VOL. 129 | NO. 25 | Thursday, February 06, 2014
ServiceMaster Lays Off 65 in Restructuring
By Bill Dries
Memphis-based ServiceMaster Co. has laid off 65 employees and eliminated another 40 vacant positions in a restructuring of its headquarters that began Wednesday, Feb. 5, and was confirmed Thursday.
The total number of positions – 105 – amounts to 8 percent of the headquarters staff and is a result of the spin-off of ServiceMaster’s TruGreen division as a separate company, said ServiceMaster spokeswoman Alison Bishop.
“With the TruGreen separation behind us, we’ve taken a fresh look at the overhead structures and associated costs to support ServiceMaster’s growth plans and ensure that we are operating effectively and productively,” Bishop said. “We recognize the need for a simpler, leaner operating model that’s in line with the scale of the new ServiceMaster.”
TruGreen became a company independent of ServiceMaster with the closing of the spin-off deal Jan. 14. ServiceMaster leaders had struggled to bring the commercial and residential lawn care service back to profitability.
TruGreen lost 300,000 customers in two years despite several turnaround efforts, including an overhaul of sales methods and in-office practices, across the administrations of three ServiceMaster CEOs in 2 1/2 years.
Under changes that began when Hank Mullany succeeded Patrick Spainhour as ServiceMaster CEO, the company tried to transplant the successful business model and methods of its Terminix pest-control division, loaning Terminix leaders to TruGreen in a turnover of TruGreen leadership.
However, instead of Terminix executives returning, the effort instead led to new leadership at Terminix, not a return of the leadership to ServiceMaster’s most prominent brand in its set of commercial and residential services.
So in November, five months after he was named ServiceMaster CEO, Rob Gillette announced TruGreen would be an independent company by the end of 2013.
The irony was that it came just as TruGreen showed its first year-over-year increase in revenue in more than two years. Nevertheless, the bump in revenue didn’t make a dent in the declining customer count.
TruGreen President David Alexander, at the time, called the spin-off “the best possible move for both ServiceMaster and TruGreen.”
“We’re in charge of our own destiny,” Alexander added in the November earnings call with analysts.
The layoffs appear to be the public start of the move to restructure ServiceMaster toward that destiny.