Company cites 'muted demand' in key markets of China and Germany, coupled with increased competitive pressures
German technology conglomerate Siemens has announced that it is laying off thousands of employees worldwide, with the majority coming from its Digital Industries business.
In a statement, Siemens announced that it will reduce 5,600 jobs under Digital Industries, including 2,600 jobs in Germany.
The layoffs are equivalent to eight per cent of Siemens' 68,000 employees under the division worldwide. It is expected to be implemented by the end of fiscal 2027.
The company attributed the layoffs to the "changed conditions" in key markets.
"Since the start of fiscal 2023, muted demand primarily in the key markets of China and Germany coupled with increased competitive pressures have considerably reduced orders and revenue in the industrial automation business," it said in a statement.
"Global demand for automation technology is intact over the long term. However, the shift of growth away from current key markets such as Germany has made a structural adjustment of capacities necessary."
The possibility of layoffs at the company's business was first hinted at in November 2024 by chief executive officer Roland Busch.
"Sometimes we have to do some re-engineering because the developments weren't as positive as we expected them to be," Busch said as quoted by Reuters.
Meanwhile, Siemens also announced that it is cutting around 450 jobs under its electric vehicle charging business, which will also impact about 250 roles in Germany.
The cuts are around a third of the company's more than 1,300 employees in the electric vehicle charging business worldwide. The layoffs will be implemented by the end of fiscal 2025.
Siemens said the adjustment comes as they focus on market segments such as fast-charging infrastructure for depots and fleets and for en-route charging.
"In addition, the intention is to establish a more regional approach for markets with sometimes different charging standards to be able to serve the markets faster and in a more targeted manner," it said.
According to Siemens, affected employees will be offered opportunities for reskilling and upskilling.
"Job placement inside the company will also play a key role in implementing the measures," it added.
This is the biggest number of layoffs announced by Siemens since 2017, which saw 2,600 jobs axed in Germany, Reuters reported.
However, the firm maintained that its total headcount in Germany will remain stable due to hiring in other growing areas. It stressed that there are currently more than 7,000 open positions at Siemens, including about 2,000 roles in Germany.
Siemens' layoffs come in the wake of significant job cuts across other organisations in Germany, including Audi, which announced this week that it will reduce its headcount by 7,500 jobs in indirect areas by 2029.
Xavier Ros, Member of the Board of Management for Human Resources, said they are now entering dialogue with employees regarding the reductions.
"We are focusing our team setup and consistently orienting it to the requirements of the future. We are doing this in a socially responsible, targeted, step-by-step manner," Ros said in a statement.
The layoffs at Audi add to the growing number of layoffs under its parent company Volkswagen Group.
Reports of widespread layoffs across major organisations have filled headlines over the past years, as employers navigate economic uncertainty post-pandemic.
The University of Washington Human Resources advised that understanding how the process works will help prepare organisations for layoffs.
"Adequate planning and communication will have a significant effect on the employees being laid off, the remaining staff, and on clients who work with your employees," it said on its website.
It outlined the basic steps that employers need to carry out, including:
Employers may also contact HR consultants, according to the university, as they will review the process that needs to be followed.
Verifitech, an HR services firm, stressed that HR leaders need to understand all the details related to the layoffs in advance.
"They should find answers for and finalise matters like severance pay, healthcare, retirement benefits, employee assistance, and outplacement services," the firm said on LinkedIn. "Be prepared to answer questions and concerns from many employees and be ready with honest answers. Any delay in response can further deteriorate an already sensitive situation."
To organisations carrying out mass layoffs, it offered the following advice:
