Pitney Bowes (US) to Cut 1,500 Jobs
The Stamford-based mail and document-managing company announced it will take a charge of between USD 300 million and USD 400 million to write off inventory and leases of equipment that is discontinued. And it will cut 1,500 jobs, about 4 percent of its work force, as it outsources manufacturing work and streamlines management.
Pitney Bowes, which began its shift to digital mailing technology in 2002, is reacting as much to changes in the U.S. Postal Service on which its business relies as to technological advances such as Internet mail tracking, Web-based postage sales and computer networks.
Shares of Pitney Bowes rose 16 cents to USD 38 Thursday.
The company also announced that it expects results between a loss of 17 cents and a profit of 4 cents per share for the fourth quarter and a profit of USD 1.76 to USD 1.97 for the year. In October, Pitney Bowes forecast net income of 66 cents to 70 cents per share.
Excluding extraordinary items, the company said it still expects to earn 67 cents to 71 cents per share for the fourth quarter. Analysts expected a profit of 69 cents a share, according to a survey by Thomson Financial.
Martin, without being specific, also said Pitney Bowes will consider alternatives to its U.S. management services business. The business, which brings in about USD 1 billion in annual revenue and employs 12,000 workers, provides mailroom and copy center services to large corporations, federal agencies and law firms.
Analyst Shannon Cross of Cross Research said she expected some action by Pitney Bowes following disappointing third-quarter earnings last month. The company’s USD 127.6 million in profits was down about 16.5 percent, from USD 148.6 million in the same quarter last year. Per-share earnings sunk to 58 cents, from 67 cents in the third quarter of 2006.
