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

A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements
Materials Shares

How much upside does Macquarie forecast for Pilbara Minerals shares?

Is the broker bullish or bearish on this lithium giant? Let's find out.

Read more »

Group of miners working at a coal mine with one smiling and holding up a piece of coal.
Materials Shares

How much upside does Macquarie project for South32 shares?

Is this miner's luck about to change?

Read more »

A group of miners in hard hats sitting in a mine chatting on a break as ASX coal shares perform well today
Materials Shares

Down but not out: Can these ASX mining shares bounce back?

Here’s what one broker is predicting for Australia’s largest mining companies. 

Read more »

Broker analysing the share price.
Materials Shares

Buy, hold, or sell? Broker's verdict on 3 ASX 200 materials shares

Materials was one of four market sectors that weakened in overall value in FY25.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Why is this ASX mining stock crashing 14% today?

Let's see what is causing investors to hit the sell button on Monday.

Read more »

Three miners stand together at a mine site studying documents with equipment in the background
Materials Shares

$10,000 invested in BHP shares in FY25 is now worth

Did the Big Australian outperform or underperform during the last financial year?

Read more »

A male investor sits at his desk pondering at his laptop screen with a piece of paper in his hand.
Share Market News

Why did Macquarie just downgrade Liontown resources shares?

Here’s what the broker had to say about this materials company. 

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Why did Macquarie downgrade Mineral Resources shares?

The broker is no longer bullish on this mining and mining services company.

Read more »