Global engineering group WorleyParsons will cut more jobs in a new restructure that will hit this year’s bottom line by $35 million.
No figure has been put on how many jobs it will cut, but they will be on top of more than 500 job losses and $13.6 million in restructuring costs in the first half.
The market likes the news, with the stock up 79 cents, or 5.1 per cent, to $16.27 by 1050 AEDT.
WorleyParsons announced a reorganisation of the business into three sections: Services, Major Projects and Improve.
Chief executive Andrew Wood said the restructure would better position the company for future earnings growth by improving delivery and offering a more competitive value proposition for its customers.
“It will simplify the corporate structure, reduce overhead costs and enable our staff to deliver greater customer satisfaction,” he said.
WorleyParsons has suffered like others in services industries due to its exposure to oil and gas companies that have slashed capital spending, but some analysts such as Citigroup have criticised the company’s performance.
It sounded a profit warning last year which is the subject of a shareholder class action.
It reaffirmed that guidance for underlying net profit for fiscal 2014 of $260 million to $300 million, which was cut from a forecast increase from last year’s $322 million.
The guidance does not include the extra restructuring costs of $35 million this fiscal year.
It said overhead reductions and improved project delivery would result in improved margins from next financial year.