Canton, Ohio-based Diebold Nixdorf, a maker of financial point of sale systems and ATMs has confirmed that their restructuring and cost-containment program named DN Now will result in approximately 1,600 layoffs, thinning the ranks of middle managers.
In responding to a question about head count reductions from JPMorgan Securities analyst Paul Coster, “… And my other question is on the head count reductions. Can you just talk to us about whether it's surgical or whether it's across the board? And I guess we're generally speaking kind of feel better if there were discrete functions being cut out or discrete products. But I think you get what I'm aiming at here, perhaps you can elaborate?”
DN CEO Gerrard B. Schmid responded, “Yes, sure. So let me just start at a high level. A lot of the focus of that effort has been to impact non-customer-facing roles. So we have not impacted our frontline services technicians nor our frontline sales force. We've really been looking at middle management roles in particular. There are 1,600 people roughly that are impacted by this effort. And as I said, 85% have exit dates. The work has been both surgical and across the board. This wasn't a blunt instrument approach that we adopted. It was a very, very analytical thoughtful look at spans of control, levels of management across the board.
Schmid went on to say, “We expect stronger cost savings from the new operating model we implemented during the quarter, and we also initiated a services modernization plan designed to improve service levels, enhance profitability and increase customer satisfaction. When combined with the actions we are taking to simplify our product portfolio, we are increasing our savings target to approximately $250 million annually by the end of 2021. We are also driving several other operational initiatives to improve our net working capital and efficiency levels, and expect these to add further savings in future quarters.”
Happy talk to Wall Street from a company who has recently reported a 38-year low, a 52-week stock price that fell from $22 to $3.42 on top of continuing losses of $212.6 million for the quarter ending September 30, 2018 which does not compare favorably with a loss of $36 million a year ago.
It can happen to anyone, anytime, anywhere ... are you wondering, Am I Next?