Stainless steel manufacturer Outokumpu is to slash 15% of its global workforce in an effort to dramatically reduce operational costs.
More than 1,300 jobs will be axed as part of the overhaul, with more than half of the lay-offs taking place in Finland and Sweden.
The company’s target is to reduce costs by EUR100m (£87m) before the end of 2012 and working capital by EUR250m (£218m) by mid-2013.
As well as slashing jobs, Outokumpo plans to reduce the number of production shifts, restructure the organisation and outsource some support functions as well as improvements in overall efficiency.
Outokumpu serves a wide range of industries, including catering, where it suppliers commercial and domestic manufacturers with stainless steel for appliances that come into contact with liquids, food and cleaning agents.
CEO Mika Seitovirta said: “The stainless industry is facing significant overcapacity, and imports into Europe have increased. In this situation, to compete successfully in the global market, we need to reduce costs drastically, simplify the way we manage the company and establish clear accountabilities. Reducing complexity and cutting the number of organisational layers will bring us closer to our customers."
In addition to reducing its workforce, Outokumpo intends to rationalise its European distribution network and inventory turnover as part of a strategy to trim its working capital.
It is aiming to achieve inventory days of around 90 days within the next 18 months, compared with 110 days during its most recent quarter. Stocking operations will be consolidated into a smaller number of locations moving forward.