Ramirent cuts 600 jobs and expects "rapid deterioration' in construction

Ramirent is to cut around 600 jobs - 15% of its workforce - as part of a plan to reduce costs by €50 million in 2009. The Finnish company said the restructuring was required because of an expected "rapid deterioration" in 2009 construction volumes.

Ramirent said it would take a €25 million restructuring charge in its final quarter of 2008, with contingency plans developed in the event of further market declines.

Kari Kallio, Ramirent''s chief executive officer, said the equipment rental business remained "structurally attractive in the long-term" and that it would continue to execute its long-term growth strategy; "the company is prepared to weather this downturn with its strong balance sheet and solid cash generation.

"Measures to streamline cost structure and a minimum need for investments in fleet capacity will safeguard cash flow and improve our competitiveness. We will focus on re-allocation of our modern fleet capacity to optimise utilisation and defend price levels", said Mr Kallio.

Ramirent said it would start negotiations with the workforce about redundancies, with the impact in each country only being clear when negotiations had been completed.

Ramirent is the latest of several European rental company's to announce cost-cutting measures, with UK majors such as Hewden, Ashtead Group and Speedy Hire all having recently announced cut backs.

The announcement comes as Kari Kallio prepares to step down as chief executive officer. His successor, former Cramo executive Magnus Rosén, starts on 15 January.