NEW YORK, Bowne & Co. Inc. (NYSE: BNE) today announced additional steps in its cost reduction program that are expected to result in reductions in fixed and variable costs of more than $20 million in 2001. These savings will result from further realignment in manufacturing and composing operations; elimination of certain underutilized resources; and staff reductions in the company's world-wide work force of approximately 3%, accomplished through attrition, layoffs and some reassignments. The company estimates that the related restructuring expenses will result in a fourth quarter pre-tax charge to earnings of less than $2 million.
The company noted that the reductions announced today are in addition to the $7 to $9 million in annual cost savings recently announced, resulting from the combination of the company's Internet unit, Immersant, and Bowne Global Solutions' content business unit. (See November 17, 2000 press release: "Bowne Combines Web Content Unit of Globalization Business with its Internet Business".)
Robert M. Johnson, chairman and CEO of Bowne & Co. said, "We have experienced tremendous growth the past five years-especially in our financial printing business, where revenues have grown at a compounded rate of approximately 20%-and 2000 looks like it will be another record year. In addition, through both acquisition and organic growth, we have diversified our revenue base from the highly cyclical, transaction-based print revenues to a more contractual revenue base. In order to fuel and support this growth, we have made substantial investments in technology and infrastructure in order to make our network more scalable and efficient. Now that these investments are beginning to payoff, it is important that we realign our cost structure with our customer demand."
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