Granite cutting 227 employees to ‘reduce costs’
| October 27, 2010 |
Watsonville, Calif.-based Granite Construction is taking “actions to reduce its cost structure, enhance operating efficiencies and strengthen the business to achieve long-term profitable growth.”
As part of its “Enterprise Improvement Plan,” the Granite is cutting about 227 employees, or about 13 percent of its salaried workforce.
Actions associated with the reduction in force are expected to reduce the company’s cost structure by approximately $20 million to $24 million annually.
Granite will record a pre-tax charge in the fourth quarter of approximately $10 million to $12 million associated with severance and benefits-related costs.
As part of the plan, the company is also reviewing select underperforming assets and investments for closure or divestiture. The executive leadership team is using several criteria to identify those assets and investments that are not meeting profit and cash flow expectations, and are not projected to provide acceptable returns in the foreseeable future.
Timing of the actions is subject to ongoing evaluation and review.
“Throughout the course of this challenging environment, our management has been focused on identifying effective ways to reduce costs, improve processes and strengthen the overall business,” said Granite President and CEO James H. Roberts in a press statement. “Our goal is to become a more efficient, collaborative, and adaptive organization that is better positioned to respond to changing market conditions and take advantage of future growth opportunities.
“Reducing our workforce is a very difficult decision and we appreciate the valuable contributions of those who will be affected by this change,” Roberts continued. “These steps, however, are an important part of our plan to be more competitive, restore long-term profitable growth and create value for our shareholders.”
Granite is scheduled to release its third quarter fiscal 2010 earnings on Nov. 9, 2010 followed by a conference call and Webcast, at which time the Granite will provide additional comments and address the impact of these actions on its fiscal 2010 guidance.