Dialight axes 130 staff
Lighting technology specialist Dialight is axing 130 staff – around 12 per cent of its global workforce – as part of a cost-cutting programme.
The market reacted positively with the Newmarket company’s share price rising 15p (almost three per cent) to 565p on early trading.
New chief executive, Michael Sutsko (above), had warned previously that a review was underway and the job cuts are the first manifestation. Other measures taken as part of the review will be unveiled in October.
Sutsko insisted that the move would strengthen the business and lay the foundations for future growth. He said Dialight had created significant opportunities to convert firm inquiries into contract wins.
Dialight said the roles expected to be made redundant spanned all of the group's countries of operation; consultation with employees is underway.
The company outlined at its interim results announcement in July that the group experienced a downturn in profitability in the first half of 2015 due to operational inefficiencies and excess costs.
“We are therefore taking swift action to address these excess costs to improve profitability and better position Dialight in its key growth markets,” the company said in a statement to the London Stock Exchange.
The redundancy programme will, on a run rate basis, reduce operating costs by more than £3 million a year. It will save more than £1m in the current financial year, although this will be offset by cash costs of a similar amount.
Sutsko said: “I believe that we have a huge opportunity ahead and Dialight is well positioned to capture significant value in our rapidly growing markets. “However, as sales continue to grow, the business has taken on excess costs which have resulted in our poor first half performance.
“We firmly believe that our team can deliver continued growth with future resources being added in line with our strategy. This action is a key part of our plans to transform our business in the short term whilst realigning to deliver profitable growth going forward.
As previously indicated, we will report back with the findings of our strategic review in October.”