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WCI Will Slash 575 Jobs, Scale Back Tampa Projects

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By SHANNON BEHNKEN | The Tampa Tribune

Published: November 8, 2007

Updated: 11/07/2007 08:56 pm

TAMPA - WCI Communities Inc., the Florida-based developer of upscale condominiums and homes, said Wednesday it will cut 21 percent of its work force as part of a restructuring spurred by the difficult housing market.

WCI also is scaling back some of its current Tampa Bay projects until the real estate market improves, a top executive said.

"We're not going to build vacant homes," said Jim Dietz, executive vice president and chief financial officer for the Bonita Springs-based company. "We're committed to that."

WCI plans to consolidate operating regions and shed 575 jobs. The cuts are expected to save $46 million a year. The company will have about 2,100 employees after the move, or 46 percent fewer than it employed in mid-2006.

Dietz would not say how many of the employees being laid off are in the Tampa Bay area. Locally, the company is building the West Shore Yacht Club, a luxury home project along West Shore Boulevard, south of Gandy Boulevard. It also is building homes in Sun City Center, a retirement community.

At the Yacht Club, one of the three planned towers is complete. The project is on 74 acres and initially included plans for 539 homes. Roughly 60 percent of the single-family homes and town homes are complete, Dietz said. The finished condo tower has 80 units, 30 of which have not sold.

Dietz said some West Shore Yacht Club buyers defaulted on their purchases. The company is now concentrating on selling those homes, some at a reduced price. The other two towers are on hold until most of the existing inventory is sold, he said.

A proposed WCI condominium project slated for the Rocky Point area is on hold, pending stronger sales at the West Shore development, Dietz said.

"Unfortunately, we picked areas that were among the hottest in 2004 and 2005, but among the weakest in 2006 and 2007," Dietz said.

As part of the restructuring, WCI named David Fry chief operating officer, and he will oversee the restructuring. The restructuring cuts will cost about $5.4 million, with $1 million hitting the company books in the third quarter, the company said.

Six board members, including billionaire investor Carl Icahn, agreed to forfeit compensation for the rest of 2007 and all of 2008. Icahn had led a proxy fight to overthrow the board and force the sale of the flagging company before being named chairman in September.

The housing sector is in the third year of a drastic slump that has left builders with a glut of unsold homes, forcing them to cut prices and take massive balance-sheet charges. Florida, one of WCI's primary locations, along with California and the Southwest have been hit hardest after growing fastest during a five-year boom.

"This prolonged downturn requires that we continue to assess our overhead and make reductions in order to remain viable through the trough of this cycle," said chief executive Jerry Starkey.

Shares in WCI slipped Wednesday on the New York Stock Exchange, closing at $5.29, down 13 cents, or 2.4 percent. They are off their 52-week high of $24.20.

Information from The Associated Press was used in this report. Reporter Shannon Behnken can be reached at (813) 259-7804.

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