Laird, the specialist electronics group, is laying-off 5,000 manufacturing staff and closing factories as falling consumer demand leaves fourth-quarter sales predictions up to 30 per cent down.
The redundancies, from the company's operations in Eastern Europe, the US and the Far East, represent more than a third of the global workforce. Laird is also closing one factory in Hungary and three in the US, and shifting production to Mexico and China, which will mean further headcount reductions in the first half of next year.
"... we have seen an acceleration of the slowdown in demand for our products across virtually all of our market sectors in November," the company said yesterday. "This has continued into December, with de-stocking in the global supply chain."
Sterling's weakness will mitigate some of the falling revenues, but Laird is expecting sales in the current quarter to come in between 25 and 30 per cent lower than last year, on a constant currency basis. The expectation for 2009 is no better. "For planning purposes we are assuming the current de-stocking lasts through at least the first quarter of 2009, and that there will be no market recovery during 2009," Laird said yesterday.
With the expectation that global handset sales will drop by 10 per cent next year, the company is looking to improved efficiency, lower commodity prices and diversity of products to shore-up the business. The cost-cutting plans will cost £20m in 2008, and produce £12m of annualised net benefits.
Last month's profit warning and muted management statement pushed the company's shares down to 62.25p. Yesterday's announcement was no surprise to the market and Laird's shares closed up almost 1 per cent at 112p.
Jonathan Hurn, an analyst at KBC Peel Hunt, said: "A lot of the downgrades have been put into the pricing, and the balance sheet is fairly healthy. The first half of 2009 will be tough, but if you have a 12-to-18-month horizon then it is potentially a good stock."Reuse content