Up to 600 jobs to go in Zumtobel and Thorn restructure

The Zumtobel Group has announced up to 600 job losses as it merges its infrastructure with British subsidiary Thorn in a bid to slash costs and double profit margins.

The restructure of the group’s operations will see the headcount in sales reduced by around 150 and in manufacturing by up to 450, the Austrian lighting giant announced at the Light + Building exhibition in Frankfurt this week.

Four to six of the group’s 18 plants will be reduced in size, closed or sold in an effort to exploit ‘synergy effects that have lain dormant in the company for over a decade’ since its acquisition of Thorn, said CEO Ulrich Schumacher.

The company will now structure its sales activities in line with distribution channels rather than brands, as well as merging administrative functions, consolidating showrooms and offices, and introducing ‘leaner management structures’.

‘2014/15 is going to be the year in which we put down sound foundations for profitable growth,’ said Schumacher. ‘We have identified specific restructuring measures in sales and in terms of plant organisation that we are now going to implement quickly. In this way, we are going to leverage the synergy effects from the multi-brand approach that have lain dormant in the company for over a decade. In the coming financial year, however, we are also going to invest in the targeted expansion of our product portfolio, the sharpening of our brand profiles, the training of our employees, and in our market presence, especially in Asia and the Middle East.'

The new organisation is designed to achieve ‘coordinated, widespread marketing of the product portfolios of both luminaire brands’, the company said.

Zumtobel said the restructure will mean costs in the fourth quarter of the current financial year of around $21-27.5 million (€15-20 million).

The company is optimistic about the outlook for the lighting market and says it expects to achieve revenue growth of three to five per cent over the next three years.

It will be investing more in R&D, particularly in the area of software development.