Callaway Golf Co., which is in the midst of a tough restructuring with a new CEO in charge, announced major “cost reduction initiatives” that are expected to cut 12 percent of its workforce, Callaway said Wednesday, reports local publication North County Times
The layoffs target 250 of Callaway’s 2,100 workers, according to the estimates provided by the iconic golf company.
The initiatives are expected to yield an estimated $52 million in annualized savings, and will be felt across the company’s global workforce, the company said.
The layoffs and other savings will result in estimated pre-tax charges of $40 million over the next year, said Chip Brewer, the company’s president and CEO, in a prepared statement Wednesday after the close of the market.
Brewer also announced preliminary results for the second quarter that ended June 30, and first six months of 2012.
The company estimates sales of $280 million for the second quarter ended June 30, up 3 percent compared with the same year-earlier period in 2011.
He also said the company is expected to break even in its second quarter, compared with a loss of $1.03 a share in the same 2011 quarter.
First-half 2012 sales are estimated at $565 million, a 1 percent increase compared with the same 2011 period. Earnings per share are estimated at 41 cents in the first half versus a loss of 87 cents in 2011’s first six months. Overall, Callaway is looking at a loss of 55 cents to 75 cents a share in 2012.
Earlier this year, Brad Holiday, Callaway’s chief financial officer, said that the recovering company is expected to see sales in the first six months of 2012 at $560 million to $575 million, with earnings per share estimated at 20 cents to 25 cents a share in the first half.
Callaway is expected to report its final second quarter results on July 26. This is one of Brewer’s first big decisions since joining Callaway in late February.
Shares of Callaway closed Wednesday at $5.66, down 54 cents.