Domestic appliance producer rephrased: A company specializing in producing household appliances. - Miele lays off 1300 workers in Germany.
Appliance manufacturer Miele intends to trim around one-seventh of its workforce in Germany. Out of its current 11,700 positions, roughly 1,300 will be axed, according to the company based in Gütersloh. They have also revealed an updated collective bargaining agreement with the union Verdi that is set to run from August 2024 to December 2028 and will include a hefty investment of 500 million euros.
To carry out the downsizing, Miele plans to implement severance packages and early retirement schemes. Job losses due to operational factors are not on the table until the end of 2027. However, if the number of job cuts fails to meet expectations, they may still be implemented.
Challenging times for Miele
Miele has been grappling with difficulties. During the COVID-19 pandemic, the company saw its sales soar as people spent more time at home and sought to improve their living space. For instance, they purchased new kitchens. Once the pandemic abated, demand dropped, and in 2023, sales slumped to approximately €4.9 billion (€5.4 billion in 2022). Miele employs nearly 22,700 people globally.
Management did not take this dip in sales as a temporary setback but as a "permanent change in our environment," prompting a response. The job reduction plans, initially announced in February, were then discussed with employee representatives. Back then, it was about 2,000 jobs worldwide; now, it's roughly 1,300 in Germany.
The majority of these job cuts will take place in Gütersloh, where the company's headquarters and a production facility are located. Approximately 700 roles in Gütersloh's washing machine production will be shifted to a plant in Poland - these roles will thus be dismantled in Germany and assembled in Poland. A further 600 jobs will be slashed throughout all German sites, encompassing sales, production, and administration.
Verdi sees both bright and dark aspects
Verdi assessed the negotiation outcome following the drawn-out collective bargaining talks as "light and shadow." Verdi's negotiator, Patrick Loos, explained that they couldn't prevent Miele from pursuing its fundamental reduction and relocation plans. The layoffs are "really hard" on the affected workers. "But with the generous severance pay, especially benefiting the lower wage earners, we've achieved something positive." The labor representative Birgit Bäumker viewed the €500 million investment in German Miele sites as a favorable sign.
Miele's personnel manager, Rebecca Steinhage, expressed confidence in the future: "We're creating ideal conditions for implementing any necessary changes without resorting to job cuts." She considered the agreed-upon regulations "a fine example of social partnership in challenging circumstances." The collective bargaining agreement is still subject to finalization, as Verdi's members will decide in the coming week whether to accept the negotiation outcome.
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- The United Services Union has expressed concerns about the job losses at Miele, which is a prominent mechanical engineering company based in Gütersloh, North Rhine-Westphalia, known for producing consumer goods such as domestic appliances.
- Despite Miele's plans to dismantle around 700 roles in Gütersloh, focusing on washing machine production, and further cutting 600 jobs across all German sites, the company has reached an agreement with the United Services Union to invest 500 million euros during its collective bargaining period from August 2024 to December 2028.
- The United Services Union also acknowledged both the challenges and advantages of the agreement with Miele, as the layoffs are substantial but the severance packages, particularly for lower-wage earners, are generous.
- Job losses at Miele in Germany come during a challenging time for the company, as its sales dropped significantly in 2023 after a pandemic-related surge, leading to a need to trim its workforce of 11,700 positions and relocate some production to Poland.
- The United Services Union has stressed the importance of maintaining and strengthening the relationship between the union and Miele, keeping in mind the positive impacts of social partnership in navigating challenging times and ensuring job security and growth, despite the need for dismantling certain roles in the company's workplace.
