Pitney Bowes provides update on cost rationalization programs

Pitney Bowes announced an update on the first phase of the company’s cost rationalization initiative, which was previously announced in late May. The company has identified and initiated approximately $70M in cost savings, the majority of which has already been eliminated in the second quarter. Approximately $25M of non-recurring charges associated with these efforts are expected to be recorded in the second quarter. The cost reductions announced are anticipated to be largely reflected in the company’s second half of 2024 pre-tax earnings and fully reflected in 2025. The savings primarily come from general corporate cost reductions and include certain SendTech and Presort expense reductions. These savings do not include prospective savings from changes in the Global Ecommerce segment, where the company is in the final stages of an expedited strategic review of alternatives to eliminate ongoing operating losses. Further, management has identified additional opportunities for achieving new efficiencies in the coming months and has increased its anticipated savings from an initial target of $60M to $100M to between $120M to $160M. The company anticipates that a meaningful portion of these incremental savings will be realized over the remainder of 2024, while some initiatives will require efforts into 2025.