Armstrong Cuts to Yield Savings

Lancaster, PA, December 7---Armstrong World Industries will save much more than it costs to lay off the latest round of ill-fated workers, the company has disclosed. The Lancaster New Era reported that the company, in a filing with Securities & Exchange Commission last week, said it will save $9.5 million a year annually by cutting the 240 salaried jobs nationwide. In contrast, it will cost the company $5.7 million in one-time severance and outplacement assistance to eliminate the jobs, Armstrong said in its three-paragraph filing. These costs will be reflected in the company's 2004 fourth quarter and 2005 first quarter results. Armstrong said Tuesday it would trim the jobs, mostly in its North American flooring operations, over the next four months, without mentioning the financial impacts. The cuts include 70 workers at Armstrong's Columbia Avenue headquarters, who are scheduled to be idled by year-end. The layoffs at the headquarters follow Armstrong's announcement a month ago that 450 jobs at its Liberty Street flooring plant would be eliminated over the next 18 months, as the company shifts production of commercial flooring to lower-cost plants. This week's cutbacks include 95 account representatives who serve Home Depot. Their jobs will be lost because Home Depot is switching to a third party to merchandise Armstrong products in its stores. The balance of this week's cutbacks are due to "customer-driven changes in the marketplace," the company said in its SEC filing. In response, Armstrong is planning more marketing and product-development work, to become more competitive. The cost of these initiatives has not been determined, said the company.