ABB unveils $800m cost-cutting plan

ABB, the troubled engineering giant, yesterday unveiled plans to axe thousands more jobs and dispose of a key division as part of an $800m (£517m) cost-cutting programme.

The radical cutbacks are an effort to restore investor confidence following the profits warning earlier this week from ABB, which wiped 75 per cent off its share price.

ABB has already axed 13,100 jobs in an earlier $500m cost-cutting initiative. But Jürgen Dormann, ABB's chairman, said: "It is clear our overall cost base is still much too high, and that the benefits from our restructuring programme have been slower than expected."

The Zurich-based company refused to spell out how many more jobs would disappear. But industry sources said several thousand redundancies were likely from ABB's 150,000-strong worldwide workforce.

ABB said it planned to sell its oil, gas and petrochemicals division, which analysts estimate is worth about $1.5bn.

The company revealed that it had received several approaches for the division and indicated that it hoped to conclude a deal within 12 months.

Profits before interest and tax fell 72 per cent in the third quarter to $47m due to the weak economic climate, increased costs and investment writedowns. But Mr Dormann said ABB was on course to reduce debt by at least $1.5bn by the end of the year.