Minneapolis-based G&K said reductions in the levels of customer employment, higher energy costs and increasing prices for operating items such as textiles, freight and hangers are hurting results.

According to a report in the Minneapolis/St. Paul Business Journal, around 200 jobs or 2% of the company’s total workforce of 10,000 will be lost as a result of the closures. Cuts were planned at G&K’s corporate locations in Minnetonka, USA, and Toronto, Canada.

The restructuring moves will cost US$2.5m and eventually result in pre-tax savings of about US$3.5m to US$4.5m, according to the company.

The company also increased its reserve for environmental matters by US$4.5million and established a reserve of about US$3.5m for recent changes in compensation laws.