Cimpress, the Dutch parent company of Waltham, Massachusetts, distributor Vistaprint (PPAI 565755), has announced plans to deeply decentralize the company’s operations and move roughly 3,000 positions to business units, as well as eliminate approximately 160 positions and reduce planned hiring in targeted areas.
Cimpress also has made several promotions and additions to its executive team. Trynka Shineman, previously president of Vistaprint, has been promoted to chief executive officer to reflect the substantially increased scope of her responsibilities after the decentralization. Maarten Wensveen, previously senior vice president, technology, has been promoted to chief technology officer and will join the executive team, as will Peter Kelly, chief executive officer of National Pen.
As part of the changes, the company announced that it intends to eliminate the positions of four Cimpress executive officers who, as a result, will leave the company.
The restructuring is intended to improve accountability for customer satisfaction and capital returns, simplify decision-making, improve the speed of execution, further develop its cadre of general managers, and preserve and release entrepreneurial energy.
“This decentralization is a natural outgrowth of our strategy and consistent with the evolution of our organization as we pursue that strategy,” says Robert Keane, chief executive officer. “As we have evolved from Vistaprint to Cimpress and become a much larger and more diverse company, we need to give our businesses more accountability and reduce the weight of our central organization.
Many Cimpress employees who are currently part of company-wide central groups in technology, manufacturing and supply chain, and other corporate functions, will become part of one of the company’s business units or related portfolio-management teams in its decentralization plans. After the changes, the company’s central groups will be limited to global procurement and supplier research, a central technology team whose primary focus is building its mass customization platform, and essential corporate services.
The majority of the changes are expected to be completed during the third quarter of fiscal 2017. Some of the planned actions are subject to mandatory consultations with employees, works councils and governmental authorities. Cimpress estimates it will incur an aggregate pre-tax restructuring charge of approximately $28 million to $31 million, which includes $22 million to $25 million in severance-related expense and approximately $6 million of other restructuring charges. Once the actions are complete, the company expects annualized pre-tax operating expense savings of approximately $55 million to $60 million and pre-tax free cash flow savings of approximately $45 million to $50 million.
“We are making these changes proactively from a position of strength and we maintain our uppermost objectives to be the world leader in mass customization and to maximize our intrinsic value per share,” adds Keane.