We predicted almost a year ago that if the slump in the oil and gas industry continued, restructuring, changing focus, and diversification would be necessary to regain/maintain the fiscal health of our industry. Oil and gas shows no indication of a rebound any time soon, and Siemens is adapting and reorganizing; pulling resources away from the oil and gas and metals and mining sectors to focus instead on becoming a “digital industrial company.”
With this transition, Siemens announced in a press release dated March 9 that twenty-five hundred industrial division jobs will be slashed, approximately two thousand of which are in Germany (primarily Bavaria), but five hundred additional positions worldwide will be cut as well. “Plunging demand in raw materials markets has led to a significant intensification of competition, particularly in Asia,” said Juergen Brandes, CEO of Siemens’ Process Industries and Drives Division. “To guarantee our competitiveness, we’ve got to adapt to these conditions.”
Siemens pledged to make 25,000 new hires worldwide “in each of the coming years” for its other divisions as it dedicates itself to becoming a digital industrial company. The press release indicates that with an increase of more than €1 billion in investment in research and development, productivity and global sales, Siemens will keep the number of new hires at a continuously high level in the years ahead. In particular, the company expects to add at least 25,000 new employees worldwide each year for the next several years – around 3,000 of them in Germany.
This scenario reminds me of a scene in a Star Trek movie, The Wrath of Khan, where Spock gives his life to save the Enterprise. As he dies from radiation poisoning after saving the ship, he comments, “The need of the many outweighs the need of the few.” That comment is certainly apt here. Siemens employs over 300,000 world-wide. To keep the company healthy, some sacrifices are inevitable. Just as Spock lost his life to ensure that the Enterprise survived, in the short term some Siemens employees will loose their jobs to ensure that Siemens survives. We must accept that this is necessary for our industry as a whole to “ Live long and prosper!”