Outotec initiates EUR 70 million program to adapt its cost structure to the weakened market situation
In anticipation of continuing weak market, especially in capex investments, Outotec initiates an additional program to adapt its cost structure further.
The market situation in the mining and metals industry has further weakened during the recent months. Outotec's current cost savings program will continue, but it will not be sufficient given the current market outlook. In anticipation of continuing weak market, especially in capex investments, Outotec initiates an additional program to adapt its cost structure further. The new cost structure program aims at EUR 70 million annualized savings in fixed costs compared to the Q3/2015 situation. The majority of the savings will materialize in 2016, and the program will not impact Outotec's financial guidance for 2015.
The estimated one-time costs from the program will be at maximum EUR 40 million, and will materialize mainly during Q4/2015 and Q1/2016. Approximately two thirds of the savings are expected to be coming from personnel costs.
The measures are planned to include streamlining Outotec's organization, adjusting capacity, as well as reviewing the site structure. The planned measures may lead to the reduction of maximum 650 permanent employees globally through redundancies and other arrangements. Discontinuing fixed-term agreements and temporary lay-offs may also be used to achieve the targeted savings. In addition, the amount of manufacturing, site services and external workforce will be adjusted according to business needs.
"The global market in minerals and metals processing has further weakened during recent months. Therefore we need to adjust our operations and improve our cost structure correspondingly. The actions we need to take are tough but necessary to ensure our competitivenes in the challenging market", says Outotec's CEO Pertti Korhonen.
Outotec currently employs approximately 5,000 persons.
source: Outotec
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