Debbie Blank
About 300 Hill-Rom U.S. workers - 6 percent of its American workforce - are being eliminated, the board of directors decided Tuesday, Jan. 13.
Close to 170 Batesville-based employees, working between Indianapolis to Cincinnati, are losing their jobs, reported Lauren Green-Caldwell, corporate communications and public relations director, Jan. 14.
The affected positions "run the gamut, primarily production (jobs), also salaried positions," she said.
The other 130 employees who will be without jobs are located "all across the United States," where Hill-Rom has "lots of small service centers."
Two consolidations are in the works, according to Green-Caldwell. Patient support manufacturing operations will move from the company's Charleston, S.C., facility to its Batesville operations and to some outside suppliers, but that plant is not shutting down. The Vest will still be produced in Charleston, she said.
"A number of post-acute care accounts receivable positions will be consolidated to create one Center of Excellence at the company's St. Paul, Minn., site," a news release stated.
"We are trying to have most of our affected associates notified within the next 24 hours," either in one-on-one or group meetings, according to the communications director. "We will have some areas that will take a little longer for people to know how it affects them directly. Our goal is to keep people informed ... and keep communication lines open so people know what's happening."
To mitigate the impact of the resizing effort, a voluntary early retirement program is being offered to eligible workers who meet certain requirements, the news report said.
Terminated employees will receive enhanced severance packages, including ongoing health care benefits and outplacement services.
President and CEO Peter Soderberg observed, "These are painful decisions, particularly because they directly affect our dedicated associates during these challenging times; however, I want to reiterate the company's commitment to stay the course on our strategy and maintain our investments in selling and new product development."
There is not just one reason for the job cuts. While Hill-Rom has experienced a lowered demand for hospital items, leaders have strategized how to become "a more cost effective company and continue to be a leader in the industry." Green-Caldwell admitted those efforts may have accelerated because of the current state of the economy.
"It's been a journey. How do we become the most effective and efficient company we can be?"
Officials expect the eliminations and consolidations will result in about $12 million to $14 million in annual savings, about half of which is related to volume declines.
A special charge of between $7 million and $10 million over the second and third quarters will relate primarily to severance, early retirement benefits and other associated costs.
In addition to the voluntary early retirements, involuntary job losses and consolidations, two more actions are being taken to more aggressively manage the company's cost structure: redeployment of U.S. sales and service resources to increase customer presence and support; and further reduction in nonsales, non-research-and-development discretionary spending.
These cuts continue a Hill-Rom pattern of streamlining. About 160 salaried positions globally disappeared in the fourth quarter of fiscal year 2008. Close to 140, mostly in the rental service area, were terminated in October 2006. In September 2004 it was announced about 130 salaried positions in the United States and about 100 in Europe would be gone. Between 250 and 300 salaried jobs globally were cut over a yearlong period starting in April 2003. On Jan. 22, 2001, 200 Hill-Rom positions were eliminated, half in Charleston, S.C., and the rest across the United States. Less than two months later, 200 associates, half in Batesville and half globally, lost their jobs.