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Siemens Gamesa To Axe 6,000 Employees Amidst Restructuring & Weak Earnings

Siemens Gamesa Renewable Energy announced on Monday that it plans to cut 6,000 jobs amidst its continuing restructuring program and weak fourth-quarter earnings, with revenues falling 12% year-over-year. 

Siemens Gamesa Renewable Energy announced on Monday that it plans to cut 6,000 jobs amidst its continuing restructuring program and weak fourth-quarter earnings, with revenues falling 12% year-over-year.

Siemens Gamesa Renewable EnergyThis is the second quarter for Siemens Gamesa as a fully-merged company, but the company’s fourth-quarter of its financial year, which runs from October to September. In the company’s fourth quarter, which runs from April to September, revenues fell by 12% on the same quarter a year earlier due primarily to the temporary suspension of the Indian wind market — which similarly hit the company’s third-quarter hard as well. Nevertheless, order intake for the fourth quarter increased by 40% to 3 GW (gigawatts) thanks to an intensification of commercial activity. This is the best quarterly onshore order intake since the beginning of 2015 when it reached 2.2 GW (though, whether that refers only to Gamesa or to both companies in their previous forms is unsure).

 

Revenues for the fourth quarter were €5,022 million, down 12.3% year-over-year, with an underlying EBIT (Earnings Before Interest & Tax) of €192 million, down 63% year-over-year. For the company’s fiscal year 2017, revenue increased by 5% to €10,964 million, while underlying EBIT was €774 million, down 18%, with an EBIT margin of 7%.

Looking forward, Siemens Gamesa is hanging part of its hopes on the Indian Government’s plan for 3 GW in central auctions next March, and that the wind industry will fully recover in 2019.

“Our financial performance is still not at the level we’re all aiming for,” explained Markus Tacke, CEO of Siemens Gamesa. “But it’s clear that we are making positive progress as we carry out our plan to make this company an industry leader. Our integration efforts are proceeding ahead of schedule, and I’m confident that the decisions we’re making will allow us to better respond to changing market conditions, and to better serve our customers and other stakeholders.”

The other big news which the company pushed out on Monday was the news that, as part of its ongoing restructuring program in the wake of the company’s merger, it will be cutting a maximum of 6,000 employees located across 24 countries — of which 700 job cuts have already been announced. According to Siemens Gamesa, “This plan, which will be implemented in the coming months, is a necessary step to strengthen the group and consolidate its position as a market leader.”

Looking into 2018, Siemens Gamesa is expecting revenue in the range of €9,000 to 9,600 million and underlying EBIT margin of 7-8%.

 
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