Swiss toolmaker, Tornos, is to slash a third of its 1200-strong workforce after incurring heavy losses in the first four months of the year.
Struggling with severe liquidity problems, the Moutier-based company detailed the job cuts alongside a planned financial-rescue package, after declaring a net loss of SFr28.4 million ($18.22 million) for the first four months of 2002.
Tornos says it is negotiating a SFr10 million cash injection, or bridging loan, and has asked creditors to "substantially" reduce their claims in order to guarantee its survival.
The canton of Bern has expressed its concern at the job cuts, and called on the State Secretariat for Economic Affairs to help find new positions for unemployed workers.
The company said on Friday that it had made no provisions for the sacked workers. The hope is that the stricken firm's main shareholders might come to the rescue.
Tornos has revealed that its owners include the Bern Cantonal Bank, the Jura Cantonal Bank, as well as Credit Suisse and private investors, among them Daughty Hanson.
Former boss "not under question"
Tornos's financial woes have raised questions about Anton Menth, the company's recently departed chief who has just taken up a job as chairman of Switzerland's state-owned post office.
Menth quit his post at Tornos on April 30, after being appointed by cabinet to head Swiss Post from June 1.
However, Hugo Schittenhelm, a spokesman for the federal communications office said Menth's role at the Swiss Post board was not in question.
The government said the cabinet knew of Tornos's problems at the time of Menth's appointment.
Menth was not seen as having caused the company's crisis, and was described as an experienced entrepreneur who had previously saved it from collapse.
The company blamed difficult trading conditions for creating an operating loss of SFr18.7 million between the beginning of January and the end of April.
In a sparsely worded statement, the company said: "The market situation in the machine tool industry worsened in the first four months of 2002".
Shares in the beleaguered firm were suspended by the Swiss stock exchange on Friday, after they dropped 8.73 per cent to SFr11.50 on Thursday. They were trading slightly above a recent low of SFr9.75, but light-years away from their 52-week high of SFr97.75.
The machine tool company also reported its full-year results for 2001. Gross sales for the year were SFr372.8 million, operating profit was SFr11.4 million and the consolidated loss was SFr29.9 million.
A general shareholders meeting will be held on June 28 in Moutier. The company said it would seek shareholder approval for a capital reduction of 90 per cent to SFr11.5 million by cutting the nominal share value.
A second step involves asking shareholders to inject fresh capital into the company of SFr73 million.
Job losses "too high a price"
Swiss metal workers' union, SMUV, condemned the big job losses, saying workers were being forced to pay too high a price for the company's woes.
But Fabienne Blanc-Kühn, a spokesperson for the union, said the Tornos crisis was not purely the fault of management.
Rather, it was symptomatic of problems throughout Switzerland's machine industry, which had seen around 4,000 jobs cut since June 2001.
1990s growth stalls
The job cuts are not the company's first in recent months. Tornos slashed 200 positions last October, ending a four-year expansion programme.
Since 1997, the company created 450 new jobs in Moutier alone, and a total of 540. Its turnover grew from SFr197 million to SFr372 million.
Menth was replaced by Pierre-Claude Jaquier.
swissinfo with agencies