UTI Worldwide Form 8-K Shows Company Plans Reorganization, Reduce Positions Of Employees Worldwide
On January 21, 2015, UTi Worldwide Inc. (the “Company”) committed to a plan to simplify its leadership structure and to shift management of its freight forwarding business from four geographic regions to a global leadership structure managing approximately 17 discrete geographic areas. In connection with these actions, the Company will reduce several leadership positions and will no longer maintain regional infrastructures. These actions are collectively referred to herein as the “Reorganization”. Following the Reorganization, the Company will continue to have two lines of business, freight forwarding and contract logistics and distribution. The Company will also continue to utilize the 1View freight forwarding operating system. The Reorganization is the result of a rigorous review by our new Chief Executive Officer, Edward Feitzinger, and is intended to simplify the Company's organizational structure, to facilitate faster decision-making, to enable the Company to better serve the needs of its clients and to reduce the Company's cost structure. The Company believes the Reorganization will enhance its ability to achieve its operational and financial goals.
In connection with the Reorganization, the Company expects to reduce a number of positions worldwide. Such headcount reductions are expected to be substantially complete by January 31, 2015, however, due to local legal requirements, some actions are expected to extend into the first quarter of fiscal 2016. The Company expects to record charges in connection with the Reorganization relating to one-time employee termination benefits, including severance benefits and other employee expenses during the fourth quarter of fiscal 2015. Such charges will primarily result in future cash expenditures. At the time of this filing, however, the Company is unable in good faith to make a determination of the estimate of the range of expected charges and will file an amended Current Report on Form 8-K within four business days after it makes such determination.
The Company estimates that the Reorganization and other related actions will result when fully implemented in $30 million to $40 million of expected annual cost savings (excluding the charges incurred as a result of the Reorganization). The Company expects to complete a majority of the actions necessary to achieve the estimated cost savings before January 31, 2015, and the remainder is expected to be completed during the first quarter of fiscal 2016. The Company is in the process of determining the impact, if any, the Reorganization and related actions may have on the carrying values of certain assets and liabilities.
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