Oerlikon Shocker: Thousands of Jobs on the Line as Major Division Faces Spin-off
Oerlikon Shocker: Thousands of Jobs on the Line as Major Division Faces Spin-off
Tue, Feb 20th 2024
Oerlikon undergoes a critical restructuring, shedding its textile machinery arm to stabilize finances and streamline focus towards surface technology amid a challenging market.
Oerlikon, once a beacon of industrial prowess, finds itself in trouble. It was compelled to undertake a significant restructuring.
The company is severing ties with its textile machinery division. The focus will shift to surface technology. The textile machinery business will be spun off.
The decision to potentially spin off the Polymer Processing Solutions division reflects a strategic retreat under duress. This approach, which will span a 12 to 36-month timeline, raises questions about the firm’s agility in responding to market demands.
This recalibration will invariably shrink Oerlikon’s operational footprint. With its 3,800-strong workforce, the Polymer Processing division was a significant contributor to Oerlikon’s revenue.
The division’s network of 11 production and R&D centers and 35 sales and service downsizing will not be simple.
The announced layoffs of approximately 800 positions, predominantly in Germany, and a stark 40% plummet in new orders for the Polymer Processing division in 2023 alone.
Reflecting on the fiscal downturn, with sales and incoming orders taking significant hits and operating profit (EBITDA) dwindling, the outlook appears grim.
The forecasted decline in sales for 2024, coupled with a marginal EBITDA margin recovery, paints a picture of a company in the throes of a challenging transformation.
Financial year performance: Sales down >7% to CHF 2.69 billion, orders down -18% to CHF 2.46 billion, EBITDA down -13% to CHF 444 million, EBITDA margin down 1.1 points to 16.5%.
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