Heidelberg's 'Focus' Program to Cost 2,000 Jobs

HEIDELBERG, GERMANY—As announced in November 2011, the management board of Heidelberger Druckmaschinen AG (Heidelberg) has agreed on the “FOCUS 2012” efficiency program to achieve the company’s profitability targets. As a result, as many as 2,000 job cuts are planned worldwide.

The aim is to ensure that Heidelberg's target operating result before special items of around US$194 million is still achieved in financial year 2013/14 and the company can independently continue to build on its position in the future.

The objective of the “FOCUS 2012” efficiency program is to help significantly reduce capacities and costs at Heidelberg over the next two years. It is intended to lay the foundation for positive business developments in response to the volatile environment and changing market requirements. Most of the measures will be initiated and implemented quickly before the end of calendar year 2012. In addition, the program includes a number of medium- to long-term measures aimed at adapting the entire organization to the changed structures.

The goal of the program is to achieve total sustainable savings of around US$233 million in financial year 2013/14. Depending on the results of negotiations with employee representatives and other factors, the non-recurring expenditure required to do so is estimated at up to US$194 million.

“The ongoing economic uncertainties will continue to put a brake on the industry’s recovery. We are seeing weaker demand in industrialized nations but stronger growth potential in emerging markets,” said Heidelberg CEO Bernhard Schreier. “FOCUS 2012 will position Heidelberg accordingly, above all by significantly reducing production capacities and by adjusting sales activities to the regional market changes. This will create the basis and efficient structures needed for profitable business development.”

Among the short-term measures:

• Production capacities will be reduced by around 15 percent and service capacities in the regions will be adapted in line with the expected medium-term level of sales.
• Research and development expenditures will be cut by reducing capacities, further optimizing internal R&D processes, and reprioritizing projects.
• Sales, marketing and structural costs will also be reduced substantially by pooling sales and marketing activities and restructuring individual markets. Comprehensive support for the global customer base will still be ensured.

The entire package of measures will have an impact on the global head count of Heidelberg. Based on current plans, around 1,200 production, development, administrative, sales and marketing jobs in Germany and around 800 jobs outside Germany will be eliminated. As of Dec. 31, 2011, Heidelberg had 15,666 employees worldwide (including trainees).