QINETIQ chief executive Leo Quinn looks set to announce a number of stinging cost cutting measures in order to stem the losses at the defence group.
The Hampshire based company was forced to issue two profit alerts in the last few months, warning that the cost of war in Afghanistan had resulted in lower spending by the British and American governments.
Quinn told staff in a series of e-mails that he planned to cut head office costs by half and significantly reduce the number of senior management.
The company said that employees appreciated Quinn’s candid work style but could not comment on the possible job losses. The chief executive started a review of the company’s operations and processes before Christmas, the findings of which will be announced at Qinetiq’s preliminary results in May this year.
Quinn has also launched two internal programmes to reshape the business, in addition to a new performance management system. He described the company’s recent financial performance as “a severe warning to us all” adding that “staying as we are is not an option”.
The firm has blamed economic and political uncertainty for delayed orders from the Ministry of Defence and said the American defence department had put off ordering for Afghanistan.
It is believed profits will be down more than 15 per cent for the full year and analysts said sales would not pick up in the second half of 2010.