Industry News

Quiksilver Cuts 200 Positions Amid Restructuring

Surfersvillage Global Surf News, 28 January, 2009 : - - Quiksilver, Inc. said it is taking additional steps to reduce expenses in its Americas region as part of an overall restructuring effort 'to reposition its business and in response to the continued decline in the consumer retail environment.'

The company will eliminate 200 positions as part of the plan, including a reduction-in-force of approximately 150 employees which is expected to account for roughly one-third of the annual cost reductions.

The cost saving measures are expected to reduce expenses in the Americas region by more than 10%, or approximately $40 million annually, and will impact nearly all functional areas. Quiksilver expects to record a charge of approximately $5 million in its first fiscal quarter as a result of these actions.

Quiksilver said these cost reduction measures are in addition to expense reductions made by the company in 2008 and other actions already taken in the company’s European and Asia Pacific regional businesses.

Robert B. McKnight, Jr., chairman, president and chief executive officer, said, Beginning last year, we initiated a process to reduce our corporate overhead and cut spending in each of our regions. While these measures improved our overall cost structure by more than $35 million, our commitment to further streamlining the business and the continued decline in the retail environment make additional steps necessary.

Our spending cuts are across-the-board, touching each of our internal organizations and systems in the Americas, but have been designed to drive improved efficiency while minimizing the impact to our customers and other business partners. All levels of our organization are affected by these actions as nearly 20 percent of the employees involved in the reduction hold manager-level titles or higher.

Our management team has worked together on these cost reduction measures with the primary goal of becoming better positioned to weather the current environment and to meet our business objectives moving forward.”

As a part of its reduction in payroll, Quiksilver also noted that it had provided news of further pay cuts for members of its executive management team in an SEC filing. As reported, Quiksilver Inc. has approved a 5% cut to the annual base salaries of some top executives as part of its cost-cutting efforts, according to a Securities & Exchange Commission filing.

The current reductions, effective Feb. 1, are in addition to earlier pay cuts implemented in February last year, the company said in a regulatory filing dated Jan. 20. Consequently, the annual base salary of CEO Robert McKnight was lowered 16% to $903,000, according to the filing. Annual base salaries for the chief financial officer and the chief administrative officer have gone down by 8% and 10% respectively.

The company also reaffirmed that its efforts to restructure its uncommitted debt in Asia Pacific and Europe remain on track for completion in February.

www.quiksilver.com

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