Siemens AG has completed a company reorganization to respond to the “persistently difficult environment” in the global power generation market.
The global technology company, which had around 357,000 employees in 2014, said it would cut 4,500 jobs worldwide as part of efforts to streamline administrative functions. Siemens announced 7,800 jobs cuts earlier this year.
Along with steps to restructure chronically low-profit businesses, the company also specifically took steps to boost profitability at its power and gas division’s power generation business.
The global power generation market was facing several hurdles, the company said. “The Power and Gas Division is having to cope, among other things, with regulatory changes, massive price erosion, aggressive competitors and regional overcapacities.”
In a second-quarter earnings call, company officials described a 4% year-on-year increase in orders for its power and gas business—but a 6% dip in revenue. It also reported a 27% decline in orders for wind power and renewables, attributed to a “sharply lower offshore order volume.”
Efforts to boost profits will include investing more in research and development and ramping up commercial-scale production of a new 2-MW onshore wind turbine.
—Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)