Household appliance manufacturer Miele is planning to cut around one in nine jobs in Germany, resulting in the elimination of approximately 1,300 out of the current 11,700 positions. The company made this announcement in Gütersloh on Friday, along with the introduction of a new collective agreement with the IG Metall union. The new agreement will be in effect from August 2024 to December 2028 and includes investments of 500 million euros.
To reduce staff numbers, Miele will offer severance payments and early retirement schemes, among other measures. While redundancies are generally excluded until the end of 2027, there is a provision that allows for dismissals if the job cuts do not meet expectations. The company has faced challenges following the end of the pandemic, with a decline in sales to just under five billion euros in 2023 from 5.4 billion euros in 2022. Miele employs around 22,700 people globally.
The majority of job cuts will occur in Gütersloh, where up to 700 positions in washing machine production will be relocated to a plant in Poland. An additional 600 jobs will be cut across all German sites, including sales, production, and administration. IG Metall expressed mixed feelings about the outcome of the negotiations, acknowledging the difficult decisions made by Miele while emphasizing the benefits of the agreed-upon severance packages for affected employees.
Miele’s managing director for human resources, Rebecca Steinhage, expressed confidence in the company’s ability to implement necessary changes without resorting to redundancies. She highlighted the collaborative nature of the negotiations and the commitment to ensuring a smooth transition for all involved parties. The finalization of the collective agreement is pending approval by IG Metall members, who are scheduled to vote on the negotiation results in the coming week.