Siemens Energy, which supplies turbines to the power sector, said on Tuesday it will cut 7,800 jobs, or 8.5% of its workforce, by 2025 to raise margins and competitiveness.
“The energy market is significantly changing which offers us opportunities but at the same time (it) presents us with great challenges,” Chief Executive Officer Christian Bruch said.
“We will undertake these measures in the most socially responsible way possible.”
Most of the cuts will be implemented by 2023, Siemens Energy said, adding that they will incur estimated restructuring costs in a mid- to high-triple-digit million euro range for the fiscal years 2020 to 2023.
Cost cuts also helped Siemens Energy, spun off from Siemens AG last year, swing to a net profit of 99 million euros ($119.53 million) in the first quarter of its fiscal year, compared with a loss of 195 million a year ago.
By slashing costs, Siemens Energy, which owns 67% in Siemens Gamesa, hopes to reach its 2023 profit target, which foresees a margin on adjusted earnings before interest, tax and amortisation of 6.5%-8.5%.
Reporting by Christoph Steitz; editing by Thomas Seythal and Uttaresh.V