Miele restructures business and cuts jobs

Miele has announced its latest business changes as part of its future plans.

The German appliance manufacturer will “bundle” its operating business into eight individual units and it is introducing a more powerful format for worldwide sales and a new location for digital marketing and sales.

This realignment in the fields of administration and sales with a view to greater growth, is coming at the cost of around 1,070 jobs worldwide by the end of 2021; nearly 240 jobs could be shed in Germany at the company’s central headquarters and around 830 jobs may be affected outside Germany.

These changes across the entire Miele Group, which are set to save €190 million – also through reductions in material costs, are part of its Design2Excellence (D2E) programme, which was launched a year ago.

Also included in this programme is the ‘New Growth Factory’ business unit, which was specifically created to identify new fields of business, and the Group’s new Digital Hub Marketing & Sales is to be set up in Amsterdam, where digital marketing, e-commerce and digital analytics are to be merged into a new unit.

Elsewhere under D2E, around 470 jobs will be created to strengthen Miele’s digital expertise, to exploit new business fields and at further new locations to provide cross-border support.

“The objective is to expand the company’s leading market position in the premium segment for domestic appliances and commercial machines whilst at the same time sustainably securing the economic standing of the entire Miele Group,” the company said in a statement.

“The Executive Board is fully aware of the huge impact of these cuts on the employees concerned. Consequently, every effort will be made to arrive at responsible and socially acceptable solutions which reflect the values of the company. The next phase will include detailed negotiations with Works Councils, which will commence immediately.”

The manufacturer said there is an “urgent need for action” and that the increasingly price-aggressive behaviour of Asian corporations is a contributory factor.

“Account must be taken of far-reaching changes in the marketplace and in consumers’ habits,” the statement said. “Furthermore, economic prospects in important markets are greatly subdued. This situation is triggered by familiar geopolitical conflicts and risks to which no end is in sight.”

At the same time, Miele reported around €4.16 billion turnover in its 2018/19 financial year; this corresponds to growth of more than 30 per cent. The first quarter of the current business year also points to further growth.

The company also spoke about its Laundry Care 2025 programme and preparations for the future relationship between the Gütersloh washing machine plant (GTG) and the new production plant in the Polish town of Ksawerów. Through this, around 650 jobs are to be shed before the end of 2025.

According to the two Executive Directors and Co-Proprietors, Dr. Markus Miele and Dr. Reinhard Zinkann, “implementing the proposed changes will be a tour de force, which will only be possible with the support and the backing of the workforce”.

“But such effort will be worthwhile ‘as we are all making an essential contribution to sustainably securing Miele’s standing as the sound, strong and independent family-owned company it is today.”