Chip Brewer, the president and CEO of Callaway Golf, announced on Wednesday that the company is laying off 12 percent of its workers as part of an initiative to save money and quicken a corporate turnaround.
In a statement released by Callaway on Wednesday, Brewer said, "As I mentioned last quarter, the company's business has not recovered at a satisfactory pace and we are taking actions to accelerate the recovery."
Eliminating about 250 jobs across all levels and regions, along with other cost-cutting measures, is expected to help Callaway generate approximately $52 million of gross annualized savings.
"The cost reduction initiatives we announced today are part of those actions and are consistent with the significant changes we are making in streamlining and simplifying our organization and in how we approach and operate our business," Brewer said. "These changes, however, will have a greater impact on our financial results in 2013 and 2014 than on 2012. As a result, and given the slower than anticipated pace of recovery, we no longer expect that 2012 full year financial results will be significantly better than last year."
In 2011, Callaway reported a net loss of $172 million after a loss of $19 million in 2010.
In April, Brewer, who joined Callaway in April after leaving the top position at Adams Golf, announced that Callaway had sold the Top-Flite golf ball brand to Dicks Sporting Goods. The sale of the Ben Hogan brand to Perry Ellis International was completed in the first quarter of 2012.
"I am very excited by the consumer-oriented changes we have made to our 2013 product line," Brewer said, "and look forward to providing more information about those new products later in the year."
On Wednesday, shares of Callaway Golf (ELY) dropped 8.71% to $5.66.