Weir Group is to cut a further 125 oil and gas jobs in North America as the FTSE 100 engineer continues to feel the pain from the slump in oil prices.
The Glasgow-based engineer, which manufactures valves and pumping equipment for miners and oil and gas companies, reported a 23% fall in orders for oil and gas in the first three months of the year and said it expects the decline to continue into the second quarter., Tanya Powley writes.
The group warned in February at its full-year results that the plummeting oil price will hit profitability this year, saying it expected a “significant reduction” in group revenues and lower operating margins in 2015. At the time, it announced plans to slash 22% of its North American workforce, taking total job cuts to 1,200.
On Wednesday, the engineer said it planned to make an additional 125 job cuts as well as the closure of a number of service centres because of challenging conditions in the market. This would result in a further £10m of cost savings, the company said.
Keith Cochrane, chief executive at Weir, said: “Trading conditions in oil and gas markets were challenging through the quarter with a steeper decline in the North American rig count than the market had anticipated.”
The company said it was facing pricing pressure from customers, with discounts ranging from between 5% and 20% across its product portfolio.
Source: Financial Times