Home appliance company Whirlpool (NYSE:WHR) announced this week in an SEC filing that it expects to pay between $260 million and $280 million in restructuring costs this year, including severance pay for terminated workers. The new figure updates and replaces a previous estimate of $100 million in total restructuring expenses that the company provided earlier in the year.
Though Whirlpool and other home appliance companies saw a spike in sales of many appliance types during the first wave of the COVID-19 outbreak, the manufacturer is still feeling the effects of the pandemic. Whirlpool earlier launched cost-cutting initiatives such as limiting business travel, furloughing employees, and encouraging voluntary retirements.
However, according to a company representative, Whirlpool deems it is "now also necessary to take additional action and reduce the number of people we employ in the U.S." The representative went on to say that the decision is "necessary to adapt to the reality of an economic contraction and prepare us for new ways of working in the future."
Whirlpool has not yet said how many employees will be terminated as a result of the new decision. The spokesperson also said those affected "are being offered a strong severance package." According to the SEC filing, severance pay amounts to roughly one third of the $280 million in restructuring costs, adding up to around $95 million.
Whirlpool notes it "expects substantially all of the costs to result in cash expenditures in 2020," and anticipates all of the job cuts and other measures to be fully completed this year. The company's stock is trading slightly more than 2% higher today following the announcements.