Alstom Rationalises Company Structure

French railways and power company Alstom is to cut 1300 jobs and sell a minority stake in its railways division. The large multinational is pointing to poor future growth estimates as its reason for cutting back on assets and employees.

The firm employs 93,000 people around the world, 18,000 in France. It builds the French Train Grand Vitesse (TGV), the high speed trains used on the French railway network.

In the first half of the 2013 financial year to September, Alstom reported a 22% fall in orders, down to just under 10 billion Euros. As a result it is planning on cutting costs by 1.5bn Euros a year by 2016.

On this announcement this week the company’s shares rose by 5.63% as against a French stock market average of 0.73%, indicating happiness with its rationalisation plans among investors.

A spokesperson for Alstom, which supplies rolling stock around the world including the MENA region, reckoned on selling between 20 - 30% of its rolling stock division Alstom Transport, though nothing is set in stone as yet. Buyers may be industrial or financial stakeholders. The spokesperson made it clear that the company is not short of capital.