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Sandvik cuts workforce in mining and construction

Sandvik Group announced on January 18 that its global workforce in the Sandvik Mining and Sandvik Construction business areas would be reduced by 400 employees.

This will result in a non-recurring cost of about US$74 million (SEK500 million), which will be represented in Q4, 2011.

According to the company, in most cases the reduction will only affect a small number of people per country and per production unit.

Local negotiations will be concluded in the first and second quarters of 2012. The total includes already implemented, ongoing and planned restructuring activities.

It includes the workforce reduction of 70 salaried staff, which was announced on November 3, 2011, at Sandvik Mining and Construction’s operations in Sandviken, Sweden. This reduction resulted from the separation of the business area into two businesses, and the relocation of the head offices of Sandvik Mining and Construction.

As part of the review, the two business areas will focus more on core operations. For some smaller products in certain geographical areas, the sales channels will be adjusted, resulting in more sales  via distributors to achieve better coverage of those regions where market penetration was weaker.

In addition, Sandvik’s legal entity in Algeria will be closed and, as of 2012, sales will be conducted via distributers, in line with the updated strategy.

Production and sales will be discontinued for a small number of products that will not form part of the company’s long-term offering. Sales of these represented less than 5% of the joint sales of the two new business areas in 2011.

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