LEO Quinn, the new chief executive of Qinetiq, will announce radical new plans next month to turn around the fortunes of the struggling British defence technology firm.
Quinn is in the process of finalising his restructuring programme, which will include slashing redundancy terms for thousands of the company’s UK employees. Union representatives have been told that Qinetiq can no longer afford lucrative redundancy terms for around half its former Ministry of Defence staff, who are entitled to public sector-type conditions.
The cuts follow two profit alerts in recent months, as the group revealed that the cost of war in Afghanistan had resulted in lower spending by the British and American governments.
Two of Qinetiq’s most significant investors, the American investment firms Artisan Partners and Ruane Cunniff & Goldfrab, will be hoping Quinn can provide the shake-up that the City says the company so desperately needs. Artisan Partners recently increased its stake in the company from 4.99 per cent to 5.04 per cent.
Analysts estimate that the company’s profits will be down more than 15 per cent for the full year and said sales would not pick up in the second half of 2010.
Quinn said in a staff e-mail last week that the company had paid out £75m in redundancy payments in the past three years. Up to 1,000 jobs could be lost in the restructure.