The specialty chemicals group, Clariant, plans to close 10 production sites, resulting in the loss of 1,000 jobs. The Basel-based company said the cuts were in response to tumbling profits, which fell by 50 per cent in the first half of the year.
The markets reacted badly to the news: Clariant's shares fell more than 14 per cent to close at SFr35.55.
The group also announced that it had suffered a SFr1.43 billion ($850 million) decrease in net profit during the first half, compared with the same period last year, after taking a charge of nearly SFr1.6 billion.
The latest job losses follow restructuring projects, which involved one-time costs of SFr347 million in the first half of 2001. More than a third of those costs related to write-offs, particularly the integration of Clariant's British acquisition BTP. Workforce reductions in Germany, the United States and Spain as well as factory closures in the US also resulted in write-offs.
The company said the new cut backs will "focus on slimming down all processes, with a particular focus on the production facilities".
Clariant said in a statement that the affected projects will be defined within the next few months.
The group expects the costs of this supplementary program to exceed SFr350 million, about 60 per cent of which will be accounted for by write-offs. The costs will be charged to the company's income statement in the second half of 2001.
Operating income fell from SFr615 million in the first half of 2000 to just SFr451 million in the first six months of 2001.
"Because the operating result was below expectations, Clariant took a series of radical restructuring measures during the period under review - and a second series designed to extend and reinforce them is now underway," the company said in its statement.
swissinfo with agencies