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October 24, 2019

Stanley Black & Decker’s $200M cost-reduction plan includes layoffs

Photo | Robert Benson Photography Stanley Black & Decker's New Britain headquarters.
By Sean Teehan

Amid continued pressure from tariffs and currency fluctuations, New Britain-based Stanley Black & Decker announced Thursday it’s cutting $200 million in costs, which will include layoffs and the possible shuttering of some operations.

The announcement comes on the heels of layoffs the company recently implemented in Connecticut, though it’s not clear how many jobs were lost. A Stanley spokesperson declined to comment on any recent layoffs in its local operations.

“The cost-savings will come from head-count actions across the company, as well as executing some footprint rationalization opportunities,” Stanley’s CFO Don Allan Jr. said Thursday morning during an analyst’s earnings call. “We are taking cost actions to help counteract the carryover effect of currency, and likely tariff headwinds as well as softness in the industrial and emerging markets.”

A Stanley spokeswoman confirmed “head-count actions” refer to workforce reductions and “footprint rationalization” refers to review of buildings, manufacturing and distribution facilities.

Allan was speaking to investor analysts during a third-quarter earnings call, during which the company reported a 7.5 percent decline in profits.

For the three-month period ending Sept. 30, Stanley recorded net income of $230.5 million, or $1.53 per diluted share, vs. $247.8 million, or $1.65 per diluted share, in the year-ago period.

Allan said tariffs and currency fluctuations cost the company about $90 million in the third quarter. About 95 percent of that fell on Stanley’s tools and storage businesses. He added that the company is expecting a tax increase next year.

But CEO James Loree noted a strong quarter for North American sales, largely driven by the company’s rollout of the Craftsman tools brand, which Stanley bought from Sears Holdings in 2017.

“By the end of the year we will have grown Craftsman into a $600-million business,” Loree said.

Stanley’s third-quarter sales were up 4 percent to $3.6 billion, the company said.

Loree expressed optimism about the company’s outlook, noting Stanley’s initiative to improve its margin by $300 million to $500 million by 2022. Most of this, he said, will come from leveraging technology like machine learning and connected factories throughout Stanley’s operations.

“There is a lot to be excited about as we look ahead,” Loree said.

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5 Comments

Anonymous
January 17, 2020

How are they trying to beat " tariff headwinds", when they took jobs from the US and sent them to Columbia? This is how they trying to reduce cost!!! They did not reduce the people, but took the business from the US people and gave it to another country of people. So tell the truth Stanley on what's really going on!!!

Anonymous
November 23, 2019

Wouldn't be facing headwinds from the Tariffs if you hadn't offshored your manufacturing to begin with. Always in the bread line for US company tax benefits, but screwing over the US based workers at every turn. Routinely put merit increases on hold for everyone except executive compensation plan members. They hide a lot by ignoring operational expenses and simply refusing to track and report them accordingly - really need a full audit and some jail time for some executives.

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