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

Five happy miners standing next to each other representing ASX coal mining shares which some brokers say could pay big dividends this year
Materials Shares

ASX lithium shares: Best 5 of a weak bunch in 2024

Only one All Ords lithium stock really impressed investors last year with a near 90% share price gain.

Read more »

Three miners looking at a tablet.
Materials Shares

Why did the BHP share price crash 21% in 2024?

This mining giant had a disappointing year. Will things be better in 2025?

Read more »

a man holds his arms out and shrugs his shoulders as if indicating he doesn't know the answer to a question he's been asked.
Materials Shares

Why did the Pilbara Minerals share price crash 45% in 2024?

Why were investors selling off this lithium giant this year? Let's dig deeper into things.

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

How much could $5,000 invested in BHP shares be worth in a year?

Here's what one leading broker believes could happen with this miner's shares next year.

Read more »

A woman jumps for joy with a rocket drawn on the wall behind her.
Materials Shares

Bell Potter says this ASX lithium stock could rocket 90%+ in 2025

Let's see why the broker is bullish on this lithium developer.

Read more »

A female employee in a hard hat and overalls with high visibility stripes sits at the wheel of a large mining vehicle with mining equipment in the background.
Materials Shares

Forget Fortescue shares and buy this ASX iron ore stock

Bell Potter thinks this iron ore miner could deliver big returns over the next 12 months.

Read more »

Miner looking at a tablet.
Materials Shares

Are ASX lithium shares prime real estate for value hunters?

Can these stocks recharge returns for investors?

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

Are Rio Tinto shares a buy for its lithium plans?

Let's see what one leading broker is saying about the mining giant.

Read more »