Miele Announces Major Job Cuts in Germany and Outsourcing to Poland

Miele, the renowned German manufacturer of high-quality household appliances, is facing significant operational changes due to a downturn in demand and escalating costs. The family-owned company headquartered in Gütersloh has announced a comprehensive restructuring plan that includes the elimination of approximately 2,000 jobs worldwide and the relocation of around 700 positions to other sites, with a significant focus on moving operations to Poland.

Strategic Adjustments Amidst Economic Challenges

In response to the changing economic landscape, exacerbated by the aftermath of the COVID-19 pandemic and the Ukraine conflict, Miele is embarking on a cost-saving and growth initiative aimed at saving around €500 million by 2026. Despite experiencing a surge in sales during the pandemic, with a record-breaking revenue of €5.43 billion in 2022, the company has observed a substantial decline in both revenue and unit sales in the subsequent year. The premium segment, in particular, has been severely impacted, prompting Miele to adjust its strategy to ensure long-term sustainability.

Relocation of Production to Poland

A major component of Miele’s restructuring plan involves shifting the assembly of all household washing machines to its facility in Ksawerów, Poland, by 2027. This move is part of the company’s effort to adapt to “a lasting change in the conditions relevant to us,” as stated by Miele’s management in an internal communication to employees. While the relocation aims to streamline operations and reduce costs, it has sparked criticism from labor representatives and concerns about the impact on the company’s brand promise of prioritizing quality over cost.

Criticism and Concerns

The IG Metall union has voiced strong objections to Miele’s restructuring plans, accusing the company of compromising its commitment to quality and undermining its brand image. Despite the challenging market conditions, the union argues that the company’s exceptional performance in the years leading up to the pandemic should have provided a buffer against such drastic measures. The planned job cuts and production shift have raised questions about the future of Miele’s workforce in Germany and the broader implications for the German manufacturing sector.

Miele’s Commitment to Quality and Innovation

Founded 125 years ago, Miele has long been synonymous with innovation, quality, and durability in the household appliance industry. With approximately 23,000 employees globally, half of whom are based in Germany, the company’s decision to restructure its operations reflects the broader challenges facing the industry, including supply chain disruptions, inflation, and shifting consumer preferences.

A Hope for a Better Future

As Miele navigates through these turbulent times, the focus remains on maintaining its leadership position in the market while adapting to the new economic realities. The company assures that no production sites will be closed and that efforts will be made to minimize the impact on its workforce. However, the details of the restructuring, including the specific areas and extent of job cuts, are still being finalized and will be negotiated with worker representatives in the coming months.

This pivotal moment for Miele underscores the delicate balance between preserving tradition and embracing change, as the company strives to uphold its legacy of excellence in the face of unprecedented challenges.