Compounding leader PolyOne Corp. of Cleveland will cut 400 salaried jobs in an attempt to improve its difficult financial status.
The company expects the cuts to lower selling and administrative costs by $30 million to $35 million annually, before taxes, beginning in the second quarter of 2003.
PolyOne officials also said the company will cut $5 million to $10 million in nonpersonnel costs such as consulting work, charitable contributions and the firm's two corporate jets.
Thomas Waltermire, chairman and chief executive officer, said in a Jan. 14 news release that the moves will ``help [PolyOne] to achieve a position of low-cost competitiveness within our industry.''
The firm is committed to reducing its selling and administrative costs to less than 10 percent of sales, PolyOne said. Those costs currently total 12 percent of sales.
Almost 90 percent of the job cuts are expected to be in North America. The number of cuts equals about 5 percent of PolyOne's work force.
Officials said most of the reductions, which will take effect in the first quarter, will result from simplifying processes and eliminating low-value activities throughout the organization.
Outside professional services are expected to be eliminated, while North American human resources, information technology, sourcing and finance functions will be centralized.
Of the cuts, 160 are expected to come from the Cleveland area, PolyOne spokesman Dennis Cocco said by telephone.
Most of the cuts will come from human resources, information technology, finance and accounting.
A majority of the 400 workers affected were told of the moves Jan. 14, Cocco added.
On Dec. 18, company officials announced plans to reduce the firm's debt by at least $200 million through job cuts and sale of ``nonstrategic assets.'' The firm is expected to lose almost $60 million on sales of $2.6 billion in 2002.
PolyOne was listed as North America's largest compounder - with a 12 percent market share - in a recent Plastics News industry ranking.