ST. LOUIS, MO – Furniture Brands Intl Inc. announced it would eliminate about 1,400 jobs, or 15% of its domestic workforce, to reflect continuing soft retail market conditions, according to RTT News.
Ralph Scozzafava, chairman and CEO said, “These reductions are an inevitable response to the recessionary environment and are necessary to strengthen Furniture Brands for the future.”
The company said it would incur severance costs of $8 million to $9 million, related to workforce reduction, most of which would be reflected in the company's fourth quarter financial results. The cash impact of the severance will be incurred in the first quarter of 2009. The company said that the severance costs are included in its estimated fourth quarter pre-tax charges of $56 million to $72 million.
The job cuts of management and professional positions not related to direct production costs are expected to yield annual, run-rate cost savings in excess of $20 million beginning in early 2009.
The company said that the workforce reduction matches anticipated lower sales volumes and is expected to reduce the need for factory shutdown days. Through the first nine months of 2008, factory down day costs totaled $14 million.
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