ABB reported a third-quarter net loss of $183 million and a 13 per cent drop in its order intake to $4.6 billion. Orders for large projects - those over $15 million - fell 72 per cent.
More than 40,000 jobs at ABB could be lost through a mixture of redundancies and disposals as one of the world's largest engineering conglomerates breaks itself apart.
The last-ditch effort to rebuild investor confidence is aimed at saving $800 million (€822 million) a year.
It accelerates a restructuring that will leave the Swiss-Swedish group bearing little resemblance to the sprawling empire created by Percy Barnevik, its disgraced former chairman, who was forced to resign in November after a compensation scandal.
Yesterday, Jurgen Dormann, the German industrialist who has put his reputation on the line by taking on the task of trying to salvage ABB, announced significant disposals after third-quarter results showed customers were deserting the company.
ABB, whose shares lost more than two-thirds of their value after it scrapped its earnings targets on Monday and warned it could no longer afford to pay its mounting asbestos liabilities, has also unveiled a sweeping corporate reorganisation, cutting its five divisions down to two core businesses - power technologies and automation.
Mr Dormann announced that ABB's oil, gas and petrochemicals division was being prepared for sale. It joins building products and financial services businesses already earmarked for sale.
ABB has 150,000 employees worldwide and employs 618 staff at its Irish operations in Dublin, Cork, Longford, Waterford and Lisburn. The power technologies and automation technologies businesses employ 106,000, leading to speculation the group's workforce will have to shrink by perhaps one-third. The firm declined to speculate on how many jobs would disappear to reach the $800 million cost-cutting target, but unions fear the total will be 18,000 to 20,000. This would be in line with previous cost-cutting.
On top of any forced redundancies, up to 30,000 further jobs are expected to go through the disposal of the oil, gas and petrochemicals division, which employs 12,000, and building services, which has 18,000.
- (Financial Times Service)
