ABB's Irish staff hang in limbo as 12,000 jobs are cut globally

Thousands of jobs were axed by two big European industrial companies yesterday, raising concerns about the spread of the global economic slowdown.

ABB, one of the world's biggest electrical engineers, announced 12,000 job cuts 7 per cent of its workforce. A spokesman for the company was unable to say last night how the global restructuring would affect ABB's 650 employees in three Irish operations, spread throughout the Republic and Northern Ireland.

"We don't have any specific information on any national market," he said, adding that businesses performing well would obviously not be affected.

ABB announced in May that it had won a contract from ESB worth $14 million (#16 million) to expand and upgrade the power network in and around Dublin.

Meanwhile, Invensys, the UK-based engineering group, said it had increased its target for job cuts this year from 3,500 to 6,000. It has already shed 3,200 in the first three months of the year.

Mr Allen Yurko, chief executive of Invensys, resigned after accepting the blame for failing to forecast the "worst recession for 30 years" in US industrial production.

Both firms said the cuts followed a sharp slowdown in orders from customers over the past six weeks. Analysts said there were growing signs that the slowdown was moving to the industrial sector.

ABB and Invensys sell controls equipment to industrial companies. Both are considered bellwethers of demand.

ABB announced its job cuts to reduce costs by $500 million a year, after saying earnings before interest and taxes in the first half of 2001 fell 21 per cent from last year to $626 million, well below expectations.