Struggling engineering group ABB could cut 10,000 jobs under plans to slash costs.

The Swiss-Swedish firm, which employs 6,800 staff in the UK, is restructuring its business in the wake of a shock profits warning last month, which prompted ratings downgrades and a share slump.

Two weeks ago, ABB unveiled plans to reduce its divisions from five to three to simplify the organisation, increase efficiency and cut costs.

It said the programme to lower costs by four per cent of revenues would start on January 1 and take 18 months.

Two-thirds of cost reductions are to come from job cuts and one third from other actions.

But the group said it was not possible yet to give job reduction figures.

ABB chairman and chief executive Jurgen Dormann said, although the exact figure was yet unclear, it could be in the range of 10,000.

In total, the group employs about 146,000 staff.

Mr Dormann said: "The streamlining of our structure and the programme to lower the cost base by four per cent of revenues demonstrate our commitment to restoring profitability.

"We are taking forceful action to improve operational performance and cash flow.

"We need a rapid and radical change. We are taking the measures needed to optimise the business, build on our strong product and customer base, and technological leadership positions.

"Over time, the aim is real expansion with increased market share and profitable growth."

ABB's share price slumped last month after it said it was considering bankruptcy protection for one of its US units under pressure from asbestos litigation.