SAN FRANCISCO (Reuters) - Furniture Brands International Inc said on Thursday it would cut its workforce by 15 percent, or about 1,500 jobs, to cut costs as it faces softer sales in the recession.
The company, whose shares have fallen 70 percent in the past year, said it would record severance costs of between $8 million and $9 million, the bulk of which would be seen in the fourth quarter.
Furniture Brands said it expects to save more than $20 million a year on the action.
The workforce reduction includes jobs in management as well as hourly positions across all functions of the company. Furniture Brands said that production jobs to be eliminated matched the anticipated lower sales volumes the company said were "stemming from soft market conditions."
"These reductions are an inevitable response to the recessionary environment and are necessary to strengthen Furniture Brands for the future," said Chief Executive Officer Ralph Scozzafava in a statement.
The company, which warned in October that it would cut jobs to cope with slumping demand for home goods, also said then it was cutting its full-year earnings view and suspending its quarterly dividend.
St. Louis-based Furniture Brands, whose brands include Broyhill, Thomasville and Lane, has been trying to revamp its business by consolidating its U.S. plants and exiting store leases.
U.S. furniture companies have been reeling from a lingering sales decline amid the collapse of the housing market, and the credit crunch has only exacerbated problems.
The severance costs are included in the anticipated pretax charges of $56 million to $72 million the company warned in October it could take in the fourth quarter.
But Furniture Brands said it also anticipated an additional non-cash tax asset impairment charge in an amount to be determined early next year.
Shares of Furniture Brands, whose shares hit a 16-year low in November and have continued to tumble, fell 7.5 percent on Thursday on the New York Stock Exchange to close at $3.06. (Reporting by Alexandria Sage; Editing by Bernard Orr)
