Newell Brands to cut 13% of office workers amid restructuring
Yahoo Finance Live anchors discuss reports that Newell Brands will cut 13% of its workforce amid restructuring plans.
BRIAN SOZZI: Hey, the opening bell is just a few minutes away. Let's check out some trading tickers on the Yahoo Finance platform.
Add another one to the list of layoffs, Newell Brands has announced a restructuring and savings initiative called Project Phoenix that is expected to result in 13% of office positions being cut. The company will begin the process of reducing headcount in Q1. It will continue throughout the year. When fully implemented, Newell expects to realize annualized pretax savings in the range of $220 to $250 million.
And this one seems to be focused on consolidating international operations. I think just running a more lean and efficient operation has been a focus of CEO Ravi Saligram, who we've talked to a lot in recent years since he joined the company. So I can't say I'm surprised by this initiative.
And also it comes in the context of a lot of these retailers ending the holiday season too high on inventory, notably in the home and furnishing category. And I'll put Newell Brands' products under home furnishings.
BRAD SMITH: Well, for some of the other simplification that they're talking about within this restructuring plan, it sounds like they're gonna go from five operating segments now down to three operating segments. And consolidation is really gonna take place between this commercial solutions, home appliances, home solutions segment, as well there.
And so perhaps within that, trying to make sure that it at least looks a little bit more-- a little bit more, for lack of a better word, has more well-roundedness, perhaps, in that segment itself, as they kind of redefine exactly where they're gonna allocate some of the other headcount based on the people that are being retained as part of this, too.
JULIE HYMAN: So it's not just tech.
BRAD SMITH: Yeah.
JULIE HYMAN: We should make that clear, right? When we talk about all these layoffs that are happening, a lot of it's happening in tech, the preponderance is happening in tech. But we're gonna see other companies, as we head into a rockier period, you know, as they batten down the hatches or prepare for what's coming, they're gonna do this also.
I'm just looking at the sales numbers for Newell. It's had two consecutive quarters of declining sales. And analysts are predicting that it's gonna have two more, at least, of declining sales. So it makes sense then, also, that it is making this kind of move in that backdrop there. So, you know, preparing for the worst after what's already been not great. I mean, the stock is down something like 36% over the past year.
BRIAN SOZZI: If you're looking for good tell on the economy, it's not necessarily these tech layoffs. It's a company like Newell that sells affordable bowls at a Target. They sell baby strollers. They sell pens at Staples. And all these products, the prices on these everyday products have gone up significantly. Not just for Newell, really across the board for consumer products.
And this might be consumers just cutting back for whatever reason. They cannot go and buy that stroller. They're sticking with the pens they have. To me, this is a big red flag on the economy more broadly.
BRAD SMITH: The pens last too long.
BRIAN SOZZI: Yes.
BRAD SMITH: There's just too good.
BRIAN SOZZI: [LAUGHS]