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Siemens on Thursday said it will cut 6,900 jobs as the large German industrial company responds to “unprecedented” change in the power generation market.
The company unveiled the plans as part of a “consolidation” that will affect three power-related divisions, and aims to “increase capacity utilisation at production facilities, drive efficiency and enhance expertise by bundling resources.”
“The power generation industry is experiencing disruption of unprecedented scope and speed,” said Lisa Davis, member of the managing board of Siemens.
Siemens’ decision comes after General Electric, the US industrial conglomerate, unveiled its own restructuring plan this week after a disastrous 2017. Both companies are facing slowing demand for equipment meant for generating power using fossil fuels at a time when renewable energy becomes more economically viable.
“Global demand for large gas turbines (generating more than 100 megawatts) has fallen drastically and is expected to level out at around 110 turbines a year,” Siemens said in a press release. “By contrast, the technical manufacturing capacity of all producers worldwide is estimated at around 400 turbines.”
Roughly half of the job cuts will be made in Germany. The reduction to headcount will take place over “several years”.
Ms Davis added: “The cuts are necessary to ensure that our expertise in power-plant technology, generators and large electrical motors stays competitive over the long term.”