Whirlpool Corporation Announces Additional Employee Layoffs

Whirlpool Corporation Announces Additional Layoffs and Restructuring Charges

Whirlpool Corporation has announced further employee layoffs as part of a global workforce reduction plan initiated in March. The company has incurred $23 million in costs related to the initial round of layoffs and expects to spend an additional $52-57 million in Q2, primarily on employee termination costs. Whirlpool anticipates total restructuring charges of $75-80 million for the layoffs, which they aim to complete by the end of 2024.

Key Takeaways

• Whirlpool (WHR) announces additional layoffs after initial global workforce reduction in March.
• Total costs for these layoffs are estimated to be $23M.
• A second round of layoffs began in late April with costs of $52M-$57M.
• Whirlpool expects total restructuring charges of $75M-$80M for 2024 layoffs.
• Restructuring from layoffs to be completed by the end of 2024.

Analysis

Whirlpool's additional layoffs indicate its cost-cutting measures in response to supply chain disruptions, rising raw material costs, and softening demand. The significant restructuring charges of $75-80 million may impact Q2 finances, potentially affecting investor confidence and share price (WHR). Suppliers may also face reduced orders, while affected employees need to consider job searches and potential skillset upgrades. In the long term, Whirlpool aims to enhance operational efficiency, but the workforce reduction may limit innovation and responsiveness to market changes. Consequently, this move could prompt competitors to reassess their own workforce strategies, potentially leading to a ripple effect in the industry.

Did You Know?

• Whirlpool Corporation (WHR): A leading global manufacturer and marketer of major home appliances, including refrigeration, laundry, cooking, and home cleaning products. Whirlpool has a portfolio of notable brands such as Whirlpool, Maytag, KitchenAid, and JennAir, among others. It operates in nearly every country around the world and is a component of the S&P 500 and the Fortune 500.

• Global Workforce Reduction Plan: A strategic initiative taken by companies to downsize their workforce in response to financial pressures, market changes, or operational restructuring.

• Restructuring Charges: Also known as reorganization costs or restructuring expenses, these are one-time or non-recurring costs incurred by a company during a restructuring or reorganization process. Restructuring charges typically include costs related to employee termination, such as severance pay, benefits, and other related expenses. In Whirlpool's case, the estimated restructuring charges for the 2024 layoffs are $75-80 million.