Gigaset AG today defined in more detail the program it announced on August 8, 2012, aimed at increasing efficiency and cutting costs by at least €30 million a year, and presented it to employees and employee representatives. The program comprises several measures to help Gigaset safeguard its competitiveness in the current difficult market climate. The company plans an organizational setup with three entrepreneurial Business Units. The efficiency program envisages not only cutting non-personnel and service costs, but also reducing the total workforce from almost 1,700 to around 1,350. The job cuts should be implemented responsibly. Initial effects from the cost-cutting and efficiency program are already expected in 2013.
The efficiency program and planned reorganization are Gigaset’s response to the rapidly changing market conditions and the resultant decline in earnings in its core business of cordless phones. The market has come under strong pressure not least due to the continuing crisis in the euro area and increasing consumer restraint as a result. The company is also feeling the effects of the euro’s continuing weakness, which is pushing up the costs of purchasing materials.
Reorganization strengthens core business and benefits growth segments
By creating three Business Units, Gigaset intends to improve its competitiveness especially in its core business of consumer products (cordless phones). In addition, greater resources are to be invested in the new growth segments of enterprise customers and home networking. All new Business Units will largely operate independently and in an entrepreneurial manner, thus having the freedom they need to be successful in their respective markets. As of next year, the three Business Units are also to be part of a new Product Center in Düsseldorf, where they will benefit from being near to the Bocholt production site. Gigaset hopes to boost efficiency by optimizing its geographical positioning.
“The new structure gives Gigaset the latitude it needs to adapt costs in its core business more flexibly to its sales performance and also invest in the growth topics of enterprise customers and home networking,” is how Charles Fränkl, CEO of Gigaset AG, explains the reorganization. The company plans to create about 50 jobs in the new Product Center. Employees who are affected by the planned restructuring but are interested in subsequently working at the new Product Center should be given the opportunity to transfer.
Cost cutting is vital to sustainable competitiveness
As part of the cost-cutting and efficiency program, around 75 jobs are to be eliminated at the Munich site and around 270 at the Bocholt plant. Around 30 positions are to be cut abroad. The company aims to reduce non-personnel costs by cutting advertising, transportation and office costs, hence making a contribution of 30 percent to the savings target of at least €30 million a year. “Our priority is to reorganize Gigaset in such a way that we improve our competitive edge. We know that staff cutbacks are painful for those who may be affected, but you can be sure that we will tackle this difficult process with respect and a strong sense of responsibility,” says Fränkl.
In international business, the current six sales regions are to be merged into three. “Reducing complexity and, above all, focusing on profitable regions will put us in an even stronger position in international business,” says Chief Sales Officer Maik Brockmann.
Gigaset AG, Munich, is a worldwide operating company in the telecommunication and accessories sector. The company is a leading global producer of cordless phones and Europe’s market leader in DECT phones. Internationally, the premium provider with 1,700 employees is represented in more than 70 countries and is ranked in third place in its sector.
The Gigaset AG shares are traded in the TecDAX (Prime Standard) of the Frankfurt Stock Exchange. Symbol: ISIN: DE0005156004.
You can find more information in the Internet at www.gigaset.ag
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