Posted on October 3, 2022
Siemens Gamesa intends to lay off 2,900 employees after revealing that inflation and supply chain issues are affecting its bottom line. Rising costs for energy, raw materials and transport are cutting into margins, while shortages of components, port congestion and supply delays are impacting production.
Three days after the world’s largest offshore wind turbine maker called for EU governments and regulators to provide the wind industry with “simple safeguards” to enable it deliver energy security and timely energy transition, the company announced it was cutting jobs across its global operations.
The layoffs will affect 2,900 employees globally. Denmark will take the biggest hit with 800 job losses followed by Spain with 475, Germany 300 and the United Kingdom another 50. The company said that further reductions are planned in other countries across the world, with details for all affected countries being worked out in negotiations with workers’ councils.
The move to cut its global head count by about 10 percent is the next step in the implementation of the company’s new operating model. Under what the firm calls its “Mistral” strategy, it will reorient towards a simplified, leaner structure.
“It is never easy to make such a decision, but now is the time to take decisive and necessary actions to turn the company around and ensure a sustainable future. We need to build a stronger and more competitive Siemens Gamesa to secure our position as a key player in the green energy transition,” said Jochen Eickholt, Siemens Gamesa CEO.
The company posted a 12 percent decline in revenues to $6.2 billion for the first nine months of the year, and it attributed the reduced performance to volatile market dynamics. Siemens Gamesa is also grappling with internal challenges, including a difficult ramp-up for its 5.X onshore platform and higher costs, driven mainly by component failures and repairs in legacy onshore platforms.
However, the company believes that it is well positioned to unlock renewables’ growth potential. It has a record backlog of $33.2 billion, up four percent, and an order intake of $3.4 billion in the third quarter of fiscal year 2022.
Siemens Gamesa has warned that Europe needs to do more at a policy level to support the wind sector. Unless EU governments treat the wind turbine supply chain as a strategic industry, “the energy transition here in Europe will become unattainable and Europe will lose its position as a global leader in the wind industry,” Siemens Gamesa’s CEO Jochen Eickholt cautioned in a statement last week.