Hanover Compressor Company, a provider of outsourced natural gas compression services, has completed a comprehensive review of its business operations and human resources needs based on the long term objectives of the company. As a result of this process, Hanover has announced its intention to reduce its staffing levels by approximately 500 employees representing 11% of the company's global workforce. The number of employees affected will vary by region, business segment and position, but the workforce reduction will primarily be concentrated in Hanoverís manufacturing operations as the company consolidates manufacturing facilities. Affected employees will be offered a severance package based on years of service with the company. Hanover will take a one-time charge of approximately $2.5 million, pre-tax, in the 4th quarter of 2002 as result of the workforce reduction. The company expects pre-tax savings in employee salaries and benefits of approximately $12 million in 2003 and annualized pre-tax savings of approximately $20 million going forward.
"As a result of a number of acquisitions, Hanover has experienced exceptional growth over the past few years which has allowed us to quickly emerge as the leader in our industry," said Chad Deaton, President and Chief Executive Officer of Hanover. "However, until now, consolidation of the manufacturing facilities and operating locations has been limited, which has resulted in an uneven distribution of our asset base and resources. The rationalization and consolidation of our manufacturing centers will result in significant savings beginning in the second quarter of 2003, will allow us to compete in the current business cycle and will better align our human resources with the long term interests of the company, our customers, and our shareholders."