Waste Management Restructures Operations, Cuts 700 Jobs

Waste Management Inc. said it is restructuring its operations to cut costs, reducing management layers and eliminating about 700 jobs.

The Houston-based Waste Management said in a news release the reorganization is designed to improve focus on the three major company initiatives: yield management, improving efficiency in operations and getting better at meeting customers’ needs. The move flattens the company’s management structure and removes about 100 basis points of costs, Waste Management said.

In addition to eliminating 700 positions, Waste Management intends to remove the management layer of four geographic groups; consolidate and reduce the number of areas managing the core collection, disposal and recycling businesses to 17 from 22; and reduce corporate support staff in order to better align their work with the needs of the operating units, while reducing costs.

The company also made several executive appointments: James Trevathan Jr. was named executive vice president and chief operating officer; and Jeff Harris and John Morris each were appointed to the position of senior vice president, field operations. Harris and Morris will oversee the 17 operating areas.

Waste Management anticipates a third quarter pre-tax charge to earnings of $50 million to $60 million, primarily related to employee separation costs. This amount doesn’t include potential additional charges for facility shutdowns or consolidations. 

“The steps we are taking to restructure our organization are expected to provide two very important results for us,” said David Steiner, Waste Management president and CEO. “First, the restructuring is expected to reduce our cost structure by about 100 basis points in 2013. This is a good step toward our longer term goal to reduce costs by 200 to 400 basis points.  Second, we believe that eliminating a layer of management and restructuring our support staff around our three major initiatives will intensify our focus on achieving those initiatives.”  

James Fish Jr., who Waste Management said earlier this month would be assuming the chief financial officer position, was described in the release as “a leading architect of the reorganization.”

Trevathan previously was executive vice president – growth, innovation. Harris was most recently was senior vice president – Midwest Group, and Morris previously served as chief strategy officer.