- THE MAGAZINE
Momentive Performance Materials Inc. recently announced a plan of additional cost-cutting actions that will reduce operating costs and position the company to be more competitive in the global marketplace. Beginning April 1, the salaries for President and Chief Executive Officer Jonathan Rich and the company’s senior leadership team will be reduced by 10%.
The company will also implement a plan to reduce the pay of most salaried professional and administrative employees by approximately 7.5%. Affected employees will receive one additional week of paid time off each quarter that the reduction remains in effect. In some countries, affected employees will receive one week of unpaid time off per quarter in lieu of a reduction in pay. Rich and the senior leadership team will not receive additional paid time off.
The need for the reduction in pay will be reevaluated each quarter. The company anticipates the reduction remaining in effect throughout 2009. The reduction in pay will affect approximately 2300 employees worldwide. Momentive currently employs approximately 4600 people globally.
The company also plans to reduce its global workforce by approximately 100 additional employees through a combination of reductions and attrition by the end of the third quarter of 2009. Upon completion, Momentive will have reduced its global workforce by 15% from its January 2008 levels. In addition, the company intends to further reduce the number of contractors by 50% and take various measures to reduce spending on outside services and fees.
In connection with the workforce reductions and other cost-cutting actions, Momentive expects to take non-recurring pretax charges primarily related to severance and other benefits totaling approximately $8 million through the end of the second quarter of 2009. Annual cost savings generated from these cost cutting actions are anticipated to be approximately $40 million.
“Given the realities of the current economic recession, it is imperative that we act to reduce costs and take the difficult but necessary steps to protect the long-term interests of the company, our customers and our employees,” said Rich.
Additional information is available at www.momentive.com.