Overview of Job Cuts
Siemens, the German multinational technology conglomerate, has announced plans to reduce its global workforce by more than 6,000 jobs by 2027. This decision follows a downturn in demand for products from its industrial automation and electric vehicle (EV) charging segments.
Impact on Industrial Automation Division
The industrial automation division, part of Siemens Digital Industries, will bear the brunt of the cuts, with approximately 5,600 positions being eliminated. This represents 8% of its total workforce of 68,000 employees. Around half of the job reductions will be in Germany, where Siemens has its headquarters.
Declining Demand and Competitive Pressures
The industrial automation sector, which is a major supplier of robotics and industrial software to factories, has faced significant challenges. Siemens cited a drop in demand from critical markets, particularly China and Germany. The company also acknowledged increased competitive pressures that have contributed to a decline in orders and revenue within the sector.
Job Cuts in EV Charging Business
In addition to the job cuts in industrial automation, Siemens also announced the elimination of 450 jobs in its electric vehicle charging business. The company explained that the limited growth potential for low-power charging stations was the primary reason behind these reductions. Siemens intends to shift its focus toward the development of fast-charging infrastructure, which it views as a more promising area for growth.
Financial Struggles and Profit Decline
This decision follows Siemens’ financial struggles, which were highlighted by a 46% slump in profits across its digital industries division. Despite once being the company's most profitable segment, industrial automation has faced considerable difficulties in recent years.
Criticism of the Job Cuts
Juergen Kerner, vice-chairman of IG Metall and a member of Siemens’ supervisory board, criticized the job cuts, arguing that transformation should not be driven by downsizing. He emphasized that transformation should be achieved through positive change, further development, and employee training to adapt to new technologies.
Siemens’ Shift Toward New Technologies
Siemens, which has over 300,000 employees globally, has been undergoing a shift in focus from traditional industries to newer, more technology-driven areas. While the company aims to streamline its operations to align with these shifts, the job reductions have raised concerns about the human impact of such transformations.