Weir Group axes 450 US oil and gas division jobs
Weir Group has warned over profits in its oil and gas division and revealed a fifth of its US workforce has been axed in the face of tough trading in the US.
The Glasgow-based engineering firm said it had cut about 450 US jobs under plans to slash annual costs by £30m across the division.
It suffered a 32% fall in oil and gas orders year-on-year in the third quarter.
Weir said US customers had cut back operations and ordered less machinery.
This left the division only "moderately profitable" in the three months to 30 September. Weir said the fourth quarter would be "sequentially lower".
Iron Bridge Project
It cautioned that full-year profits in the division would now be below previous expectations.
Overall orders in the third quarter rose 4% and were flat year-on-year, as its recent record £100m Australian mining contract helped offset the oil and gas performance.
Orders in its minerals division lifted 17% in the quarter and orders for equipment jumped 72%, thanks largely to the Iron Bridge Magnetite Project.
With that contract stripped out, minerals equipment orders were about £20m, or 22% lower, as it said some projects were held back due to worries over the outlook for the global economy.
Chief executive Jon Stanton said: "In North American oil and gas markets, demand was impacted by an intensified focus on cash preservation in the quarter.
"In response, we have undertaken a circa £30m cost reduction programme in this division to support competitiveness in the short term."
The group kept its outlook unchanged for its minerals and Esco mining businesses.