PulteGroup, Inc. Provides Update on COVID-19 Impacts and Response Actions
Tuesday, May 12th, 2020
PulteGroup, Inc. provided an update on actions the Company has taken in response to the COVID-19 pandemic.
“As part of our first quarter earnings release, we reported that following a very strong start to the year, housing demand slowed materially beginning in mid-March as the country was impacted by the COVID-19 pandemic,” said Ryan Marshall, PulteGroup President and CEO. “In response to the pandemic, we quickly modified our sales, construction and administrative processes to allow our business to operate while protecting the health and safety of our customers, trade partners and employees.”
“After an initial significant contraction in housing demand, recent sales trends have been more encouraging as weekly net new orders went from approximately 140 homes in the last week of March to almost 400 homes in the final full week of April that ended May 3,” added Marshall. “While order rates have improved, our net new orders for the month of April were still down approximately 50% from the prior year, so we have taken steps to reduce our targeted overhead expense through a combination of layoffs, furloughs and other cost cutting initiatives. The steps we have taken are expected to reduce overhead expenses by approximately $100 million on an annualized basis, of which approximately $65 million will be realized over the remainder of 2020.”
“We have an outstanding team and employee-oriented culture which makes these actions extremely difficult, but these changes are necessary given the current operating environment. To help support employees impacted by these actions, the Company’s senior leaders, along with the Board of Directors, have agreed to temporarily reduce their compensation and the Company will redirect the foregone compensation into our employee assistance fund. We have also modified the terms of this fund to significantly broaden the areas of coverage, as well as to make assistance available to any PulteGroup employees who were furloughed or released as part of these recent overhead reductions.”
As a consequence of its actions, the Company anticipates taking a second-quarter charge of approximately $10 million for severance and related expenses.