German engineering firm Siemens has announced a plan to make 10,000 job cuts while carving out and listing its struggling power and gas division into two a separately managed company.

Announced on Tuesday (May 7) evening, the plan is said to be the company’s biggest spinoff in its history. According to Chief Executive Officer Joe Kaeser, “It’s about the next steps of a business that is fundamentally changing. The highest priority is the stabilization of a business that at its core is still feasible.”

The plan to list the energy division next year will be the latest in a series of de-consolidation moves by Kaeser after previously bringing the health-care division to market and merging the wind power unit with a Spanish competitor, Bloomberg reports.

The carve-out “is a major step in the history of the company, as Siemens moves further toward a ‘break up’ scenario,” Morgan Stanley analyst Ben Uglow said in a note. “Management is doing what many companies struggle to do in more forgiving labor environments.”

Regarding the job cuts, Siemens said it will retain “somewhat less than 50 percent” of the new entity, which will include its 59 percent stake in Siemens Gamesa Renewable Energy, to create a company with 30 billion euros in business volume. The division has operations spanning oil and gas as well as conventional power generation and transmission, while Siemens Gamesa develops wind farms and makes renewable energy equipment.

In addition to the structural revamp, Kaeser also unveiled job reductions at its core divisions to save about 2.2 billion euros by 2023. These include 4,900 cuts at digital industries, 3,000 at so-called smart infrastructure and 2,500 at its central corporate unit. At the same time, Siemens plans to hire about 20,500 new employees.

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