Amidst the decline of conventional illuminants like incandescent bulbs and fluorescent tubes, the lighting manufacturer Osram announced plans to cut 7,800 jobs worldwide, or 22% of its global workforce of 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 firm reported 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 of Germany. The company said its production locations in Berlin and Augsburg will be hit particularly hard, according to news reports. The large remainder of the eliminations will be distributed across the company's international locations. Osram maintains operations in the US, 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 extent in administration and sales.
During the last quarter, Osram achieved sales of Ä1.2 billion ($1.6 billion), of which solid-state lighting products accounted for 39%. The earnings before tax, capital costs and amortization (EBITA) was 9.5% of the sales; SSL products made a disproportionately high contribution to this figure, the company said. Driven by the strong demand for LED products, Osram's LED lamps and 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. Osram 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.
-- Christoph Hammerschmidt, EE Times Europe
This article was originally published on EE Times Europe.