ATLANTA — Hanesbrands Inc. plans to close nine plants in four countries and reduce management and administrative jobs worldwide as part of a consolidation and globalization cost-reduction strategy.
The streamlining is part of a multi-year effort the company started when it was spun off from Sara Lee as an independent company in September 2006.
Many of the cost-saving actions should be completed by the end of the year.
Approximately 5,300 employees will be affected, but Hanes said it has added or will add approximately 3,000 positions at other company manufacturing plants to absorb shifted production. The Winston-Salem, N.C.-based company has about 50,000 employees in 24 countries.
Hanes will close plants and operations affecting nearly 5,000 employees in Canada, the Dominican Republic, Mexico and the U.S. and Puerto Rico, while moving production to lower-cost operations in Central America and Asia. Also, approximately 350 management and administrative positions will be eliminated with the majority (90 percent) based in the U.S.
“This streamlining is part of our larger cost-reduction and process-standardization strategies to increase competitiveness and become a more-effective organization,” said Richard A. Noll, CEO of Hanesbrands. “Taking these actions will better position us to achieve our long-term growth goals and financial objectives and help us in our efforts to offset independent company costs and selected investments we are making in our business.”
Hanesbrands has long-term annual growth goals of 1 to 3 percent for sales, 6 to 8 percent for operating profit excluding the above actions, and double-digit gains for earnings per share excluding actions.
The company said it expects to incur restructuring and related charges for the actions, including severance costs and accelerated depreciation of fixed assets of approximately $42 million, primarily in the second quarter of fiscal 2007 with the majority of the remainder in the second half of fiscal 2007.
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