logo
Plus   Neg
Share
Email

Rent-A-Center To Layoff 250 Employees, Reviewing Alternatives

Rent-A-Center, Inc. (RCII) Wednesday said it will cut 25% of its corporate office workforce in Plano, Texas, as the household goods leasing company implements costs cutting initiatives to improve growth and profitability.

Rent-A-Center is reducing its headcount by about 250 positions, effective today. Rent-A-Center expects this decision to "better align the company's organizational structure with its operations under its strategic plan to drive $65 million to $85 million of annualized cost savings opportunities."

The headcount reduction, along with related G&A, is expected to generate about $28 million in annual run-rate cost savings with about $20 million realized in 2018. The company expects to incur employee severance charges and other one-time costs relating to these workforce reductions of around $3 million in the first quarter.

The headcount reduction follows the recent elimination of Rent-A-Center's Chief Operating Officer Joel Mussat. The elimination of that position is intended to bring the overall operations of the company under the direct control of CEO Mitch Fadel.

"As we outlined just two weeks ago, Rent-A-Center is implementing initiatives to reduce costs and improve performance. While major reductions in work force are difficult, we are confident that Rent-A-Center will be better positioned for long-term growth and profitability," said Mitch Fadel, Chief Executive Officer of Rent-A-Center. "Additionally, we remain focused on delivering a more targeted value proposition and look forward to building on our momentum from our January and February performance."

The company also reconfirmed that its Board is continuing its review of strategic and financial alternatives to maximize stockholder value, including evaluating a sale. Rent-A-Center has received proposals from bidders interested in acquiring and the Board and its advisors remain actively engaged with these parties.

For comments and feedback contact: editorial@rttnews.com

Business News

Editors Pick
Shares of General Electric Co. are rising more than 10 percent on Thursday after the industrial conglomerate said it plans to establish a new, independent company focused on building a comprehensive Industrial Internet of Things or IIoT software portfolio. In addition, longtime bearish analyst Stephen Tusa of J.P. Morgan upgraded shares of GE to neutral. Apple Inc. said Thursday that it will invest $1 billion to build a new corporate campus in North Austin that will eventually create 15,000 jobs. Further, the tech giant announced plans to establish new offices and expand to over 1,000 employees each in three cities - Seattle, San Diego and Culver City, California. In January, Apple said it will create over 20,000 jobs over the next five years. German telecom giant Deutsche Telekom, Chinese conglomerate Alibaba's Alibaba Cloud, banking giant Citi and 13 other organizations have joined Hyperledger Blockchain project, an open source collaborative effort aimed to advance cross-industry blockchain technologies. Hyperledger, a project of The Linux Foundation that started less than three years ago, is a multi-project.
Follow RTT