Company that makes home appliances - Miele lays off 1300 employees in Germany.
Home appliance maker Miele plans to slice around 1,300 jobs in Germany from its current 11,700 workforce. The company disclosed this news on Friday in Gütersloh, along with the unveiling of their newly-negotiated collective bargaining agreement with the IG Metall union. The contract dates from August 2024 until December 2028 and boasts 500 million euros in investments. To shrink staff, severance packages and early retirement opportunities will be offered. Despite this, layoffs for operational reasons aren't anticipated until the end of 2027. If the job reduction falls short, layoffs could still occur.
Miele has been going through tough times lately. Pandemic-prompted home improvement frenzy caused surging sales in 2020, with people looking to upgrade their homes, perhaps with a new kitchen. Post-pandemic, however, sales tanked, dropping to $5.7 billion in 2023 (from $5.9 billion in 2022). The global company employs approximately 22,700 people.
The company's management saw this shift as more than just a temporary setback; they viewed it as a "durable change in the factors” they had to deal with. They'd already announced the staff reductions in February, and later discussed them with worker representatives. Initially, this was about 2,000 jobs worldwide, but now it's reduced to 1,300 in Germany.
Most of the job eliminations will affect Gütersloh, where Miele's HQ and a manufacturing facility are situated. Up to 700 positions devoted to washing machine production in Gütersloh will leave for a Polish plant. These washers would be built in Germany and then disassembled before being reassembled in Poland. Remaining 600 positions will be axed company-wide, from sales and production to administrative roles.
IG Metall union assessed the negotiated outcome after arduous contract discussions as "light and shade." Their representative couldn't sway Miele into scrapping the downsizing and relocation plans, noting, "The job cuts are 'very bitter' for affected workers." However, the generous severance pay strongly benefits employees in lower wage groups, boosting the union's morale. Labor councilor Birgit Bäumker considered the 500 million euros investment a promising sign for Miele's German locations.
Rebecca Steinhage, Miele's HR chief, felt confident: "We're establishing excellent conditions for achieving the shared goal of executing necessary changes without layoffs due to operational reasons." Steinhage deemed the signed regulations an "illustration of social partnership during a tough time." The bargaining agreement is yet to be finalized as IG Metall members vote on the outcome in the near future.
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Read also:
- Despite the challenging pandemic time, Miele, a company based in Gütersloh, Germany, known for manufacturing consumer goods like home appliances, announced the layoff of 1,300 employees from its current workforce of 11,700.
- In the heart of North Rhine-Westphalia, where Miele's headquarters and a mechanical engineering facility are situated, the upcoming collective bargaining agreement with the IG Metall union will secure 500 million euros in investments from August 2024 to December 2028.
- As part of the restructuring plan, the German metal industry giant will offer severance packages and early retirement opportunities to reduce its workforce by 1,300 employees, with operational layoffs not anticipated until the end of 2027.
- Under the proposed contract with IG Metall, Miele's product lines, including mechanical engineering and metal-based consumer goods like washing machines, will maintain their strong presence in Germany, with some positions potentially shifting to Poland for cost efficiency.
- As a responsible employer, Miele is striving to minimize layoffs and emphasizes the importance of social partnership throughout the pandemic, ensuring fair treatment to its employees in Germany and its international workforce.
