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Siemens Energy (OTCMKTS:SMEGF) announced yesterday that it will be cutting 4,100 jobs in its Gamesa wind turbine division, amounting to roughly 15% of its overall workforce. Indeed, Wall Street is abuzz over Siemens layoffs this week as the company adjusts to subdued demand.
“Our current situation demands adjustments that go beyond organizational changes. Wehave to adapt to lower business volumes, reduced activity in non-core markets, and a streamlined portfolio,” division CEO Jochen Eickholt said in an internal letter.
Siemens told Reuters that it will announce the final number of affected roles following “consultations with all stakeholders.” Eickholt is apparently trying to keep the company’s total workforce at a stable level by moving jobs and hiring more employees in other areas of the division. The unit CEO will step down from his role later this summer.
“The leadership team and I are aware that today’s announcement is difficult, especially considering the challenges you’ve been facing over this past year,” said Eickholt. “But I want to underscore that our wind business, including Onshore, has a future.”
What Do Siemens Layoffs Mean for SMEGF Stock?
Siemens is a German multinational tech conglomerate known best for its automation and digitalization processes within various manufacturing industries. The Munich-based company maintains branches related to healthcare services as well as energy, named Siemens Healthineers (OTCMKTS:SMMNY) and Siemens Energy, respectively.
Interestingly, investors didn’t respond particularly bearishly to the layoff announcement. Indeed, SMEGF stock actually climbed 0.65% on the news Tuesday, contributing to the stock’s 115% gains since the start of the year.
SMMNY stock was the real victim on Tuesday, sinking 1.12% on the day. The healthcare unit has enjoyed notably less success in the stock market this year, with shares up only about 1% year-to-date (YTD).
It’s unclear whether this week’s layoff announcement represents a one-time occurrence for Siemens, or the beginning of wider organizational changes for the business.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.
With degrees in economics and journalism, Shrey Dua leverages his ample experience in media and reporting to contribute well-informed articles covering everything from financial regulation and the electric vehicle industry to the housing market and monetary policy. Shrey’s articles have featured in the likes of Morning Brew, Real Clear Markets, the Downline Podcast, and more.
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