Cumulative costs of the expanded Project Renewal are now expected to be $340 to $375 million pretax, with cash costs of $300 to $340 million. Project Renewal in total is expected to generate annualized costs savings of approximately $270 to $325 million by the second quarter of 2015. The company is on track to realize annualized cost savings from the first phase of Project Renewal of approximately $90 to $100 million by the first half of 2013.
The company announced five new work streams in connection with the expansion of Project Renewal. These initiatives will accelerate the release of structural costs that currently constrain the investment capacity in the business for growth. These work streams will result in slightly over a 10 percent reduction in the global workforce over the next two and a half years.
The five new work streams include:
- Organizational Simplification: The company will de-layer its top structure eliminating the two Groups (Consumer and Professional) and further consolidating the global business units from nine GBUs to six business segments – Tools, Commercial Products, Writing, Home Solutions, Baby & Parenting, and Specialty.
- EMEA Transformation: The company will leverage its new SAP-driven insights to significantly reduce complexity and cost to improve profitability in this region.
- Best Cost Finance: The company will deliver a simplified approach to decision support, transaction processing and information management by leveraging SAP and aligning resources with the Growth Game Plan.
- Best Cost Back Office: The company will achieve “One Newell” efficiencies in customer and consumer services and sourcing functions.
- Supply Chain Footprint: The company will further optimize manufacturing and distribution facilities across its global supply chain.
As part of the aforementioned Organizational Simplification, the six new segments will be defined as follows:
- Tools: Irwin® and Lenox® tools and Dymo® industrial
- Commercial Products: Rubbermaid Commercial Products® and Rubbermaid® Healthcare
- Writing: Sharpie®, Paper Mate®, Expo®, Prismacolor®, Parker® and Waterman®
- Baby & Parenting: Graco®, Aprica® and Teutonia®
- Home Solutions: Rubbermaid®, Calphalon®, Levolor®, Kirsch® and Goody®
- Specialty: Bulldog®, Ashland®, Shur-Line®, Dymo®, Endicia®, and Mimio®