CDI Corp. (CDI), which provides solutions to over 20 industries, announced Thursday certain business model and organization changes, which would result in staff headcount reduction of around 200 employees. The company said it will take the related severance costs of about $8 million to $9 million in the fourth quarter of 2011.
Going forward, CDI intends to focus on providing end-to-end engineering and technology solutions mainly for oil & gas, chemicals, aerospace, industrial products and hi-tech industries.
The outsourcing solutions and professional staffing services provider anticipates pre-tax cost savings of nearly $22 million in 2012.
The recent changes are expected to grow CDI's solutions business, optimize professional staffing operations and prioritize the geographic markets and industries to which it will deliver engineering and technology solutions.
As part of its strategic plan, the company intends to include a new client engagement model in three geographic regions, the Americas, Europe, Middle East and Africa and Asia Pacific. The company also intends to reorganize its existing Engineering Solutions and IT Solutions services into a Global Engineering and Technology Solutions service line.
Paulett Eberhart, president and chief executive officer of the company said, "This strategic plan will focus CDI on high-potential growth opportunities in a limited number of priority industries, selectively expand our geographic footprint to meet the global needs of core clients, and provide a clear vision and improved organizational structure to make CDI a market-leading engineering and technology solutions provider."
Looking ahead, the company expects organic revenues to reach $1.3 billion to $1.4 billion by 2014, with operating profit margins of 3.5 to 4.5 percent.
The company stated that beginning in 2012, it will report revenue, gross profit and operating profit geographically.
CDI closed Wednesday's regular trading at $13 on the NYSE.
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