Waste Management Inc. is undertaking a restructuring plan aimed at lowering costs, a plan that includes eliminating a layer of management as well as about 700 positions.
The reorganization removes the company's management layer at the group level, which divides the company's operations into four regions around the country.
Waste Management expects to take a $50 million to $60 million charge during the third quarter to pay for the reorganization.
The Houston-based company is also consolidating and reducing the number of areas from 22 to 17. The areas manage collection, disposal and recycling businesses within those groups.
The reorganization is expected to reduce the company's costs by about 1% -- what the company calls 100 basis points.
"The steps we are taking to restructure our organization are expected to provide two very important results for us," CEO David P. Steiner said in a statement. "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."
Those initiatives are involve yield management, improving efficiency in operations, and better meeting customers' needs, the company said.
Waste Management also announced that James E. Trevathan Jr. has been appointed chief operating officer.
Waste Management signaled possible changes when it recently appointed James C. Fish as chief financial officer, indicating he saw the potential to make changes to save money for the company.
He is being described by the company as a "leading architect" in the reorganization.
"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," he said in a statement.