Kennametal takes action to lower costs
Kennametal Inc. is implementing cost-control actions to mitigate the lower market conditions associated with COVID-19.
As part of its ongoing Simplification/Modernization initiative, Kennametal is accelerating its structural cost reduction plans. A restructuring of approximately 10 percent of salaried employees globally is expected to be substantially complete in the first half of fiscal 2021.
Effective July 1, compensation of salaried employees will temporarily be reduced by 10 to 20 percent based on job level through the first half of fiscal 2021. This action is expected to save approximately $10 million to $15 million per quarter, which is similar in amount to and replaces furloughs or similar actions currently in place for salaried employees.
In addition, cash compensation to board members will be reduced by 20 percent through the first half of fiscal 2021, and the company will continue temporary shutdowns and reduced production schedules to align manufacturing capacity to anticipated customer demand.
Combined, the actions are expected to reduce costs by $65 million to $75 million in fiscal 2021.
"Based on our April and May sales, we expect economic weakness will persist, and we need to continue to maintain these types of temporary cost-control actions until we begin to see markets recover," said Christopher Rossi, president and CEO.
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