Royal IHC cuts 1,100 jobs in major restructuring

Dutch shipbuilder Royal IHC is laying off 1,100 employees as part of a major restructuring  In order to return to profitability, the company is returning to its core activities in the dredging and offshore market.

The size of the organisation will be brought in line with the expected turnover of EUR 600‐700 million for the coming years. As a result, approximately 300 jobs will be lost in the Netherlands with a similar number of redundancies taking place outside of the country. In addition, a contingent workforce of around 500 will be phased out. Although most layoffs concern management and office roles, IHC’s spokesperson says some 5-10% will involve yard personnel.

IHC has more than 3,000 employees in 39 locations worldwide, which means the redundancies amount to almost a third of the company’s workforce. According to a spokesperson, none of the yard locations in the Netherlands will be divested.

“Royal IHC has a long history, in which it has built up extensive technological knowledge and a leading position in the Dutch maritime cluster. This was only possible through the knowledge, commitment and talent of its employees. It is very painful that we now have to say goodbye to some of those colleagues”, says CEO Gerben Eggink.

Eggink added: “Because we are now adapting the organisation to the expected turnover and structuring the company in such a way that we can respond efficiently and flexibly to market movements, IHC can continue to fulfil its leading role in the Dutch maritime industry. This is how we preserve the unique and high‐quality technology and knowledge in the Netherlands.”

Earlier this year, IHC was rescued from bankruptcy by the government, banks and a group of companies consisting of Van Oord, Boskalis, Deme and Huisman Equipment. The companies want to prevent IHC and the company’s high tech expertise from falling into Chinese hands. IHC received bridging loans and credit guarantees amounting to hundreds of millions of euros.

Divestment

With the companies stepping in, it was clear at the time of acquisition that IHC would define a new strategy in which it would return to its foundations. Moving forwards, the company will focus on its core activities in the dredging and offshore market. Activities in the (wet) mining and defence markets have been designated as potential core activities, with opportunities to develop further.

Other activities and business units will be divested, with the key objective being job retention. This is said to include engineering companies Vuyk and KCI, IHC Hitech, which supplies diving and medical equipment, and the company’s tunnelling business. Its participation in Rotterdam Offshore Group and Brazilian joint venture GranIHC (50 per cent share) will also be divested.

Following the restructuring, Chairman of the Supervisory Board Jaap Huijskes has stepped down. Commissioner Menno Snel takes over as Chairman of the Supervisory Board from 1 November. Former Dutch State Secretary of Finance Snel was appointed a member of the board on behalf of the Dutch State after it rescued the company.

Author: Mariska Buitendijk/Tobias Pieffers

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