MUNICH (Reuters) - Siemens said on Monday weakness in the power generation market is forcing it to temporarily shut down its Power & Gas (PG) sites around the world.
Large gas turbines are increasingly unloved as the world shifts to renewable energy, which is weighing on Siemens’ earnings and prompting the group to restructure the PG business.
In November, Siemens said it would cut 6,900 jobs, mainly at the PG division, which once thrived on supplying turbines for electricity generation. Excluding its services business, the PG division has around 30,000 employees worldwide, of which 12,000 are based in Germany.
“The shutdowns are part of a comprehensive package of measures, which also includes issues such as travel costs, sponsoring, participation in trade fairs and investments,” Siemens said in a statement on Monday.
Siemens said it aimed to temporarily shut down all of its PG sites after the Pentecost holiday later in May, depending on local regulation. It did not say how long each site would be closed for.
In Siemens’ fiscal first quarter through end-December, the division’s profit nearly halved and its profit margin shrank from 12 percent to 7.6 percent, well below the target range of 11 to 15 percent.
Analysts on average expect this to have accelerated in the second quarter, with the division’s profit seen down 62 percent from the year-earlier period, according to a Reuters poll.
Siemens is due to publish second-quarter results on Wednesday.
Reporting by Alexander Huebner; Writing by Maria Sheahan; Editing by Victoria Bryan and Alexander Smith