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Newell Brands (NASDAQ:NWL) is up almost 6% in mid-day trading after the consumer goods maker announced a restructuring and savings initiative labeled Project Phoenix.
The initiative aims to strengthen the company by leveraging its scale to further reduce complexity, streamlining its operating model and driving operational efficiencies. The plan is expected to result in the elimination of approximately 13% of office positions. The company will begin reducing headcount in the first quarter 2023.
“We are taking action to simplify and strengthen our organization by leveraging the scale and power of One Newell to optimize our cost structure and operate more efficiently. Specifically, we are evolving our operating model into three operating segments based on similarities of consumer and customer dynamics, which will reduce duplication and yield synergies,” said Chief Executive Officer, Ravi Saligram. “Based on the success of Project Ovid, we are moving to a unified global manufacturing organization that we expect to drive meaningful margin improvement in the long term. Also, we are reducing international fragmentation by moving to a One Newell go-to-market approach in key geographies. 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. We expect to unlock significant savings from the restructuring initiatives, which should help partially offset the impact of macro-economic pressures on the business, while making us a more nimble and agile organization.”
In connection with Project Phoenix the company expects to realize annualized pre-tax savings in the range of $220 to $250 million when fully implemented. Restructuring and related charges associated with these actions are estimated to be in the range of $100 to $130 million and are expected to be substantially incurred by the end of 2023.
Effective immediately, Kris Malkoski has been named the Segment CEO for Learning & Development, Mike McDermott has been named the Segment CEO for Home & Commercial Solutions, and Jim Pisani has been named Segment CEO for Outdoor & Recreation. Dennis Senovich, Chief Supply Chain Officer, will lead the company’s manufacturing, distribution, transportation and customer service functions globally.
