CLEVELAND, Feb. 2 /PRNewswire-FirstCall/ --
- A greater than 10% global workforce reduction will generate annualized savings of approximately $50 million
- Reduced work hours at Cleveland-based operations generate the equivalent of a greater than 10% headcount reduction within the facility
- Voluntary Separation Program for Cleveland-based employees initiated in Q1 2009
- Executive Management team base salaries cut and overall 2009 compensation expected to be reduced between 20% and 45%
- All merit increases and external hiring frozen
- Annual capital expenditures to be reduced by a minimum of $20 million
- Year-end cash balance in excess of $275 million, with no net debt
Lincoln Electric Holdings, Inc. (Nasdaq: LECO) today announced a number of actions to lower its fixed and variable cost structure to align the Company's business with the current economic environment. These measures include the continuation of previously announced reduced work hours, cutting expenses and discretionary spending in all areas, reassigning employees under the Company's Guaranteed Employment policy, canceling merit raises, instituting a base salary reduction for its executive management (with overall compensation expected to be reduced by as much as 45%), suspending the Company's 401(k) match and offering a voluntary separation incentive program to its Cleveland-based employees.
'Lincoln Electric has a long history of effectively managing its cost structure through economic cycles,' said John M. Stropki, Chairman and Chief Executive Officer. 'The variable compensation programs at our major operations in the U.S. enable us to seamlessly adjust our manufacturing labor cost to market conditions without incremental cost to our business. However, the severity of global conditions has required us to institute additional actions and target cost reductions in our Selling, General & Administrative expenses.'
The Company announced today that a voluntary separation program is being offered to all of its approximately 2,900 Cleveland bonus-eligible employees, regardless of years of service. Lincoln will also continue to reduce the number of temporary and contract workers.
