Newell Rubbermaid (NYSE:NWL) is cutting about 2,000 jobs, or 10% of its workforce, over the next 2 1/2 years in an effort to save between $180 million and $225 million annually in costs.
Friday's announcement came as the Atlanta-based consumer products maker posted slightly higher third-quarter sales of $1.54 billion that matched average analyst estimates in a Thomson Reuters poll and adjusted earnings of 47 cents, topping the Street’s 44 cents.
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“Our solid third quarter results represent another step toward establishing a more consistent cadence of delivery,” Newell Rubbermaid CEO Michael Polk said in a statement.
Newell Rubbermaid also announced a 50% quarterly dividend increase on Friday to 15 cents from 10 cents and reaffirmed its fiscal 2012 guidance for core sales growth in the range of 2% to 3% and non-GAAP earnings between $1.63 and $1.69.
The consensus is calling for EPS of $1.68 on sales of $5.91 billion.
Shares of Newell Rubbermaid climbed more than 5.5% to a 52-week high of $21.23 Friday.
The expansion of the overhaul plan is expected to flatten and simplify the business, while reducing costs and giving the company the flexibility to expand geographically.
“The actions taken today reflect an exciting set of changes and an important moment for our company,” Polk said. “I am confident they will accelerate achievement of our Growth Game Plan ambition of creating a bigger, faster growing, more global, more profitable Newell Rubbermaid.”
The company, which will record structuring charges in the range of $250 million to $275 million from now through mid-2015, said a majority of the cost savings will be reinvested into the business to improve global brand building and selling capabilities.