Alstom shares fell by 20% after news of layoffs of 1.5 thousand employees
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Today shares of the French industrial concern Alstom fell on the Paris Stock Exchange by 20% after the company reported about plans to reduce staff, sell part of its assets and raise capital to improve its financial position.
Alstom, which is the world’s second-largest train maker after China’s CRRC, plans to sell assets worth about €1 billion and reduce its debt load by €2 billion by March 2025.
As part of cost reduction, it is also planned to fire 1.5 thousand people, which is about 10% of the company’s administrative staff. The company emphasizes that the cuts will affect only administrative personnel, sales department employees and some other departments, but will not affect production. The total number of Alstom employees is now about 80 thousand people.
Experts note that Alstom’s problems may be related to the purchase of the railway business from competitor Bombardier about three years ago. Alstom continues to incur losses on contracts, which were once contracted by Bombardier. Based on the results of the current financial year, which ends for Alstom in March 2024, the company expects a net outflow of free cash flows of €500–750 million, and Alstom’s total debt has already reached €3.5 billion.
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