USG Corp., the drywall maker and distributor that has racked up $284 million in net losses through the first nine months of this year, revealed today in an SEC filing it will take steps to save $22 million to $28 million annually through job cuts and other cost reductions.
"Continued adverse market conditions" prompted the job cuts, Richard Fleming, USG's executive vice rresident and chief financial officer, said in the filing. Employees were first told of the job cuts on Dec. 6 and the company plans to complete the process by the end of January.
"The program includes a salaried workforce reduction and other cost reductions that are targeted to reduce costs by an additional $22 million to $28 million annually, before charges for termination benefits," the filing said. The Chicago-based company plans to first offer voluntary severance benefits, after which the company plans to make involuntary job cuts. Employees who lose their jobs will receive a severance package as well as continuation of their medical, dental, and vision coverage.
These will be the first workforce cuts the company has had since 2008. USG officials estimate the company will incur $4 million to $6 million in related charges.
USG and its subsidiaries, which includes the United States Gypsum Co. and L&W Supply, have been hit hard by the collapse of the construction market in recent years. USG posted a net loss of $463 million in 2008 on sales of $4.6 billion and a net loss of $787 million in 2009 on sales of 2009. Through the first three quarters of this year, it has incurred $284 million in net losses on $2.24 billion in sales.
The layoffs come as the company prepares to go through a transition at the top as James S. Metcalf will become president and CEO on Jan. 1. Metcalf is currently president and COO. He will succeed William Foote.