Siemens, the German tech giant, is considering cutting up to 5,000 jobs globally in its factory automation division due to ongoing challenges, as reported by Reuters. CEO Roland Busch revealed the potential layoffs on Thursday, explaining that re-engineering efforts are sometimes necessary when developments do not meet expectations, following a 46% profit decline in the company’s flagship digital industries division.
Although a final number for the job cuts has not been determined, Busch indicated the need for strategic adjustments in response to these financial struggles. Siemens’ Q4 FY 2024 results reflected the pressures of global geopolitical and macroeconomic challenges.
Despite these hurdles, Siemens performed strongly in its Profit Industrial Business, reporting a €3.1 billion profit with a margin of 15.5%. Busch highlighted that the company had navigated continued geopolitical and macroeconomic uncertainties, pointing to challenges like the US elections and the political situation in Germany, which could persist.
Siemens is forecasting only modest macroeconomic growth in the upcoming year, with risks such as trade conflicts, overcapacity, and declining consumer demand remaining significant threats to the manufacturing sector. Nonetheless, Busch emphasized Siemens’ focus on long-term growth, particularly in automation, driven by factors like declining populations and low mechanization levels in small and medium-sized enterprises. The company, with 70,000 employees in its digital industries division, aims to overcome these challenges by capitalizing on strong infrastructure markets, especially in electrification and mobility.
