CIT: Retail best practices during the current economic rebound.
SHACC: "Endless Summer" party tonight.
Details on Industry Insight.
Updated 2:50 p.m. with status of strategic review and the percent of Quiksilver's workforce the layoffs represent. Also of note - Quiksilver said it is still working to restructure some of its debt in Asia Pacific and Europe which should be completed in February.
Quiksilver announced job cuts this afternoon.
The company said 200 positions will be eliminated in the Americas region, which translates into 150 employees losing their jobs, or 4 percent of the 3,555 employees in the region.
Quiksilver said the cuts, across nearly all divisions, will save $40 million annually.
Nearly 20 percent of the employees being laid off hold manager-level titles or higher. Entire categories have not been eliminated, spokesman Joshua Katz said, but rather the cuts have come across the board in many different job functions.
According to a memo sent to employees by CEO Bob McKnight that I read, impacted employees will be notified individually this week and provided with financial and transition support. Bob also described the situation as "difficult and painful" for him.
"I am deeply sorry and understand that this only serves to reinforce the angst many of you have felt over the last few months," the memo said. "And saying goodbye to some of our fellow employees will be the hardest. But like many other companies we have no choice but to make these difficult decisions in order to weather the current economic climate and position our company for future growth."
Katz said the company's review of strategic alternatives is still underway and all the options are still on the table, including a change in ownership, selling brands, new investors, splitting off regions, etc.
Here's the press release about the job cuts:
Huntington Beach, California, January 26, 2009--Quiksilver, Inc. (NYSE: ZQK) today announced
that it is taking additional steps to reduce expenses in its Americas region as part of an overall
restructuring effort to reposition its business and in response to the continued decline in the
consumer retail environment. The cost saving measures are expected to reduce expenses in the
Americas region by more than 10%, or approximately $40 million annually, and will impact nearly
all functional areas. The company will eliminate 200 positions as part of the plan, including a
reduction-in-force of approximately 150 employees which is expected to account for roughly one-third of the annual cost reductions. Quiksilver expects to record a charge of approximately $5 million in its first fiscal quarter as a result of these actions.
These cost reduction measures are in addition to expense reductions made by the company in
2008 and other actions already taken in the company's European and Asia Pacific regional
Robert B. McKnight, Jr., Chairman of the Board, President and Chief Executive Officer of
Quiksilver, Inc., commented, "Beginning last year, we initiated a process to reduce our corporate
overhead and cut spending in each of our regions. While these measures improved our overall
cost structure by more than $35 million, our commitment to further streamlining the business and
the continued decline in the retail environment make additional steps necessary. Our spending
cuts are across-the-board, touching each of our internal organizations and systems in the
Americas, but have been designed to drive improved efficiency while minimizing the impact to our
customers and other business partners. All levels of our organization are affected by these
actions as nearly 20 percent of the employees involved in the reduction hold manager-level titles
or higher. Our management team has worked together on these cost reduction measures with
the primary goal of becoming better positioned to weather the current environment and to meet
our business objectives moving forward."
As a part of its reduction in payroll, Quiksilver provided news of further pay cuts for members of
its executive management team in an SEC filing last week.
The company also reaffirmed that its efforts to restructure its uncommitted debt in Asia Pacific
and Europe remain on track for completion in February.
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