ABB looking at just 100,000 jobs
The Swiss-Swedish industrial concern, ABB, could reduce its workforce to 100,000 staff, down one-third from its current level of 146,000.
The troubled engineering group announced just a few weeks ago that it would be slashing around 10,000 jobs from its payroll as part of a restructuring plan.
Peter Voser, ABB’s chief financial officer, told the “SonntagsZeitung” newspaper that the company was focusing on its core activities of automation products and energy technology, and should employ 100,000 people.
To meet this target, ABB would have to axe more jobs than previously stated. The group had said the jobs cuts announced in October would make up two-thirds of an $800 million (SFr1.2 billion) savings programme.
The planned reduction of the workforce comes on top of the 12,000 jobs slashed from the payroll in 2001.
ABB wants to reduce its debt to $4 billion by 2005. To reach that goal, the company has also begun selling off assets to concentrate on automation and energy technology.
Liquidity concerns
The company may have also found a solution to its liquidity problems. Voser confirmed the group was in talks with three banks over a $1.5 billion credit facility.
If Credit Suisse, Barclays and Citibank agree to the credit line, ABB’s liquidity problems would be alleviated, added Voser.
“We still don’t have a signature,” he said. “But there will be a contract by December 17.”
“As financial chief, I have kept all my promises. I will keep this one.”
With the group reducing its payroll and shedding some activities, its Swiss employees can also expect to see some changes.
Voser warned that the 600-strong workforce at its headquarters in Zurich would also be slimmed down, perhaps by half.
“When one trims a business from five divisions and several side businesses to two divisions, one must radically cut the central functions,” he said.
“Cost-cutting is essential. We are currently spread over four locations in Zurich and we will draw those together.”
Voser said the restructuring programme would cost $300 million next year, $180 million in 2004. But the CFO believes the company will save around $400 million as of 2005.
ABB issued a profit warning for 2002 in November and has reduced its earnings targets for the next three years.
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