Miele is launching a comprehensive efficiency program in response to a global slump in demand for domestic appliances and drastic price increases. 

The ‘Miele Performance Program’ involves a substantial reduction in personnel costs, which will see up to 2,700 jobs affected worldwide – more than 10% of the company’s global headcount of approximately 23,000.

After three consecutive years of strong growth, the domestic appliance division recorded a decline in 2023, particularly noticeable in the premium segment, with the extraordinary Covid economic cycle coming to an end, coupled with economic consequences of the war in Ukraine.

Preliminary turnover dropped approximately 9% and unit sales declined around double this percentage. In addition, high inflation is driving significant cost increases in procurement for materials and energy, as well as wage tariffs.

“What we are currently experiencing is not just a blip in the economic cycle but rather a sustainable shift in the framework conditions which are relevant to us and to which we must adjust,” the Miele Group executive board announced to employees in an internal address.

“Prompt and decisive action will be taken to come out of this challenging situation with renewed strength. With the aim of sustainably securing economic viability, additional financial room to manoeuvre in the order of €500 million is to be created by 2026, whereby more than two-thirds will come from improvements in turnover and a reduction in material and associated costs.”

Considerable savings must also be achieved in personnel costs as the company considerably increased its expertise and capacities since 2019. Up to 2,000 jobs are potentially affected worldwide, mainly in ‘indirect areas’, such as persons not operating production machinery or on assembly lines.

With a renewed focus on laundry care, combined with cost reasons, Miele will relocate more of its washing machine production and associated areas in Gütersloh to the company’s plant in Ksawerów, Poland. The assembly of almost all domestic washing machines will be relocated in stages through to 2027, which may impact around 700 jobs at the Gütersloh plant.

“These are grave measures, and we are fully aware that this will hit many colleagues hard. Only this way will it be possible to put Miele back on track towards a successful future – as a strong and independent family company with a clear focus on premium and with the necessary earning power in all areas,” the executive board said.

“Potential downsizing to the extent described does not mean that anywhere near the same number of redundancy notices are to be expected. The pending transformation will be conducted as socially compatibly as possible and in close collaboration with employee representatives.”

On behalf of Miele Australia and New Zealand, managing director, Yves Dalcourt acknowledged the announcement made by head office in Germany regarding the ‘Miele Performance Program’.

“Acknowledging there have been challenges in the retail industry at a global level, I would like to emphasise that locally, we have been experiencing solid growth and the ANZ teams will continue to contribute to the success of the Miele brand,” he told Appliance Retailer.

“We will do this by expanding our product lines and retail offerings, with our latest Miele Experience Centre due to open in Canberra early this year, along with a number of anticipated new product launches and continued investment in our retail partner displays.

“Our Miele staff, stakeholders, retail partners and customers are at the forefront of our success, and we look forward to a strong year ahead for the Miele brand here in Australia and New Zealand.”