Seven Group subsidiary warns on full-year earnings, plans organisational restructure at cost of $13m.
Seven Group Holdings (SVW) says it will cut 630 positions across its WesTrac business in a divisional restructure and expects earnings to be at the lower end of guidance due to challenging market conditions.
The staff reductions, to be implemented in the next month, will cost $13 million and come in addition to 375 redundancies announced earlier this year at a cost of $8 million.
Seven also said it expects full-year EBIT to be at the lower end of previous guidance of 30% to 40% below the prior year, with a more marked reduction in the first half given the record previous corresponding period.
In August, Seven Group said it expected WesTrac's full year earnings to fall by more than a third due to a slowdown in mining investment.
The group said it will reduce jobs through a combination of natural attrition, reduction in contractors and redundancies.
"WesTrac has implemented a series of efficiency and productivity initiatives over the past twelve months in an effort to streamline its cost base, but these measures alone have not been sufficient in view of continuing challenging market conditions," Seven said in a statement to the Australian Securities Exchange.
After the restructure, WesTrac is expected to have a workforce of approximately 3,350.