STOCKHOLM (Reuters) - Swedish security services group Securitas, (SECUb.ST) which has posted seven straight quarterly earnings drops, is to cut costs and merge two divisions, it said on Wednesday.
The company, the world’s second largest security firm after British-Danish G4S, (GFS.L) has suffered from weakness in Europe during the sovereign debt crisis, affecting key contracts. Profitability in its U.S. market has been weaker than expected.
“A cost-savings program has been initiated at Security Services North America and at Security Services Europe,” the group said in a statement, referring to two core divisions which accounted for a combined 76 percent of sales in 2011.
It said it was aiming for annual cost savings of 300 million crowns ($45.18 million) from 2013 and estimated restructuring costs of about 360 million crowns, which it would take in the fourth quarter.
Securitas’ shares were up 2 percent at 0726 GMT to a one week high, outperforming the wider market in Stockholm.
The firm said it would merge its mobile and monitoring division, which accounted for 10 percent of sales in 2011, with the Security Services Europe division.
Communications director Gisela Lindstrand said the changes would lead to job losses of about 400 people within middle and higher level management. The group employed about 300,000 people worldwide in 51 countries, it said in its 2011 annual report.
The group said chief executive officer Alf Goransson would oversee the merger of the units and named Bart Adam, formerly head of the European security services division, as group chief financial officer.
($1 = 6.6408 Swedish crowns)
Reporting by Anna Ringstrom and Veronica Ek, editing by Patrick Lannin