Miele has announced it may have to cut or relocate nearly 12% of its total workforce as it looks to reduce costs amid the current economic crisis.
The potential job losses – nearly 2,700 – were forecast as part of a long-term strategy launched to improve the company’s structures, processes and costs. According to Miele, the strategy will help the company free up to €500 million (£426m) by 2026.
Although Miele said that more than two-thirds of this sum will be achieved through improvements in turnover or reducing material costs, the company confirmed that a reduction in its staff is regretfully “unavoidable”.
According to Miele’s executive board, the majority of staff reductions are likely to occur in what it calls “indirect areas”, such as those who aren’t on production lines or involved in operating machinery.
Miele has stressed that it has yet to decide which areas will actually be affected, and that further details will likely be decided upon over the coming months. Miele is estimated to have a global staff of around 23,000 so if the reduction of staff is to go ahead as forecast, it would represent a loss of almost 12% of its global workforce.
Explaining its motivations, Miele said the new strategy was prompted by the global downturn in the domestic appliance market. It has attributed this downturn largely to the post-Covid market slowing and the economic consequences of the war in Ukraine.
As a result, Miele says its preliminary turnover dropped by around 9%, and it also experienced a decline on unit sales at a rate of almost 20%.
Miele’s executive board commented: “These are grave measures, and we are fully aware that this will hit many colleagues hard.”
“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. Miele would not be Miele if the pending transformation were not to be conducted as socially compatibly as possible and in close collaboration with employee representatives.”
kbbreview has reached out to Miele UK about this situation, which said it does not have any further information to share at this time.
Just two years ago in March 2022, Miele reported that 2021 was its best sales year in its 123-year history.