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Denmark’s Global Cleaning Giant to Cut 100,000 Jobs

Bloomberg logoBloomberg 12/10/2018 Peter Levring and Christian Wienberg
a man in a blue shirt© AndreyPopov/Getty Images

ISS A/S of Denmark, which is the world’s largest cleaning company, is planning to get rid of about 100,000 jobs -- representing a fifth of its global workforce -- as it exits 13 countries that were among its least profitable markets.

Shareholders will get at least a quarter of as much as 2.5 billion kroner ($383 million) in anticipated net proceeds, Chief Executive Officer Jeff Gravenhorst said by phone on Monday.

The countries being exited are mostly in emerging markets, including Asia and Eastern Europe. At the same time, ISS wants to do more business with so-called key accounts, such as global banks.

ISS shares have plunged recently, adding to 2018's decline© Bloomberg ISS shares have plunged recently, adding to 2018's decline

The 13 countries targeted represent just 12 percent of ISS’s group revenue and 8 percent of operating profits. The plan means the company will no longer do business in Thailand, the Philippines, Malaysia, Brunei, Brazil, Chile, Israel, Estonia, the Czech Republic, Hungary, Slovakia, Slovenia and Romania. After leaving those markets, ISS’s workforce will shrink to about 390,000 people, it said.

CEO Gravenhorst said ISS wants to focus on getting a larger share of the $400 billion global market for key accounts with the biggest corporate customers. That business accounts for 46 percent of the company’s organic growth, with ISS currently sitting on about 2 percent of the key-account market, he said.

a close up of a fence: After peaking in 2011, ISS has reduced work force© Bloomberg After peaking in 2011, ISS has reduced work force

Copenhagen-based ISS expects organic growth to accelerate to 4-6 percent a year “in the medium term,” from 1.5-3.5 percent expected in 2018, it said in a statement.

World’s Biggest Cleaner Is Hit by Record Hedge Fund Attack

ISS, which is one of Europe’s biggest employers, is taking the drastic steps after its shares lost about 18 percent this year, in part as hedge funds speculated against the company. The new strategy also comes after signs that some analysts were starting to question ISS’s prospects. Though most had been positive, Goldman last month told clients to start selling ISS shares.

Monday’s announcement should now “appease investors,” Per Hansen, an investment economist at Nordnet said.

Shares in ISS traded down about 0.6 percent just after the market opened in the Danish capital.

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ISS statement here

To contact the reporters on this story: Peter Levring in Copenhagen at plevring1@bloomberg.net;Christian Wienberg in Copenhagen at cwienberg@bloomberg.net

To contact the editor responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net

For more articles like this, please visit us at bloomberg.com

©2018 Bloomberg L.P.

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