EVERETT – Intermec Inc. is eliminating 9 percent of its jobs around the globe and is consolidating some of its facilities in an attempt to save up to $25 million a year.
As a result of the restructuring, “just under 40” jobs have already been cut at Intermec’s Everett headquarters, according to the maker of bar code scanners, mobile computers and other inventory tracking technology. About 800 of the company’s 2,500 employees work locally.
The local layoffs, completed by Wednesday, were spread across several departments, said Steve Winter, Intermec’s president and chief operating officer.
“We’re also consolidating some activities from other sites into this plant,” he said. “So the net reduction here will be even lower.”
The cost-cutting measures at Intermec aren’t coming out of the blue. Intermec Chairman Larry Brady warned two weeks ago that the company needed to tighten its belt after revenue during the third quarter fell by 11 percent, from about $220 million at this time last year to just under $196 million. Originally, the company had hoped to make more than $230 million in the quarter.
At the same time, Intermec’s primary competitor, Symbol Technologies, was purchased by Motorola, making the competitive landscape that much rockier going forward.
“The many strategic and ownership changes which have occurred in our industry require a more aggressive focus on productivity in order to accelerate our competitive positioning,” Brady said in a written statement that outlined the restructuring plan Thursday. “While difficult, this restructuring is essential to establish a more agile and efficient posture required for competitive success.”
Intermec expects to take a restructuring charge of $7.6 million to $8.6 million, before taxes. Most of that will be recorded in the fourth quarter, as the cost cutting should be completed by early 2007.
The result should be annual savings of $22 million to $25 million. The savings should begin kicking in immediately, Brady said.
During its 40-year history, locally founded Intermec has been forced to reinvent itself a few times. Before the new restructuring, the company moved its corporate headquarters from California and sold off its industrial-related businesses to focus on technology products. Those actions, undertaken under Brady’s direction, helped return it to profitability.
Before Thursday’s announcement, Intermec’s shares closed trading at $24.51, down 14 cents.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
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