NEW YORK - Tool maker Stanley Works said today that it will cut 2,000 jobs and close three manufacturing facilities, citing weakness in its construction and industrial segments and the effect of a stronger dollar. The company also cuts its 2008 earnings forecast.
Stanley said the job cuts amount to 10 percent of its total work force and will also involve elimination of layers of management. A spokesman said the company has not yet disclosed which of its 45 plants it will close.
Its shares fell more than 3 percent in morning trading.
New Britain, Conn.-based Stanley said most of cuts and plant closures will take place in December and will result a pretax charge of about $80 million, or 70 cents per share, in the fourth quarter.
The company hopes the cuts and closures will save $115 million in 2009.
The Stanley Works also cut its 2008 earnings outlook, citing the difficult economy. The company said it now expects per share earnings of $3.30 to $3.40, excluding the fourth-quarter charges. Previously, the company said it expected to earn $3.75 per share for the year.
Analysts polled by Thomson Reuters expect a full-year profit of $3.72 per share, on average. Such estimates typically exclude one-time charges.
Stanley said the depth of decline in its construction and industrial segments has been worse than in previous recessions. This implies that its markets are facing an "exceptionally severe" contraction, the company said in a statement.
The cuts come two months after Stanley reported a second-quarter profit that rose 80 percent from the previous year. The company said then it had raised prices on its products to offset economic weakness and a soft housing market.
Stanley Works shares fell $1.12, or 3.3 percent, to $33.20 in morning trading. The stock has traded in a 52-week range of $24.19 to $52.18.