Stanley Works Plans To Eliminate Another 550 Jobs
Company Won't Say How Many Cuts Will Be In Connecticut
The Stanley Works complex sits idle on Myrtle Street in New Britain. The company announced 550 layoffs Friday. The number in Connecticut isn't yet known. (PATRICK RAYCRAFT / THE HARTFORD COURANT / December 11, 2008)
The announcement comes as the tool and security equipment manufacturer struggles with falling demand. The company reported Friday that it sold 19 percent fewer hammers, screwdrivers and other items by unit volume in the first quarter of this year compared with the same period last year.
Last December, Stanley estimated it saved $140 million by cutting 2,000 jobs, and it plans to save another $33 million by cutting at least 550 jobs this year, said Kate White, the company's director of investor relations.
The company declined to say how many of the job cuts will occur in Connecticut, where it has 1,300 employees.
The new job cuts are part of a cost reduction plan the company presented to investors Friday. Among other moves, the company plans to consolidate its Bostitch fastening systems unit into consumer tools and storage. The cost reduction plan is expected to save the company $100 million.
"We anticipated that 2009 was going to start on a difficult note, but we experienced even greater volume pressure," John F. Lundgren, Stanley's chairman and chief executive officer, said in a statement Friday.
The company's net income dropped sharply in the first quarter to $37.7 million, or 48 cents a share, from $66.5 million, or 84 cents a share a year earlier.
Stanley's bright side was its security segment, now larger than either consumer or industrial. Security revenues grew by 12 percent to $374 million as profits surged 33 percent to $71 million. Security systems are providing Stanley with the sort of hedge against a retail and industrial downturn that the company envisioned when it created the division a few years ago.
White could not confirm Friday whether the 550 planned job cuts would be the last of the company's reductions.
"We haven't said anything one way or the other about what we'd do for the rest of the year," she said.