Independent News & Media (IN&M) will shed almost 600 jobs in a drive to become a "low cost operator". The company presented details of a €53.5 million restructuring yesterday in its pre-close trading update.
The job losses include 95 redundancies currently being sought at Independent News & Media's Irish operation. A company spokesman said yesterday the brunt of the 565 job losses would be borne at the Irish, British and South African operations, which account for 5,000 of the group's 12,000 employees. Some 1,200 work in Ireland and 800 in Britain.
The group has already restructured its Australian and New Zealand operations.
The announcement comes weeks after the company raised €125 million in a bond issue, and the timing surprised some market participants. Shares in the group closed up 1 per cent at €1.96 in Dublin.
The firm said a detailed worldwide plan had been drawn up with consultants Booz Allen Hamilton. It will generate "savings and profit improvements building up to €18.4 million by the end of 2005", according to the group. Most of the €53.5 million restructuring charge will cover redundancies, said the spokesman.
The company would seek savings in a number of areas, including back office support functions, procurement and some editorial activities, said the spokesman. The group would move work to jurisdictions where work practices were less restrictive and labour rates more competitive, such as in Britain and South Africa.
Specific initiatives mentioned include a shared finance back office across operations and streamlining the Irish and South African distribution and circulation processes.
In addition to eliminating "inefficient working practices" and relocating to "lower-cost locations", the group will "use outsourced staff where appropriate".
The programme - already under way - will "drive growth" and "enhance market competitiveness" without compromising short-term performance, according to the company.
It is expected to produce savings of up to €5 million next year, rising to €11 million in 2005, before levelling out at more than €18 million there after.
Sir Anthony O'Reilly, the executive chairman of the group, said in the statement that the restructuring would allow the company "to be the low-cost operator in all of our markets. It will allow us to further exploit our global foot print in a truly location-indifferent way, meaningfully reducing costs, while improving our product and distribution capabilities".
The group continues to trade in line with market expectations according to the trading statement released with the restructuring announcement. Advertising revenues are ahead of 2002 and circulation revenues "continue to show solid advances".
Looking ahead to 2004, the group said lower debt levels following this year's recapitalisation should deliver a "reduced interest charge and enhanced cash generation".
