Energizer Holdings Inc said on Thursday that it would cut more than 10 percent of its workforce, or about 1,500 people, as it tries to rev up results in its battery business.
A restructuring at the company, which also makes Schick razors, was in the works for months. In September, Energizer said it planned to cut jobs and expenses but until Thursday it had not disclosed details of the plan.
Energizer's shares soared to $74.85 in after hours trading after dipping 22 cents during the regular session to $70.82.
This year, the company faced pressures including losing shelf space for batteries at Walmart and stepped up competition from larger rival Procter & Gamble Co's Gillette razors. At the same time, it has been under constant pressure as popular iPads, mobile phones and other electronic gadgets do not require its kind of batteries.
It is absolutely what the company has to do in the context of declining market share, declining category growth in batteries and much tougher competition, Sanford C. Bernstein analyst Ali Dibadj said of the restructuring. This is a short-term Band-Aid, but going forward they're still stuck in very difficult categories and positions in those categories.
Energizer's latest restructuring comes two years after another effort to overhaul the battery business following the decline in battery-powered devices and the battery category during the Great Recession.
While there was some recovery in the battery category in 2010 and 2011, declines in devices that use batteries and the battery industry resumed in the past year, CEO Ward Klein said on a conference call.
We think these slow but steady negative trends are here to stay, said Klein, who the company credits with having an integral role in introducing the Energizer Bunny back in 1989.
Energizer said it wants to streamline its lineup of household products to allow it to focus on the core battery business.
Plans include closing or streamlining battery factories and packaging facilities in the United States, Malaysia and Canada and streamlining lights manufacturing in China. Energizer expects pre-tax cost savings of about $200 million from the restructuring, and said the majority of its charges should be recorded within the next 12 to 18 months.
St. Louis-based Energizer is best known for its namesake batteries. Its other products include flashlights, Eveready batteries, Playtex tampons, and Banana Boat and Hawaiian Tropic sunscreen.
The details of the restructuring come after other household