"Our new structure as Operating Company Gas and Power creates synergies that will enable our businesses to operate even more competitively in the structural change in our industry," said Lisa Davis, member of the Siemens Managing Board and CEO Gas and Power (GP). "The planned measures will help us to create more growth opportunities. They will also enable us to increase our competitiveness in the energy market and better secure our business."

At the 'Capital Market Day' on May 8, 2019, Siemens announced that further savings of EUR 500 million are required at GP in addition to the current savings program in order to significantly improve cost efficiency against the backdrop of the challenging market environment. The new structure as Operating Company GP enables these additional savings: EUR 200 million is to be saved through synergies and capacity adjustments. A further EUR 100 million will result from a new positioning in the regions. 200 million is to be achieved through savings in the support functions.

Net increase of 10,000 employees

The plans that the industrial group has now presented envisage a reduction of around 2,700 jobs worldwide over the next few years. Around 1,400 of these jobs will be in Germany. Siemens will now begin consultations with the relevant employee representatives as soon as possible and implement the planned measures in as socially responsible a manner as possible. This includes programs for requalification in the course of the structural change in the industry. At the 'Capital Market Day', Siemens also emphasized that the growth-oriented strategy concept 'Vision 2020+' will also be reflected in employee development. Taking into account all adjustments, including the newly planned measures at GP, the company expects a net increase of around 10,000 employees.

Reaction to the downturn in major projects

The focus of the reconciliation of interests with the employee representatives in 2018 was on the power plant business (Power Generation). The new measures primarily address the project business and the business with products and systems in electricity transmission. According to the Group, measures are required in the project business in order to reduce costs and counter the downward trend in the number of major projects. The business must be enabled to operate more selectively in the market and find the right balance between volume and margin. In the business with products for electricity transmission, the markets for transformers and switching technology are suffering from overcapacity. This requires measures to optimize cost structures and capacities at all locations in order to maintain their competitiveness. In addition, bundling and optimization within the Operating Company GP has reduced the need for some support functions, according to Siemens.