Newell Brands, parent company of Coleman and Marmot among other consumer businesses, said it’s trimming its workforce and retooling the organization in a bid to hedge against the macroeconomic environment.
CEO Ravi Saligram said the moves will “simplify and strengthen” the business.
“These actions are a continuation of the simplification agenda that we have driven over the last four years and in response to the difficult macro environment,” Saligram said in a statement. “We expect to unlock significant savings from the restructuring initiatives, which should help partially offset the impact of macroeconomic pressures on the business, while making us a more nimble and agile organization.”
The company said under its restructuring strategy, named Project Phoenix, it will lay off 13% of its office positions. Most of those cuts are expected by the end of the year.
The company declined through a spokesperson to provide specifics on which divisions will be impacted by the layoffs.
Additionally, Newell consolidated its business units into what it’s referring to as a “segmented” structure. That new organization will take Newell from seven business units to three segments, with former Timberland Global President Jim Pisani heading up the Outdoor & Recreation segment as CEO.
Pisani previously served as a business unit CEO for Outdoor & Recreation, which oversees the Coleman, Marmot, Contigo, and Campingaz brands.
A company spokesperson explained the segmented approach reduces duplication in a bid to create efficiencies and offer more room for growth and development opportunities.
Newell said it expects the restructure to eventually bring pretax savings of $220 million to $250 million.
The company reported that core sales for its outdoor and recreation businesses were down 18.4% in the third quarter, driven by orders placed earlier in the year, declining demand as retailers looked to reduce high inventory levels, and inflation.
“We expect continued normalization of home and outdoor categories from Covid peak demand levels, and we expect retailers to plan open-to-buy dollars for general merchandise categories conservatively as we likely move into a more recessionary environment,” President and former CFO Chris Peterson told analysts in October at the time of the company’s third-quarter results.
Peterson held the CFO title up until Jan. 9, when Mark Erceg joined as chief financial officer to oversee finance and information technology. Erceg now reports to Peterson.
Newell reported total net sales down 19.2% to $2.3 billion in the third quarter compared to a year earlier. The company generated net income of $31 million in the same quarter, narrowed from $190 million in the year-ago period.
Shares of Newell closed up 6.1% to $15.97 on Monday, with a recent market cap of $6.6 billion.
The company said more details on its restructuring plan are expected when it reports its quarterly and full-year results Feb. 10.