During the pandemic, Miele was one of the winners, with demand for kitchen appliances and washing machines skyrocketing. Those days are over, and the company has now cut costs.
The household appliance manufacturer Miele wants to cut around one in nine jobs in Germany. Of the current 11,700 jobs, around 1,300 are to be eliminated, the company announced on Friday in Gütersloh, while also announcing an agreement on a new collective agreement with the IG Metall union. The future and social collective agreement runs from the beginning of August 2024 to the end of December 2028 and provides for investments of 500 million euros. In order to reduce staff, there will be severance payments and early retirement schemes, among other things. Redundancies for operational reasons are “basically” excluded until the end of 2027. However, there is a back door: if the job cuts fall short of expectations, employees can still be dismissed.
Miele is going through a difficult phase. During the Corona period, business boomed. People spent a lot of time at home and wanted to spruce up their own four walls – for example with a new kitchen. After the end of the pandemic, demand weakened, and in 2023 sales fell to just under five billion euros (2022: 5.4 billion euros). Around 22,700 people work for the company worldwide.
Management did not see the development as a temporary dip, but rather as a “sustainable change in the framework conditions relevant to us” to which it had to respond. The company had already published its job cut plans in February and subsequently started talks with employee representatives. At the time, 2,000 jobs were being cut worldwide; the new figure for Germany is now 1,300.
The majority of the job cuts will affect Gütersloh, where the company has its headquarters and a production site. Up to 700 jobs will be relocated from the washing machine production there to a Polish plant – in other words, they will be cut in Germany and created in Poland. The other 600 jobs will be cut across all German sites, in sales as well as in production and administration.
IG Metall speaks of “light and shadow”
IG Metall viewed the outcome of the negotiations after the lengthy wage negotiations as “both light and shade”. It was not possible to dissuade Miele from its fundamental downsizing and relocation plans, explained IG Metall’s chief negotiator, Patrick Loos. The job cuts were “very bitter” for those affected. “But with the generous severance payments, which have a social component that particularly benefits the lower pay groups, we really got something out of it.” Works council member Birgit Bäumker viewed the investment of 500 million euros as a good signal for the Miele locations in Germany.
Rebecca Steinhage, Miele’s managing director responsible for human resources, was confident: “We are creating very good conditions for the common goal of being able to implement the necessary changes without having to terminate employees for operational reasons.” The regulations that have been made are a “good example of social partnership in action in a challenging time for everyone involved.” The collective agreement is not yet finalized – the IG Metall members are to decide next week whether to accept the negotiation result.
Source: Stern
