Siemens AG CEO Joe Kaeser (here addressing the company’s annual general meeting) is working to decentralize management of the group’s multiple subsidiary businesses.

Siemens Planning to Reorganize, Decentralize

June 22, 2018
Industrial giant seeks to focus on digitalization, making business units more flexible, adaptable

Add Siemens AG to the list of industrial conglomerates preparing for fundamental restructuring, according to a published report citing sources with knowledge of a plan to consolidate several Siemens divisions. In brief, the plan is to redraw the group’s five industrial divisions to three businesses. According to the report, Siemens CEO Joe Kaeser is seeking to decentralize the organization, making the existing operating units more flexible for their respective customers and adaptable to new industrial market opportunities.

Similar restructuring initiatives, with similar objectives, are underway at General Electric Corp. and Rolls-Royce Plc, each of which competes with Siemens in selected industrial markets.

It’s not known exactly which of Siemens’ five industrial divisions — Digital Factory, Energy Management, Power and Gas, Power Generation Services, and Process Industries and Drives — will be conserved or subsumed. However, according to the report, the Digital Factory business (which customizes hardware and software packages for industrial customers seeking data integration, from product development to manufacturing, product support and service, etc.) will coordinate the activities of some other industrial divisions.

The reorganization plan, referred to as “Vision 2020+”, will be announced in August and the changes are due to take place on October 1.

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