Siemens Will Fire 10,000 Employees, Stock Price Up By 4.6%; Will Indian Employees Be Impacted?
Siemens AG, Europe’s largest industrial manufacturing company, and world’s one of the largest business conglomerates have announced that they will fire 10,000+ employees in the next few years.
Besides this mass-firing news, Siemens has also announced some big structural changes, which will impact their entire business model.
Investors have welcomed the decision, as the stock prices of the company receoved a boost, and it closed 4.6% higher.
Will Indian employes of Siemens be impacted?
Siemens: 10,000 Employees To Be Fired Under Business Transformation
Under pressure due to fall in profits and less revenue, Siemens CEO Joe Kaeser has announced that the company will fire 10,000+ employees in the next few years, to decrease the costs, and to enable more profits.
The mass-terminations will happen till 2023. Siemens has made plans to save 2.2 billion euros till 2023, and the mass layoffs are part of the exercise.
However, after 2023, Siemens will hire 20,000+ employees across various business verticals, which will make net job loss at 10,000. Siemens has said that the job cuts will managed such that “all measures worldwide are to be implemented in as socially responsible a manner as possible.”
For the first three months of 2019, net profit of Siemens fell to 1.92 billion euros, from 2.02 billion last year, for the same period. However, at the same time, revenues increased by 4% to 200 billion euros.
Will Indian Employees Be Impacted?
Most probably no.
Siemens have 3.6 lakh employees, all over the world, and their Indian subsidiary: Siemens Technology and Services has around 5000 employees.
Job cuts at Siemens will largely impact their oil, gas and power divisons, as they will be spun off into new companies to reduce cost.
Siemens will hold less than 50% share in the new spun off company, while the rest will be sold off.
The reason is that, Siemens has been incurring huge losses in oil, gas and power business, as the attention and focus of global investors are on the renewable energy. General Electric and Japan’s Mitsubishi have also experienced huge losses due to the same reason.
In India, Siemens is mainly focussing on technology and consulting related projects, and have carved a niche in this space. Hence, it is very highly unlikely that Siemens India will have any job cuts due to this business restructuring.
We will keep you updated, as we receive more updates.