German industrial conglomerate Siemens on Monday said it would shut down its power and gas sites worldwide for a week as it grapples with an "unprecedented downswing" in the market for electricity generating equipment. The drastic move comes as global demand for Siemens' huge gas turbines has plummeted in the face of competition from renewable energy, prompting the company to embark on a cost-cutting drive and announce nearly 7,000 job cuts last year.
"Against the background of an ongoing unprecedented downswing in the market for power generation equipment, the power and gas division (PG) has announced temporary shutdowns," Siemens said in a statement. The shutdowns would affect "all PG locations worldwide within the current quarter" and last for a week, a spokesman said.
Siemens added that the move was part of wider efforts to slash costs at the beleaguered division, which employs some 47,000 people worldwide and accounts for 18 percent of Siemens' revenues. That includes "the reduction of travel expenses, as well as the costs for sponsoring or participation in trade shows and capital investments," it said.
Siemens chief executive Joe Kaeser in January said he was convinced there would continue to be a global market for gas turbines, but that it would be smaller and the focus would no longer be in Europe.
German unions are furious about Siemens' planned jobs cull given the company's robust overall financial health, but management insists the layoffs are necessary to respond to the changing energy landscape.
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