100,000 jobs will go at ISS

COPENHAGEN: ISS A/S of Denmark, which is one of the world’s largest private employers, is planning to get rid of about 100,000 jobs — representing a fifth of its global workforce — as it exits 13 countries that are among its least profitable markets.

“Shareholders will get at least a quarter of as much as 2.5 billion kroner ($383 million) in anticipated net proceeds,’’ chief executive Jeff Gravenhorst said by phone yesterday.

The countries ISS plans to leave are mostly in emerging markets, including Asia and Eastern Europe. At the same time, the company wants to do more business with so-called key accounts, such as global banks.

ISS, which aside from cleaning offers services such as catering, property maintenance and security, is leaving countries that represent just 12% of its group revenue and 8% of operating profits.

The plan means the company will no longer do business in Thailand, the Philippines, Malaysia, Brunei, Brazil, Chile, Israel, Estonia, the Czech Republic, Hungary, Slovakia, Slovenia and Romania.

“After leaving those markets, ISS’s workforce will shrink to about 390,000 people,’’ it said.

Gravenhorst said ISS wanted to focus on getting a larger share of the $400 billion global market for key accounts with the biggest corporate customers.

“That business accounts for 46% of the company’s organic growth, with ISS currently sitting on about 2% of the keyaccount market,’’ he said.

Copenhagen-based ISS expects organic growth to accelerate to 4-6% a year “in the medium term,” from 1.5-3.5% expected in 2018.

ISS, which is one of Europe’s biggest employers, is taking the drastic steps after its shares lost about 18% this year, in part as hedge funds speculated against the company.

The new strategy also comes after signs that some analysts were starting to question ISS’s prospects. Though most had been positive, Goldman last month told clients to start selling ISS shares.