Libbey Inc., the Toledo-based table glassware manufacturer which filed for Chapter 11 bankruptcy protection on June 1, said late Friday that it will reduce the size of its U.S. salaried workforce by more than 15 percent, effective this Saturday.
The reductions primarily will affect its U.S. headquarters and commercial organization. The company said it does not expect to incur any material charges to its earnings in connection with the reduction in force.
In April, Libbey said U.S. and Canada salaried associates would have base salaries cut through Sept. 30. However, the glassware maker said Friday those cuts are now extended through Dec. 31. Also, the temporary suspension of the company’s 401(k) match is now extended through Dec. 31 and furloughs of certain U.S. salaried associates will continue through September.
Libbey CEO Mike Bauer and other top executives also are being affected.
In April the company cut Mr. Bauer’s base salary by 25 percent and base salaries of other executive officers were cut by 20 percent. The cuts originally were to last through September, but last week the board of directors extended the cuts through Dec. 31.
Libbey said all of its latest actions are separate from a tentative plan to close its Shreveport, La., manufacturing plant. Libbey continues to negotiate with unions representing employees there prior to a final decision.
On June 1, Libbey, one of the largest table glass and stemware manufacturers in the world, filed bankruptcy for the first time in its 202-year history. It declared assets of between $100 million and $500 million, and liabilities between $500 million and $1 billion. Creditors numbered between 10,000 and 25,000.
In a mostly prepackaged bankruptcy plan, Libbey stated that it expects to emerge from Chapter 11 by Sept. 13.
For two months prior to the bankruptcy filing, the company had been quietly putting its bankruptcy plan into place by furloughing employees, promising bonuses to top executives if they stayed with Libbey over the next year, and arranging to delay for two months a $12 million payment on its term loan.
Libbey had sales of $782.4 million in 2019 but still posted a net loss of $69 million, compared with a loss of just $8 million the year before. The company already had been struggling with debt, and then was plagued further by U.S.-initiated trade wars, shifting consumer patterns, growing competition, and in February, the coronavirus pandemic that severely damaged sales to restaurants.