David Luxton (Darren Brown, OBJ.)

Debt-ridden company Allen-Vanguard Inc. (TSX:VRS) announced a restructuring plan Thursday to slash jobs and save money.

The company, which previously said it might miss a $10-million bill this month, announced its current workforce of 660 would be reduced by more than 100 people.

Annual savings are expected to be $6.5 million, although this year's fourth quarter will be hit by a $4.6-million restructuring charge.

"The overall objective of our restructuring plan is to rebuild our base of operating earnings from our diversified, high-quality portfolio of products and services ... and achieve a rapid and permanent reduction in our operating cost base," said president and CEO David E. Luxton in a statement.

"Our operations are readily scalable, and therefore we expect to be able to maintain and grow revenue from a permanently lower cost base."

Allen-Vanguard's stock, which has been free-falling in value since reaching a high of well over $11 last year – had a small rebound by midday on Thursday.

Around 11:40, it was sitting at 35 cents – five cents and 18 percentage points higher than its closing number of 30 cents on Wednesday.

"It's hard to imagine that anyone is surprised at this announcement, but cost-cutting at Allen-Vanguard seems to be giving the stock a 15-per-cent-plus boost this morning," said Neil Linsdell, a research partner at Versant Partners Inc., in an e-mail.

"The company is obviously cutting the cost structure that it has been maintaining to address increasing business. As these contracts get delayed, it only makes sense to streamline the operations in the meantime."