Stanley Black & Decker Inc.
cut a large chunk of finance jobs as part of an effort to cut up to $200 million in costs by the end of the year amid high inflation and a slowing economy request.
The New Britain, Connecticut-based power tool and lawn equipment maker cut about 1,000 financial positions this week, according to two people familiar with the matter. The finance team job cuts are part of broader layoffs across the company that have affected thousands of workers globally, current and former employees said.
The cuts come as Stanley Black & Decker announced ambitious cost-cutting plans in July, including $1 billion in costs by the end of next year and $2 billion over the next three years. The company, whose brands include DeWalt and Craftsman tools as well as Cub Cadet riding lawn mowers, said it was simplifying its structures and processes, cutting some expenses and streamlining operations.
“These actions are necessary as we successfully navigate the current market environment,” chief executive Donald Allan Jr. said in July. The company told TK on Friday.
Stanley Black & Decker stock price has fallen 60% since the start of the year and closed at $75.21 on Friday.
Since July, the company has made major staff reductions in different parts of the organization, including in the finance and information technology departments, four of the current and former employees said. That includes the elimination of much of a global analytics team of around 200 employees in early August, according to four current and former employees.
Finance at Stanley Black & Decker is led by interim chief financial officer Corbin Walburger, who took over in July when Mr Allan, then chief financial officer, was appointed chief executive. Mr. Allan’s promotion to CEO signaled a greater focus on cutting costs for employees, which includes layoffs, three former employees said.
But the scale of the current round of cuts has taken employees by surprise, four current and former employees said. Some of those who were cut received an email calendar invite, about 24 hours before joining a 15-minute video meeting to learn they were being laid off, three former employees said. At least some of those laid off received severance pay based on the length of their tenure with the company, four current and former employees said.
Stanley Black & Decker had about 71,300 employees and about 10,400 temporary contractors as of Jan. 1, according to the company’s latest annual report.
In the quarter ended July 2, the company’s revenue increased 16% from the year-ago period to $4.4 billion. Stanley Black & Decker, which will report quarterly results next month, posted a profit of $87.6 million in the quarter, compared with a profit of $459.5 million a year earlier.
Selling, general and administrative expenses reached $853 million in the second quarter, up 11% from a year earlier. The company cut its annual guidance for diluted earnings per share under generally accepted accounting principles to between 80 cents and $2.05 per share, to a range of $7.20 to $8.30.
Inventories at the end of the second quarter were $6.6 billion, up $400 million from the previous quarter. The company said it will reduce manufacturing of finished goods and expects inventory to decline sequentially.
Demand for Stanley Black & Decker products surged during the pandemic as consumers spent on home improvements and yard work, but has fallen this year due to high inflation and an uncertain economic outlook.
Over the past year, the toolmaker has raised prices to fight inflation, implementing a third round of increases in May. Stanley Black & Decker has also cut business units in recent months to cut costs, including its oil and gas division in June. In July, it completed the $3.2 billion sale of its electronic security and healthcare solutions business to Swedish security services company Securitas AB.
In January, the company announced it would restate previous financial statements for the period ended Jan. 2, 2021, to correct an accounting error related to how it accounted for stock-based compensation. The move, which was prompted by comments from the Securities and Exchange Commission, is not expected to impact Stanley Black & Decker’s historic net earnings, the company said.
In December, Stanley Black & Decker completed the acquisition of MTD Holdings Inc. and Excel Industries, expanding its reach into the lawn care and outdoor equipment markets and adding approximately $4 billion in revenue annual. But, the agreements also brought more complexity to the company’s operations by adding thousands of employees and a network of independent resellers to service business customers.
—Bob Tita contributed to this article
Write to Jennifer Williams-Alvarez at email@example.com
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