Whirlpool Corporation (NYSE:WHR), the home appliance company, confirmed that it is going to conduct layoffs in Michigan at its World Headquarters in Benton Harbor and its St. Joseph locations this week. Deborah O’Connor, the company’s spokeswoman, said that the job cuts are part of the $150.0-million Whirlpool cost-cutting measures. However, the number or types of jobs cut is undisclosed and no clarification was provided as to whether the Whirpool layoffs are temporary or permanent. O’Connor further added that the company still employs roughly 4,000 employees in the southwestern Michigan region.
Companies who lay off more than one-third of their workers at a particular location are required to file a Worker Adjustment and Retraining Notification (WARN) notice. But no such WARN notice was filed with the Michigan Workforce Development Agency.
The Whirlpool layoffs were announced shortly after news that the federal government will be creating tariffs to protect American washing machine producers from foreign competitors.
On January 22, President Donald Trump announced his decision to tax washing machine imports. His policy is supposed to impose a 20% tariff on the first 1.2 million imported large residential washing machines in its first year. The tax will increase to 50% on any additional machines imported. This decision is good news for Whirlpool as it would help it compete with competitors in Asia like Samsung Electronics Co Ltd and LG Electronics Inc.
After this news, Whirlpool stock jumped and the company announced its plan to add 200 jobs to its factory in Clyde, Ohio. Last week, the company’s fourth-quarter results were published. They revealed a smaller-than-expected increase and a net loss of $268.0 million, due in large part to a one-time tax charge.
Whirlpool Reported Net Loss in 4th Quarter Due to Tax Reform
Whirlpool reported mixed quarterly results for 2017. The company posted a quarterly loss, compared to the previous year’s profit, blaming Trump’s tax cut policies for the losses. The company had a net loss of $268.0 million, or $3.69 per share, in the fourth quarter that ended on December 31, compared to a profit of $180.0 million, or $2.36 per share, in the prior year.
The company’s bottom line came in at $4.10 per share, or $392.0 million, which was lower than the prior year’s fourth-quarter value of $4.33 per share, or $431.0 million. According to the figures compiled by Thomson Reuters, analysts expected the company to earn $3.93 per share, typically excluding special items.
The company’s revenue for the quarter increased 0.7% to $5.7 billion, up from the prior year’s $5.66 billion.
Here’s a quick overview of the Whirlpool earnings:
- Q4 Earnings: $392.0 million vs. $431.0 million prior-year
- Earnings Decline (YoY): 9%
- Earnings per Share (Q4): $4.10 vs. $4.33 prior year
- Earnings per Share Decline (YoY): 5.3%
- Analysts Estimate: $3.93
- Q4 Revenue: $5.7 billion vs. $5.66 billion last year
- Revenue Change (YoY): 0.7%
Job cuts due to tax reform, digitalization, technological advancements, and many more reasons will continue to happen. The Whirlpool layoffs are just one addition to such cuts.
“Whirlpool posts quarterly loss due to tax reform charge,” Reuters, January 25, 2018.
“Whirlpool in the midst of layoffs,” The Herald-Palladium, January 31, 2018.
“Whirlpool confirms it will conduct layoffs,” South Bend Tribune, February 2, 2018.
“Whirlpool (WHR) Beats on Q4 Earnings, Sales Lag Hurts Stock,” Yahoo Finance, January 25, 2018.
“Whirlpool Corp. Announces Fall In Q4 Profit,” Business Insider, January 24, 2018.