News

George Clarke, Heidelberg UK managing director, has insisted that the UK arm of the company remains "healthy" as the press giant's German HQ announced plans to cut around 500 jobs.

Heidelberg revealed the plans last week, as part of a cost-cutting exercise following a downturn in sales and poor economic outlook.

The cuts are part of a four-tier strategy by the company to save 100m euros (£80m) by the 2010/2011 financial year – 75m euros of which is expected in the next 18 months.

Clarke admitted that he did not yet know if any of the cuts would affect the UK. To stay competitive you have to continually re-examine what you’re doing. We’re healthy, but we have to stay that way. And that’s the challenge.

For the first quarter of this financial year, the manufacturer has pitched preliminary sales for the 2008/2009 period between 640m euros and 660m euros – a fall from 742m euros in the previous year, resulting in a loss of up to 40m euros compared with a profit of 26m euros for the same quarter a year earlier.

Heidelberg cited the rapidly increasing prices of raw materials, such as steel and energy, coupled with problematic exchange rate movements, as contributing factors towards the downturn in figures.

The 500 positions will be axed from a worldwide workforce of nearly 20,000 by the end of the 2010/2011 financial year.

The company also plans to hike its purchasing and production activities outside the Eurozone, increasing its spend from 40m euros (£32m) to 200m euros (£160m) with a focus on China and Slovakia.

The German press manufacturer follows in the footsteps of Océ which earlier this month announced it would be cutting 600 jobs worldwide following a 68% fall in profits.

RESULTS & CUTS

• 500 jobs to go by 2010/2011
• First quarter sales for 2008/2009 expected at 640-660m euros (£510-£525) down from 742m euros in 2007/08
• 100m euros to be saved by 2010/2011 financial year