UTi to Cut Jobs, Lowers Outlook

0

UTi Worldwide Inc. said Friday that it will be cutting 7 percent of its workforce in a cost-cutting effort and also lowered its fiscal 2008 forecast due to slower-than-expected sales.


The cost-cutting measures are an attempt by the Long Beach-based freight forwarding company to improve profitability and contend with current economic conditions. UTi employs 19,000 people, putting the job cuts close to 1,300.


The company said it will close its African retail distribution operations as well as the logistics division. It will also close some other underperforming operations, trim the number of airfreight charters and end some unprofitable contracts, the company said. The company added that some corporate and regional operations will be realigned to lower overhead costs, but no specifics were provided.


The company said it expects to save as much as $80 million while raising operating profit by approximately $30 million to $40 million with these cuts.


UTi also said it anticipates restructuring charges of between $15 million and $20 million related to the cost control initiatives, with about $9 million expected in the fourth quarter.


Excluding these charges, UTi said it now anticipates full-year net income in a range of 98 cents to $1.02 per share well below its initial guidance of $1.09 and $1.15 per share and below Wall Street’s expectations of $1.08 per share, according to Thomson Financial.


Shares in UTi tumbled 12 percent to $17.19 in early trading Friday.

No posts to display