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Levi Strauss Enters Into 5-yrs Strategic Agreement With Wipro; To Cut 500 Jobs(dpa-AFX International Compact Via Acquire Media NewsEdge) NEW DELHI (dpa-AFX) - Levi Strauss & Co. (LVISF.PK.) announced the next phase of its global productivity initiative, including a five-year strategic agreement with Wipro Limited (WIT) to outsource certain global business services. Levi said that it will eliminate about 500 positions, primarily due to the decision to partner with Wipro, a global information technology, consulting and business process services company. The initiative, announced in March 2014, is expected to generate net annualized cost savings of $175 million - $200 million once fully implemented. Wipro will provide support for certain business services within information technology, finance, human resources, customer service and consumer relations. LS&Co. also continues to reduce layers of management, increase spans of control, remove duplicative roles and make other structural changes as part of the global productivity initiative and the company's continued structural transformation of its cost base. LS&Co. expects to incur total restructuring and related charges in the range of $45-$55 million in connection with the actions announced today, the majority of which will be recognized in the fourth quarter of 2014. The charges consist of cash expenditures principally related to severance benefits, retention bonuses and consulting fees. The initial term of the Agreement is five years with activation of certain components of the outsourced services starting in the first quarter of 2015. LS&Co. will pay Wipro for the services through a combination of fixed and variable charges, with the variable charges fluctuating based on the Company's actual need for services. The Company expects to pay Wipro a minimum of approximately $143 million over the initial term of the agreement. LS&Co. noted that it continues to expect additional savings in future periods to come from streamlining its planning and go-to-market strategies; implementing efficiencies across its retail, supply chain and distribution network; and continuing to pursue more disciplined procurement practices. Copyright RTT News/dpa-AFX |