Mike
Well-known member
Tyson to Implement Approximately $200 Million in Cost Reductions; Plan exceeds $110 million goal; some positions to be eliminated
Tyson Foods, Inc.
7/13/2006 9:53:50 AM
July 13, 2006 / Springdale, Ark. / Tyson Foods, Inc. (NYSE: TSN) will implement approximately $200 million in cost reductions as part of a strategy to return to profitability. The reductions significantly exceed the $110 million goal set by new CEO Richard L. Bond, and include the elimination of some positions.
"We've taken an aggressive look at all aspects of our business and also reviewed suggestions from our Team Members on ways we can more effectively manage our business," said Bond. "The result is a plan expected to generate significant savings for the company, principally in fiscal 2007."
Savings will be generated from reductions in such things as staffing, recruiting, relocation, consulting fees, sales related expenses and supplies, as well as travel. Virtually all of the savings measures should be in place by the end of the calendar year.
"This has been a difficult process, especially since it involves the displacement of some of our Team Members," said Bond. "However, we would not be doing this unless we believed it was absolutely necessary."
Tyson, which employs 114,000 people worldwide, currently plans to eliminate approximately 420 positions primarily held by Tyson management and management support Team Members. In addition, another 430 jobs that are currently open will not be filled and will be eliminated. All affected Team Members will be offered severance payments and outplacement assistance. They will also be given an opportunity to apply for other jobs in the company.
Severance payments and other costs related to this initiative are expected to result in a charge to Tyson's fourth quarter earnings in the range of $10 million to $15 million or $0.02 to $0.03 per share.
The process of notifying Team Members whose positions have currently been identified begins today and should near completion by Friday, July 14. Most of the position reductions will take effect by the end of the current fiscal year, which is September 30.
Jobs being eliminated include approximately 140 positions currently held by Tyson Team Members in northwest Arkansas and 90 in Dakota Dunes, South Dakota and Dakota City, Nebraska. The remaining positions are at various locations throughout the company. The company is also eliminating the services of 40 outside consultants. Hourly plant production jobs are not affected by this initiative.
Some steps have already been taken to provide the company with some immediate savings. Tyson's senior management team recently decided to delay annual merit increases for qualified management and management support Team Members from July 2006 to January 2007. The company has also temporarily suspended the company match on the Stock Purchase Plan for salaried management Team Members for the remainder of 2006.
"We realize we can't save our way back to profitability," Bond said. "That's why in addition to improved cost management, our team will spend more time on activities that make money and provide top line growth." He noted the company's existing long-term strategies provide the company with a focused long-term perspective for the future. They include creating more value-added products, improving operational efficiencies and expanding its international business.
Tyson Foods, Inc.
7/13/2006 9:53:50 AM
July 13, 2006 / Springdale, Ark. / Tyson Foods, Inc. (NYSE: TSN) will implement approximately $200 million in cost reductions as part of a strategy to return to profitability. The reductions significantly exceed the $110 million goal set by new CEO Richard L. Bond, and include the elimination of some positions.
"We've taken an aggressive look at all aspects of our business and also reviewed suggestions from our Team Members on ways we can more effectively manage our business," said Bond. "The result is a plan expected to generate significant savings for the company, principally in fiscal 2007."
Savings will be generated from reductions in such things as staffing, recruiting, relocation, consulting fees, sales related expenses and supplies, as well as travel. Virtually all of the savings measures should be in place by the end of the calendar year.
"This has been a difficult process, especially since it involves the displacement of some of our Team Members," said Bond. "However, we would not be doing this unless we believed it was absolutely necessary."
Tyson, which employs 114,000 people worldwide, currently plans to eliminate approximately 420 positions primarily held by Tyson management and management support Team Members. In addition, another 430 jobs that are currently open will not be filled and will be eliminated. All affected Team Members will be offered severance payments and outplacement assistance. They will also be given an opportunity to apply for other jobs in the company.
Severance payments and other costs related to this initiative are expected to result in a charge to Tyson's fourth quarter earnings in the range of $10 million to $15 million or $0.02 to $0.03 per share.
The process of notifying Team Members whose positions have currently been identified begins today and should near completion by Friday, July 14. Most of the position reductions will take effect by the end of the current fiscal year, which is September 30.
Jobs being eliminated include approximately 140 positions currently held by Tyson Team Members in northwest Arkansas and 90 in Dakota Dunes, South Dakota and Dakota City, Nebraska. The remaining positions are at various locations throughout the company. The company is also eliminating the services of 40 outside consultants. Hourly plant production jobs are not affected by this initiative.
Some steps have already been taken to provide the company with some immediate savings. Tyson's senior management team recently decided to delay annual merit increases for qualified management and management support Team Members from July 2006 to January 2007. The company has also temporarily suspended the company match on the Stock Purchase Plan for salaried management Team Members for the remainder of 2006.
"We realize we can't save our way back to profitability," Bond said. "That's why in addition to improved cost management, our team will spend more time on activities that make money and provide top line growth." He noted the company's existing long-term strategies provide the company with a focused long-term perspective for the future. They include creating more value-added products, improving operational efficiencies and expanding its international business.
:shock: :wink: 