Newell Rubbermaid Plans to Cut 10% of Jobs in Restructuring
Newell Rubbermaid Inc. (NWL), the maker of Sharpie pens and Calphalon cookware, hired a former Unilever strategist to help run the company under a new structure and plans to cut 10 percent of its jobs.
Chief Executive Officer Michael Polk has reorganized in two new units as he seeks to boost sales outside the U.S., the Atlanta-based company said today in a statement. One unit, focused on brand development, will be run by Mark Tarchetti, Unilever’s former head of global strategy. The other, focused on sales, distribution and supply, will be run by Newell’s William A. Burke III, who was named chief operating officer.
Polk previously ran Unilever’s foods, home and personal- care business. At Newell, he’s reduced operating units to two from three, cut 500 jobs and shifted resources into brands with high growth potential such as Paper Mate pens.
“We like the progress that Newell is making under CEO Mike Polk,” Connie Maneaty, an analyst at BMO Capital Markets in New York, wrote in a note today. “Newell continues to aggressively identify cost savings opportunities and funnel investment toward its most promising businesses and geographies.”
She rates the shares outperform, the equivalent of a buy.
Newell rose 2.5 percent to $20.59 at the close in New York. The shares have gained 27 percent this year.
Newell will shift more money and focus to its tools, commercial and writing businesses, Polk said today in a telephone interview.
“Those are the big bets that we intend to make as part of the growth game plan,” he said. Any acquisitions also would probably be in those areas, he said.
Newell, which had 19,900 employees as of December, said today the job cuts will occur over the next 2 1/2 years. The restructuring will cost $340 million to $375 million before taxes and may produce annualized savings of $90 million to $100 million by the first half of 2013, the company said.
Newell also said third-quarter adjusted earnings rose 4.4 percent to 47 cents a share, beating the 44-cent average of 12 analyst estimates compiled by Bloomberg. Net sales declined 0.9 percent to $1.54 billion, matching analysts’ estimates. It’s increasing its quarterly dividend by 50 percent to $0.15 a share.
The management changes will lead to the departures of Newell Consumer President Penny McIntyre, Chief Marketing Officer Ted Woehrle and Chief Customer Development Officer Paul Boitmann.
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