Agfa to cut European payrolls

October 9, 1996

Agfa-Gevaert's ongoing effort to improve its profitability tookanother turn last month. The film and PACS vendor announced thatit plans to cut 550 jobs in Europe, primarily through the consolidationof its headquarters staff, which is split between

Agfa-Gevaert's ongoing effort to improve its profitability tookanother turn last month. The film and PACS vendor announced thatit plans to cut 550 jobs in Europe, primarily through the consolidationof its headquarters staff, which is split between Belgium andGermany.

Agfa's parent, German pharmaceutical giant Bayer, has crackedthe whip over Agfa for the past several years, trying to improvethe unit's profitability (SCAN 9/11/96). Agfa has cut personneland consolidated many of the company's operations in response.

In last month's announcement, Agfa said it would move centraland administrative functions now taking place in Leverkusen, Germany,to Mortsel, Belgium, where most of Agfa is headquartered, accordingto Dionn Tron, vice president of corporate communications. Agfa'sPhoto Imaging business group will remain in Leverkusen, whereit has manufacturing facilities, Tron said. The move is expectedto result in about 550 job cuts in Germany by 1997.

Agfa's U.S. subsidiary in Ridgefield Park, NJ, will not beaffected by the cuts, according to Tron. The unit began its cost-cuttingefforts several years before the Europeans.

"We've been doing this for a while and we are at the optimallevel in the U.S.," she said. "We've reduced our staff38% over the past five years."

There are signs that Agfa's cost-cutting is having the desiredimpact. Agfa's year-to-date worldwide profit margin is at 4.3%,up from 3% last year, according to Tron.