Apparel company Hampshire Group is axing nearly one-quarter of its workforce as part of restructuring plans aimed at reducing the company's costs.

The company announced a net reduction of 75 workers, about 24% of its global workforce, plus the immediate departure of president and CEO Michael S Culang.

Redundancies will take place across all levels of the organisation's US and Asian operations, and senior employees will face reductions in salary packages.

Certain operating functions will be reorganised, and Hampshire's New York operations will be consolidated into one location.

Hampshire said the job cuts were necessary because of falling sales and the outsourcing of certain functions.

The measures should be complete by the end of the third quarter of 2009, achieving annualised savings of more than US$6.6m, but incurring one-time costs of $3.8m, mostly made up of termination benefits.

"The challenging economic environment has continued to weigh heavily on our industry and our financial performance," said Richard Mandell, newly installed president and CEO.

"These actions are designed to streamline our operations, improve overall efficiency and refocus resources on our core businesses."

The restructuring is not expected to impact Hampshire's acquisition by investment group NAF Holdings. NAF's offer of $5.55 per Hampshire share closes on Friday (24 April).