UPDATE 3-Laird announces 5,000 job losses as sales slump

Tue Dec 16, 2008 4:42am EST

Related Topics

* Nearly half of staff to go by end-Q4

* Jobs to go from N American and Asian operations

* Q4 revenues to drop 25-30 percent

* Shares down 2 percent, underperforming FTSE 250

* Sees 2008 underlying performance within expectations

(Adds analyst comment, background, updates shares)

By Victoria Bryan

LONDON, Dec 15 (Reuters) - British electronics group Laird Plc (LRD.L) on Tuesday announced the loss of 5,000 jobs, or nearly half its staff, as it predicted fourth-quarter revenues would be 25-30 percent below last year on a drop in demand. The company, which makes electromagnetic interference (EMI) shielding devices and antennae, said the jobs will have gone by the end of the final quarter from its manufacturing operations in North America and Asia.

Laird also said the closure or downsizing of three of its U.S facilities, alongside previously announced plans to close its Hungarian factory, would lead to "further labour and overhead reductions during the first half of 2009."

Laird, whose products are used in consumer electronic devices manufactured by companies such as Nokia (NOK1V.HE) and Panasonic (6752.T), warned last month the worsening economic conditions would hit both revenues and profits in the fourth quarter of 2008.

Demand for consumer electronics has slumped in the run-up to the key Christmas sales season and has resulted in the loss of 16,000 jobs at Sony Corp (6758.T) and profit warnings from Samsung Electronics Co (005930.KS) and Texas Instruments Inc TXN.N. [ID:nL9720301]

Laird said on Tuesday it sees no further market recovery during 2009. "Our planning assumption is that global unit handset volumes will decline by 10 percent from 2008 levels."

Nokia earlier this month predicted volumes in the handset market would fall by at least 5 percent next year.

As a result of the cost-cutting actions, Laird will incur exceptional charges of up to 20 million pounds ($30.09 million) in 2008, with annualised net benefits of at least 12 million pounds to be gradually realised during 2009.

It said underlying performance for 2008 will be within expectations and that currency movements will mitigate the reduction in sales when expressed in sterling.

Brokerage Teathers said the comments on 2008 performance should be seen as a "relief" given the deterioration in recent trading, but said visibility was still very low.

Analysts are forecasting full-year pretax profit of 45.9 million pounds, down from 51.5 million last year.

Shares in Laird, which touched their lowest level in more than 25 years in November, spiked 5 percent lower in opening trade, but recovered some ground to trade down 2.3 percent at 0927 GMT. The wider FTSE 250 index for mid-caps was largely flat.

The company said it has a strong financial position with low gearing and credit facilities in place until 2012.

"We expect that the cost reduction measures that we are implementing, lower commodity prices, greater penetration of our products, and the breadth of our business activities, will underpin our performance in 2009." (Editing by Chris Wickham and Andrew Macdonald)

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