MUNICH (Reuters) - German lighting maker Osram Licht AG (OSRn.DE) said it expects its net income to improve sharply in its current fiscal year after it cut jobs and shuttered factories to return to profit.
Osram, the world’s No. 2 lighting maker after Philips (PHG.AS), is in the midst of a restructuring, having been slow to adjust to a shift in demand from traditional light bulbs to newer technologies such as light-emitting diodes (LEDs).
It said on Tuesday it was now cutting an overall 8,700 jobs, or 21 percent of its workforce, to generate gross savings of 1.2 billion euros ($1.6 billion).
So far, only two of Osram’s remaining 36 factories make LEDs - in Regensburg, Germany and Penang, Malaysia - but it is building a new plant in China at a cost of over 100 million euros to boost its presence in the fast-growing Asian market.
Meanwhile, newer players in lighting such as South Korea’s Samsung Electronics (005930.KS) and Japan’s Toyoda Gosei (7282.T) are grabbing market share from traditional industry leaders - Philips, Osram and General Electric (GE.N).
In its year to the end of September, the company, spun off from Siemens (SIEGn.DE) earlier this year, swung to a net profit of 34 million euros from a year-earlier loss of 391 million thanks to its restructuring program and a gain from the sale of a stake in a joint venture.
That fell slightly short of analysts’ consensus forecast of 38.2 million euros in a Reuters poll. <ID:L5N0IT2X7>
($1 = 0.7459 euros)
Reporting by Maria Sheahan; Editing by Jonathan Gould