Medical equipment manufacturer Invacare Corp. announced a restructuring initiative that the company says is expected to generate $14 to $15 million in annualized pre-tax savings when fully instituted in 2015.
Part of that restructuring initiative includes a cut back to the company’s workforce of approximately 150 associates and 40 temporary associates working for Invacare’s North America Home Medical Equipment, Institutional Products Group and Asia/Pacific segments.
Also, due to the realignment, an Invacare statement said the company expects to pay restructuring charges up to $6 million on a pre-tax basis.
The news comes after Invacare President and CEO Gerald Blouch retired from his leadership positions with the company and his spot on its board of directors on July 31. He was then replaced by Robert Gudbranson, Invacare’s senior vice president and chief financial officer, is serving as the company’s interim president and chief executive officer, while retaining his role as CFO.
“Invacare is committed to improving free cash flow and restoring profitability in the North America/HME and Asia/Pacific businesses,” Gudbranson said. “While the decision to downsize our workforce is extremely difficult, it is a necessary step toward achieving these objectives in light of our financial results for the first six months of 2014 and the slow sales start to the third quarter.
“All of our associates, including those affected by this restructuring, have been committed to Invacare,” he added. “As always, we will provide support to our impacted associates during this transition period.”