HOUSTON (AP) — Waste Management Inc. said Thursday it will eliminate about 700 jobs, or 2 percent of its workforce, as part of a cost-cutting drive at the trash and recycling company.
News of the job cuts, which will be spread across the U.S., comes as the company said it’s become more cautious about its financial expectations for the full year because of continued weaker prices for certain commodities.
The restructuring involves trimming and consolidating some management positions and support staff. That will cost $50 million to $60 million, recorded in the current quarter. The company also promoted a vice president, James Trevathan Jr., to chief operating officer to better oversee field operations.
Waste Management, which is based in Houston, has about 45,000 employees worldwide.
The layoffs were announced as the company said its second-quarter profit fell 12 percent, hurt by the costs of withdrawing from a pension plan and other one-time charges, as well as weaker prices in several divisions.
Profit came to $208 million, or 45 cents per share, down from $237 million, or 50 cents per share, last year. Adjusted profit was 52 cents per share, matching the average prediction of analysts surveyed by FactSet.
Revenue rose 3 percent to $3.46 billion from $3.35 billion. Analysts expected $3.5 billion.
Waste Management said average recycling commodity prices fell about 20 percent from a year earlier, reducing the recent quarter’s profit by 3 cents per share. In addition, a 10 percent drop in electricity prices lowered profit at its waste-to-energy operations and reduced its overall earnings by an additional 3 cents per share.
The company said it expects recycling and electricity prices to remain low in the second half of the year and reduce its full-year profit by about 7 cents per share. As a result, Waste Management said it now expects to post a 2012 profit of $2.15 to $2.20 per share.
Analysts had expected a profit of $2.18 per share.
Waste Management shares fell 33 cents, or 1 percent, to $32.10 in morning trading.
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