Huge job cuts to come as Invensys slims down

Invensys, formerly BTR/Siebe, announced 5,600 job losses last week as part of a radical reshaping following the merger of the two companies earlier this year. The group, which cut 6,000 posts in the run-up to the merger, said it expected cost savings to amount to £300m a year, £50m ahead of previous forecasts. Unveiling results […]

Invensys, formerly BTR/Siebe, announced 5,600 job losses last week as part of a radical reshaping following the merger of the two companies earlier this year.

The group, which cut 6,000 posts in the run-up to the merger, said it expected cost savings to amount to £300m a year, £50m ahead of previous forecasts.

Unveiling results for the year to the end of March, chief executive Allen Yurko said the group would sell £1.8bn of its businesses, employing 40,000 staff, and return £1bn of the proceeds to investors.

Profits for the 12-month period came in at £295m, a big drop from £1.58bn last year. The fall reflected restructuring costs, plus losses on disposals which totalled £771m.

On a continuing basis, operating profits rose 13.5% to £998m.

Although Yurko said it was too early to say where the bulk of the job cuts would come, the businesses to be disposed of include the group’s worldwide automotive division as well as its paper technology and environmental operations.

Invensys will be left with a core operation of automation and controls. An estimated 600-700 jobs will go from these businesses in the UK, and 5,000 globally over the next three years.

Yurko’s plans contrast with statements made when the Siebe/BTR merger was announced in November. At that time, BTR’s then chief executive Ian Strachan denied there were plans to dispose of the automotive business.

`The sales will help us to focus on automation and controls,’ said Yurko. `We will be a global leader in that business with roughly 10.5% of the global market.’

The City welcomed the announcements, and the group’s shares soared more than 12% to 316.5p.

Invensys shares were also boosted by news that the company plans to apply for a move from the lowly-rated engineering sector to the electronics sector.

Invensys is also to seek a listing on the New York Stock Exchange. Half the group’s revenues, half its workforce and a third of its shareholders are in the US.