Siemens Gamesa Changes CEO, Announces Job Cuts as Part of New Focus
Siemens Energy announced an overhaul of its struggling wind power division on May 8, unveiling plans for a new CEO for its wind turbine business and also saying job cuts would be included in the plan.
The news came on a day when the company raised its revenue outlook and also said it needed to cut costs within the Siemens Gamesa group, which has been dogged by problems that led to a €4.6 billion ($4.9 billion) loss in 2023, triggered by the suspension of sales for two wind turbine models. The company on Wednesday said it would resume sales of the 4.X and 5.X turbine platforms, which were halted after the discovery of engineering defects.
Siemens Energy raised its full-year financial projections after saying the company had a fourfold increase in quarterly operating profit. Siemens Energy spun off from Siemens in 2020. Siemens Energy still owns about 25% of Siemens Gamesa, which has operated since 2017.
New CEO
Current board member Vinod Philip will become the new CEO of Siemens Gamesa, replacing Jochen Eickholt, who held the position since March 2022. Siemens Energy chief executive Christian Bruch said Eickholt was not to blame for some of the problems at Gamesa, while saying the wind business required a “generational change.”
Said Bruch: “The turnaround of our wind business is still our focus. To this end, we are taking steps to reduce complexity and create a more focused business.” The plan will include an unspecified number of job cuts, along with reductions in manufacturing capacity.
Philip, who has led logistics, purchasing, and IT at Siemens Energy, joined the company’s board in 2022. He has held various roles at Siemens in his more than 20 years with the company.
Streamline Operations
Burch said that Siemens Gamesa will look to streamline its operations. The group previously had said it needed to cut costs by at least €400 million ($430 million) within the division. Bruch said the restructuring is a first step toward those cost savings, and added “We will not defend each and every market.”
Reports have said the problems with the 4.X and 5.X wind turbine platforms centered on some of the equipment’s rotor blades and main bearings, including wrinkles in rotor blades and the discovery of particles in the bearings section.
Siemens Energy on Wednesday reported that its solid quarterly revenues were mostly the result of a strong performance from its Grid Technologies and Transformation of Industry divisions. The company said that thanks to strong demand for power grid equipment, it was raising its outlook for sales, operating profit, and free cash flow for this year, and now expects revenues will grow by 10% to 12%.
Bruch said the company expects the Gamesa division will perform well in the second half of the company’s financial year. The company has said it will focus its onshore wind development ventures in the U.S. and Europe, and also will continue to support offshore wind projects.
—Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).