Georg Fischer to cut 2,300 jobs due to falling sales

May 28, 2009, 9:00 GMT

Geneva - Swiss car parts and machinery supplier, Georg Fischer, announced Thursday it would cut 2,300 jobs - 16 per cent of its workforce - in response to a sales slump.

The company reported a 38 per cent drop in sales in the first quarter of 2009. Particularly hard hit was the automotive section of the business, aligned to the overall state of the ailing auto industry.

In a statement, the Schaffhausen, Switzerland-based corporation said it had already implemented plans leading to a reduction of over 20 per cent in operating and personnel expenses.

It reduced executive pay by 10 per cent for its top 250 managers and the board would take a 20 per cent cut on their base salaries.

Already in the first four months of this year, the company's headcount was decreased by 990 posts.

About one third of the additional reductions, to be completed by the end of 2010, would be through natural attrition, early retirement schemes and divestment, the statement said.

About a quarter of the 2,300 jobs are to be lost in Switzerland.

The job cuts were part of a larger programme to cut Georg Fischer's costs by 350 million Swiss francs (320.6 million dollars).

It was also moving some manufacturing to cheaper labour markets, like China, and selling some assets.

'Georg Fischer believes that the crisis has bottomed out, and that no sustainable recovery is likely before 2011, however,' the statement said, adding that the company was forecasting a drop in 2009 sales of about one third compared with the previous year.