siemens is to add 2,500 square metres to the current production area and construct a new 10,000-sqm production hall, creating 150 new jobs for technicians.
“Both Germany and Siemens are Hungary’s strategic partners, and the German company employs 3,000 people in Hungary," Péter Szijjártó, Hungary’s Minister of Foreign Affairs and Trade, said at the groundbreaking ceremony in June. It seems that Hungary might just be one of the winners of the job cuts Siemens plans in Germany.
There could be thousands of positions cut in the power and gas business, which makes turbines, while redundancies in process industries will be substantial, one person said.
The announcement, which will probably come in early November, could be the largest reorganization since Chief Executive Officer Joe Kaeser initiated 4,500 job cuts in May 2015. Since Kaeser was appointed CEO in 2013, over 15,000 retrenchments have been announced.
Power and gas, Siemens’ largest division, has about 48,700 employees and accounts for 20% of revenue. The business, once one of the company’s biggest drivers for earnings on big contracts like a power plant in Egypt, has slumped recently due to a lack of major follow-up orders. Process industries and drives, which accounted for just over 10% of sales, also supplies other company units.
Bloomberg News first reported significant job reductions were planned for the power-and-gas division in August, and that a historical Berlin site would be particularly affected. Manager Magazin reported on Thursday that 11 of 23 power-and-gas sites could be shut or sold off, including one in the east German city of Erfurt.
In June this year, Siemens laid the foundation stone of a new plant that would expand its gas and steam turbine blade plant in Budapest. The state-of-the-art technology investment in the Power and Gas unit is to absorb 10 billion forints (EUR 32.5 million). Siemens is to add 2,500 square metres to the current production area and construct a new 10,000-sqm production hall, creating 150 new jobs for technicians.
“Both Germany and Siemens are Hungary’s strategic partners, and the German company employs 3,000 people in Hungary," Péter Szijjártó, Hungary’s Minister of Foreign Affairs and Trade, said at the groundbreaking ceremony in June. It seems that Hungary might just be one of the winners of the job cuts Siemens plans in Germany.
