Gigaset Group today terminated a general agreement with the employee representatives to cut 279 jobs at the Munich and Bocholt locations. The reductions are to be made in a responsible manner by setting up a transfer company. Rapid conclusion of the agreement means that the personnel reductions start considerably earlier than expected. Because of further reductions in non-personnel and service costs the cost-cutting target of at least €30 million a year can be achieved with fewer job losses than originally announced.
“Today we are concluding the first part of Gigaset AG’s restructuring and entering the second phase. We will now turn our focus more toward Gigaset’s future growth,” says Charles Fränkl, Chief Executive Officer of Gigaset AG.
Job reductions through a transfer company
Under the general agreement, which was set in place after just eight weeks of negotiations, 207 jobs are to be eliminated at Bocholt and 72 at Munich, 66 less than originally planned. The cuts will be achieved through offers to move to a transfer company, early retirement, attrition and expiry of temporary contracts. To this end, the company and the IG Metall trade union have concluded a new special collective bargaining agreement that will run until the end of 2015. Under this agreement, 965 jobs will be guaranteed. The employees to be made redundant are to move to a transfer company, where they will be given assistance in finding new employment. The transfer company will exist for a term of twelve months. Further 30 positions are planned to be reduced outside of Germany still. The cost-cutting and efficiency program was necessitated after Gigaset suffered a decline in earnings in the first half of 2012 due to the euro crisis and the strong US dollar.
New organizational structure strengthens competitiveness
The employee representatives also agreed to the company’s organizational restructuring. Gigaset will create three Business Units: Consumer Products (its core business), Business Customers and Home Networks (smart home solutions). All of the new units will operate with a strong entrepreneurial mindset and thus have the freedom they require to be successful in their respective markets. As a result, the company’s competitiveness should be strengthened and future growth enabled. As of next year, the three Business Units will also be part of a planned new Product Center in Düsseldorf, where they will benefit from their proximity to the Bocholt production site. 34 jobs shall be created there. Gigaset hopes to boost efficiency by optimizing its geographical setup in this way.
The restructuring that has now been finalized is expected to entail non-recurring costs of around €20 million, for which Gigaset will immediately set up a provision, but in conjunction with cutting additional non-personnel and service costs the company will also generate annual savings totaling at least €30 million. Including restructuring costs, Gigaset expects a slightly negative EBITDA in this fiscal year. After adjustment for this one-off effect, the company anticipates a positive EBITDA, although it has already announced that this will be well below that of the previous year.
The company has set itself the target of achieving revenue of €500 to 560 million and an EBITDA margin of around ten to 13 percent in 2015 thanks to its improved setup and the new Business Units.
Gigaset AG, Munich, is a interantionally operating company in the area of communications technology. The Company is Europe's market leader in DECT telephones. The premium supplier ranks second worldwide with around 1,700 employees and a market presence in more than 70 countries.
Gigaset AG is listed on the Prime Standard of Deutsche Börse and thus is subject to the highest requirements for transparency. Its shares are traded on the Frankfurt Stock Exchange under the symbol 'GGS' (ISIN: DE0005156004).
Tel.: +49 (0)89 444456-600
Tel.: +49 (0)89 444456-937