Bowne to Cut $10 Million in Expenses, Includes 2.5% Workforce Reduction
Press release from the issuing company
Cuts Largely Affect Financial Print as Bowne Manages Resources Consistent with Ongoing Weakness in Capital Markets
NEW YORK, Sept. 5 -- Bowne & Co., Inc., a global leader in delivering high-value document management solutions, announced today that it is implementing $10 million in annualized cost reductions as it continues to manage its resources -- primarily in its Financial Print division -- consistent with the lower volume of business generated by continuing weak capital markets.
The cost reductions include the elimination of approximately 200 positions in Financial Print, representing about 2.5% of Bowne's total workforce or 5.4% of Financial Print employees. Bowne is also limiting all discretionary spending and continuing its ongoing efforts to reengineer workflow to match the size of its network to customer demand. Similar measures taken in 2001 resulted in approximately $70 million in annualized cost savings, including about $60 million in Financial Print.
The company estimates that related restructuring expenses from the latest cost reductions will result in a third quarter pre-tax charge of $2 million to $3 million; however, this does not change Bowne's third quarter or full-year outlook provided in the August 7 news release reporting financial results for the second quarter ended June 30, 2002.
In recent years, weakness in the capital markets has reduced the financial printing industry's transactional business, although Bowne remains the world's largest financial printer. Through an ongoing diversification program, Bowne has reduced its reliance on transactional financial printing to approximately one-quarter of total revenues as of the second quarter of 2002.
"As we indicated in our second quarter news release, Bowne continues to approach the rest of 2002 cautiously, managing our assets wisely and assuring that our resources - including our workforce -- are appropriately matched to realistic business prospects," said Bowne Chairman and CEO Robert M. Johnson. "The capital markets remain weak and the business climate is unpredictable, so we must continue to demonstrate our willingness and ability to adjust our resources to the realities of the market and current economic conditions. Furthermore, we are moving forward with a diversification program that reduces our reliance on cyclical business. With that said, it is always painful to announce staff reductions, especially at a people-focused company such as Bowne."
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