Workforce Growth

Siemens' Untold Story of Expansion

  • Why it matters

    Why it matters

    Siemens job reductions have been highly publicized, but while the company is downsizing some units, others are growing bigger.

  • Facts

    Facts

    • Globally, the company’s number of employees worldwide increased from 348,000 to 351,000 during the last fiscal year.
    • Its German workforce declined slightly to 113,400.
    • According to Handelsblatt information, its core business in power and gas saw a decline from more than 50,000 to slightly less than 49,000 employees due mainly to excess capacity in the gas turbines market.
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    Audio

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Jahreswechsel
Siemens workers protest job cuts. Source: DPA

Another year goes by, another announcement of more job cuts from German engineering heavyweight Siemens in one of its technology divisions.

In 2016, it was the Process Industries and Drives Division (P&D) that was downsized. Because of homegrown problems and the impact of the low oil prices, the company announced the elimination of 2,500 jobs around the world last spring. In Germany, 1,700 positions were ultimately affected, somewhat fewer than originally planned.

However, upon closer scrutiny, Siemens’ figures turn out to be more positive than one might expect. Globally, the company’s number of employees increased from 348,000 to 351,000 during the last fiscal year. Its German workforce declined slightly to 113,400.

Chief Executive Joe Kaeser complains that the public is only interested in hearing about cuts. “We add far more than we lose. But unfortunately, I most often read on the front page, ‘Siemens Eliminates 2,500 Jobs,’” he said at a press conference where he presented the annual figures. The company hired 31,500 people during the last fiscal year; 4,600 of which were in Germany. Most of the new hires were due to fluctuation – positions that became free were filled.

According to information obtained by Handelsblatt, employees in its wind power division rose.

In a few divisions, Siemens actually increased its employment numbers. The company doesn’t publish all workforce figures, but according to information obtained by Handelsblatt, its wind power division grew from 12,800 to 14,500 positions. The digital factory division also increased from 43,500 to 45,000. In medical technology, a similar story: The Healthineers, where an IPO is planned, had a good 46,000 employees at the end of the fiscal year. The previous figure was nearly 45,000.

However Siemens did not generate new jobs in all areas. According to information obtained by Handelsblatt, its core enterprise in power and gas saw a decline from more than 50,000 to slightly fewer than 49,000 employees due mainly to excess capacity in the gas turbines market. P&D experienced a decline from around 46,000 to 45,000 positions. This drop reflects only a small part of the cost-cutting measures announced last spring. The lion’s share of eliminated jobs will go in the coming years – in a socially responsible manner, the company promises.

All in all, employment continues to grow at Siemens. Mr. Kaeser announced that around 25,000 new workers will be hired in the next three years, including some 3,000 in Germany due to fluctuation. Next year a new wind power factory begins operations in Cuxhaven and will employ 1,000 people. “Name me a single competitor that is building a big factory in Germany – a single one,” said Mr. Kaeser.

Expansion does not help everybody losing their jobs. Siemens tries to fill new positions internally, but an engine or transformer specialist can’t simply switch over to wind turbine production, for example.

Job cuts at P&D hit small German towns such as Ruhstorf and Bad Neustadt the hardest. That is why the IG Metall trade union considers Siemens’ overall growth a modest success. “Job cuts are painful and dissatisfying from the workers’ point of view,” criticized the head of IG Metall in Bavaria, Jürgen Wechsler.

 

Axel Höpner is the head of Handelsblatt’s Munich office. To contact the author: hoepner@handelsblatt.com

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