Wind OEM Siemens Gamesa unveiled plans to cut 600 further jobs to protect profitability in a “tough market”, but said it is well placed to benefit from the sector’s strong long-term outlook after record commercial activity last year.
Siemens Gamesa said the staff reductions, affecting white collar workers, will help it stay competitive following a “transitional year” in 2020 for the industry, which is still experiencing the impact of “adverse factors” such as ongoing price pressures, rising costs and regulatory uncertainty in some key markets.
The OEM will begin talks with employee representatives today “with a view to reaching agreement over the coming weeks”, it said, in a move designed to help protect profitability.
The job reductions will be spread across a number of markets, including Germany, Spain, Denmark, the US and UK.
The manufacturer had already in September announced 600 job losses in Denmark as it discontinued some legacy turbine production. CEO Markus Tacke said while those reductions were the result of shifting global demand patterns, and would be offset by growth in production elsewhere, the latest cuts are “structural” adjustments geared to help keep the company in competitive shape for the future.
The announcement came as Siemens Gamesa unveiled full-year financial results for the 12 months ending September and expectations for the current year.
The Spanish-German group said last year saw record commercial activity, with onshore order intake up 5% to 9.4GW and offshore up 11% to thanks largely to Taiwan, which delivered 1.5GW. The company ended its financial year with a record order book of €25.5bn, 12% up.
On the service front, Tacke said the acquisition of some Senvion assets could be a “game changer” for the company.
The company grew revenues 12% to €10.23bn last year, but Ebit margins fell slightly to 7.1%. Net profit doubled to €140m, and the group met its financial guidance.
In its outlook for 2020, Siemens Gamesa said revenue should come in between €10.2bn-10.6bn, with Ebit margin between 5.5-7.1%. But the company expects to hit margins of 8-10% from 2022.
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