The spinof press release on Honeywell.com posted this week (August 23) that all "stranded costs will be eliminated by end of 2019 or before" (read as employees RIFd)
We just survived the 20% volunteer RIF with people exiting end of August and end of September
Any word on volunteers for 2019?
HBS just started to reduce HQ functions. The other SBGs should get started soon
The easiest way to reduce cost in the short term is to reduce headcount.
Stranded costs are the leases for buildings for Homes and TS, and reducing office space at shared locations once Homes and TS employees move out. There will be some reduction in Corporate employees as Honeywell won't need as many HR, Legal, Accounting, Tax, Finance, IT, Facilities people. Some people RIFs were done already but the rest won't occur until they are sure the spin off work for those groups is complete
Employees in the SBGs only have the normal meet Wall Street promises RIF targets to worry about. The spins should not increase those
Stranded costs are costs that were previously absorbed by the divested business but remain with the parent company following separation. Examples of circumstances that lead to stranded costs include shared services centers, shared infrastructure, and long-term vendor contracts that support multiple business units. The Honeywell divestiture would be separating theses costs between Honeywell and the new companies.
In a perfect world, employees that were primarily involved with the new companies were transitioned to those new companies. Those that were primarily involved with the existing Honeywell products stayed with Honeywell and their jobs would likely be safe.
Excerpt From Yahoo Finance article titled
“Honeywell's EPS View Up, Divested Businesses File Form 10”
“Additionally, by 2019-end, Honeywell intends to get rid of all redundant corporate, functional, and shared services expenses related to Garrett and Resideo divestitures.”
Dont think they are referring to assets, most shared expenses are headcount.
The "Stranded Costs" appear to refer to Hon costs dealing with the spin off divisions not employees