Automotive drought forces Neways to ax another 100

As a result of the reorganization started at the end of last year, Neways Electronics will reduce its headcount by an additional 100 FTEs. Including the layoffs announced earlier, a total of 350 jobs will be cut to “adapt the capacity utilization in Germany to the reduced demand from automotive on a structural basis,” according to the Son-based EMS specialist in the announcement of its annual results. The reorganization, which is also affecting the company’s Dutch operations, is expected to be completed in the second quarter of 2021.

Due to the reduced demand in automotive and the automotive-related part of Neways’ industrial sector, last year’s net turnover declined by 10 percent to 478.6 million euros. With 144 million in earnings (-12 percent), the industrial segment no longer is the company’s number-one moneymaker. Rising to 162 million (+12 percent), semicon has been regained that role. Automotive decreased to 114 million euros (-29 percent), medical to 53 million (-2 percent). Net result sunk into the red: -3.9 million, compared to +8.5 million in 2019. The order book shrunk 23 percent to 225.0 million euros. The decline in automotive was offset by higher intakes from the medical and semiconductor sectors.

“2020 was a challenging year, as we saw a drop in demand in automotive due to the Covid pandemic, translating into a decline in both turnover and result,” comments Neways CEO Eric Stodel. “The effective strategic spread across various sectors and, in particular, strong growth in semiconductor partly compensated for this. To offset the sharp and abrupt drop in demand in automotive in the spring, we responded quickly through strict control of costs and investments and a strong focus on cash and working capital. In addition, we were able to close better agreements with clients, which greatly improved our inventory position and enabled us to realize a strong positive cash flow. We also immediately scaled down production and reduced working hours.”