TORONTO, Feb. 27 /CNW/ - Livingston International Income Fund (TSX:
LIV.UN) today announced further significant steps to reduce operating costs
and preserve cash in response to continuing deterioration in the economy.
The Fund's operating company, Livingston International Inc., has already
laid off employees in operations experiencing the most severe volume declines,
imposed a freeze on most hiring, cut budgets and encouraged some early
retirements. The Fund announced its first reduction to its distribution in
Actions being announced today include:
- Company-wide salary and hours reduction
- Elimination of salary increases
- Voluntary resignation incentive
Company-wide salary and hours reduction
All employees in Canada and the United States will have their hours of
work and corresponding salary or wages reduced by 10 per cent. This is
intended to be a temporary measure effective on March 23, 2009. It will be
revisited periodically in light of market conditions, and is expected to
remain in place for approximately six months.
Directors or managers will determine which hours their employees will
take off, depending on the needs of their business units, teams or
departments. All levels of management are included in the salary reduction
program. However, Livingston understands that, in practice, managers'
responsibilities will undoubtedly prevent them from working 10% fewer hours.
Although some benefits will not be affected, there will be a corresponding
reduction in salary-based benefits, such as retirement contributions.
"We recognize the sacrifice we are asking our people to make, and
arriving at this decision was difficult," said President and CEO Peter Luit.
"In the current environment, action was needed. Reducing hours and
corresponding salaries is a far better alternative to additional layoffs for
both our employees and our clients. Our people are our key assets and our
competitive advantage. We will need them when trade levels recover."
Elimination of salary increases
As well as reducing work hours and corresponding pay, Livingston is
freezing all salary increases, including performance-based increases. This
step takes effect March 1, 2009 and is expected to remain in place for 12
While intending to keep as many employees as possible, Livingston is also
offering a special voluntary resignation compensation package to full-time and
permanent part-time employees in Canada with more than 25 years of service and
in the U.S. with more than 20 years of service by the end of March 2009.
These initiatives are expected to reduce overall costs by approximately
$15 million on an annualized basis. As Livingston is a non-asset-based service
provider, payroll and benefits-related costs represent the largest portion of
Livingston's operating expenses.
"We fully expect our revenues to recover when trade increases as the
economy responds to the stimulus it is being given by governments," Mr. Luit
said. "To ensure that Livingston is well positioned and continues to have the
best people in the business, we need to take these actions now."
Livingston International Income Fund is a trust that holds the securities
of Livingston International Inc., a leading North American provider of
customs, transportation and integrated logistics services. Headquartered in
Toronto, Ontario, Livingston has more than 2,500 employees located at
approximately 100 key border points, seaports, airports and other strategic
locations across Canada and the United States.
Certain statements in this release may be considered forward-looking
statements, which reflect management's current beliefs and expectations and
that involve assumptions about expected future events or results that are
subject to inherent risks and uncertainties. There is significant risk that
assumptions and other forward-looking statements will not prove to be
accurate. Many factors could cause actual future results, conditions or events
to differ materially from the results or outcomes expressed, including risks
related to trade volumes, deterioration of economic conditions, currency
volatility and continued availability of credit facilities and bonds, among
others. Furthermore, given prevailing uncertain economic conditions, there can
be no assurance that the announced measures will be adequate and that further
actions will not be required. Investors are cautioned not to place undue
reliance on assumptions or forward-looking statements.
For further information:
For further information: Dawneen MacKenzie, vice-president, public
affairs, 1-800-387-7582 ext. 3109