ST. LOUIS — Emerson Electric (NYSE: EMR) on Thursday said it will eliminate 2,900 jobs as part of a $425 million cost reduction plan that also involves closing several facilities.
But the Ferguson-based maker of automation equipment and other technology products said it isn't planning to break-up the company, as was proposed last year by activist investor D.E. Shaw.
The cost restructuring plan, outlined by Emerson executives during an annual investor conference, is the result of a broader operational review launched by the company last year as its revenue growth began to stall.
Then, in October, D.E. Shaw went public in October with demands for a shakeup at Emerson, proposing the company could save $1 billion annually by splitting itself into two distinct units: an industrial automation company and a climate technology-focused company. Emerson said it would conduct a comprehensive review of its operations after news broke of D.E. Shaw’s activism.
In announcing its cost-saving strategy Thursday, CEO David Farr said Emerson's board was “very focused on making sure we weren’t doing damage just to make short-term gain” as it completed the operational review. The company is targeting $215 million of the cost restructuring for fiscal 2020, saying earlier this month it initiated $97 million of "cost resetting programs" in the first quarter.
The focus on savings for Emerson comes as the company operates what it has described as a "no-growth environment," reporting earlier this month that fiscal first-quarter net sales of $4.2 billion were flat. Farr said Tuesday he sees the period of slowdown as an apt time for the company to reset itself.
Click here for the full story.
More from the Business Journal
- Court upholds $3.2M Edward Jones settlement
- In the market for a castle? This one comes with an 18-hole golf course
- Bayer appeals $86 million verdict, citing 'inflammatory and disparaging' claims
- Fewer people are visiting the Arch — even after $380M in renovations
- Take a peek inside this historic Clayton hotel's $3.5M renovation