Miele announces job cuts after slump in demand

Miele Group has said it is feeling the impact of a worldwide slump in demand for domestic appliances and drastic cost-side price increases. A substantial reduction in personnel costs is unavoidable, meaning 2,700 jobs could be cut worldwide or be affected by relocation. The process will be conducted as socially compatibly as possible.

The cuts are part of a comprehensive program of counter measures to further improve structures, processes and costs. The Executive Board today announced to the workforce that additional financial room to manoeuvre in the order of € 500 m is to be freed up by 2026. By more than two-thirds, this will be achieved through improvements in turnover or through reductions in material and associated costs.

After three years of strong turnover growth in succession, the entire domestic appliance branch recorded a decline in business across the globe in 2023. Along with the end of the extraordinary economic cycle as a result of Covid, it is also the economic consequences of the war in Ukraine which have impacted the situation. And, unlike in earlier economic cooldowns in the markets, this is particularly noticeable in the premium segment.

Against this backdrop, the preliminary turnover of the Miele Group dropped by around 9%; in terms of unit sales, the decline year-on-year was around double this percentage. 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 today to employees in an internal address.

That is why prompt and decisive action will be taken in order to come out of this challenging situation with renewed strength. The framework for this is provided by a companywide cost and efficiency initiative under the title ‘Miele Performance Program’ which addresses the structures, processes and costs in all areas. With the aim of sustainably securing economic viability, additional financial room to manoeuvre in the order of € 500 m is to be created by 2026, whereby more than two-thirds of this will come from improvements in turnover and a reduction in material and associated costs.

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