Newell Rubbermaid, the Sandy Springs maker of Calphalon pans and Sharpie markers, announced a corporate restructuring Friday that will cut 500 jobs.
Most of the cuts will be outside of Atlanta, but the restructuring will eliminate the positions of some highly paid executives here. Newell Rubbermaid president and CEO Michael Polk said some new positions would be added, but he did not know how many or where they would be.
"It's too early to say what the net effect will be," he said.
Newell Rubbermaid had restructured five or more times during the past decade, SunTrust Robinson Humphrey analyst Bill Chappell said, but this time is different. The other moves changed the company's brands and manufacturing facilities, while this one will focus on a bloated corporate structure that remained after the other changes.
"This is more taking off overhead," Chappell said. "They're not cutting costs just to make money."
Indeed, the $90 to $100 million in savings will be reinvested into Newell Rubbermaid's business, Polk said. Some money will go toward creating more selling jobs and increasing the company's geographic footprint. Newell Rubbermaid will also try to improve its marketing capabilities and increase research and development.
As of Jan. 1, the company will realign its three operating groups -- Home and Family; Office Products; and Tools, Hardware and Commercial Products -- into two groups, Newell Consumer and Newell Professional. It will consolidate 13 business units into nine, but did not announce how those business units would be combined.
The leaders of the Office Products and Tools, Hardware and Commercial Products will head the Consumer and Professional groups, respectively. The leader of the Home and Family group will leave Newell Rubbermaid after being passed over for the CEO post.
Additionally, Newell Rubbermaid will shift away from focusing on mergers and acquisitions, and will reduce its corporate development group, eliminating the job of the president there. The Baby and Parenting business unit will also get a new leader, after that category has struggled. Two manufacturing facilities and two distribution centers will be consolidated.
Polk, who was on Newell Rubbermaid's board before taking the helm of the company this summer, said the moves were being made to reduce high structural costs and reinvent the company into one that is bigger, faster-growing, more global and more profitable.
"We're freeing up trapped capacity," he said. "We're trying to reinvent this company. We're getting back to a cadence of delivery."
Previously, Newell Rubbermaid shrank from 49,000 to 22,000 employees as the company sold off some businesses and closed others. It reduced its manufacturing footprint from 136 to about 40 and cut its distribution facilities from 96 to about 50. It laid off 8 to 10 percent of its professional employees in 2009, eliminating between 800 and 1,000 people. It is in the midst of a European transformation plan.
Polk said this program is "wholly different," though it builds on some of the previous moves.
Chappell, the analyst, said Newell Rubbermaid is known as a "serial restructurer," but that this restructuring is a good move to simplify the company.
"On the front end, it sounds great," he said.
Newell Rubbermaid's stock closed up more than 11 percent, at $15.36 a share. The company lost $177.6 million in the third quarter, after making $28.3 million in the same quarter a year ago. Net sales increased by 5.8 percent.
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