Electronics Production | December 10, 2007
PartnerTech plans to remove 150 employees
Declining demand is expected to generate operating earnings close to breakeven for the fourth quarter. An action program is being adopted to adjust costs to lower sales and to streamline operations. 150 employees will be removed primarily at units in Sweden, Finland and the UK.
The measures are expected to steadily boost earnings during 2008. Non-recurring costs of SEK 50 million will be charged to fourth quarter earnings. For all of 2007, operating earnings (including non-recurring costs) are expected to total SEK 20 million and sales are expected to total SEK 2.6 billion. Following several years of rapid growth and multiple acquisitions, operations need to be consolidated and streamlined to achieve synergies and economy of scale. The action program that is being adopted will optimize operations to current volumes while more clearly defining processes and areas of expertise. The measures will lead to a staff reduction affecting around 150 employees – primarily at units in Sweden, Finland and the UK. The total program will save an estimated SEK 100 million on a full-year basis. The impact on operating earnings is expected to grow steadily starting in the second quarter of 2008 and fully manifest during the fourth quarter. Non-recurring costs of SEK 50 million will be charged to operating earnings for the fourth quarter of 2007. The underlying source of the costs is write-off of inventory and accounts receivable. The recent changes of the CEO role and impairment of goodwill for Finnish operations are also included in non-recurring costs. “The measures we have adopted are necessary, and they will further strengthen and streamline our business concept,” says Acting CEO Rune Glavare. “This adjustment, as well as a focus on our operating processes and structures, will reinforce our leading position in the European contract manufacturing sector.” Mr. Glavare and CFO Jonas Arkestad will hold a teleconference at 10:00 CET today to discuss the above information.