British company Senior Plc (Senior) has announced that it will now be cutting a further 12% of its 8,200-strong workforce, taking the total to 17%, while 19% remain on furlough.
Established in 1933 the company operates in two distinct sectors – aerospace where it is responsible for manufacturing parts such as airframes and engine build-up tubes for planemakers, and flexonics, which provides the automotive and energy industries. Prior to the outbreak of the coronavirus pandemic, Senior had already seen an increase in over capacity after Boeing, one of its principal clients, reduced production levels of the troubled 737 MAX.
In November last year, the company laid out a £20 million (US$25 million) restructuring plan, while in the following month it announced that it was actively considering the sale of its aerostructures business for a figure around £450 million (US$562 million) owing to weakening revenues. By April this year Senior decided that in the long term, it would be more beneficial to retain its aerospace division, which makes components for Boeing and Airbus, as well as for private jets and military helicopters such as the Black Hawk, and brings in the bulk of revenue.
Subsequent to this, a likely “prolonged contraction” due to the coronavirus crisis has forced it to broaden the restructuring. “The coronavirus pandemic has had a profound effect on our markets and customers since March and the impact will be with us for some time to come,” CEO David Squires said. The company has seen weakness in most of its markets bar defense, semi-conductor equipment and medical, which have remained in a “healthy” state.
Senior anticipates a 30% drop in first-half 2020 revenue, while net cash inflow was approximately £3 million (US$3.75 million) during the period.
