November 17, 2017 Read More →

Electricity-Generation ‘Disruption of Unprecedented Scope’ Drives Siemens to Follow GE in Restructuring Power Equipment Business; 6,900 Job Cuts

Wall Street Journal:

German electrical engineering giant Siemens AG on Thursday became the latest corporate behemoth to bow before sweeping changes to the way electricity is made the world over, as it unveiled a restructuring plan to tackle overcapacity in its core businesses.

The German conglomerate said it would cut 6,900 jobs world-wide, or 2% of its total workforce. The cuts affect three of its oldest units that provide clients that range from electrical utilities to commodities companies to the oil-and-gas industry with gigantic turbines, industrial motors and other heavy equipment.

The restructuring at Siemens comes just days after rival General Electric Co. admitted misjudging demand in its own core power businesses and announced it would halve its dividend and launch a sweeping restructuring. GE is cutting thousands of jobs, and its new chief executive, John Flannery, said 2018 would be a “reset year.”

Siemens, like GE, has been caught unprepared for governments’ and companies’ shift away from large, fossil fuel-powered plants to renewables, which make electricity in a decentralized way and without the need to move massive amounts of steam through one of Siemens’s mighty turbines.

Meanwhile, gas-powered plants haven’t picked up the slack from embattled coal and nuclear businesses as quickly as both Siemens and GE had anticipated.

“The power-generation industry is experiencing disruption of unprecedented scope and speed,” Lisa Davis, a prominent American board member at Siemens with special oversight of the power-and-gas division, said in a statement Thursday. A full 6,100 of the job cuts, or 13% of the 46,800 workforce at the unit, will address overcapacity in the company’s manufacturing of turbines for power plants, a Siemens spokesperson said.

More ($): Germany’s Siemens to Slash 6,900 Jobs Amid Shift to Renewable Energy

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