Compass Minerals, a prominent global mineral provider, has announced significant cost-cutting measures, including substantial layoffs and the closure of its fire retardant business, Fortress North America (Fortress). These actions are aimed at boosting free cash flow and reducing debt, with a renewed focus on the company's core Salt and Plant Nutrition operations.

The company revealed it is eliminating over 10% of its corporate workforce, resulting in the termination of nearly 50 positions. Additionally, Compass Minerals has decided to completely wind down its Fortress business, leading to the immediate termination of all Fortress employees. The combined impact of these decisions results in a significant workforce reduction as the company aims to streamline its operations.

In addition to the immediate layoffs, Compass Minerals has implemented a hiring freeze, choosing not to fill certain open and budgeted roles. The company is providing severance packages and outplacement services to assist the affected employees during this transition.

Edward C. Dowling Jr., President and CEO of Compass Minerals, acknowledged the difficulty of these decisions, stating, "Decisions such as these are never easy, but our board of directors and senior leadership team took a hard look at our cost structure and determined these actions were necessary to enable us to generate additional cash flow and accelerate our deleveraging. I’m grateful to departing employees for their service and to those remaining who will help us chart a new path in this next chapter. Moving forward, our company will be leaner with an intense focus on getting back to the basics of our core Salt and Plant Nutrition businesses in order to become a stronger and more profitable company."

The shutdown of the Fortress business will result in a non-cash impairment charge related to the write-off of associated assets, subject to residual value assessments, which will be recorded in the fiscal second quarter ending March 31, 2025. Conversely, the company anticipates a non-cash gain from the elimination of the contingent consideration liability tied to the Fortress acquisition.

Compass Minerals estimates that these cost-cutting measures will yield run-rate cost savings between $11 million and $13 million for the 12-month period ending December 31, 2024, assuming the workforce reductions had been implemented at the beginning of that period. However, the company cautions that actual savings may vary due to potential offsetting costs and timing factors.

These actions build upon the company’s ongoing efforts to align capital expenditures with cash generation performance.