In light of rapidly evolving market conditions, Libbey said it is implementing a number of additional cost reduction measures that includes a pay reduction for all salaried associates in the U.S. and Canada through September 30, 2020.
According to the company, this includes a 25% base salary reduction for CEO Michael Bauer; 20% base salary reductions for executive officers and other vice presidents; and 10% to 15% salary reductions for all other impacted associates.
In addition, the board of directors has also reduced its cash compensation by 25% and has also implemented temporary furloughs for a portion of U.S. manufacturing and distribution salaried associates in line with the curtailed operations in the U.S.
Additional actions include suspending the company’s 401(k) match for U.S. employees participating in the retirement savings plan through September 30, 2020; reducing manufacturing and distribution operations at its Mexico facilities and requiring all office staff to work remotely; and reducing planned 2020 capital expenditures and expenses, including delaying ERP implementation milestones.
Libbey said it has also taken significant measures across its locations in EMEA and China in line with local government regulations and the resulting downtrend to demand for its products. These changes are in addition to the previously announced temporary shutdowns of the company’s U.S. manufacturing facilities and retail stores and related furloughs, which have been extended into May.
“As we adapt to the impact of COVID-19, Libbey’s management team and board of directors are focused on business continuity and ensuring we can continue to meet the needs of our customers, employees and business partners,” said Mike Bauer, CEO, Libbey. “We believe the actions we are announcing today, in addition to the previously announced changes to our U.S. operations, are necessary to help ensure the strength of our business over the long-term. We will continue to take actions to prioritize health and safety, comply with applicable government orders and respond to changes in market conditions.”