Keller Group Plc has announced on Thursday (Nov 22) that it is going to implement worldwide restructuring and lead to 700 job cuts in four countries, including Singapore and Malaysia.
The London-based geotechnical services provider said it would exit its heavy foundations business in Singapore and Malaysia, with heavy competition and pricing pressure. The company is also set to scale back in Brazil and South Africa, leading to exceptional restructuring charge of about 57 million pounds in its full-year results. Heavy foundation activities involve laying the foundation for structures whenever weak soils have little capacity to resist an existing load or a change in existing load, Reuters reports.
In an official statement, Chief Executive Officer Alain Michaelis said that the company decides to take the tough but necessary actions in order to reduce cost base and exposure to unprofitable market segments. The move is also aimed to sharpen their control regime, he added.
According to its review of Asia Pacific (APAC) business in October, Keller cited deteriorating conditions in Southeast Asian markets, especially Malaysia. The company, which provides systems and services for monitoring the safety of buildings, ground improvement equipment and cable systems to the construction industry, has said in July its business had been hit in Malaysia, where the surprise win of Mahathir Mohamad in the elections led to the country putting some major planned infrastructure projects on hold.
The company also flagged challenging market conditions in Brazil and South Africa, significantly affected by geo-political tensions, and said it was taking “proactive measures” to scale back its operations in those difficult markets.
“It is encouraging to see management reacting quickly to events in its end markets and we take some comfort from the fact that the net cash costs are minimal,” Liberum said in a note.