The manufacturing giant’s move is in response to a fall in orders to below €500m (A$965m) in the fourth quarter of 2008/2009 – a drop on already weak orders of €560m (A$1.08bn) in the previous quarter.

It anticipates the cuts will help save the group €400m (A$772m) by 2010/2011, compared to an original goal of saving €200m (A$386m) in the same period.

Heidelberg has cited an ongoing reluctance and hesitance to invest by printers, which has led the manufacturer to reduce its own capacity.

The cuts, which will take place in the company’s research and development, production, administration and sales divisions, are estimated to cost Heidelberg €170-190m (A$320-367m) to implement.

Heidelberg chief executive Bernhard Schreier said despite introducing a cost-cutting program last year there has been a further slump in demand and “there are no signs of any improvement in the short term.”

He added: “In this situation, it is up to the management team to maintain the company’s competitiveness and efficiency.

“We have made the necessary structural adjustments to optimise our company’s earnings on a sustainable basis and ensure it is primed for the upturn when it comes.”

In addition, the manufacturer will terminate its collective agreement at the end of June this year.

“Given the worldwide financial market crisis, we regret that we are left with no alternative but to terminate the agreement.

“This is the only way we can ensure our competitiveness and efficiency, something that is also in our workforce’s interests,” added Schreier.

Read the original article at www.printweek.com.

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