German appliance maker Miele to cut 1,300 jobs in Germany

German domestic appliance manufacturer Miele plans to cut around one in nine jobs in Germany, the company announced on Friday from its head offices in the north-western city of Gütersloh.

Miele said that around 1,300 of the current 11,700 jobs are to be cut, while also announcing the agreement of a new collective labour agreement with the IG Metall trade union.

The future and social collective agreement will run from the beginning of August 2024 to the end of December 2028 and provides for investments of €500 million ($540 million).

There will be severance payments and early retirement schemes to reduce the workforce, Miele said. Dismissals for operational reasons are “fundamentally” ruled out until the end of 2027. However, there is a loophole: If the job cuts fall short of expectations, redundancies can still be made.

Miele is going through a difficult phase. Business was booming in the coronavirus pandemic era as people spent a lot of time at home and were keen to make home improvements.

After the end of the pandemic, demand weakened and sales fell to just under €5 billion euros in 2023 from €5.4 billion in 2022. Around 22,700 people work for the company worldwide.

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 facility there to a Polish plant. The other 600 jobs are to be cut across the board at all German sites, both in sales and in production and administration.