Comment by jansan
11 days ago
Siemens Energy (which meanwhile is completely separated from Siemens) did a massive cleanup of their management overhead two or three years ago. They cut several layers and a lot of managers got downgraded or let go. Looking at their stock performance it seems they did the right thing.
I really hope that other German enterprises will use this as an example.
How is stock performance any indication of a company having too many managers.
It isn't. Stock price just measures investor confidence. Sometimes firing managers leads to more investor confidence. Most of the time it's a crapshoot but it's the best objective indicator we have for comparison.
It can also be a measure of other market factors. In the case of Siemens Energy the high demand for electricity generation capacity from AI certainly plays a role.
It means their financials improved
As I was following Siemens Energy in these years, I remember them getting a huge bailout, or you can call it help or whatever, at one point and from there on the stock price started going up.
It was a government guarantee in November 2023, which was never used, but allowed them to borrow money from banks for new projects. Demand was never a problem, but they were on the brink of collapse due to hidden quality problems at their subsidiary Gamesa. Somehow they seem to have solved this.