Tobacco giant Reynolds American, Inc. ( RAI ) on Wednesday unveiled plans to cut around 10% of its workforce in a voluntary buyout program.
The Winston-Salem, N.C.-based company said it would cut around 540 of its 5,400 jobs by the end of 2014. As a result, RAI will incur severance costs of $110 million in the current first quarter.
Reynolds said the moves will eventually save the company around $70 million per year by 2015. A company spokesman commented that "We are pleased that the majority of people leaving the companies will be doing so on a voluntary basis." RAI also noted that some job losses will be offset by new hires in select positions.
Reynolds American shares were unchanged in premarket trading Wednesday.
The Bottom Line
Shares of Reynolds American ( RAI ) have a 5.35% dividend yield, based on last night's closing stock price of $41.86. The stock has technical support in the $38 price area. The stock is trading near all-time highs.
Reynolds American, Inc. ( RAI ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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