By Tess Stynes
KBR Inc. plans to restructure its operations and divest or exit
some noncore segments following a strategic review as it aims to
reduce its operating costs.
KBR expects the moves, which will focus the company on its
hydrocarbons and international government services businesses, to
result in $800 million to $1 billion in write-downs and other
one-time charges. The company is aiming to lower costs by at least
$200 million a year by 2016.
KBR, the former Halliburton Co. unit, had been one of the key
U.S. government contractors in Iraq following the 2003 invasion,
providing logistical support for American forces, among other
tasks. KBR has suffered declining revenue as defense budgets in the
U.S., which had withdrawn from Iraq and scaled back its presence in
Afghanistan, have been tight.
The strategic review was implemented by Chief Executive Stuart
Bradie upon his arrival in June. At year's end KBR plans to
reorganize into three major business units: technology and
consulting, engineering and construction and government
services.
Businesses KBR plans to shed or exit include its building group
and its fixed-price EPC Power, EPC infrastructure and U.S. Minerals
and stand-alone construction segments.
KBR said options for its Canadian module fabrication and U.S.
military deployed operations remain under consideration.
KBR didn't disclose in a news release whether any job cuts would
result from the restructuring.
Write to Tess Stynes at tess.stynes@wsj.com
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