LafargeHolcim slashes spending as virus hits building, does not plan layoffs, for now

LafargeHolcim slashes spending as virus hits building, does not plan layoffs, for now

Reuters  | Mar 27, 2020 07:00

LafargeHolcim slashes spending as virus hits building, does not plan layoffs, for now

ZURICH (Reuters) - LafargeHolcim (S:LHN) ditched its profit forecast for 2020 and announced spending cuts to counter the downturn in construction caused by the coronavirus, the world's biggest cement maker said on Friday, adding it is not currently planning job cuts.

The Swiss company said it was trimming capital expenditure by at least 400 million Swiss francs (339.93 million pounds) compared to 2019, and also reducing fixed costs by at least 300 million francs.

"There are no job cuts planned for now," a company spokesman said. LafargeHolcim employs 70,000 people globally.

LafargeHolcim, whose share price has slumped by a third this year, is the latest construction company to warn about the epidemic's impact after HeidelbergCement (DE:HEIG) froze hiring and shuttered plants in Italy last week.

The company scrapped its previous guidance for annual sales to rise by 3%-5% and a recurring operating profit growth target of at least 7%. LafargeHolcim said although a recovery was underway in China, it was experiencing disruptions elsewhere.

© Reuters. The logo of LafargeHolcim, the world's largest cement maker, is seen in Zurich

"In most of the other key markets, the construction sector is disrupted and we forecast significant volume declines in April and May," it said, predicting "a significant negative impact" on second-quarter business.

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