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EDITIONS
Friday, 8 November, 2002, 22:26 GMT
Jobs go as ABB focuses on debt
ABB worker
ABB employs almost 150,000 staff - for now
Crisis-wracked engineering giant ABB has announced at least 10,000 job cuts, as it struggles to cope with its mountain of debt.

Chief executive Juergen Dormann aims to cut costs by $800m within 18 months, and two-thirds of the cost savings will come from the payroll.

The cuts are part of a wider restructuring package, announced to analysts on Friday, as the Swiss-Swedish company tries to woo back investors.

The company said it was now focused on reducing its total debt, and aimed to cut its obligations from the current $8bn to $6.5bn next year, and to $4bn by 2005.

In the meantime, company profits will fall sharply, ABB admitted.

The announcement initially sent ABB shares more than 10% lower, but they recovered after traders digested the news.

By the close, the shares gained 2% to 3.03 Swiss francs.

Asbestos claims

In a forecast released ahead of the analysts' meeting, ABB said its profit margins would be roughly halved from current forecasts - to 4% next year, for example.

Juergen Dormann
Mr Dormann says the time to act is now

ABB has lurched from one crisis to another this year, including nearly running out of cash, and losing a string of senior executives.

Most recently, its shares have been mercilessly punished as investors worried about the effects of ongoing asbestos litigation on its US businesses.

Mr Dormann said it was vital that ABB do something to remedy its situation.

"We do not expect any help from the markets in the next year to 18 months," Mr Dormann said.

"Clear, decisive action is needed and that is what we will do."

ABB employs 146,000 workers worldwide, and about 7,000 of them in the United Kingdom.

The company said it had not decided yet where the cuts would be made, and promised more details towards the end of the year.

On Thursday, rumours had circulated that the company might cut as many as 40,000 jobs.

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