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Hi Tech Hardware/Software/Services Company in EMEA

Issue Faced. Real Estate cost @ 3X the computer industry standard as % of revenue for EMEA

Industry. Hi tech hardware/software/services company in EMEA

Location. Fourteen subsidiaries in Europe plus 8 distributor countries.

Size Of Company. 1000 employees and $ 400 million in Revenue

Who Brought In The Team/Individual. Internal reviews, CEO of company

Goal Of Assignment. At least 50% ACTUAL REAL Cost reduction of EMEA real estate costs

Actions Taken. Four major thrusts:

  • Implemented OPEN office environment in HQ and all subsidiaries. (This saved about 34% SQ. FT in every location)
  • Renegotiated all leases with the subtle threat of walking out on each lease and let them sue us.
  • Sublet excess space at higher rates than leased rate.
  • Moved the offices to much less costly areas while keeping with a high level environment.

Results. Reduced the Real Estate expenses from $24M (7.3% of revenue) to $10M (2.6% revenue).

Assignment Duration. Eight months for analysis and conclusions. Two to 10 Months for validation and planning across 14 subsidiaries Two months of time from an outside consulting firm and eight months for implementation of the consolidation plan.

Resources Utilized. Internal staff of two for analysis, external staff of two for planning and implementation and approximately $200K in fees to an outside consulting group.

Submitted By. Stephen Paul Baxter