Vancouver-based Finning cutting 1,100 jobs
Vancouver-based Finning International Inc announced on Thursday that it will cut a further 1,100 jobs in as it continues to struggle with lacklustre demand and plunging commodity prices.
The company is the world’s largest dealer of Caterpillar Inc. equipment.
Finning will lay off 1,100 workers in Canada and abroad – about eight percent of its total workforce. A total of 440 jobs in Canada, 550 jobs in South America, and 100 jobs in the UK and Ireland are affected.
Since the start of the year Finning has cut its overall workforce by 1,900, or 13 percent.
In addition to the job cuts, Finning said that it will also be closing 11 facilities in Western Canada.
Finning Intenrational is the world’s largest dealer of Caterpillar parts and vehicles.
“Our customer’s needs are changing, our business model is changing. The bricks and mortar footprint that we have was built for 20 years ago is in my personal view less relevant going forward,” company chief executive Scott Thomson said in a conference call with analysts.
“If there’s ways to get parts to customers without bricks and mortar, without that fixed investment, we should be doing it.”
Thomson said on the conference call that the restructuring will help the company be in a better position for when demands picks up again.
“I would view this less as a cost-cutting effort and more as a transformation,” said Thomson. “It was accelerated by the environment we’re in, but I think it’s the right approach moving forward.”
Finning also posted lower-than-expected revenue and profit in the third quarter because its customers in the mining, energy and construction sectors have severely cut spending.
Revenue for the quarter was C$1.5 billion, shy of the average analyst estimate of C$1.65 billion, according to Thomson Reuters.
Net income dropped 42 percent to C$33 million ($25 million), or 19 Canadian cents per basic share.