German manufacturing giant Miele has announced it is laying off thousands of jobs in Germany and relocating positions to Poland due to the deteriorating financial climate in Europe’s powerhouse economy.
The household and commercial appliances maker informed employees at several production sites across Germany on Tuesday that up to 2,000 jobs are to be cut as part of tough austerity measures in a company restructuring — as many as 700 other positions could also be moved to neighboring Poland.
“The Miele Group has also felt the effects of the global collapse in demand for household appliances and the drastic price increases on the cost side,” the company explained in a statement issued on Tuesday. It added the move to cut up to 10 percent of its workforce in Germany was “inevitable.”
“What we are currently experiencing is not a temporary dip in the economy, but rather a lasting change in the framework conditions relevant to us that we have to adapt to,” the company added.
It cited higher inflation as a factor affecting procurement of materials and energy, and said the restructuring was part of a wider business plan to save €500 million in expenditure by 2026.
Specifically, jobs related to the production of washing machines will be cut at the company’s headquarters in Gütersloh and be re-created at the Miele factory in the central Polish town of Ksawerów.
The German manufacturing giant expects the relocation to be fully completed by 2027 when almost all of its household washing machines will be produced in Poland.
Despite reporting record sales of €5.42 billion in 2022, rising expenditure and factors such as the conflict in Ukraine and an end to the boom experienced after the pandemic have led to a significant market slowdown, with Miele’s preliminary sales falling by around 9 percent last year.