Waste Management Inc. (WM), headquartered in Houston, has announced plans to reorganize its operations. WM says the goal of the restructuring is to flatten the company’s management structure, which will allow it to sharpen its focus on its three major initiatives: yield management, improving efficiency in operations and meeting customers’ needs.
The principal organizational changes that will take place are:
- Removal of the management layer consisting of four geographic groups (Eastern, Midwest, Southern and Western);
- Consolidation and reduction of the number of areas managing the core collection, disposal and recycling businesses from 22 to 17;
- Reduction of corporate support staff to better align their support with the needs of the operating units while reducing costs; and
- Elimination of about 700 employees.
Additionally, WM has announced the following appointments:
- James Trevathan Jr., previously executive vice president – growth, innovation and field support, has been appointed executive vice president and COO.
- Jeff Harris and John Morris have each been appointed senior vice president, field operations. Harris was most recently senior vice president – Midwest Group, and Morris was most recently chief strategy officer. In their new roles, they will oversee the 17 operating areas.
David Steiner, president and CEO of Waste Management, says, “The steps we are taking to restructure our organization are expected to provide two very important results for us. First, the restructuring is expected to reduce our cost structure by about 100 basis points in 2013. This is a good step toward our longer-term goal to reduce costs by 200 to 400 basis points. Second, we believe that eliminating a layer of management and restructuring our support staff around our three major initiatives will intensify our focus on achieving those initiatives.”
Steiner continues, “Jim Trevathan has been in a role where he had all of the operations staff that supports the field reporting to him. In order to improve the connection between that staff and field operations, it makes sense to have the persons responsible for field operations also reporting to Jim. In addition, we have two excellent executives to fill those field operations roles in Jeff Harris and John Morris. The 17 area vice presidents will report directly to one of these two senior vice presidents.”
James Fish Jr., who was recently named CFO of the company, states, “We will continue to focus on taking costs out of the business through procurement programs and other business improvement initiatives. Reducing our administrative overhead is the next logical step, which we are now taking. A simpler and flatter organization will not only result in lower SG&A (selling, general and administrative) costs but should also allow us to more efficiently identify and execute opportunities. We specifically designed this restructuring with the primary goals of streamlining the delivery of corporate support, while not disrupting our front line operations.”