Manufacturing firm Johnson Matthey has revealed it will be axing 2,500 jobs over the next three years as a result of the coronavirus crisis.
The FTSE 100 company, which specialises in producing catalytic converters to be used in cars, also announced plans to halve its dividend to shareholders after taking a £60 million hit from the impact of pandemic.
It comes as the airplane manufacturer Bombardier announced it too will be cutting 600 jobs at its plant in Belfast amid the severe downturn in the aviation industry.
Today Robert MacLeod, chief executive of Johnson Matthey, said the company made ‘good progress’ before the pandemic but now needs to be ‘even more efficient’ amid challenging market conditions.
Manufacturing giant Johnson Matthey (pictured is the inside of its factory in Poland) has confirmed that it will cut 2,500 jobs due to the coronavirus crisis
The company, which also announced plans to halve its dividend to shareholders, hopes its cost reduction plans will help secure £80 million in annual savings by 2023. Pictured: The Johnson Matthey facility in New Jersey
The firm said it aims to secure £80 million in annual savings from its cost reduction plans by 2023.
It came as the firm reported a 27 per cent slump in operating profits to £388 million in the year to March, after taking a £60 million hit from the impact of coronavirus.
Mr MacLeod added: ‘Covid-19 has brought unprecedented challenges to the world and Johnson Matthey.
‘During this pandemic, we have tried to balance the needs of all of our stakeholders but our first priority remains the health and safety of our people, customers, suppliers and communities where we operate.
‘I would like to say a heartfelt thank you to all of our employees for their dedication and efforts over the past few months.’
The company said it was unable to provide guidance for the current year as a result of ‘ongoing uncertainty’.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: ‘In recent years the group has benefited from ever tougher environmental legislation increasing the complexity of catalysts and thus increasing the price of catalysts.
‘However, that relies on the car industry continuing to tick over, and consumers slammed the brakes on car sales as coronavirus struck.
‘There are early signs of recovery in Asia, but whether that will be sustained remains to be seen.’
Car production has dropped dramatically in the face of the outbreak, with UK car manufacturing plummeting by 99 per cent in April compared to the same month last year, according to the Society of Motor Manufacturers and Traders (SMMT).
Meanwhile aircraft manufacturing plant Bombardier revealed around 600 jobs are set to be lost at its plant Belfast amid the severe downturn in the aviation industry.
Elsewhere the aircraft manufacturing company Bombardier will cut around 600 jobs at its plant in Belfast (pictured)
The manufacturer said the ‘extraordinary industry interruptions and challenges’ caused by the coronavirus crisis has led it to take the action. Pictured: Workers inside the Bombardier plant in Belfast
The planned redundancies include around 400 core staff members and 200-plus contractors that also work at the operation.
Bombardier Aviation blamed the ‘extraordinary industry interruptions and challenges’ caused by the coronavirus pandemic.
There will be a 90-day consultation period on the proposed core staff redundancies.
If 600-plus jobs are lost it will reduce the workforce to around 2,900.
Last week Bombardier announced plans for 2,500 redundancies across its worldwide aviation operations.
It cited an anticipated 30 per cent drop in the sale of its jets.
The workforce at Bombardier in Belfast was informed of the plans on Thursday morning.
The announcement comes a week after the company said it planned 2,500 redundancies across its worldwide aviation operations
A Bombardier spokeswoman said: ‘Bombardier Aviation announced last week that it would adjust its workforce to align with current market conditions reflecting the extraordinary industry interruptions and challenges caused by Covid-19.
‘We have now reviewed our requirements in Belfast for all of our aircraft programmes and regret to confirm that we must adjust our core workforce levels downwards by around 400 to align with market demand for the remainder of this year and through 2021.
‘Around 400 Bombardier core employee jobs in Northern Ireland are currently at risk of redundancy. The company will be lodging a formal HR1 redundancy notice with the Department for the Economy, following which there will be a 90-day consultation period when we will explore opportunities to mitigate the number of redundancies.
‘We deeply regret the impact this will have on our workforce and their families, but it is crucial that we resize our business in line with market realities in these unprecedented circumstances.’
A Bombardier spokeswoman later confirmed the company would also be ‘gradually releasing’ members of its Complementary Labour Force (CLF) over the coming months.
Bombardier has more than 200 CLF contractors working in Belfast.
