Thursday 26 March 2020 3:05 pm

Weir axes dividends, slashes US jobs and cuts costs as coronavirus crisis hits firm

Energy services and engineering firm Weir has scrapped its dividend as a result of coronavirus uncertainty.

The FTSE 250 listed, Glasgow-based company, becomes the latest in a list of firms to do this as they try to cut costs.

Although it reported a return to normality with its Chinese operations, the company’s main area of concern is in North America.

This is due to travel restrictions being imposed to prevent the spread of the virus.

Weir will cut its US workforce by 25 per cent and further reduce costs.

Read more: US unemployment skyrockets as coronavirus hits economy

The oil price, currently near $27 a barrel for Brent crude and $23 for WTI futures, is near-20-year lows.

Shares in the company are trading down two per cent at 719.40p.

The sudden descent of crude oil prices is also down to oil oversupply due to the Russia-Saudi Arabia price war.

Some analysts have suggested the oil price could fall as low as $10 a barrel, with fears that the world is running out of oil storage capacity, and result in a glut released to the market.

Last month, Weir announced it was exiting the oil sector to focus on its mining operations.

Read more: Weir to exit oil and gas after £379m loss

This came after disappointing results in oil exploration with revenue falling by a quarter.

By comparison, the company enjoyed strong margins in its mining operations.

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Performance for January and February had been in line with expectations.

However, when these results were released, coronavirus uncertainty grew.