Johnson Controls To Cut 3,000 Jobs

(RTTNews) - Auto parts supplier Johnson Controls Inc. (JCI) said Friday that it plans to cut as many as 3,000 jobs from its global salaried workforce over the next two years, as part of its ongoing cost savings program. The company expects these actions to ultimately deliver annual cost savings of up to $250 million.

The job cuts represent about 2.5 percent of the company's total workforce. While reporting its financial results in the third quarter, Johnson Controls said it was initiating a comprehensive cost saving program to address existing costs.

The Milwaukee, Wisconsin-based company said it continues to realize productivity improvements through ongoing implementation of the Johnson Controls Operating System or JCOS, which is lowering annual operating expenses through standardization, simplification and waste reduction across the company.

Alex Molinaroli, chairman and CEO of Johnson Controls said, "As we continually adapt to our changing business portfolio, there is significant opportunity across the company for us to reduce costs, simplify processes and increase our speed and agility. The steps we are taking now will enable a more competitive, sustainable cost structure for Johnson Controls as we continue to move the company forward."

In late July, Johnson Controls said its third-quarter profit edged up from last year, aided by higher revenues at its building efficiency segment. The company also said it plans to pursue a tax-free spin-off of its Automotive Experience business, in about 12 months, as an independent, publicly traded company.

At that time, Johnson Controls said that as part of the spin-off preparation, it is initiating a comprehensive cost savings program and will provide additional details of the transaction as the separation process develops.

The automotive business, which makes interiors and seatings for vehicles, generated over half of the company's net sales in fiscal 2014. Ever since he took over as CEO in 2013, Molinaroli is seeking to rely less on the auto industry and invest to expand the company's other two segments - Building Efficiency and Power Solutions.

In early September, Johnson Controls said it completed the sale of its Global Workplace Solutions or GWS business to CBRE Group, Inc. (CBG) for about $1.48 billion. The decision to sell its GWS business, a provider of facilities management services, is part of Johnson' strategy to invest in core businesses.

The company has also divested its automotive electronics business and conducted a major restructuring of the building efficiency business.

JCI closed Thursday's trading at $41.45, down $0.51 on a volume of 2.83 million shares.