Siemens plans up to 5,000 job cuts amid ongoing challenges in factory automation

Siemens, the German tech giant, may reduce its workforce by up to 5,000 positions in its factory automation division, according to recent statements from CEO Roland Busch. The company has been grappling with challenges in its digital industries sector, which saw a significant 46% decline in profits.

Busch reportedly acknowledged that job cuts are sometimes necessary when business results fall short of expectations, pointing to the company's recent struggles as a catalyst for re-engineering efforts. While the exact number of job reductions has not been confirmed, his comments suggest that Siemens is preparing for strategic adjustments to address the current situation.

The company’s Q4 FY 2024 earnings report revealed the negative impact of global geopolitical and macroeconomic instability. Despite these challenges, Siemens reported a solid performance in its Profit Industrial Business, generating €3.1 billion in revenue with a profit margin of 15.5%.

Busch highlighted that the year had been defined by persistent geopolitical tensions and economic uncertainties, exacerbated by events such as the upcoming US elections and ongoing political developments in Germany. These factors are expected to continue influencing the company’s operations in the near future.

Looking ahead, Siemens forecasts modest macroeconomic growth for the coming year, with risks including trade tensions, overcapacity, and declining consumer demand, which could continue to affect the manufacturing sector. Despite these headwinds, Siemens remains committed to long-term growth, with a focus on automation opportunities driven by demographic shifts and the relatively low mechanization levels in small and medium-sized enterprises.