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Sunbeam cuts 6,000 jobs
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November 12, 1996: 12:53 p.m. ET
Appliance maker to cut workforce by half, close production facilities
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NEW YORK (CNNfn) - Appliance maker Sunbeam Corp. on Tuesday announced a long-awaited restructuring plan, saying it will eliminate half its 12,000 work force, cut 39 of its 53 facilities and consolidate administrative functions.
Sunbeam Chairman and Chief Executive Albert J. Dunlap outlined the overhaul at a news conference Tuesday. Investors and employees had expected a massive company overhaul ever since Dunlap, known as "Chainsaw Al" for his aggressive cost-cutting methods in turning around struggling companies, took the helm at Sunbeam in July.
"As we have repeatedly advised investors, Sunbeam required a massive effort to reduce costs and grow the business in order to restore higher levels of profitability and provide the kinds of returns our shareholders have a right to expect," Dunlap said.
Analysts agreed that Sunbeam needed major surgery to recover from an extended slump. Under the plan unveiled Tuesday, company officials said they will be able to save $225 million a year and refocus efforts on core products in kitchen appliances, health care, personal care and comfort, professional care and outdoor cooking. The company will take a one-time $300 million charge to cover the restructuring costs.
Among the changes, Sunbeam will eliminate 18 of 26 production facilities, consolidate warehouses, eliminate sluggish product lines and realign its purchasing operations. The company said it will enact most of the changes within 45 days.
The plans also called for reducing the overall payroll from 12,000 to 6,000 workers, including the reduction of administrative staff from 1,400 to 700.
Dunlap said his plan will not only save money, but will ultimately boost revenues and profit margins by 1999. As part of a three-year plan, the company set a goal of doubling annual revenues by 1999 to $2 billion and raising profits margins to 20 percent of sales.
"We will be a leader in new product development," Dunlap said. "These new innovations will focus on products which are more relevant to the lifestyles and concerns of both individuals and families as the 21st Century approaches." 
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