Colabor Group to cut 120 jobs in move to improve efficiency
By Canadian Pizza
By Canadian Pizza
Boucherville, Que. – Food wholesaler and distributor Colabor Group has announced it will cut approximately 120 jobs, or eight per cent of its staff, in a plan aimed at improving operating efficiency and profitability, and integrating recent acquisitions, the company said in a news release.
This plan follows the board of directors’ decision of March 12, 2015, to suspend the declaration of a dividend in order to deploy more financial resources to its operations, while applying excess funds to debt repayment.
The plan encompasses most of Colabor’s divisions and consists mainly of centralizing and consolidating certain operations at the head office of the company or of its divisions. In addition to a reduction of current staff, some vacant positions will be eliminated, the company said.
Essentially reflecting these layoffs, Colabor will record a charge not related to current operations of approximately $3 million, before taxes, in its results for the first quarter of fiscal 2016.
These measures are expected to result in cost reductions estimated at more than $6 million annually, before taxes.
For fiscal 2015, Colabor expects to report adjusted earnings before financial expenses, income taxes, depreciation and amortization of slightly more than $26 million.
“This detailed plan, which stems from the analysis of our profitability and indebtedness, will enable Colabor to remain a leader in the foodservice distribution industry in eastern Canada,” said Claude Gariépy, president and chief executive officer of Colabor, in the release. “We regret the consequences of personnel reduction for the employees concerned and their families and we have taken equitable measures to provide them with all the support they deserve. The plan will result in a leaner and more flexible operating structure to the benefit our customers and suppliers. Its execution will facilitate the achievement of our strategic priorities in the short and medium term, while promoting long-term growth.”