Carpenter Technology Lays Off 20% of Global Workforce

Carpenter Technology expects to save between $60 million and $70 million annually through all of its cost-cutting initiatives.
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Carpenter Technology  (CRS) - Get Report shares fell Thursday after the company announced that it is cutting its workforce by 20% globally while also enacting temporary furloughs. 

The move comes as the company, which provides specialty metals necessary for the aerospace and defense industries, deals with the fallout from the coronavirus pandemic. 

Carpenter shares fell nearly 3% Thursday after announcing the news, before rebounding to a loss of 1.6%.

“Our business remains firmly on the foundation that has been built over 130 years as a recognized leader in high performance specialty alloy-based materials and process solutions for critical applications. The actions we are announcing today as well as those already deployed are expected to make us even stronger," said CEO Tony Thene. 

Reducing the company's salaried positions by 20% is expected to save the company between $30 and $35 million annually. 

The company is undertaking other cost-cutting across its business, including deciding to exit an oil and gas business and idling powder facilities in Rhode Island and West Virginia, that it says will save Carpenter Technology between $60 million and $70 million annually when combined with the layoffs and furloughs. 

Carpenter also announced that it is withdrawing its previously provided segment operating income outlook for the current quarter as near-term visibility is obscured by the coronavirus pandemic. 

The company reported having $317 million of total liquidity including $93 million of cash and $224.1 million of available borrowings under its credit facility. 

"We believe the actions we announced today, together with the actions we have initiated over the last several months, will further strengthen the Company’s foundation for future growth," the company said.