Ecolab Restructures European Biz, Cuts 900 Positions

The company has completed the rollout of a system for its European operations that is more efficient and eliminates the need for the positions that are being cut.

St. Paul-based Ecolab, Inc., announced Thursday that it will be cutting 900 jobs in Europe as part of a transformation plan that has increased efficiency and eliminated the need for some positions.

According to Ecolab spokesman Michael Monahan, the company is currently in negotiations with various works councils in Europe to finalize the job cuts, which will be in the areas of general administration and manufacturing operations.

In April 2010, the company completed the implementation of a new universal system in Europe, which has greatly improved efficiency and streamlined the company's efforts-thus eliminating the need for about 900 positions.

Specifically, the company went from an operating system that was set up on a country-by-country basis-which was created when the company first expanded into Europe in 1991-to one that was pan-European, which is “less cumbersome,” more automated, and requires much less manual work.

Ecolab said it expects to incur a pretax restructuring charge of approximately $150 million over the next three years, beginning in the first quarter of 2011, as the restructuring is rolled out. About $50 million to $70 million of that will be charged in 2011.

Also on Thursday, Ecolab announced that its fourth quarter earnings of 60 cents per share-which were up 9 percent from last year-missed estimates of 61 cents per share, according to analysts polled by Thomson Reuters.

Revenue for the quarter, which ended December 31, increased 1 percent to $1.58 billion.

Ecolab, founded in 1923, manufactures and distributes cleaning and maintenance products for the hospitality, institutional, and industrial markets. It is among Minnesota's 15-largest public companies based on revenue, which totaled $6.1 billion in 2010.