Callaway Golf to announce job cuts, sources say
Tuesday, July 10, 2012
Callaway Golf Co. will announce cuts of up to 10 percent of its global workforce Wednesday after the 4 p.m. bell closes on Wall Street, sources have told Golfweek.
The changes, to unspecified divisions across the Carlsbad, Calif.-based golf-equipment manufacturer, are part of an overall company plan instituted by new chief executive Chip Brewer.
Brewer came to Callaway on March 5 as president and CEO after leading Adams Golf. He faces a big challenge at Callaway, which has been losing money in recent years and finding it difficult to compete in the marketplace and resonate with consumers.
"Chip has the right mix of leadership skills and experience to complement the company's two main strengths, namely its people and its leading golf club and golf ball technology,” said Tony Thornley, the transitional CEO, in a statement regarding Brewer's hiring. “I believe that he has the insight and ability to build upon these strengths and have an immediate impact upon the company and its recovery."
Callaway, which grew from a start-up into one of golf's major players with the development of the Big Bertha line of metalwoods under the late Ely Callaway, has struggled in the past few years. The company recently reported a net loss of $171.8 million in 2011 following a net loss of $18.8 million in 2010. It recorded net sales of $886.5 million last year, down from $967.7 million in 2010.
Characterized as a “cost reduction initiative,” the changes to be announced Wednesday include 150-170 employees to be given pink slips, with a majority in North America.
The announcement Wednesday afternoon also will revise revenue for the second quarter of this year and the first half of 2012. Callaway is scheduled to report second-quarter earnings on July 26.
Joe Urzetta, the senior vice president of Americas, was the highest employee to lose his job in the staff reductions.
“Remove layers and you improve efficiency,” an insider at the company said. “We will be able to improve our core competency, and the speed at how we will be able to move will make us more efficient.”
Callaway representatives would confirm only that a statement would be made Wednesday about the company, but would not comment further.