Facing a sharp downturn in orders, Zebra Technologies is making plans to shed 700 workers, many of them older employees.
The Lincolnshire-based company has said in a regulatory filing it will reduce its global employee headcount by 7% via buyouts, or what it called a “voluntary retirement plan.” In its 2022 annual report, Zebra said it had 10,500 workers.
The maker of bar code systems and handheld computers used in manufacturing said it will offer severance and other benefits to get retirement-eligible workers to depart. With around 120 locations, the company has not said where the job cuts will be concentrated.
Crain’s Chicago Business said Zebra has 1,200 employees in Lincolnshire.
The cuts loom as the company has said it expects third-quarter net sales to fall 35% compared with the same period last year. The disclosure caused its share price to fall more than 20% in early August, although it has partially recovered since then.
Zebra reported on Aug. 1 its second-quarter revenue was off 17% while profits jumped compared with a loss in the prior year. The company attributed that to sales that carried a higher profit margin.
The company enjoyed a business boom during COVID-19, which caused customers in retail and logistics to stock up on systems that improve efficiency. But with fewer kinks in supply connections and capital budgets tight, it said customers are reducing orders.
“Zebra has a track record of judiciously managing our operating expenses and investments with a long-term view,” the company said in a statement. “Our disciplined approach has enabled our long history of success, preparing us to succeed in challenging times. While we are facing [a] difficult and uncertain business environment, we believe these actions are needed to reprioritize and invest in parts of our business that will strengthen our business for the long run.”
Zebra said its buyouts should cost $45 million. The sum will be recorded against earnings in the third quarter and payouts completed by the first quarter of 2024, Zebra said.
When the second-quarter earnings were issued, Zebra CEO Bill Burns said, “While we are revising our outlook downward, we remain confident in our ability to benefit from the long-term secular megatrends to digitize and automate workflows.”
