Apogee Enterprises will lay off 250 employees and close a Michigan plant and some administrative offices as part the company’s latest plan to improve its profit margin.
Apogee laying off 250 workers, closing plant in restructuring
The company says it must shift focus from revenue growth to profitable growth.
The Minnesota Star Tribune
January 31, 2024 at 4:58PM
The Bloomington-based provider of architectural products and services and architectural glass used on building facades approved the latest layoffs on Jan. 10 and told employees on Tuesday.
Apogee has been reducing its headcount over several years. Employment peaked on Feb. 29, 2020, when the company had 7,200 workers; as of Feb. 25, 2023, that count had declined to 4,900. The latest layoff plan will reduce employment 5%.
The restructuring plan, dubbed Project Fortify, is meant to streamline operations, reduce costs and position the company for more profitable growth.
“Project Fortify will further improve our cost structure, enhance organizational efficiency, and enable our team to focus on higher growth, higher margin opportunities,” said Ty Silberhorn, Apogee’s chief executive, in a news release.
The company will incur $16 million to $18 million in restructuring costs, $7 to $9 million of which will be employee severance and other employee costs. It expects to save $12 million to $14 million annually over the next several years.
The bulk of the changes are focused on the company’s Architectural Framing Systems segment, which designs, engineers and makes aluminum window, curtainwall, storefront and entrance systems. The company will stop making some lower-margin products and close a factory it leases in Walker, Mich., shifting all of the production to plants it owns in Monett, Mo., and Wausau, Wis.
Apogee’s fiscal year ends Feb. 28. For the most recently completed fiscal year, the company earned $104.1 million, up from $3.5 million the year before. Revenue in the last fiscal year grew 9.6% to $1.4 billion.
In August 2021, Apogee laid off 400 employees in what were the first steps of a new strategic plan that would be officially presented a couple of months later.
In November 2021, the company launched a strategic plan to shift its focus from revenue growth to profitable growth, with goals to increase its adjusted operating margin to more than 10% by fiscal year 2025. In fiscal year 2022, it was 6.3%.
According to the plan, one of the strategies the company will use is cost optimization and productivity enhancements.
“These actions will further improve our cost structure and operational efficiency, and allow our team to focus on those products where we see higher growth opportunities and better profitability,” said a company official via email.
Other Minnesota companies are also looking at employment to tighten profit margins. For example, Minneapolis-based Jamf Holding announced last week it would lay off 170 employees. Xcel said this month it had cut 550 positions. And in November, Minneapolis-based Fairview Health Services said it was laying off 250 employees.
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