Siemens confident for coming year, but job cuts loom

GERMAN industrial behemoth Siemens reported a leap in profits in its 2016/17 financial year, meeting its own forecasts even as headwinds for its energy units threaten to spark mass layoffs. Net profits at the group, whose products range from wind turbines to trains to medical equipment, grew to 6.0 billion euros ($7 billion), up 11 percent compared with the previous year. The group’s fossil and renewable energy divisions struggled, while its smaller activities like transport and factory automation powered growth. Operating, or underlying profit grew 12 percent year-on-year, to 8.3 billion euros, while revenues added 4.3 percent to top 83 billion euros. Chief executive Joe Kaeser praised the “excellent results” in a statement, but warned that “we have to tackle structural issues in some individual businesses” in the coming year. Kaeser took the reins in 2013, hoping to refocus sprawling Siemens as he sold off activities including domestic appliances, telecom networks, solar energy and lightbulbs. The group will not be spared “painful cuts” in 2017/18, the boss predicted. Siemens’ present difficulties focus on its power and gas division, the largest in the conglomerate. The unit, which employs 30,000 people worldwide making the turbines and generators at the heart of fossilfuel plants, saw lower profits as prices fell and fewer new orders rolled in. German weekly Manager Magazin reported that the Munich-based group could sell off or shutter up to 11 of the power and gas division’s 23 sites.