Unifi Inc. has announced broad, proactive changes that are designed to increase the company’s long-term competitiveness by enhancing organizational effectiveness and improving overall cost structure.
The changes will result in the elimination of 400 current domestic positions, bringing the number of positions eliminated through cost reduction initiatives since January 2003 to approximately 600, or 15 percent of the company’s U.S.-based workforce. Reductions will affect every North American facility, including the Greensboro, NC, headquarters. The company expects to lower ongoing annual compensation costs by approximately $20 million as a result of these changes.
“Reduced domestic sales stemming from our nation’s prolonged soft economy, coupled with increased imports from Asia, have required us to reassess every aspect of our business,” said Brian Parke, CEO of Unifi. “Weve concluded that we must take proactive steps to create a radically redesigned organization that is leaner, flatter and faster — attributes we need to ensure long-term success in an increasingly competitive and dynamic global industry.”
As part of the corporate redesign, Unifi has reduced the number of managerial categories from eight to four. Parke said this new business model will streamline the decision making process, improve the flow of information and bring individuals closer to the company’s products and customers. Additionally, the initiative will generate near term productivity improvements estimated at 13 percent.
“All of our strategic growth initiatives, domestic and global, remain fully funded and fully staffed, including product development, information technology, employee development and customer support,” said Parke. Unifi will support the transition of all employees adversely affected by the changes. Every employee will receive professional outplacement counseling and assistance.
“In many cases, employees were given the option of staying with the company or accepting a severance package designed to make the transition smoother and more manageable,” Parke added. “Although we can no longer accommodate the employment needs of every individual at Unifi, we remain concerned about their personal and professional well-being.
“Enacting organizational change is never easy, and taking the offensive to create a more resourceful and healthy company often means making tough decisions that have individual consequences,” Parke said. “Embracing change – – and the personal and professional growth opportunities that it brings — will keep Unifi on its course for long-term success.”
The company expects to take a restructuring charge of approximately $11 million as a result of the changes announced.
