NEBS to Cut 3% of Staff in Restructuring

Groton, MA—New England Business Service (NEBS) on May 15 said it would restructure some of its operations to reduce operating costs. The plan, designed to reduce operating costs by $4.5 million, or $0.22 a share annually, includes cutting 3% of its nearly 4,000-person workforce—or 125 people–through a combination of attrition and severance. NEBS will also consolidate its Ogden, UT, manufacturing plant and a portion of its warehouse and distribution space in Sudbury, MA, into its other operations.

The layoffs reflect NEBS’s disappointing sales. For the company’s fiscal third quarter, ended March 24, overall sales rose 5%, but that included revenue from its PremiumWear work clothes catalog, which the company bought in July 2000. Excluding that book, sales dropped 6%.

“Demand is down across all our channels,” says spokesperson Timothy Althof. “It wasn’t isolated to NEBS, Macbee Systems, Chiswick, or our other catalogs. We have seen softening in ordering levels that started in January and continues through till this time. Driving this is economic pressure on the business. So we really needed to reduce costs to continue to ensure a strong healthy business and reach our objectives for 10%-15% earnings growth in fiscal ’02.”

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