LONDON -- Johnson Matthey, the world's largest maker of diesel-engine catalysts, plans to cut about 2,500 jobs in a further sign of the damage being caused to suppliers by the coronavirus-led slump.
The company said the layoffs, which represent about 17 percent of its staff, were part of a new plan to target annualized savings of at least 80 million pounds ($101 million) over the next three years.
"The decision taken to reduce costs has been difficult and the impact on jobs is regrettable," Chief Financial Officer Anna Manz told Reuters. "But they are the correct ones to ensure that Johnson Matthey continues to be well placed to deliver long term."
Johnson Matthey said costs cuts would come from consolidating plants in its Clean Air division, which accounts for about 60 percent of sales, and by using better technology to simplify the organization.
The company said, however, that it would accelerate its growth strategy by investing 400 million pounds in 2021 with a focus on climate change and sustainable technology.
"Following automotive OEM shutdowns earlier in the year, we are now seeing our customers gradually reopen their plants," the company said. "However, visibility on the path of recovery remains low."
Johnson Matthey did not provide a forecast for 2021. Its operating profit for the year ended March 31 tumbled 27 percent to 388 million pounds as it booked a restructuring charge of 140 million pounds and took a COVID-19 hit of 60 million pounds.
With liquidity of about 1.3 billion pounds and net debt of 1.1 billion pounds at the end its financial year, Johnson Matthey said it would propose a final dividend of 31.125 pence, or half the level for the previous year.
Manz said the company could raise dividends once market conditions recover.
JP Morgan analysts said Johnson Matthey's second-half performance beat its estimates.
Bloomberg contributed to this report