By Maria Saporta
Atlanta-based PulteGroup is in a state of transition.
It reduced its workforce earlier this month – both nationally and at its corporate headquarters – to lower its overhead costs. It survived a public attack from its founder – William Pulte – against the board and CEO Richard Dugas. And the board is now searching for a new CEO given Dugas announcement that he plans to step down by May 2017.
Despite all these challenges, the company’s financials are doing well.
In a recent telephone interview, Dugas said he was satisfied with how the company has weathered its recent storms.
“I’m certainly hoping that most of that tumultuousness is behind us,” Dugas said. “At the end of the day, I’m proud of how we’ve handled the situation. I have great respect for Mr. Pulte. I will always have a lot of respect for the Pulte family. That will not change.”
The company’s layoffs were due to a commitment to lower its overhead expenses from 10 percent to 9 percent of the company’s operating profits.
“We felt we needed to take some steps (to reduce the overhead),” Dugas said, adding the reductions occurred during the week of Aug. 15. “A large percentage of our total cost is people. We did have adjustments. And it did have an impact on our corporate office.”
Dugas, however, would not comment on how many people were impacted locally or nationally. But some reports have said up to 600 people were impacted around the country. The company employs about 5,000 direct employees, but that doesn’t include subcontractors that work for the company.
Dugas said when the company moved its headquarters to Atlanta about two years ago, it had about 300 corporate employees. Since then, the company announced the acquisition of Atlanta-based John Wieland Homes, which added to the local base.
“We have a large presence in Atlanta,” Dugas said.
One of the areas of division mentioned by the founder and his grandson had been the decision to move the headquarters to Atlanta. With the recent layoffs, there had been speculation that the company may not stay in Atlanta.
Unequivocally we will not be moving from Atlanta,” Dugas said. “We love being in Atlanta.”
Before the company had its annual meeting in May, the board of directors were able to respond to challenges from the founder and his family. And Dugas said that is now behind them.
“We have certainly listened to what the Pulte family said, and they remain our largest shareholder,” Dugas said. “I’m personally very proud of our response. We remain committed to having a good relationship with all our shareholders.
And I continue to have productive and constructive dialogue with the Pulte family. They are very important and a respected part of our legacy.”
Meanwhile, the board is conducting a search for a CEO – and it includes both internal and external candidates.
“The board has made it crystal clear to me that it will have an independent process,” Dugas said. “They hope to have an announcement in the next couple of months.”
Dugas said it is possible he would step down as CEO before May 2017 depending on the board’s preference. There also could be a period of transition where Dugas would stay on in some role.
When he offered to retire next May, Dugas said he would be willing to help in any transition, if needed.
Meanwhile, Dugas, who is chairman of the Westside Future Fund, said he optimistic how the efforts are coming together to revitalize that community.
“We have made significant progress,” Dugas said. “We are laying the groundwork for long-term success. I will point out that we birthed this from scratch.. I hope people appreciate John Ahmann (the executive director of the WFF). “I’m incredibly pleased with the work John has done.”
Dugas said there are several initiatives underway that will be rolling out later this year.
“Regardless of my status at the company, I’m committed to the work of the Westside,” Dugas said. “I’m in it for the long haul.”