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Ecolab Unveils Restructuring/Cost Saving Plan

Actions include cutting 500 positions in corporate G&A.

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By: Tom Branna

Ecolab Unveils Restructuring/Cost Saving Plan

Ecolab Inc. plans to undertake restructuring and other cost-saving actions to help enable and enhance realization of its merger-related cost synergies as well as streamline and strengthen its global business.

“We are making excellent progress in our work to integrate our businesses. Our teams have come together quickly. Our similar business approach and cultures have made the merger process very smooth and productive, and our work to develop synergies has developed better than expected, resulting in our higher cost synergies forecast,” said Douglas M. Baker, Jr., Ecolab’s chairman and CEO. “The restructuring and special charges we announced today are designed to enable us to more quickly realize and increase the merger-related cost synergies and improve the efficiency and effectiveness of our global business.”

It is expected that the restructuring will be completed by the end of 2013.

Actions associated with the merger to improve the effectiveness and efficiency of the company include a reduction of the combined company’s current global workforce by approximately 500 positions, primarily in corporate G&A. A number of these reductions are expected to be achieved through open positions and attrition, according to the company.

As previously announced, none of the positions affected will be in sales or R&D.

Other actions to be taken this year include reparation work to simplify the combined company’s global supply chain, and significant cost and capability leverage within IT and other global functions.

Additional actions beyond 2012 include supply chain plant and warehouse rationalization to create a lower cost, leaner and more efficient infrastructure. This will include the reduction of plant and distribution center locations, as well as the rationalization of sales offices and other redundant facilities.These and additional productivity and efficiency actions are expected to reduce the need for future position additions by approximately 1,500 over the next several years, the firm said in a press statement.

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