CorrectionsCorp. of America is poised to eliminate 50 to 55 full-timepositions, or about 12% of its workforce, at its headquarters as part of arestructuring of its corporate operations.
The company said the restructuring is meant to realign itscorporate structure to advance its business diversification strategy and betterserve facility operations.
Corrections Corp. is also executing a cost reduction plan,and to support the initiative, President and CEO Damon Hininger volunteered toforfeit his restricted stock unit award, which had a fair value of $2.0 millionon the award's Feb. 19 grant date. He also intends to forgo his equity-basedcompensation in 2017.
In conjunction with the restructuring, the company isexpected to report a roughly $4.0 million charge during the third quarter. Thecharge mainly includes cash payments for severance and associated benefits toterminated employees and a noncash charge related to Hininger's forfeiture ofhis stock unit award, which had an unrecognized compensation expense of roughly$1.7 million.
Corrections Corp. expects to save roughly $9.0 million incosts through the staffing reductions and cost reduction plan starting in thefourth quarter through 2017.
The initiatives follow the recently announced plans by theU.S. Department of Justice to phase out its use of private prisons and the for the U.S. Departmentof Homeland Security to follow suit.