Bowne Cutting Costs, Jobs
NEW YORK—With weak capital markets resulting in less print volume, Bowne & Co. announced that it is implementing $10 million in annualized cost reductions, with its Financial Print division letting go five percent of its work force.
The reductions result in the loss of 200 jobs for the Print Division. Bowne is also limiting all discretionary spending and is reengineering workflow to match the size of its network to customer demand. The measures are not unlike those taken by the company in 2001, when $70 million in annualized cost savings was realized, including $60 million in Financial Print.
"As we indicated in our second quarter news release, Bowne continues to approach the rest of 2002 cautiously, managing our assets wisely and assuring that our resources—including our work force—are appropriately matched to realistic business prospects," says Robert M. Johnson, chairman and CEO. "The capital markets remain weak and the business climate is unpredictable, so we must continue to demonstrate our willingness and ability to adjust our resources to the realities of the market and current economic conditions.
"Furthermore, we are moving forward with a diversification program that reduces our reliance on cyclical business. With that said, it is always painful to announce staff reductions, especially at a people-focused company such as Bowne."
The company estimates that related restructuring expenses from the latest cost reduction will result in a third quarter pre-tax charge of $2 million to $3 million. It does not change Bowne's third quarter or full year outlook.
Weakness in the capital markets has reduced the financial printing industry's transactional business. Through an ongoing diversification program, Bowne has reduced its alliance on transactional financial printing to about 25 percent of total revenues as of the second quarter.