US snack maker Lance is to cut 2% of its workforce in a bid to cut costs and boost margins.
Lance said today (4 June) it wanted to “align the company’s operating costs with its revenue”, which has been “below expectations”.
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Last month, Lance cut its sales and earnings targets after booking a drop in net income for the first quarter of the year.
For the period ended 27 March, net income amounted to US$1.2m compared to a profit of $6.5m a year earlier.
Net revenue increased 3% to reach $221.6m. However, the figure was hit by increased promotional pricing during the first quarter.
“Lance is a company that is driven by people and innovation but with the current economic environment and resulting impact to our top line, adjustments are required to align operating expenses with sale volumes,” said president and CEO David Singer.
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By GlobalDataThe company expects to record a pre-tax charge for severance and related costs of around $3m in the second quarter of fiscal 2010.
It added the “annualized benefits” from the actions are expected to total around $6m.
