Seat loses 97 million after provisioning 244 million to reduce staff

Seat has returned to losses in this first semester, after applying a provision of 244 million to carry out a cut of just over 1,300 jobs until 2026 through retirement.

Thomas Osborne
Thomas Osborne
28 July 2022 Thursday 03:53
23 Reads
Seat loses 97 million after provisioning 244 million to reduce staff

Seat has returned to losses in this first semester, after applying a provision of 244 million to carry out a cut of just over 1,300 jobs until 2026 through retirement. This has been agreed in the collective agreement signed this week and it is the toll involved in the conversion to the electric car, which involves up to 30% fewer working hours than a conventional one. Retirements are the central pillar of the adjustment, although voluntary dismissals are also expected, which could lead to the cut of up to 2,300 jobs from the current 15,000.

The company has pointed out that, without the restructuring costs, operating profits of 147 million would have been achieved, which contrast with the losses of 26 million registered in the same period last year. For this reason, it considers that the "right path towards profitability" has been undertaken despite the impact of the rise in raw materials and energy costs.

He also pointed out that the supply of semiconductors, one of the most serious problems in the past year, "is gradually improving", although the situation remains tense. In any case, demand remains strong, according to the company. Seat ended the semester with a turnover of 5,377 million euros, which represents a decrease of 4.9%, but in the second quarter revenues rebounded with an increase of 6% in revenue, to 2,973 million euros.

Unit sales fell 27.4% so far this year due to semiconductor shortages, to 204,100 units. However, Cupra sold 68,400 units in the period, which translates into a strong rise of 79.1%.

"Despite challenges such as the global shortage of semiconductors and the war in Ukraine putting enormous pressure on our business, we made an operating profit of €147 million before extraordinary expenses," said CEO Wayne Griffiths. "Cupra has maintained positive performance and has been the main driver of our success, as it has allowed us to improve the profitability of our sales," he said. “2022 is the year of Seat's turnaround. We have the foundations to achieve sustainable profitability in the coming years”, concluded Griffiths.

David Powels, executive vice president of finance and IT, has highlighted that "the figures for the first half show that we are on the right track towards profitability". "We are fully focused on preparing for the challenges of electrification for the automotive industry, implementing cost efficiencies and building a stronger and more sustainable financial structure."