Siemens Energy Trims Wind Unit, Signals Leadership Shuffle and Outlook Hike

Siemens Energy AG is implementing measures to address the performance issues within its wind turbine division, particularly its subsidiary Gamesa. After four consecutive years of losses, the company is set to reduce production and implement job cuts as part of a restructuring strategy aimed at restoring profitability, focusing on European and U.S. markets. These efforts include a leadership change, with Vinod Philip slated to take over from Jochen Eickholt as CEO of the Spanish wind power division. The move to replace Eickholt, who has led Gamesa since March 2022, marks the fourth CEO change since 2017.

The job cuts are mainly concentrated in the onshore sector, where Gamesa's challenges have been exacerbated by high costs and technical issues with a new generation of turbines. Siemens Energy has signaled its intent to achieve double-digit returns and is reducing both job positions and output in the Gamesa unit as part of this objective. The company employs approximately 26,000 people, and the restructuring is a critical component of its broader effort to improve financial stability.

Alongside the operational changes within its wind turbine business, Siemens Energy reported earnings that met analyst expectations for the fiscal second quarter and subsequently raised its guidance for the upcoming year, primarily due to the performance of its energy grid business. The company's onshore wind enterprise is expected to concentrate its activities in Europe and the United States, with the resumption of sales of its 4.X onshore turbine in Europe projected by the end of September. The group also announced a significant increase in its second-quarter profit before special items, rising to 170 million euros.