McCormick & Co., the Maryland-based spicemaker, said yesterday that it will restructure its operations in Europe, resulting in the elimination of about 300 jobs, or 4 percent of the company's 7,600-member work force.
The restructuring of the world's largest spice company also will result in a projected reduction in second-quarter earnings of $15 million, or 20 cents a share, stemming from after-tax charges of $25 million. The second-quarter charge is expected to be partly offset by a $5 million gain because of a change in the actuarial method used to estimate pension expenses.
The Sparks-based company's stock dropped 6 1/4 cents to close at $30.62 1/2 yesterday on the New York Stock Exchange.
Less than 10 percent of the job cuts will be in the United States.
Joyce Brooks, McCormick's assistant treasurer, said the realignment is an outcome of an effort by the company's European management to improve marketability overseas.
The company said it plans to consolidate some manufacturing operations in Britain, improve production at previously consolidated plants, and realign operations between Britain and other European locations.
Charges associated with the streamlining include reductions in the work force and disposing of some buildings and equipment, the company said.
"This is a follow-through similar to what a number of other multinational companies are doing with operations in Europe," said Bentley Offut, an analyst with Offut Securities in Hunt Valley, Md. "It's an effort to take advantage of the new Euro economy, to reduce costs and move things around."
McCormick is on par with other U.S. companies that have manufacturing facilities abroad, Offut said: "They're trying to centralize their administrative efforts and manufacturing facilities."
Robert J. Lawless, chairman and chief executive, said in a statement that the effort will improve the company's market position abroad.
"These actions are the result of our efforts to streamline and simplify our business and will enable McCormick to better focus on and invest in those major worldwide markets that offer us the best prospects for growth," he said. Those markets include the United States, Europe, Canada, Mexico, Australia and China.
Lawless, who became president and CEO three years ago, increased the company's annual advertising budget last year from a few million dollars to $20 million, which along with lower prices and expanded distribution resulted in increased sales last year.