BANGALORE, Jan 29 (Reuters) - Diversified U.S. industrial manufacturer Manitowoc Co Inc (MTW.N) said it was cutting about 2,100 jobs, or 22 percent of the workforce at its crane segment, due to a shrinking backlog, a day after the company posted a fourth-quarter loss.
Shares of the company extended their losses and were trading down nearly 14 percent on the New York Stock Exchange.
The crane segment, which has been battered by a prolonged slowdown in construction activity, currently employs about 9,700 people and accounts for roughly about 85 percent of the company’s total business.
The company will cut jobs in France, Portugal, China, India and at its Pennsylvania facility, crane segment president Eric Etchart said in a conference call with analysts.
As of Dec. 31, 2007, Manitowoc had about 10,500 employees across its business units, according to the company’s website.
“A cut in backlog has left us with orders having shorter build and delivery times, and the need to right size our employment levels,” he added.
Crane backlog at the end of 2008 was $1.9 billion, down 34 percent from its year-ago levels.
“This is going to be the start of the decline for the company,” analyst Paul Bodnar of Longbow Research said.
Bodnar warned of more job cuts at the company as he does not see a recovery in the crane market for at least two years.
The company had on Wednesday posted a quarterly loss, hurt by acquisition and other charges and maintained its forecast of a 20 percent drop in sales at its crane segment in 2009. The rate of decline in backlog is something to monitor, particularly as it relates to the company’s 2009 crane revenue outlook, which could prove to be aggressive, analyst Steven Song of Macquaire Research Equities said in a note to clients.
Shares of Manitowoc have tumbled almost 90 percent since it touched a high in April, sharply outpacing the roughly 38 percent fall of the S&P 500 index .SPX.
The company’s shares were down 13 percent at $5.96 in afternoon trade on the New York Stock Exchange. (Editing by Anil D’Silva)