“Transformation Is Not Achieved Through Downsizing” – German Union Slams Layoffs
Engineering Giant Blames Weak Demand in Germany and China for Job Cuts
🔹 Siemens Announces Major Workforce Reduction
ZURICH, March 19 (Reuters): Siemens has announced the layoff of 5,600 employees from its Digital Industries division, citing sluggish demand in Germany and China. The move, which affects over 8% of the division’s global workforce, marks one of the biggest job cuts in the German industrial sector in recent years.
🔹 2,600 layoffs will take place in Germany, despite Siemens reaffirming its commitment to the country as a key business hub.
🔹 Siemens will also cut 450 jobs in its electric vehicle (EV) charging business, affecting one-third of its workforce in that division.
These job reductions follow similar announcements from Volkswagen’s Audi (7,500 job cuts), Volkswagen’s broader cost-cutting program (35,000 job reductions), and Porsche (3,900 job cuts).
🔹 Why Is Siemens Cutting Jobs?
Siemens’ Digital Industries division, once a high-margin leader in factory automation and software, has struggled with declining demand. The company cited two years of slow growth in China and Germany, coupled with rising competitive pressures.
📉 Key Factors Behind the Decision:
✔️ Weak market conditions in China & Germany
✔️ Declining revenues in industrial automation
✔️ Increased competition in the sector
Siemens’ latest quarterly report revealed that profit in the Digital Industries division had fallen by one-third, indicating persistent challenges.
🔹 Siemens Responds: “We Must Be Faster & More Agile”
Cedrik Neike, a member of Siemens’ managing board, defended the job cuts, stating that the company needs to realign its business strategy.
🗣️ “We need to become more regionally balanced and gain a broader customer base. We must grow in markets like India and the U.S., and expand in sectors such as aerospace, defense, and the process industry,” he told Handelsblatt.
Despite these cuts, Siemens is aiming for growth in emerging markets, particularly in India and the United States.
🔹 German Union IG Metall Condemns Decision
📢 Trade union IG Metall has criticized Siemens’ move, calling it a betrayal of employees who have worked to transform the company into a tech-driven business.
🗣️ Juergen Kerner, Vice Chairman of IG Metall, stated:
“Transformation is not achieved through downsizing, but through positive change, above all by further development and training.”
🔹 What’s Next?
🔍 Key Developments to Watch:
✔️ Impact on Siemens’ global operations
✔️ Response from German government and trade unions
✔️ Potential ripple effects on Germany’s economy and industrial sector
With German industry facing widespread cutbacks, Siemens’ layoffs could signal further economic turbulence for Europe’s largest economy.