Germany-based conglomerate Siemens AG has announced Vision 2020, a new strategy to streamline and restructure the company's operations. As of Oct. 1, the organization will bundle its business into nine divisions instead of the current 16 and focus more on growth fields in electrification, automation and digitalization.
The company says bundling the divisions will reduce bureaucracy, cut costs and accelerate decision-making. Vision 2020, which is expected to increase productivity by some EUR 1 billion a year, is to be fully effective by the end of fiscal 2016.
As part of its broader focus on electrification, Siemens has created a new Wind Power and Renewables division and named Markus Tacke, currently CEO of wind power, CEO of the new division. In its announcement, Siemens specifically calls offshore wind a "growth field," and the company is aiming for a profit margin between 5% and 8% for the new division beginning in fiscal 2015.
Furthermore, Siemens has named a new managing board team. Lisa Davis, currently an executive vice president at Shell, will be in charge of Siemens' energy divisions beginning Aug. 1. She will take over for Michael Suess, who Siemens says is resigning for personal reasons and by mutual consent.
Other aspects of Siemens' Vision 2020 realignment include a EUR 400 million annual share plan for employees and an upcoming EUR 4 billion share buyback program. The company did not indicate whether any workforce reductions would play a role in its realignment plan.
"Our Vision 2020 addresses our company's long-term perspectives along the modern electrification and automation value chains," says Siemens President and CEO Joe Kaeser. "By expanding share-based employee participation in our company's success, we're creating a sustainable ownership culture at Siemens."