Invensys To Cut More Jobs, Replace CEO

ByBridgeNews UK automation and controls company Invensys PLC said July 24 its profits will fall well short of expectations due to the worst recession in U.S. industrial output since the 1970s. Invensys said its profits in the six months to September will be 30% below its previous forecast and 20% below market expectations. As a result of the slowdown in the global economy, it will make another 2,500 job cuts. The company also announced Allen Yurko will step down as CEO at the end of September. He will be replaced by Rick Haythornthwaite, the former CEO of Blue Circle Industries PLC. Invensys said its performance has deteriorated since it last warned of lower operating profits in May, when it was being hampered by the slowdown in its U.S. operations. "Following recent trading statements from many of our customers and competitors and the latest output figures of the major economies, it is now obvious that we are seeing the worst recession in U.S. industrial production since the 1970s," Invensys says. Invensys now expects its operating profit before charges to be about 280 million sterling (US$392 million) in the six months to September. Invensys' latest troubles add to a string of problems since it was formed from the merger of BTR and Siebe PLC in February 1999. Its purchase last year of Baan, the Dutch software business, was widely criticized. It now plans to cut 6,000 jobs during the year to March 2002, higher than its previous forecast of 3,500 job losses. The company said it cut 3,200 from its 80,000 workforce during the April-June quarter. Yurko will retire at the end of January and step down as chief executive four months before then. Formerly chief executive of Siebe, he has been chief executive at Invensys since it was formed in 1998. Invensys said there will be no severance payment to Yurko. Haythornthwaite has been out of a job since he failed to defend Blue Circle against a hostile takeover from France's Lafarge SA, completed earlier this month.