German appliance manufacturer Miele Group has announced cost-cutting measures as part of a 'worldwide efficiency programme' that mean around 2,700 jobs will potentially be cut or affected by relocation.
Following 3 years of growth, the group says that it is now 'feeling the impact of a worldwide slump in demand for domestic appliances and drastic cost-side price increases', and as a result needs to make savings of 500million Euros by 2026. The company cites Covid, the war in Ukraine, and the cooldown in the markets particularly affecting the premium sector as reasons for a drop in preliminary turnover by around 9%. It adds: 'There are no indications of market recovery in sight any time soon. At the same time, high inflation is resulting in significantly higher costs in procurement, for example for materials and energy, but also regarding wage tariffs'.
'What we are currently experiencing is not just a blip in the economic cycle but rather a sustainable shift in the framework conditions which are relevant to us and to which we must adjust', the executive board of the Miele Group announced to its 23,000 employees in an internal address. 'These are grave measures, and we are fully aware that this will hit many colleagues hard.'
The company said that the areas that will be affected by staff cutbacks, and to what extent, has not yet been decided as details are to be further fleshed out over the coming months and will be the subject of negotiations. It stressed that the cutbacks are 'unavoidable' – 'Only this way will it be possible to put Miele back on track towards a successful future – as a strong and independent family company with a clear focus on premium and with the necessary earning power in all areas,' it added.
