GEA Group to Cut 1,000 Jobs in $133 Million Savings ProgramAlex Webb
GEA Group AG will cut about 1,000 jobs as the maker of food-processing equipment seeks to save 100 million euros ($133 million) in annual costs by the end of 2017.
The company will bundle four existing business lines into two divisions, one called Equipment and another named Solutions as it focuses on the food and beverage industry, the Dusseldorf-based company said today in a statement.
“GEA will have a significantly flatter hierarchy, enabling it to react more readily to local customers,” Chief Executive Officer Juerg Oleas said in the statement.
GEA, founded in 1881 as a metals-trading company and whose products now range from agricultural feeding systems to beer-brewing kits, had a decline in orders in Europe and the Americas last year. Oleas agreed to sell its heat-exchangers unit, which sells applications for air conditioning and chemical plants, to Triton Advisers Ltd. for 1.3 billion euros in April as it concentrates on food-processing equipment.
The shares gained 2.1 percent to 34.16 euros at 9:47 a.m. in Frankfurt, the highest in three weeks. That pared the decline this year to 1.3 percent, valuing GEA at 6.6 billion euros.
The savings plan announced today entails the centralization of more administrative functions, the company said. GEA said it plans to discuss with labor representatives how best to implement the job cuts.
Last month, GEA reported operating earnings before interest, taxes, depreciation and amortization increased 8.1 percent to 128 million euros in the three months through June, more than analysts had forecast. The company at the time reiterated its goal of full-year profit on that basis of 550 million euros to 590 million euros.