Fortescue share price falls after cost-cutting decision

The mining giant is cutting down its workforce materially to save money.

| More on:
Three miners stand together at a mine site studying documents with equipment in the background

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Fortescue Ltd (ASX: FMG) share price is slipping into the red on Thursday morning.

At the time of writing, the iron ore giant's shares are down 1% to $22.15.

Why is the Fortescue share price falling?

The Fortescue share price is falling this morning in response to the release of an announcement after the market close yesterday.

According to the release, Fortescue is making some big changes to support the simplification of its structure to ensure it remains lean, impactful, and agile.

One of those changes will be a significant reduction in its workforce later this month.

Fortescue advised that it "remains resolute in its commitment to be the world's leading green technology, energy and metals company" and retains its focus on achieving Real Zero by 2030.

However, as the company has undergone a period of rapid growth and transition, and as part of bringing together Metals and Energy into One Fortescue, it revealed that initiatives are being implemented to simplify its structure, remove duplication, and deliver cost efficiencies.

Management stressed that this is because it must continually evolve to ensure it remains lean, is best positioned to deliver on its strategy, and generate the maximum value for shareholders.

As part of this evolution, approximately 700 people from across Fortescue's global operations will be offered redundancies. This process is expected to be finalised by the end of July 2024.

Executive appointment

Fortescue has also announced that its acting chief financial officer, Apple Paget, will move into the role of group chief financial officer after serving 11 months acting in the role.

Fortescue notes that Paget joined Fortescue in January 2023 as group manager finance and tax and has 25 years' experience as a finance executive.

Chief corporate officer Shelley Robertson has also been appointed chief operating officer. Robertson joined the company in October and is an experienced executive with a career spanning 30 years in oil and gas, mining, and renewable energy.

Finally, Fortescue's assistant company secretary, Navdeep (Mona) Gill, has been appointed as the secretary of the company. Gill has been with Fortescue since 2021, acting as legal manager and assistant company secretary, and replaces Phil McKeiver in the role with immediate effect.

Fortescue notes that this will mean that Fortescue's board compromising almost 50% women. It also highlights that diversity will continue to be a key measure of its performance, with new targets implemented to drive diversity across the business.

The Fortescue share price is down 2.5% over the past 12 months.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

woman holding two phones connected by lead
Materials Shares

Up 46% in one month! Pilbara Minerals shares lead the charge as lithium stocks rally

Are lithium stocks back in vogue?

Read more »

smiling worker stands before power generator technology
Materials Shares

Fortescue shares jump 5% on record performance

This mining giant was in fine form during the quarter.

Read more »

A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, holding a mobile phone in his hand while thinking about something.
Materials Shares

Should you buy Pilbara Minerals shares today?

Let's see if analysts think investors should be buying the lithium giant's shares.

Read more »

Image of young successful engineer, with blueprints, notepad and digital tablet, observing the project implementation on construction site and in mine.
Materials Shares

Expert says this ASX mining stock could rise almost 30%

Let's see which miner is being tipped as a buy for investors right now.

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Materials Shares

BHP shares charge higher on record copper and iron ore production

Let's see how the miner performed during the fourth quarter.

Read more »

A man stands with hands on hips surveying construction of three high-rise buildings.
Materials Shares

Building activity on the rise – will ASX materials shares benefit?

New data from the March quarter shows a sharp rise in building activity. 

Read more »

Man smiling at a laptop because of a rising share price.
Materials Shares

Macquarie predicts 11% upside for this ASX materials stock

Here's why the broker is positive on the stock.

Read more »

Miner and company person analysing results of a mining company.
Materials Shares

Rio Tinto share price falls on Q2 update

Let's see what the mining giant reported for the second quarter.

Read more »