Paris, France – French train maker Alstom announced plans Wednesday to cut 1,500 jobs worldwide as the crisis-hit group seeks to slash its sizeable debt.
The move sent shares in the world’s number two rail company lower.
Alstom posted last month a negative cash flow of 1.15 billion euros ($1.25 billion) in the first half of its fiscal year, raising concerns about its financial health.
“The negative free cash flow of Alstom during this first half is a clear call for change,” Alstom chief executive Henri Poupart-Lafarge said in a statement.
“We are undertaking a comprehensive action plan to maintain our investment grade rating and secure our mid-term objectives,” he added.
The group said it was working on a “comprehensive operational, commercial, and cost efficiency plan” to reinforce its balance sheet.
Alstom said it aims to cut debt by two billion euros by March 2025.
In addition to reducing the number of commercial and administrative jobs by 10 percent, Alstom said it is considering selling up to one billion euros worth of assets and raising capital.
One third of Alstom’s cash flow problem was attributed to the delay in the 443-train Aventra program in Britain.
Alstom inherited the contract when it acquired the rail business of Canadian group Bombardier in 2021.
Alstom shares, which dived last month, fell more than 11 percent on Wednesday following the announcement of the cost-saving plan.