Siemens Cut Fossil Fuel Energy Jobs As Renewable Disruption Changes Revenue Models

Industrial giant Siemens is cutting a large number of jobs in its energy business as renewable energy has substantially disrupted its existing oil and gas divisions. Siemens will make the cuts at its Power and Gas division, as well as at its Process Industries and Drives division, which makes large mechanical drives for oil and gas extraction and turbines.

Siemens like other companies is reorienting itself towards green energy which is becoming more important by the day. The energy complex is seeing unprecedented change as technology improvements are upending existing business models.  Siemens has already made a multibillion-dollar company Siemens-Gamesa in the wind turbine business. This has effectively made it one of the top 2 wind turbine suppliers in the world.  Like other industrial conglomerates, Siemens has been restructuring itself in the last few years, as nimbleness becomes more and more important in all businesses today.

Also, read about the Indian Wind Turbine Industry here.

General Electric (GE) another industrial giant similar to Siemens has been reporting poor results as smaller companies with new business models are growing rapidly taking advantage of new trends such as digitization and analytics which are giving rise to new revenue streams. With large centralized power plants seeing very little investments, the turbines and generator businesses in Siemens, GE and others are seeing poor growth. These companies are almost non-existent in the solar industry, though both have substantial wind divisions.

Siemens and GE and others are pivoting themselves to take advantage of new technologies such as IOT and turning themselves more into software companies rather than slow-moving, plodding hardware companies. As data and software become key differentiators, these companies will have to become more agile and quicker in responding to new trends.