Smiths Group warns of job cuts as it attempts to save £70m a year
ENGINEERING conglomerate Smiths Group is to axe hundreds jobs across the business in a restructuring to save £70m a year.
The FTSE 100 company, which has 23,000 staff globally, 1,400 of them in the UK, refused to put a number on how many jobs would go.
However, it is understood that cuts – which it said were not down to coronavirus but part of pre-existing plans – will represent a “low single digit percentage” of staff. This could mean as many as 1,000 jobs will be lost.
The savings, equal to about 3pc of annual sales, will leave Smiths with a “flatter, leaner, faster structure” said Andy Reynolds Smith, the chief executive, who added he “very much regretted that this will involve some jobs losses”.
Announced in a trading update yesterday, the restructuring will come at a cost of £65m across this and the next financial year, and will deliver annual savings from 2022.
Smiths medical division – the spinning off of which was delayed by the pandemic – was called in by the Government to help with the effort to ramp up production of ventilators to treat coronavirus patients.
Demand for its devices, such as medical pumps, and restocking of supplies by hospitals helped lift the unit’s revenues by 1pc in the year to date.
Group-wide revenues were 6pc higher in the first 10 months of the financial year. However, sales were only 1pc up on an underlying basis which strips out the impact of acquisitions and the medical business.
Mr Reynolds Smith said the company had been “resilient” over the past four months of lockdowns, helped by strong order backlogs.
But he warned there has been “some slowing, due to the impact on our operations and those of our customers”.
All 75 of the company’s manufacturing plants are operating, but the chief executive said measures to protect staff mean the business is “not immune to higher consequential costs”.
Smiths’ John Crane engineering arm has seen revenue rising, despite a recent slowdown driven by disruption to customer service.
The detection unit which makes scanners used at airports has continued to win new orders, but tenders and servicing revenues have dipped.
Smiths also announced that it is buying US-based company PathSensors, a biotechnology business.
Shares in Smiths rose about 8pc.
Andy Reynolds Smith, chief executive of Smiths, which is axing hundreds of jobs