Pulte Homes says it will cut 16% of its workforce in response to "the challenging operating environment that exists in the U.S. home-building industry." Pulte will take a $40-50 million charge as part of the move, most of it in Q2. It said the changes will save $200 million annually, with $90-100 million in savings in 2007. Pulte had 12,400 employees in 2006 and 13,400 in 2005; post reorganization, the company said it will employ just over 10,000 people. "The homebuilding environment remains difficult and our current overhead levels are structured for a business that is larger than the market presently allows," CEO Richard J. Dugas said. The company has already reduced its workforce by 25% since 2006.
Sources: Press release, Wall Street Journal, AP
Commentary: Calculated Risk • Homebuilders Sinking Into the Subprime Mess • Pulte Homes Falls to #4 Homebuilder on Weak Earnings
Stocks/ETFs to watch: Pulte Homes Inc. (PHM). Competitors: Lennar Corp. (LEN), Toll Brothers Inc. (TOL), Centex Corp. (CTX), D.R. Horton Inc. (DHI), Hovnanian Enterprises Inc. (HOV), Beazer Homes USA Inc. (BZH). ETFs: streetTRACKS SPDR Homebuilders ETF (XHB), iShares Dow Jones U.S. Home Construction (ITB)
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