Lithonia Lighting Corporate Parent Cuts 1,100 Jobs At Factories and Headquarters

Acuity Brands, Atlanta, is accelerating a restructuring program that will cut 1,100 jobs. The cuts, which affect approximately 15 percent of the company’s salaried work force, include 600 salaried positions and 500 hourly positions.

The restructuring, originally announced in late February, involves positions at Acuity Brands’ corporate headquarters and at facilities manufacturing its stable of well-known commercial/industrial lighting brands such as Lithonia Lighting, Holophane, Peerless, Hydrel and American Electric Lighting.

A spokesperson for Acuity Brands said about half of the salaried employees have already been let go, and that the remaining positions will be eliminated by year-end. The 500 hourly positions will be eliminated later this year when facilities in Vermilion, Ohio, and Mexico are consolidated, he said.

“By accelerating our restructuring, Acuity Brands expects to significantly improve operating efficiencies, resulting in enhanced customer service, greater productivity, and higher returns for our shareholders,” said Vernon J. Nagel, chairman and CEO of Acuity Brands.

He believes the job cuts would reduce operating costs by at least $13 million in the second half of fiscal 2005 and lead to annual savings of $50 million by the end of the calendar year.

“As we currently review our operating performance, we see increasing strength in the company’s more traditional markets, consistent with industry trends,” Nagel said. “However, challenges remain in certain product lines and channels, particularly the home improvement channel where shipments and profitability trail last year. We have implemented corrective actions; however, they will not be sufficient to offset our quarterly performance to date. In addition, we have commenced a program to reduce inventory levels due to the positive impact of process improvement programs. We expect this may result in lower absorption of factory overhead costs creating a drag on operating profit in the current quarter and for the balance of fiscal 2005.”

Nagel added that cost increases for raw materials and other expenses during the second quarter have outpaced realized price increases. He does not expect the company’s most recent price increases to benefit the company’s results until the third quarter of fiscal 2005.

Its second-quarter sales increased $14.1 million, or three percent, to $505.1 million, from $491 million reported in its second-quarter 2004. The company reported a net loss for the second quarter of $8.4 million. The net loss included the previously announced pre-tax charge of $17 million related to the restructuring program.