Wind power: Siemens Gamesa will lay off nearly 11% of its workforce

The news seemed inevitable for a few weeks: Siemens Gamesa announced on Thursday the loss of 2,900 jobs worldwide, or nearly 11% of its workforce. The German-Spanish specialist in wind turbines, in difficulty, will mainly lay off in Denmark (800 jobs concerned), in Spain (475 employees) and in Germany (300).

The details of this plan and the possible impact on other countries will be known following negotiations with the unions, which are due to start next week as part of a strategic plan called “Mistral”. Other layoffs cannot be ruled out. For the moment, no information has been given on French activities – Siemens Gamesa started this year the commissioning of its manufacturing site in Le Havre.

The CEO of the company Jochen Eickholt, who arrived at the beginning of the year, had however promised in March, during the shareholders’ meeting, not to close a factory and not to lay off. But it was overtaken by operational reality and by pressure from the markets and its shareholders. “It is never easy to make such a decision, but it was time to take decisive and necessary action to turn the company around,” he said in a statement.

Production issues

Over the first nine months of the year, Siemens Gamesa accumulated 1.2 billion euros in losses, for a turnover of 6.4 billion, which comes on top of 1.5 billion euros in net loss over the past two years.

Siemens Gamesa is facing soaring costs, particularly in raw materials such as steel, and increased competition from low-cost players, particularly from China. It has also experienced serious problems in the production of its new terrestrial model, the 5.X, which it hopes to fix by the end of the year.

Finally, in an interview with “Echos”, his boss demanded in July a profound change in the rules. “One of the reasons we are struggling is the size of the wind market. The market is too small, he argued. There are several reasons for this. For example, the building permit process takes too long. For offshore wind projects, the time required to obtain permits sometimes stretches up to seven years. »

Back to Siemens

Increasingly, Siemens Gamesa, resulting from the merger in 2017 of the Spanish Gamesa and the wind energy division of Siemens, is focusing its development strategy on offshore wind turbines, whose potential is considered superior.

Siemens Energy, the parent company of Siemens Gamesa, which already owns two-thirds of its capital, announced in May its intention to buy out the balance, in order to simplify the shareholding structure and take the company out of trading. It will have to pay more than 4 billion euros for this. An operation financed in part by the recent sale of other assets in wind power, in Spain, France, Greece and Italy, to the British SSE Renewables (for more than 600 million). The difficulties of the wind subsidiary weighed on the results of Siemens Energy and Siemens, which still holds a 35% stake in the latter. The German group recorded a net loss of 1.5 billion euros over the first nine months of the year, of which 2.7 billion are attributable to Siemens Energy.