ST. PETERSBURG — Jabil is cutting its global workforce by 1,500 to trim about $50 million in expenses as its pandemic costs approach $170 million.
Of those, 118 jobs will be eliminated at the company’s headquarters in St. Petersburg, where the headcount currently stands at 2,320.
“We’re taking aggressive actions to reshape the organization and ready ourselves” for the next fiscal year, said Jabil chief executive officer Mark Mondello during a conference call Friday to announce the company’s quarterly earnings.
He called it a “difficult decision, yet a decision that’s correct for the business.”
“I think there’s still going to be quite a bit of choppiness in the business” into early 2021, Mondello said. “To have this feeling like COVID’s behind us, the stock market’s doing great, the world’s getting back on its feet — I don’t think that’s the case.”
Jabil went into the pandemic with 225,000 employees at 100 sites in about 30 countries, with more than 100,000 workers in China alone.
Those factories turn out a huge range of iPhone components, cameras, appliances, medical devices, 3D printers, data centers, product packaging and other products for customers such as Amazon, Apple, Cisco Systems, GoPro, Hewlett-Packard, LM Ericsson and Nokia Networks.
After the virus exploded early this year, Jabil shifted production at its 36 health care plants to make everything from hand sanitizer and ventilators to reusable N95 masks and testing kits.
The company had $6.3 billion in revenues during March, April and May, up more than 3 percent from the same three months in 2019.
Revenue generated by manufacturing electronics, which accounts for two-thirds of Jabil’s revenues, dropped 2 percent.
Meanwhile, revenue for manufacturing other consumer and industrial products, including health care equipment and supplies, rose 13 percent. Along with health care, Jabil saw strong demand for packaging, cloud computing equipment, routers and mobile devices.
“Our ability to deliver strong cash flows and solid revenue growth in the midst of a global pandemic suggests we’re doing something right,” Mondello said.
But Jabil doesn’t expect to repeat that feat over the summer. The company projected that total revenues will be down 5 percent in June, July and August compared with the same months last year. Electronics manufacturing is expected to be down 8 percent year over year during that time, while other manufacturing is expected to be up slightly.
For its fiscal year, the company projects total revenues of $26.2 billion — “if we’re fortunate enough that the world doesn’t go completely haywire in the next 60 to 75 days,” Mondello said — up from $25.3 billion in 2019.
Jabil reported earnings of 37 percent per share and projected that it will end the year with about $2.60 in earnings per share. Jabil stock closed at $33.51 per share Friday, up 2.2 percent.