CINCINNATI -- In a major restructuring, Gibson Greetings here announced it will lay off approximately 480 employees, including hourly and production supervisors, and office and administrative workers, by early 1999.
$30 to $35 million over the next few years in upgrading its existing management information systems.
Gibson expects these changes to generate savings of approximately $10 million annually by the year 2000 and be accretive to earnings beginning in 1999 while also improving the company's competitive position. Gibson will record a nonrecurring pretax charge of $26.1 million in the first quarter of 1998 (excluding the investment in information systems) to recognize costs related to the restructuring. The workforce reduction will result in the curtailment of a defined benefit pension plan, which in turn is expected to generate a pretax gain of approximately $3.9 million as positions are eliminated.
"This restructuring is part of our demand-driven strategy designed to improve the operating efficiency of the the entire organization by bringing additional speed and responsiveness to the marketplace and by enhancing our ability to provide customers with a diverse array of dynamic new products, many of which we cannot produce in our current manufacturing facility," said Frank O'Connell, Gibson's chairman, president and chief executive officer.