AMSTERDAM, the Netherlands - Citing uncertainty in the global financial markets, AkzoNobel has announced a suspension of its share-buyback program and plans to cut 3,500 jobs by 2011.
The job cuts, of which two-thirds is related to the January acquisition of Imperial Chemical Industries PLC, will amount to an estimated six percent of the company’s workforce. The cuts are expected to result in EUR 100 million in net cost savings for the company.
With EUR 1.8 billion of its net debt due to mature in the next eight months, the company has decided to defer the remaining EUR 1.6 billion of its current share-buyback program until the refinancing of the bonds has been completed.
“The world economy has now clearly entered a phase of lower growth, particularly in the mature markets," Commented CEO Hans Wijers. "In these challenging markets, only lean companies succeed. We have therefore started a rigorous drive to further reduce our cost base."
AkzoNobel expects its 2008 outlook to remain unchanged. The company anticipates 2008 EBITDA before incidentals to be close to the 2007 pro forma level of EUR 1,870 million.