Reynolds and Reynolds Co., one of the two largest dealership computer system vendors, said Friday that it will cut about 450 jobs or about 10.5 percent of its 4,300-employee work force.
The move, announced during its third-quarter earnings conference Friday, is part of a three-year plan to increase revenues and productivity, and cut costs to lower operating expenses by about $90 million.
The job cuts will come via attrition, outsourcing and layoffs.
Reynolds reported net income of $28 million during its fiscal year third quarter that ended June 30, up 16.6 percent compared with the same quarter in 2005. Quarterly revenue of $250 million was up 1.2 percent from $247 million in the same quarter last year.
"Our third-quarter results show that we are gaining momentum in our effort to improve performance and grow the company," Reynolds CEO Fin O'Neill said in a statement. "The plans we are announcing today accelerate our pace."
Reynolds wants to boost revenue in the mid-single digits over each of the next three years. The plan is intended to increase operating margins to 25 percent by the end of fiscal year 2009.
"While the decision to eliminate positions is difficult, it is necessary to ensure that our costs are aligned to our business strategy," O'Neill said. "None of these reductions will in any way impact customer support."
Most of the positions to be eliminated are tied to overhead and management functions within the company's Dayton, Ohio, headquarters.
You may e-mail Ralph Kisiel at [email protected]