Siemens is to spin off its power and gas division and bundle a majority stake of its renewables business to create a listed “pure play” energy business by September 2020.
The company announced the plan alongside cost cutting measures. It will cut 10,000 jobs, but said it will add 20,000 jobs in growth areas, a net increase of 10,000 positions by 2023.
The company did not say geographically where the cuts would fall. It aims to make cost savings of €2.2bn by 2023 while increasing investment and headcount in its smart infrastructure and digital industries businesses.
CEO Joe Kaeser said the energy spinoff, in which Siemens will hold a stake below 50 per cent, will create “an enterprise that encompasses the entire scope of the energy market”.
Kaeser said the new energy company will provide both thermal and renewables and have a better view of transmissions grid requirements.
“We see an increasing demand for power, that is the key message,” he told a press conference covering its quarterly results.
“If everyone in Germany was to [switch] to electric vehicles, that would not be possible today. We do not have the power – renewables, coal or gas … we have major shortcomings … which is quite remarkable considering all the investment in the energy transformation.”
Kaeser continued: “The new company will be able to cover both [thermal and renewables] and propose the ideal energy mix to customers, not just focus on the things in our portfolio. That is compelling for customers and investors.”
In a press statement, Lisa Davis, CEO of Siemens Gas and Power, said forming a separate listed entity would give the firm greater agility in the face of changing markets, as well as financial autonomy.
See the press statement here.
Listen to the press conference here.
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