Osram has unveiled plans for nearly 8,000 more job losses. The announcement comes as the German lighting giant's Push programme, which launched in 2012, comes to a close.
"We will successfully complete the first stage of Osram Push shortly," said Osram CEO Wolfgang Dehen. "However, we have always stressed that the transformation of the lighting market will also continue after 2014 and that it will require additional capacity adjustment."
This will be the company's second major savings drive, in a bid to cope with the market's move away from traditional lighting products in favour of LED. This programme will run until 2017 and will see around 1,700 domestic and 6,100 international jobs affected. These cuts are on top of the original programme, which has seen over 8,000 people lose their jobs alongside the closure of 11 manufacturing sites.
The reshuffle is expected to cost the company in the region of €450 million, and lead to permanent savings of around €260 million.?
"We always said that the decline of the market for traditional general lighting will continue," Dehen told journalists during a conference on Wednesday. "That means that we will take measures even beyond what we announced."
This will include the planned closures of factories outside of Germany.
"Many other players have already said that the traditional general illumination business is facing a strong decline," commented Philipp Grontzki, Osram's business and financial spokesperson. "That means that for a company like us, we have to think about what to do with our production capacity. The traditional market won't really recover at any point; it's being replaced by LED."
Osram has witnessed double-digit percentage declines in its traditional general illumination segment. "LED demand is coming faster than we anticipated," he said.
While the company's traditional lighting business is struggling, the company is seeing strong margins in its speciality lighting and semiconductor businesses.
"With regards to the general illumination business, this is a business that we need to restructure further in order to keep it profitable," concludes Grontzki. "But we're not just the restructuring general illumination story. We're also the speciality lighting story – we are number one in the world for automotive lighting – and the really good chip-making unit story."
Osram opened an LED assembly plant in Wuxi, China earlier this year. The 100,000m2 factory will employ around 2,100 people by 2017 and could output up to several billion LEDs each year.
