The battle is on.
Activist investor Bill Ackman takes issue with comments made by ADP (ADP) - Get Report CEO Carlos Rodriguez, who suggested recently that Ackman's goals can only be achieved fast by eliminating 15,000 to 20,000 of ADP's 58,000 employees.
"This is a scare tactic," Ackman said in an interview with TheStreet.
The comments come as Ackman is waging an intense boardroom battle against ADP, seeking to install three dissident directors onto the board of the payroll processor at the company's 2018 annual meeting scheduled for today.
"When the CEO goes on TV and says my plan would result in the laying off of 20,000 people, that's not a smart thing to do," Ackman said.
Ackman noted that roughly 11% of the ADP workforce leaves every year, which means that they have to hire roughly 6,000 people just to maintain their current employee count. He added that ADP needs to slow the rate of growth in its headcount and accelerate growth in revenue and margin improvement.
"Every talented person that works for this company will have a job," he said.
Nevertheless, Ackman's strategy for restoring growth at ADP has a number of elements that appear to indicate that employees would be let go. In a recent presentation, Ackman focused some attention on Roseland, N.J.-based ADP's vast real estate footprint, with 130 offices around the U.S. He argued that many of these offices are a "vestige" of a previous era when payroll services needed costly physical offices in a variety of locations.
Ackman says ADP owns nearly four million square feet of real estate, which he argues "is going to have value." The comments suggest that Ackman believes that some offices could be closed and the real estate sold. In addition, he reiterated that ADP's corporate headquarters are located in multiple offices in various locations that should be consolidated.
Meanwhile, Ackman believes he can work successfully with Rodriguez if voted onto the board despite the CEO referring to him as a "spoiled brat." Ackman concedes though that he hasn't thought much about if Rodriguez is the right person for the job. "I would like to hear his ideas," Ackman said.
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