Dark clouds over lighting business: Osram announces massive job cuts
July 30, 2014 // Christoph Hammerschmidt
Amidst the decline of conventional illuminants like incandescent bulbs and fluorescent tubes, lighting manufacturer Osram announced to cut 7.800 jobs worldwide, some 22% of its global workforce of currently about 35.000 employees.
The former Siemens subsidiary announced the job cuts during the presentation of the third quarter figures of its business year. Though the report states significant growth in the solid state lighting segment, the demand for these LED-based illuminants did not climb fast enough to compensate for the 14% decline in the conventional lighting business. Another negative factor is the increasing price pressure in the market.
About 1.700 positions will be eliminated in Osram’s home country Germany. The company’s production locations in Berlin and Augsburg will be hit particularly hard, Osram said according to media reports. The large remainder of the eliminations will be distributed across the company’s international locations. Osram maintains operations in the U.S. where its subsidiary Sylvania is headquartered as well as in Canada and Mexico. The jobs will be reduced mostly in production activities and to some extend in administration and sales organisation.
During the last quarter, Osram achieved sales of €1.2 billion, of which solid-state lighting products accounted for 39%. The earnings before tax, capital costs and amortisation (EBITA) was 9.5% of the sales; SSL products were contributing disproportionately high to this figure, the company said. Driven by the strong demand for LED products, Osram’s LED Lamps & Systems segment performed extraordinarily well with a sales increase of 68% over the same quarter last year.
Despite the job cuts, the company provided a positive outlook; CEO Wolfgang Dehen acknowledged the sales targets for the entire year. It also reiterated the product roadmap; the Lightify app-based intelligent home and office lighting control system will appear on the market during the upcoming fall.
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