Jabil Announces Restructuring Plan and Cost Estimates
Electronics manufacturer, Jabil Inc., has revealed its plans for restructuring, involving "headcount reductions" and an estimated cost of $200 million. The company's board approved the plan last week, aiming to realign costs following its partnership with China's BYD Electronics.
In August, Jabil announced the sale of its mobile-electronics manufacturing business to BYD Electronic for approximately $2.2 billion. The restructuring details, such as the number of positions to be cut, have not been disclosed thus far.
Jabil expects to incur around $300 million in pre-tax restructuring expenses and related costs during its fiscal year 2024. The net cash expenditures are projected to reach approximately $200 million, which will be spread out over fiscal years 2024 and 2025.
The company stated that the exact timing of these charges and cash outflows, as well as the specific cost breakdowns, are yet to be finalized. Factors including employee consultations, severance requirements based on location, and other related considerations will influence the outcome.
Following the announcement, Jabil's shares experienced a slight decline during after-hours trading on Monday. However, the company's stock has seen significant growth this year, with an increase of 89%, in contrast to the S&P 500 index's advance of approximately 12% during the same period.
