Tyco Safety to slash 52 percent of workforce by end of year, SimplexGrinnell untouched

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Wednesday, September 1, 2004

WESTMINSTER, Mass. - Despite Tyco Safety Products plans to slash 400 of 766 manufacturing positions within its products unit by the end of the year, the company’s high-end fire products division. SimplexGrinnell, and its manufacturing arm will remain untouched by the action.

Tyco hinted at plans to reduce staff in November 2003, when the company reported year-end earnings and a plan to focus its operations on core businesses, but the company did not announce specifics of this staff reduction until the end of July.

Tyco has five business segments under its corporate umbrella, including electronics, healthcare and fire and safety, which is where the safety products unit is positioned. Other business units under fire and safety include ADT Security and Software House.

“Tyco will continue to employ over 700 people here locally,” says Chris Woodcock, director, marketing communications for SimplexGrinnell. Woodcock said the company employs 6,000 throughout Massachusetts and 260,000 worldwide.

As a result of the cutbacks, the company will outsource the manufacturing of products, such as notification devices and smoke detectors. Main control panels that carry the SimplexGrinnell brand, however, will continue to be made at the site.

Tyco has closed 142 facilities, reduced its staff by 5,300 and exited 17 businesses since announcing it would tighten its focus last November.

“This is typical of American industry at this point,” said Joseph P. Freeman, president of research firm JP Freeman. Freeman notes three factors that most likely influenced the decision to scale back its northeast manufacturing location: the need to increase profit margin, a mature fire and safety industry and lack of investment by businesses to improve their corporate structures.

Coming on the heels of its disclosure to cut staff in Westminster, the company reported strong earnings for its third quarter, ending June 30, with revenue reaching $923 million for the three month period versus $844 million for the same time last year.