Global cleaning giant gets rid of 100,000 jobs
The move represents about a fifth of the company’s global workforce, but will result in bigger profitsEuropost
ISS of Denmark, the world's largest cleaning company, is planning to get rid of about 100,000 jobs as it plans on exiting 13 countries that were among its least profitable markets. The move represents about a fifth of the company’s global workforce, but will also allow ISS to focus on a smaller group of larger clients.
The countries ISS plans to leave are mostly in emerging markets, including Asia and Eastern Europe. Specifically, it will no longer do business in Thailand, the Philippines, Malaysia, Brunei, Brazil, Chile, Israel, Estonia, the Czech Republic, Hungary, Slovakia, Slovenia and Romania. According to data they represent only 12 per cent of group revenue and 8 per cent of operating profits. And without them the Copenhagen-based firm expects organic growth to accelerate to 4-6 percent a year “in the medium term,” from 1.5-3.5 percent expected in 2018, since the focus would be more on getting a larger share of the $400bn global market for key accounts with the biggest corporate customers.
To avoid financial loses on the market, the company, which aside from cleaning offers services such as catering, property maintenance and security also assured that shareholders will get at least a quarter of as much as 2.5bn kroner ($383m) in anticipated net proceeds.
The drastic steps ISS is taking follow shares lost by about 18 per cent this year, in part as hedge funds speculated against the company. The new strategy also comes after signs that some analysts were starting to question ISS's prospects. Though most had been positive, Goldman last month told clients to start selling ISS shares.