Due to sluggish demand and growing competition in its home market and China, German industrial giant Siemens said on Tuesday that it would lay off nearly 6,000 workers globally.
About 2% of Siemens’ global staff will be laid off, primarily in the company’s factory automation division, with a few jobs lost in the electric vehicle charging division.
“Muted demand primarily in the key markets of China and Germany coupled with increased competitive pressures have considerably reduced orders and revenue in the industrial automation business,” said the group in a statement.
The “aim is to strengthen the future competitiveness of the businesses affected and enable investments in growth markets,” it said.
Siemens, a multinational corporation that produces everything from manufacturing equipment and trains to data center management systems, has been having difficulties due to slowdowns in China and Europe’s largest economy, which has been in a recession for the past two years.
By 2027, the automation industry—which provides industries with industrial software, robotics, and other machinery—will have destroyed 5,600 jobs, with around half of those positions occurring in Germany.
Siemens’ quarterly operating profit dropped to €2.5 billion from €2.7 billion at the end of the previous year due to issues in the automation unit.
By the end of the current fiscal year, the group intends to reduce the number of employees in its vehicle charging division from 1,300 to 450 worldwide.
Siemens stated that it would concentrate on areas such as fast-charging infrastructure due to the “limited growth potential for low-power charging stations.”
A decline in the demand for electric vehicles has presented significant challenges for German automakers and their suppliers.
Siemens will try to find new positions within the company for some of the workers impacted by the layoffs in Germany. People retiring will also result in the loss of some jobs.
About 86,000 of Siemens’ 313,000 employees were based in Germany as of the end of the previous year.
