Metal recycling firm Schnitzer Steel Industries Inc. is laying off 300 workers, or 7 percent of its workforce, in a restructuring move as the result of declining markets.
The Portland, Ore.-based company said in a news release on its outlook for the fiscal fourth quarter that export sale prices for ferrous metals have fallen $70 to $80 a ton from May levels, and scarp sales also slowed. Higher inventory costs as a result are expected to result in a $25 million negative impact to operating income compared with the third quarter, the company said, with two-thirds of the impact affecting its metal recycling business.
The Auto Parts business also expects a 15- to 20-percent decline in revenue, and its Steel Manufacturing business is anticipated to be below break-even for the year.
Schnitzer expects the restructuring to lower annual operating costs by $25 million and be complete by the first quarter of 2013. The company expects a restructuring charge of $12 million.
The company said the restructuring will further integrate the metals recycling and auto parts businesses, streamline corporate functions and reduce organizational layers. It will allow the firm to “extract greater synergies from the significant acquisitions and technology investments which we made in fiscal 2011 and realign our organization to support our future growth.”