LafargeHolcim to cut 200 jobs as Paris, Zurich offices axed

[May 25, 2018]   By John Revill

ZURICH (Reuters) - LafargeHolcim <LHN.S> will close its corporate offices in Paris and Zurich, eliminating 200 jobs as part of a cost-cutting drive, the world's largest cement maker said on Friday.

The Franco-Swiss company confirmed the long-mooted closure of its Paris HQ, which was reported by Reuters on Thursday.

It would also shutter its corporate office in Zurich, with operations moving to its site in Holderbank, to the west of the Swiss city. Holderbank is where LafargeHolcim's predecessor company Holcim opened its first cement plant in 1912.

Other functions would be shifted to a new corporate office in the Swiss town of Zug, LafargeHolcim said in a statement.

According to the plan, 107 jobs in the Zurich area and Holderbank will be cut and 97 in Paris will go. No other sites in France will be affected, the company said.

The action could spark opposition in France, where the 2015 combination of France's Lafarge with Switzerland's Holcim was promoted as a merger of equals. The economy ministry in Paris did not respond immediately to a request for comment.

Chief Executive Jan Jenisch said the cuts were part of the plan to simplify the company's structure and improve performance.

"This painful but necessary simplification step is key to creating a leaner, faster and more competitive LafargeHolcim," he said in a statement.

The logo of LafargeHolcim, the world's largest cement maker, is seen at its headquarters in Zurich, Switzerland March 2, 2017. REUTERS/Arnd Wiegmann

LafargeHolcim, which employs 80,000 people globally, is at the start of an new strategy under Jenisch following the company's underperformance in recent years.

Its stock has lost 27 percent since the merger was completed, trailing the 32 percent gain by the Stoxx Euro 600 construction & materials index <.SXOP>.

Earnings have disappointed while the company has also been embroiled in a scandal after it admitted paying armed groups to keep a cement factory running in war-ravaged Syria.

The affair, which is being investigated by legal authorities in France, triggered the departure of CEO Eric Olsen and his replacement by Jenisch last year. Olsen denies wrongdoing.

In March the company announced a 400 million Swiss franc ($403 million) cost-cutting program, saying it would close its Singapore and Miami offices by the middle of this year.

It was on track to hit the savings goal by the first quarter of 2019, it said on Friday, adding the closure of Miami and Singapore offices had now been completed.

Bernd Pomrehn, an analyst at Bank Vontobel in Zurich, said the office closures fit with Jenisch's more localised strategy.

"Jan Jenisch is now again giving the regions more responsibilities, which requires less overhead in Zurich and Paris," he said.

(Editing by Michael Shields)

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