Westport’s Playtex Products Inc. said today its new management will overhaul the maker of baby care and personal care products by cutting more than 300 positions by the end of 2005, or about 20 percent of its workforce.
The moves are aimed at cutting costs, the company said. Playtex has its corporate headquarters in the Nyala Farms office complex just off I-95
The realignment will affect all of its locations and functions and will also include facility consolidations, outsourcing and accelerated depreciation on certain assets.
Aside from the staff reduction, Playtex said it plans to outsource its household glove manufacturing to Malaysia and reduce the office space of its corporate headquarters and reorganize its divisions.
“Many of these initiatives are already underway, and others will be initiated shortly,” President and Chief Executive Neil DeFeo said in a press release.
“We expect to use the cash generated from the realignment to reinvest in our core businesses and to pay down debt,” he added.
DeFeo took the reins from Michael Gallagher in October.
Charges related to the realignment are expected to total between $17 million and $19 million by the end of 2005. Of that amount, about $11 million will be recorded in the fourth quarter of 2004, Playtex said.
Playtex expects the moves to save it between $12 million and $14 million in 2005, and $22 million to $24 million in 2006.
Playtex also announced that it would take a charge of about $17 million in the fourth quarter of 2004 to write down the value of the Baby Magic and Binaca trademarks. Baby Magic is affected by increased competition and Binaca by reduced brand focus.
Playtex will release its fourth-quarter results after the close of trading on Thursday.
Analysts surveyed by Thomson First Call forecast, on average, fourth-quarter earnings of 3 cents a share. That would be down from the prior year’s earnings of 5 cents a share.
I hope this doesn’t affect us too much here in Dover.