Thales Optronics to axe up to 60 jobs as orders fall

DEFENCE systems designer Thales Optronics has signalled its intention to cut up to 60 jobs in Glasgow by the end of this year in light of falling orders from the UK and overseas.

The company, which employs hundreds of staff at Linthouse near Govan, is involved in continuing talks with t r ade union and employee representatives over voluntary redundancies, its directors reveal in accounts newly available at Companies House. The accounts were signed off on September 23.

The redundancy process, which will see Thales Optronics shed a total of 230 jobs across the UK, began in November 2012. It followed attempts by management to mitigate the effects of a declining workload by transferring work between sites.

Thales Optronics, which is the UK subsidiary of the French-owned Thales Group, has also closed its Llangennech site in Wales, with its operations transferring to Glasgow.

Thales provided an update on the redundancy process in its accounts for the year ended December 31, 2012.

The company, which is the UK’s second largest defence electronics supplier, reported operating profits before restructuring costs of £14.1 million, down from £25.5m in 2011. The restructuring is stated in the accounts as a £6.2m charge.

Turnover for the year edged up slightly to £230.2m, compared with £229.2m the year before.

Writing in the accounts, the directors noted the challenges facing its operations in the defence industry, which includes the development of intelligence, surveillance, target acquisition and reconnaissance systems. But they expect the workload to pick up again from 2015.

The directors said: “The current business environment is tougher than experienced in recent years, and particularly in our defence markets we are experiencing significant reductions in workload.

“We have experienced reductions in both our d o mest i c and expor t markets, and UK order intake achievements in recent years have fallen below forecast.

“This has resulted in a significant drop in workload from the end of quarter four 2012, continuing throughout 2013 and beyond.”

The directors said investment in research and development (R&D) is essential to its medium to long term future, and for building its position in the defence industry “during a period of economic decline”. Some £7.67m of R&D expenditure was recognised as an expense in its latest accounts, compared with £3.24m in 2011.

It was reported in May that Thales was to take on staff under a £600m maintenance contract for Royal Navy ships and submarines.