Siemens AG Chief Executive Officer Joe Kaeser said he’s planning sweeping cuts at the German engineering company’s power-and-gas business, setting the stage for a turnaround plan amid weak orders and a sharp drop in fourth-quarter profit. The unit, which is suffering from a steady decline in demand for large turbines used in power plants, will be “reshaped and redone,” the CEO said in an interview on Bloomberg TV on Thursday. “We know what needs to be done. We already have a plan we want to execute on.” The Munich-based company is preparing to unveil as early as next week a wave of job cuts at the division, among its largest in terms of revenue. Kaeser declined to provide details on how may positions will be affected, although he warned there would be “painful cuts.” The shares fell 2.6 percent to 120.10 euros at 9:05 a.m. in Frankfurt. As the chief executive pushes ahead with dismantling Siemens’s sprawling conglomerate structure to one resembling more of a holding company, he has faced a slump in demand for equipment used in large-scale power plants. The downturn comes amid a transformation in global energy markets due to increased reliance on renewable sources. The anticipated significant job cuts in Siemens’s power-and-gas operations would follow an announcement Monday that the Siemens Gamesa wind-power division plans to shed almost a quarter of its staff. “Even in the context of well-flagged conditions” the fourth-quarter earnings report “is likely to be taken poorly,” Morgan Stanley analysts said in a note, adding that profit and sales missed consensus estimates. Profit Slides Siemens reported industrial business profit slid 10 percent to 2.2 billion euros ($2.6 billion), missing an average estimate of analysts surveyed by the company of 2.45 billion euros. Profit at the power-and-gas division declined by 40 percent while orders for new equipment dropped. The coming financial year will be a “mixed picture,” ranging from strong markets in the short-cycle businesses to “unfavorable dynamics” for energy generation, Siemens said. The company set the same forecasts for the 2018 fiscal year as it had for the one just ended, projecting an industrial business profit margin of 11 to 12 percent, and basic earnings per share of 7.20 euros to 7.70 euros. The company is also expecting modest revenue growth and a book-to-bill ratio above 1. In the fourth quarter, sales climbed 2 percent to 22.3 billion euros. The Siemens Gamesa Renewable Energy unit, which combined with a Spanish rival earlier this year, posted a quarterly loss due to inventory write downs. Separately, Siemens said preparations for an initial public offering of its health care division, called Healthineers, are on schedule and named Jochen Schmitz as chief financial officer of the unit. The company is also planning to merge its rail business with French rival Alstom SA. Kaeser said the company is keeping its options open for the float of the health-care business.