QinetiQ Says Unions Have Accepted Changes To Employees Terms

28th Jun 2010 07:27

By Michael Carolan Of DOW JONES NEWSWIRES LONDON (Dow Jones)--U.K. defense technology company QinetiQ Group PLC (QQ.LN) said Monday unions representing its staff had accepted changes to their terms and conditions--a key plank in the company's restructuring program. "The unions have formally accepted the company's offer and the agreed changes now come into effect," it said in a statement. "This result is a credit to our people in understanding the increasingly competitive nature of our markets," said Chief Executive Leo Quinn, "this agreement was integral to our plans announced last month and will enable us to strengthen our U.K. business." The company suspended its dividend for 12 months in May as it launched a two-year program to restructure and reposition the business. CEO Quinn has been looking to cut costs in the U.K. by about 10% in a bid to return to profitable growth. The lucrative civil service contracts held by 40% of its staff has been seen as a barrier to that. QinetiQ was once part of the U.K. government's Ministry of Defence which means that staff are entitled to eight weeks' pay for every year of service if they lose their jobs. Quinn has been negotiating with unions on the introduction of "more sensible" terms and conditions. The company is taking action over the next 24 months to reduce costs, improve productivity and drive cash generation, both to reduce net debt and to refocus and reposition its businesses over the medium term. QinetiQ employs about 6,500 workers in the U.K., about 40% of whom are on civil service contracts -By Michael Carolan, Dow Jones Newswires; 44-20-7842-9278; [email protected] (END) Dow Jones Newswires June 28, 2010 02:27 ET (06:27 GMT)