Office Depot Inc (NASDAQ:ODP) decided to eliminate 1,100 jobs in Europe as part of its restructuring efforts. According to the company, the workforce reduction would cut its costs by approximately $90 million by the end of 2016.
Office Depot international unit
Office Depot Inc (NASDAQ:ODP) supplies office products and services worldwide. The company has been restructuring its international business since last year. Steve Schmidt is the president of its international business and responsible in leading its transformation in Europe and expanding its operations internationally.
Aside from cutting jobs, Office Depot Inc (NASDAQ:ODP) is also disposing assets and simplifying its operations in Europe to strengthen its competitiveness and to withstand the weak economic situation in the region.
During the first-half of this year, the company recorded a charge $28 million related to the abandonment of the implementation of its software project in Europe. Office Depot Inc (NASDAQ:ODP) expected to “substantially complete” its latest restructuring initiative by December 2015.
The company estimated to incur pre-tax charges of $120 million including $112 million in cash expenditures this year and on 2015. Office Depot Inc (NASDAQ:ODP) explained that the restructuring charges would include approximately $95 million in severance pay and other termination benefits.
Office Depot’s CEO is a turnaround expert
Office Depot Inc (NASDAQ:ODP) suffered losses in recent years. In November, the company hired Roland Smith, a turnaround expert to serve as chief executive office.
During the second quarter, Office Depot Inc (NASDAQ:ODP) reported $3.8 billion sales, up from $2.4 billion in the same period a year earlier. Its sales performance included the sales of Office Max in 2014, which was 2% lower than the combined pro-forma sales of $3.9 billion in the year-ago quarter.
“Our team executed exceptionally well, which enabled us to deliver merger synergies more quickly than anticipated,” said Smith in a previous statement. The company also raised its annual run-rate merger synergies to $700 million.
Office Depot Inc (NASDAQ:ODP) expected is third-quarter total adjusted sales to be similar to its first-half 2014 trend. The company expected to achieve adjusted operating income of not less than $200 million in 2014. It is scheduled to report its third-quarter financial results on November 4, 2014.
The stock price of Office Depot Inc (NASDAQ:ODP) is up by nearly 5% to $4.90 per share at the time of this writing around 1:24 in the afternoon in New York.