At its Capital Market Day on May 8, Siemens announced that, against the backdrop of a challenging market environment, GP will – in addition to ongoing programs – require further savings of €500 million in order to significantly improve its cost competitiveness. The additional savings will be enabled by the new setup of the GP Operating Company. Merging and rightsizing the different businesses will save €200 million. A further €100 million will result from the new regional setup. And the remaining €200 million will be achieved by optimizing support functions.
The plans, as they have now been presented, call for reducing approximately 2,700 jobs worldwide over the course of several years. Around 1,400 of these jobs are in Germany. Siemens will now begin consultations with the relevant employee representatives and then implement the planned measures, including requalification programs in the wake of the structural transformation of the industry, in a way that is socially responsible. As Siemens also highlighted at its Capital Market Day, the growth-oriented Vision 2020+ strategy concept will also be reflected in workforce development. Taking into account the efficiency-related workforce adjustments across all areas, including today's adjustments at GP, there will, accordingly, be a net increase of around 10,000 jobs worldwide within the same time period.
Since last years' reconciliation of interests with employee representatives focused on the power generation business (Power and Gas), the new measures primarily address the EPC projects business as well as the power transmission products and systems business. For the EPC projects business, measures are required in order to reduce costs, adjust to the declining numbers of major projects and enable the business to be more selective in the market, finding the right balance between volume and margin. For the power transmission products business, the markets for transformers and switching technology are burdened by excess capacities, requiring measures for optimizing cost structures and capacities at all locations. Doing so will help preserve the competitiveness of these locations. In addition, across the GP Operating Company, bundling and optimization has reduced the need for some of the services provided by support functions.