Lonza Group is to cut jobs after "unexpected" order cancellations and postponements forced it to lower its earnings targets for 2009.
The Swiss manufacturer of speciality chemicals for the pharmaceutical and life science industries says it will cut around 450 jobs (about 5% of its workforce), close factories and reduce costs by up to CHF80m (US$78.4m) over the next two years.
As part of the restructuring, Lonza said it aims to simplify its business units and divisions and cut the number of its management committee members from seven to six. It will also adapt its biopharmaceutical large-scale capacities in order to be able to fill large plants with smaller volume products.
The company now expects an operating profit of between CHF360-380m for the full year, more than 10% below its previous forecast of CHF441m.
Chief executive Stefan Borgas said he expects the market to remain volatile for at least the next two years.
He also said last week's decision to pull its bid for Canada-based Patheon was independent of the deteriorating market outlook and came after Lonza's thorough due diligence of the firm.