Dive Brief:
- Parexel is eliminating 850 jobs as part of a large-scale restructuring effort designed to make the company more productive and efficient.
- Parexel employs approximately a little less than 17,500.
- The company expects to take a charge of $30 million to $40 million associated with the layoffs.
Dive Insight:
Although Parexel will be taking an upfront charge when it lays of the 850 workers who are slated to go, ultimately the move will result in annual pre-tax savings of between $20 million to $30 million in fiscal year (FY) 2016 and $50 million to $60 million once the move is fully completed, in terms of the larger restructuring plans.
Although the company has lowered sales expectations for the fourth quarter of FY 2015 from a range of $520 million to $540 million, to $517 million to $533 million, it is raising its long-term adjusted operating margin from 12% to 14%, to 13% to 15%.