Timesizing® Associates

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Downsizings Sept. 16-30/2000
[Commentary] ©2000 Phil Hyde, The Timesizing Wire, Box 117, Harvard Square, Cambridge MA 02238 USA (617) 623-8080

9/30/2000  record 6 downsizings reported, totaling 1,402 lost jobs + unspecified -

1. Unilever to shut Chicago manufacturing plant, Bloomberg via NYT, B3.
   ...The largest maker of food and soap products [will] close a manufacturing plant in Chicago...by the end of 2002..\..and lay off 600 workers as it consolidates production to cut costs and spur growth. Unilever...will move production of deodorants, shampoos and skin lotions from Chicago to plants in Clinton, Conn.; Raeford, NC; and Jefferson City, MO.

2. Rockwell to lay off 350 electronic commerce workers, Bloomberg via NYT, B3.
   ...[A maker of] factory-automation and aerospace equipment \will\ lay off 350 workers...or about 35% of the unit's staff, to cut costs..\..at its electronic commerce business [which] makes call-management equipment for telephones, faxes, e-mail and the Internet..\.. The Rockwell International Corp...said the jobs would be eliminated in about 120 days....

3. Mattel to sell educational software unit, by Lawrence Fisher, NYT, B3.
   ...Mattel also [will] cut about 350 jobs at its headquarters and reduce its dividend from a quarterly 9 cents a share to an annual 5 cents a share.

4. Beal Aerospace lays off workers, restructures rocket program, spaceviews.com via atabiadon 29 Sep 2000 22:13:22 +0200.
   Facing mounting cost and schedule problems, [a] Texas rocket company...restructured its rocket development program last week, resulting in the layoff of over half its workforce. A Beal spokesman [David Spoede] confirmed Thursday that the company laid off about 80 employees [53%] Sept. 22, leaving approximately 70 employees with the Dallas-based company. The layoffs were part of an overhaul of the company's plans to develop a large expendable rocket booster.... Instead of developing the various components of its BA-2 rocket in parallel, the company..\..over budget and behind schedule...now plans to work on them in series, starting on the rocket engines and tanks and moving on to other components later....
   The layoffs took many company employees by surprise. "It was a shock to everyone," said one laid off Beal worker.... He noted that the company had been hiring new people earlier that week, just days before the layoffs were announced. "We were all pretty positive about the company" before the layoffs, that worker added, but said that for those still working there, "morale is pretty low right now"....

5. SPACE.com announces restructuring; company also announces layoffs, Business Wire Fri, 29 Sep 2000 via AOLNews 11:41:02 EDT via RadioTony 14:39:28 EDT.
   ...The premiere space multimedia company today announced a strategic reorganization that will support its growth and expansion across media.... The company's operational restructuring also includes the layoff of 22 [20%] of its 108 employees.... Said SPACE.com Chairman and CEO Lou Dobbs, "While this restructuring will further strengthen the fundamentals of our business, it regrettable requires a reduction in our staff. We are committed to providing our support to these employees and have provided severance packages and outplacement assistance to those affected. We want to thank each of them for their hard work, dedication and contributions to the development of SPACE.com"....
   ["Thanks a bunch. Goodbye."]

6. Bausch & Lomb plans a revamping and job cuts, AP via NYT, B3.
   ...[saying] details of the...unspecified number of layoffs...would be disclosed along with third-quarter results on Oct. 12. B&L's stock price has tumbled since Aug. 24 when it said its revenues for the rest of the year, excluding the acquisition in July of the French pharmaceutical company Groupe Chauvin, were expected to be essentially flat or even slightly lower than in 1999....

• [Again the takeover-downsizing connection.]
  WebMD says it will cut jobs, consolidate, AP via NYT, D4.
  ATLANTA - Hoping to send a clear signal about its drive toward profitability, WebMD Corp...will cut 1,100 jobs by the end of next year and consolidate many of its operations around the country.
  [A "clear" signal would be cutting the jobs by the end of next week. And shouldn't we at least be mentioning Healtheon, which acquired WebMD at some point? The notice of the Medical Manager takeover (see below) was couched entirely in terms of Healtheon - 2/15/00 - no WebMD required. Healtheon gulped down WebMD on 5/21/99 for nearly $10B and since then the two of them have been acquiring market share instead of growing it like there's no tomorrow (which there won't be if they all keep this up) - 6/24/99, 7/01/99, 1/25/2000 and 2/17/2000.]
  ...Marketing and other expenses will also be trimmed.
  [Cutting marketing is a clear signal about your drive to commit business suicide.]
  The company, which attempts to connect doctors, patients, and health care companies online, is the latest in a growing collection of Internet companies that have been cutting costs [and throats -ed.] this year in a scramble for profits.... The cuts are designed to reduce overlapping job duties in the company, which saw its work force expand to 6,000 when it bought Medical Manager Corp. [which] brought 3,300 workers into the company.
  [American CEOs - "Oh goody, let's see how many companies we can acquire and how many people we can fire before our consumer base collapses!"]

1. Bank layoffs expected, Bloomberg via NYT, C4.
   Grupo Financiero Banamex-Accival may lay off as many as 3,000 people, or about 10% of its workforce, to cut costs in coming months, a bank official said yesterday. These are "adjustments to make the bank more practical, efficient and to improve operations," said Jose Ortiz Izquierdo, director of media relations at the bank, the second largest in Mexico.
   [Thus the myopic self-destruction of American CEOs spreads stored-up depression round the world.]
   He said the adjustments would...affect all areas of the bank, though top management would remain in place.
   [Oh of course. If top management were inextricably affected by this "strategy," it would change in no time, - change to trimming a little worktime for all, instead of total worktime for a few, and a few more, and a few more....]

2. First Data to drop another 1,000 [actually 1005] employees, Bloomberg via NYT, C4.
   ...[A processor of] credit card payments and [handler of] billing for credit card issuers..\..which earlier this year said it would cut 1,940 jobs, will lay off another 1,000 employees to try to increase profits. The company, based in Atlanta...will cut 280 jobs in the U.S. \and\ said 725 of the new cuts will come at FDRLimited, a subsidiary in Britain....
   [They're actually listing 280+725= 1005 layoffs.]

3. Texas meatpacker files for bankruptcy, AP via NYT, C13.
   ...Supreme Beef Processors and Packers of Dallas \which\ supplied millions of pounds of beef to school lunch programs and fought against tougher food safety regulations...filed for Chapter 11 reorganization in bankruptcy court on Tuesday. The company [will] lay off 300 workers and shut down plants in Dallas and Ladonia, Tex. on Friday.... Supreme Beef's CEO Steve Spiritas said the company could not continue to operate under a "campaign of harrassment, intimidation and disinformation" by the Agriculture Dept..\.. The move is the latest in what has become a test case over federal salmonella inspection standards adopted in 1995. The science-based system for inspecting meat and poultry replaced "poke and sniff" methods used for decades....
   [See also the comments on our bankruptcy page today 9/28/2000.]

4. MTV cutting online jobs, by Catherine Greenman, NYT, C10.
   Viacom [will] cut the staff at MTVi Group, the Internet division of MTV Networks, by 105 positions, or 25%. The company also postponed plans for a spinoff of the year-old MTVi, whose 22 websites include MTV.com, VH1.com and Sonicnet.com. A spokesman said the 105 layoffs were part of a move to consolidate the music sites [does this refer to all the 22 websites just mentioned? - poor writing] and that MTVi's revenue is expected to nearly double this year, from $19.9m in 1999.
   [Everybody wants to double revenue with 75% of workforce (and consumer base). Here's depression creation in a nutshell.]
   But some analysts saw the move as a product of the market's cooling toward Web companies that focus on digital entertainment. "This makes you notice how even major entertainment companies are struggling to create successful online entities," said Stacey Herron, an analyst at Jupiter Communications.
   [Online entertainment - tying up the Internet while people listen to music, watch videos, or play games, is just a bad idea. CEOs want efficiency? Let them open their pea brains to the colossal inefficiency of this gigantic private-sector makework campaign. (And then there's the colossal inefficiency of long-distance trucking vs. railroads....)]

1. ABC-Naco Inc., NYT, C4.
   ...Downers Grove, Ill., a manufacturer of railroad products [will] close a factory in Melrose Park, Ill., and expedite a plan to cut 1,200 jobs to save money.

2. Adatom.com announces layoffs and changes, by Laurie Flynn, NYT, C4.
   ...An electronic commerce business will cut its 55-person workforce by 45% and reduce spending as part of a restructuring effort aimed at focusing on partnerships in China. Adatom of Milpitas, Calif., gets most of its revenue from operating an Internet superstore and helping other companies to set up electronic marketplaces.... The company reported a net loss of $2.03m, or 13 cents a share, in the second quarter.
   [Let's see, 45% of 55 is 24.75, that is, 25 jobcuts.]

1. Armstrong, a tile company, will lay off 300 in Europe, Dow Jones via NYT, C4.
   ...[A maker of] tile and sheet floor coverings, ceiling materials...gaskets materials and pipe insulation..\..based in Lancaster, Pa. \plans\ to eliminate about...17% of the company's European work force as part of a reorganization there. ...Under the restructuring plan, it would close unprofitablle sales offices, combine residential and commercial sales offices, close the British-based Team Valley commercial tile plant and discontinue unprofitable product lines....

2. [You've heard of the 'great white hope'? The dot-coms were the 'great tech hope,' and now look at them -]
   [US] Dot-coms cut 4,805 jobs in Sept., Bloomberg via Boston Globe, C6.
   ...as commercial websites - from services to retailing - tried to reduce costs, according to a [statistical] survey released yesterday \by\ employment firm...Challenger, Gray & Christmas Inc. of Chicago.
   [We might ask what calendar these stats are following - September isn't over yet. Aren't these statistics a trifle (like 5 days!) premature and substantially (like 5/30= 17%) incomplete?!!]
   That was 14.6% more than the 4,193 dot-com jobs cut in August and more than double the 2,194 in July....
   [So what's the scoop? Are they going from the 25th to the 25th, or what?]
   Dot-com founders "started the business with an exit strategy, either by an IPO or selling the company outright," said John Challenger, the firm's president....
   [VERY interesting observation. Dot-coms are not really set up for the long term. Their founders, more than in any other industry perhaps in the whole of economic history, just want to throw something together and get rich as quick as possible by going public or selling out. Rather pathetic, don't you think? The dawning ecological age demands long-term sustainability and comprehensively extended self-interest, and yet our newest and hottest industry is focused on the short term - as short as possible to "hit and run" - and on unextended self-interest. If they succeed, where do they think they are going to store the money safely - given the example they are setting?]
   Since December, there have been 5,054 cuts among service providers on the Internet, followed by 4,563 in retail, 1,670 in portal businesses, 1,430 in entertainment and 1,052 in health and fitness, the survey said....
   [Strange isn't it - a marriage will often be stronger if you start it with an exit strategy - a 'pre-nuptial agreement,' because of the extra freedom from socially pressured romantic play-acting which that confers, but - an industry where the firms are founded just to 'hit and run,' deriving its value purely from a socially fashionable 'true belief' in the automatic magic of technology - regardless of how we treat people - is doomed. Guess it actually involves much more play-acting than regular "old" economy startups. And yet the selfish, short-term cancer has infected much of the old economy as well, as the full-page Ford ad on the next page shows - instructing consumers on how to replace their tires. Rub your hands together, ye witches of Macbeth, we are cooking up another great depression, the likes of which we've never seen. We who are more populous and inter-dependent than ever before in history (the world population doubled between John Glenn's last two space flights) are each pretending no one else matters but us, except as discardable pawns in our get-rich-qik schemes or scams.]

1. Nippon Telegraph [& Telephone] to cut 6,500 jobs, Bloomberg via NYT, B3.
   ...using early retirement incentives, extending plans to trim staff through attrition as competition stiffens..\.. Japan's third-largest private employer...wants to shed the jobs at its regional units over two years.... The plan is aimed at saving...$560m at the two units, which had a combined workforce of 120,000 employees as of March 31. It would be NTT's second early retirement offer since 1993.
   [6500/120,000= 5.4%.]

2. Air Canada will trim 2,000 jobs, Bloomberg via NYT, B3.
   ...once it completes its acquisition of Canadian Airlines International Ltd [the former Canadian Pacific Airlines].... The CFO of Air Canada, Mr. [Robert] Peterson said the airline had set aside...$60.4m [C$90m] for separation packages. There will be no involuntary layoffs..\..the Globe & Mail of Toronto reported.... Since it began the acquisition, Air Canada has hired about 2,000 full-time flight attendants, mechanics and service agents to deal with public complaints about poor customer service and long lines. Mr. Peterson said he expected to reduce the staff to the level before the merger once the two airlines are fully combined....
   [Why wasn't this blocked by anti-trust???]

3. Wolohan [Lumber], building materials retailer, to shut 4 stores, Reuters via NYT, B3.
   The lumber and building materials retailer [is] closing four stores and taking a related charge of $1.1m in Q3. The company, based in Saginaw, Mich., [will] close its stores in Milan and Portsmouth, Ohio; Muncie, Ind.; and South Haven Mich. It also [will] consolidate two stores into one location in Dayton, Ohio. Wolohan said the pretax charge of $1.1m...will reflect the effect of asset liquidations, inventory adjustments and the accrual of future fixed costs associated with the four closings as well as the effect of the consolidation.

4. Sony moving electronics unit, Agence France-Presse via NYT, B3.
   ...Sony Video Taiwan, which manufactures video, DVD and laser disc players, will be closed in Dec. \and\ the operations [moved] to Malaysia to cut costs...and improve efficiency of the Sony Group, Kunio Yamamoto, a board member, said from Sony HQ in Japan.
   [Again, the current quandary of world management - how to improve efficiency without fueling a downward spiral in consumer spending and their own markets via downsizing. The only answer - Timesizing, not downsizing.]

1. KeyCorp will cut 2,300 jobs in revamping, Reuters via NYT, C4.
   The midwest regional banking company [will] cut...about 10% of its workforce...in the final phase of a restructuring intended to increase profits. The Cleveland-based bank...is the latest regional bank to cut staff members in an effort to save money and spur revenue growth. A string of interest rate increases has put pressure on bank profit margins.... KeyCorp expects to save $360m annually when the revamping is in place by 2002.

2. Possible layoffs at Titanic builder, by Brian Lavery, NYT, C4.
   Union leaders at the struggling Belfast shipbuilder Harland & Wolff said the company planned to lay off 600 of its 1,200 employees. The company has had a nearly empty order book since early this year. Harland & Wolff, which built the Titanic and once employed 20,000 people, made no statement about the job cuts.

1. Brown & Williamson Tobacco to cut jobs, AP via NYT, C4.
   ...a cost-cutting plan...as sales of its Kool, Lucky Strike, Carlton and other cigarette brands slip...more than 3% of the tobacco market share since a 1998 settlement with the states' attorneys general. How many of the company's 6,000 jobs will be cut is unclear [but] the company will offer an early retirement package to about 500 salaried employees [and then go on to] cut more jobs....
   [So 500 lost jobs plus unspecified additional. But this dark cloud has a silver lining because it's just that many more people who are not dependent for their livelihood on the health-damaging smoking industry.]

2. Saturn offers incentives to cut work force, AP via NYT, C4.
   With sales sluggish, the Saturn Corp. is offering incentives of up to $25,000 to...members of the UAW..\..who agree to leave its Spring Hill plant in an effort to trim expenses until production is increased late next year.... Saturn plans to make an SUV in the 2002 model year...and GM...will open a $500m engine factory at the plant in 2003..\..
   The incentives will be offered to [employees] to retire early, quit, take an unpaid leave of absence, or share a job with another employee.
   [Hey, now they're talkin'!  25 grand to split a job with another employee, who presumably gets another 25G's? 'Course it's only "up to $25k" but this is a subsidy for a primitive form of Timesizing - primitive because they probably have to sacrifice a number of fulltime-linked benefits.]
   ...The company expected about 400 of the 6,000 union workers employed there to take the offer. [That's 6.6%.]

3. N. E. Business to cut jobs, Bloomberg via Boston Globe, C3.
   New England Business Services Inc., a supplier of business forms...will cut about 45 jobs and take about $7.1m in charges in its 2001 fiscal year to close Virginia and Massachusetts plants and combine its New Jersey operations.... The Groton [Mass.]-based company..\..said the job cuts will affect about 1% of its US workforce of 3,975. An additional 100 people will be asked to relocate.
   ....The company will close its Damascus, Va., plant, which employed about 70 people. Its leased property in Sudbury [Ma.] also will be closed. [Its] Parsippany, NJ, operations will be moved to its plant in Thorofare, NJ....
   [Badly written article. (1) How many people at the Sudbury plant that's closing? Assuming another 70, we get 70+70= 140 people closed out of the Va. and Ma. plants but only 45 jobcuts admitted to. (2) What's happening to the additional 140-45= 95 people? Are they part of the 100 who will be asked to relocate? (3) Is there another plant in Va. for the Va. people to relocate to (we know there's the company HQ in Groton, Mass. which is an easy commute from Sudbury, or are we asking them all to move to Jersey? - which is distant and demotivated enough to constitute a jobcut, not a move. Is Thorofare close enough to Parsippany that they're not even counting the Parsippany people in the move? If not, how many people at the Parsippany plant? There can't be just 5 - or did we overestimate the number of people at the Sudbury plant? As we said, "Badly written article."
   [From a quick look at the highway map, Parsippany-Thorofare is 80 miles as the crow flies, and the car can't fly, so in simple terms, taking Rte 285 to 95 and Rte 95 to Thorofare is going to be at least 85, say 90 miles. This is an average of an additional 1.5-2 hours on employees' commute even if they move within Jersey. Too much. We're going to count all 100 admitted "moves" as layoffs here for a total of 45+100= 145 jobcut equivalents. We obviously have a CEO here who has confused the location shellgame with efficiency, regardless of employee dislocation and demoralization, which has a huge impact on productivity and ain't no-way efficient.]

4. Optimark to cut jobs and operations, Dow Jones via NYT, C4.
   The electronic stock trading company...based in Jersey City \will\ cut about 110 jobs and suspend its equity trading operations on the Pacific Exchange and the Nasdaq to save money.... The company...contemplated exiting the stock trading business last month.
   [And where would that leave it??]

1. Informix planning revamp, layoffs, Bloomberg via Boston Globe, E8.
   WESTBOROUGH, Mass. - ...A database-software maker warned that it will have a Q3 loss and said it's cutting 400 jobs and splitting into two firms to boost sales and profit.... The company, whose Q2 earnings fell 78% because of competition and slow implementation of a plan to sell more Internet software, last month reorganized its five business groups into two and cut about 10% of its workforce.... Informix will cut an additional 11% of its 3,800-person workforce....
   [So this 11% of 3800 must be the aforementioned 400 jobcuts (actually 400/3800= 10.5%), and the previous 10% cut must have involved ((3800/90)x100)-3800= 422 jobcuts. That would roughly agree with the 430 cuts mentioned in our 8/10/2000 story.]

2. Pseudo [Programs] closing its doors, by Amy Harmon, NYT, C9.
   ...A pioneer in producing original entertainment for the Internet...founded in 1994..\..
   [What a bad, Internet-clogging idea!]
   ...this week became the latest in a string of companies to fail at that endeavor. [SoHo, NY-based] Pseudo's 175 employees were laid off on Monday afternoon.... After several management shake-ups, Pseudo's shows still failed to attract enough viewers to build significant advertising revenues.

3. Archer Daniels Midland will shut 2 cottonseed plants, Dow Jones via NYT, C4.
   One of the world's largest processors of oilseed, corn and wheat [will] permanently close its...plants in Montgomery, Ala., and North Little Rock, Ark., [and] its cottonseed processing operations at Levelland and Sweetwater, Tex..\..because of poor market conditions in the cottonseed business. The company, based in Decatur, Ill., did not say how many employees would be affected....

4. Pro Air, an airline serving Detroit, suspends flights, Bloomberg via NYT, C4.
   ...A low-fare carrier...formed in 1997 [that] tried to take on...Detroit's dominant carrier \Northwest\ suspended flights at midnight last night after the FAA revoked its operating certificate [for failing] to correct maintenance procedures and record-keeping problems cited in a June inspection and [operating] "unairworthy aircraft".... Pro Air is appealing the FAA action [as] based on "incorrect and outdated" information....

1. Kaiser [Aluminum] will cut [at least] 540 jobs, Bloomberg via NYT, C15.
   ...The nation's No.2 aluminum maker will cut...19% of its hourly work force at five plants in Ohio, Louisiana, and Washington after settling a two-year strike.
   [Sounds like this bloodbath is the 'settlement,' not what ended the strike.]
   A federal arbitrator reached a settlement today between the company and the members of the United Steelworkers of America. Under the 5-yr contract, workers will get wage and benefit increases that average 2.6% a year.... The plants employed about 2,800 workers before the strike began in September 1998.

2. Mead to close a [corrugated] packaging plant in Atlanta, Reuters via NYT, C4.
   ...A forest products company [will] close a plant...by Nov. 30..\..dismissing its 90 workers.... The announcement of the Atlanta closing came 2 days after Mead said it would close plants in Michigan and Indiana...trimming about 205 jobs to reduce costs....

3. Deja.com online site lays off 50, Reuters via NYT, C12.
   ...An Internet company that provides online product reviews...cut its staff by more than a third [36%]...out of a total...of 140 in New York and Austin..\..to conserve cash.... Deja, founded as a message board in 1995, has been squeezed for cash since it withdrew a planned IPO earlier this year.
   [Boy, did it 'miss the wave'!  If it started way back in 1995, by the time this year started, it should, as we say in French, have gone public déjà (meaning "already").]

1. Dime Bancorp planning to cut 400 workers, AP via NYT, B3.
   ...or about 6% of its full-time work force, as part of a series of moves to trim costs. The cuts come as it is resisting a hostile takeover bid by North Fork Bancorp..\.. Dime, an S&L based in New York, said...about 300 of the jobs to be cut would come at its banking subsidiary, Dime Savings Bank of New YOrk, which has 127 branches in New York and New Jersey.

2. AltaVista to cut a quarter of its work force, Bloomberg via NYT, B3.
   ...A unit of CMGI Inc...which operates a popular Internet search service \will\ cut 225 jobs...as the company...seeks to become profitable before selling shares to the public [in Feb]. AltaVista, which has about 900 employees, will take a charge of about $7.5m...for the job cuts and for consolidating its four offices into one location, said Rod Schrock, [its] CEO.

3. Web firm plans layoffs, by Stephanie Stoughton, Boston Globe, C1.
   MotherNature.com Inc., an ailing online seller of vitamins based in Concord [Mass.] has laid off 25 employees, representing about 20% of its work force. Like many dot-coms, the unprofitable Internet retailer has been slashing advertising costs and other expenses....

4. Cargill to lay off workers at Alabama soy mill, Reuters 18:45 09-14 via AOLNews 14Sep2000 19:01:44 EDT via RadioTony 15Sep2000 11:27:52 EDT.
   [The] agribusiness giant...the largest privately held company in the U.S., [will] lay off some workers at it Guntersville, Ala., soybean crushing plant due to industry over-capacity.
   The...plant was closed indefinitely in mid-April, with Cargill citing poor Asian demand and unprofitable margins. "We postponed all layoffs until we were certain they were absolutely necessaryl," Wayne Teddy, Cargill vice president for oilseeds, said in a statement.
   [Heavens to murgatroyd, what have these people been doing since mid-April if the plant's been closed? Has Cargill actually kept paying them across these last 5 months?]
   "However, the economic situation remains difficult and we foresee more capacity than needed for the new crop year that begins in October."
   Cargill declined to give the number of employees being laid off. But the company will continue to market soybean meal to the plant's customers through truck or barge deliveries from other locations, Teddy said. The firm's two grain elevators at the site will also continue to buy soybeans from farmers.
   [This is also post-takeover, as indicated by our 11/11/98 story on Cargill.]

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