Outotec Initiates Efficiency Improving Measures in Uncertain Market Environment
The efficiency improvement program is targeting up to € 50 million annualized savings in operational costs by the end of 2014 compared to the third quarter of 2013 situation. The level of cost reduction activities and final savings will be subject to the development of the market environment and Outotec's order intake. The majority of the savings will materialize in 2014. The estimated one-time costs from the program for 2013 and 2014 will be at maximum € 30 million.
Outotec is analyzing the resourcing needs and restructuring opportunities in its locations worldwide. The company will start employee cooperation negotiations about possible reduction of workforce with the entire personnel. The effects of the considered restructuring on different personnel groups and locations will be determined on country basis by early 2014. The planned measures are estimated to lead to the reduction of maximum 500 employees globally through redundancies, retirements and discontinuing fixed-term agreements. The estimated need for redundancies in Finland is approximately 60 employees. The reduction measures will be realized gradually starting in late 2013 and ending by mid-2014. In addition, temporary lay-offs may be used to achieve the targeted savings. Outotec currently employs approximately 5,000 persons.
"As part of our continuous strive for operational efficiency and utilizing the investments done in developing our operating model, we are analyzing the opportunities to use our resources more efficiently across our global organization. While improving our internal efficiency and cost structure, we also continue to develop our operating model as a platform for growth. Our strategic priorities, such as service business growth and expansion to energy and water businesses, require new skills and resources," said Outotec's CEO Pertti Korhonen.