Outotec Initiates Further Measures Targeting €45 Million Cost Structure Improvement
11/07/2014 - To be prepared for possibly continuing market slowness and uncertainty, Outotec is proceeding with measures to enhance profitability and launches a new program targeting approximately €45 million savings in operating costs during 2015, compared to 2014 full year cost level.
The savings are expected to contribute in full to 2015 profitability. Year 2014 operational gross fixed costs (including delivery, sales and marketing, R&D and administrative functions) are estimated to be approximately €530 million. The estimated one-time costs from the program for 2014 and 2015 will be at maximum €40 million. Up to 400 full time equivalent employees or contractors are expected to be reduced as part of the program.
The planned profitability enhancement measures include restructuring of Outotec's operations in sales, delivery and global functions, as well as closing of some offices. To streamline the way of operating and improve efficiency, Outotec plans to centralize engineering work into engineering hubs, consolidate project implementation capabilities into fewer locations, centralize purchasing into supply hubs, as well as establish service centers and resource pools for administrative functions. Outotec has been investing in building and deploying common business processes and information technology platforms since 2011 reaching a sufficient capability during 2014 to enable the company to take the next steps in integrating its operations globally.
Most of the effects of the considered restructuring on different personnel groups and locations will be determined on country basis by the end of 2014. The planned measures may include redundancies, early retirements and discontinuing fixed-term agreements in late 2014 and during the first half of 2015. In addition, temporary lay-offs may be used to achieve the targeted savings, depending on capacity utilization. At the end of September 2014, Outotec employed 4,948 persons.
Outotec provides leading technologies and services for the Sustainable use of Earth’s natural resources. As the global leader in minerals and metals processing technology, it has developed many breakthrough technologies over the decades for its customers in metals and mining industry. It also provides innovative solutions for industrial water treatment, the utilization of alternative energy sources and the chemical industry.
The planned profitability enhancement measures include restructuring of Outotec's operations in sales, delivery and global functions, as well as closing of some offices. To streamline the way of operating and improve efficiency, Outotec plans to centralize engineering work into engineering hubs, consolidate project implementation capabilities into fewer locations, centralize purchasing into supply hubs, as well as establish service centers and resource pools for administrative functions. Outotec has been investing in building and deploying common business processes and information technology platforms since 2011 reaching a sufficient capability during 2014 to enable the company to take the next steps in integrating its operations globally.
Most of the effects of the considered restructuring on different personnel groups and locations will be determined on country basis by the end of 2014. The planned measures may include redundancies, early retirements and discontinuing fixed-term agreements in late 2014 and during the first half of 2015. In addition, temporary lay-offs may be used to achieve the targeted savings, depending on capacity utilization. At the end of September 2014, Outotec employed 4,948 persons.
Outotec provides leading technologies and services for the Sustainable use of Earth’s natural resources. As the global leader in minerals and metals processing technology, it has developed many breakthrough technologies over the decades for its customers in metals and mining industry. It also provides innovative solutions for industrial water treatment, the utilization of alternative energy sources and the chemical industry.
