De La Rue, the world's biggest banknote printer, has announced it will cut banknote production as demand for paper notes falls, putting some 300 jobs on the line.
The company, which prints 150 currencies including the Bank of England's notes as well as UK passports, is going to reduce its print capacity from eight billlion to six billion banknotes a year.
The move will save £13m a year by halving its production lines to four from eight, and closing its production centre in Malta. This is separate to its ongoing cost-cutting initiative, which is looking to save £10m a year.
The £13m savings were announced last week in the group's interim results, and mean De La Rue will cut its capital expenditure to less than £30m over the next two years. It will focus on investment to modernise print equipment for bank notes and security products, and covering restructuring costs, which are expected to reach £8m over the next two years.
Some 400 jobs will be impacted by the restructuring programme the company said, with 300 at risk of redundancy, mainly in Malta, although some UK jobs in Gateshead could be affected as well.
The production site in Malta will be used instead for the De La Rue's Security and Identity operations, which produce authentication documents, ID cards and passports. The company said it was hoping to "accelerate its growth in the Identity and Security products markets by improving capabilities and investing in new technologies," in order to get a "a competitive edge to capture the high growth opportunities."
Banknote printing will continue at facilities in the UK in Gatehead, Kenya and Sri Lanka.
Last week De La Rue reported profits had tumbled by 38 per cent to the six months ending 26 September to £12.8m and group sales were down five per cent, to £204.8m.
Shares were trading up 4.22 per cent this morning, to 481.25, but are down almost 10 per cent from a year ago.