Siemens Gamesa is to cut 6,000 of its 27,000-strong workforce as part of a restructuring plan “to consolidate its position as a market leader”, the company said on Monday. Since Siemens took full control earlier this year, the wind company’s shares have fallen 46 per cent.
Share price collapse: Siemens Gamesa Renewable Energy CA (GAM)
The world’s second-largest maker of wind turbines announced the job cuts as it released disappointing earnings and a 2018 outlook that was below forecasts.
“The guidance for next year is 14 per cent lower than the street had expected,” said Gurpreet Gujral, analyst at Macquarie, referring to operating profits.
Gamesa, the Spanish wind and renewable energy group acquired by Siemens this year, projected 2018 revenues of between €9bn and €9.6bn — about €1bn lower than the median consensus — while operating margins were targeted at between 7 per cent and 8 per cent, a modest projection relative to forecasts of 7.9 per cent.
Mr Gujral said the projections implied an underlying operating profit next year of €698m, well below forecasts of €814m.
The second half of the year, including the six months since April when Siemens completed its takeover, was hampered by a downturn in India and an inventory impairment in the US and South Africa. Sales in the six months declined 12 per cent, while underlying operating profit fell 63 per cent to €192m.
Management problems at Gamesa emerged in April when Ignacio Martín, chief executive, abruptly indicated he would not be staying on once the deal was complete. Siemens’ embarrassment over its inability to retain senior management was exacerbated by two profit warnings this year.