Tyco’s Top Executives to Move to New Jersey
BOCA RATON, Fla.
Tyco Int’l is undergoing some major changes, as the $36 billion conglomerate says it plans to move most of its more than 150 highly paid corporate employees from Boca Raton to Princeton, N.J. The move is expected to happen this summer as the company leaves behind the image of former CEO Dennis Kozlowski and start fresh at a new site.
Tyco, whose Fire and Security Division is based in Boca, is itself headquartered in Bermuda for tax purposes. However, under the era of Kozlowski, Tyco was run from corporate headquarters in three cities: Boca Raton, with 155 employees; New York, with 55; and Portsmouth, N.H., with 65. Now much of the corporate staff will work in New Jersey.
Tyco has signed a 10-year lease with a five-year option for 110,000 square feet in that state. No timetable has been set for moving the people from Florida. Tyco spokesman Gary Holmes says Breen and most of the senior executives will be based in New Jersey. However, he adds that the company hasn’t made a final decision about which functions and which people will be moving.
ADT Security Systems Inc. will keep its home base in Boca. A spokesperson for the company confirmed in April that ADT laid off 800 employees that month. “The layoffs are strictly because the company is reducing management layers in the field and reorganizing ADT. It’s what’s best for the business,” Tyco spokeswoman Liz Mather said, told Palm Beach Post.
Tyco says it took about $1.1 billion in after-tax charges in its second quarter mainly related to ADT’s business, and will push it to a loss for the quarter.
The charges conceal a forecast Breen gave in March when he said the company would take pre-tax charges of up to $325 million in the quarter, largely from accounting problems found at the fire and security division. Tyco said it will shorten the amortization schedule.
With Tyco’s office in Bermuda, union pension funds have demanded that Tyco reincorporate in Delaware. The company’s board in March agreed to consider it, Holmes says.
In other news, Tyco reports total revenues for the second quarter were $9 billion, up 4 percent from $8.6 billion in the second quarter in 2002, reflecting favorable changes in foreign currency rates. For the six months ended March 31, revenues were $17.9 billion, a 4-percent increase during the same period last year due to favorable changes in foreign currency rates.
Revenues from the compay’s Fire and Security Division increased 8 percent due primarily to a $150 million, or 6 percent, positive impact of changes in foreign currency. Security revenues increased approximately $62 million, or 5 percent, as a result of foreign exchange. Fire revenues increased approximately $143 million, or 12 percent, including 7 percent from foreign exchange and 1 percent from acquisitions.
The segment loss in 2003 includes $937 million in charges, compared to $28.1 million in 2002. Excluding these charges, operating income declined by $131.5 million year throughout year. In its security business, increased depreciation and amortization accounted for $48 million of the operating profit decline, reflecting the impact of rapid growth in the subscriber asset and dealer asset base in recent years, as well as the impact of acquisitions.
Tyco has announced restructuring programs at its ADT U.S. and SimplexGrinnell operations, involving reductions of 1,400 and 1,000 employees, respectively. The company says these restructuring programs will result in more streamlined and effective operations going forward.
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