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Siemens to cut 2,700 jobs at energy unit due for listing

An employee stands near dead tank circuit breakers inside Siemens AG switchgear electronic power unit factory in Berlin, Germany, on Thursday, Sept. 13, 2018.
An employee stands near dead tank circuit breakers inside Siemens AG switchgear electronic power unit factory in Berlin, Germany, on Thursday, Sept. 13, 2018.

Siemens AG said it will cut 2,700 jobs at its power and gas division, part of a sweeping overhaul announced last month to spin off the embattled business.

The reductions, representing about 4% of the unit’s workforce, will take place over several years, mainly at engineering, procurement and construction projects, as well as power transmission products, Siemens said Tuesday. About 1,400 of the lost positions will be in Germany. The decision comes on top of 10,000 job cuts at other businesses announced in May.

“The planned measures will help us create more opportunity for growth and the security that comes from being a competitive player in the energy market,” Lisa Davis, head of Gas and Power, said in a statement.

Back in May, investors cheered Siemens’ plans to carve out the sprawling power assets, representing the deepest cut to the core of the manufacturing conglomerate that has shed and built up several major assets over the decades. Once spun off, the gas turbine business will include Siemens’ 59% stake in its wind power company Siemens Gamesa Renewable Energy. A share sale is planned by September next year.

The division, making large gas turbines and other oilfield equipment, already announced 6,000 job cuts in 2017 as renewable energy disrupts the sector. Siemens Chief Executive Officer Joe Kaeser doesn’t expect the global gas turbine market to recover in the medium-term. Changes in demand have reduced sales of turbines to about 110 a year, compared with global manufacturing capacity of 400.

The decision to reduce jobs “lacked imagination,” the IG Metall union said in a statement, calling for investments in qualification of employees.

Siemens rose 2.3% to 105.80 at the close of trading, after an intraday high of 106.14 euros. The stock has gained 8.7% this year.

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