Schindler to cut 2,000 jobs as Covid-19 paralyzes projects

Schindler sees revenue contracting by up to 6 per cent for the full-year 2020. PHOTO: REUTERS

ZURICH (REUTERS) - Swiss elevator and escalator maker Schindler on Friday (July 24) announced 2,000 job cuts over two years after first-half profit fell more than a quarter, as the Covid-19 pandemic slammed the brakes on projects and a recovery remains years away.

Schindler's net profit totaled 313 million Swiss francs (S$469 million), the company said in a statement, down from 436 million a year ago.

Revenue dropped 8.7 per cent to 4.96 billion francs, while orders fell 12.1 per cent to 5.4 billion francs as new installations and modernization projects declined worldwide and are not expected to recover to last year's levels before 2022.

The world's second-biggest lift-maker behind U.S.-based Otis Worldwide has become slightly less pessimistic about its full-year sales outlook, and now expects a decline of up to 6 per cent for 2020, less severe than the previous forecast of a hit of up to a 10 per cent.

Finnish rival Kone expects only a 4 per cent 2020 sales decline, and said it saw Chinese business recovering.

Schindler said its net profit is now seen between 680-720 million francs, down from 929 million francs in 2019, as it takes restructuring costs of up to 130 million francs this year as it begins trimming its 66,000-employee workforce.

"Adverse conditions have been accelerating over the last few months and that calls for cost adjustment measures along the whole value chain," said Thomas Oetterli, Schindler's chief executive officer. "We need to remain competitive to be able to fulfill our growth agenda. Reducing cost now is essential to secure the long-term health of our company."

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