Timesizing® Associates - HOMEPAGE
Downsizings, December 16-31/2000
[Commentary] ©2000 Phil Hyde, The Timesizing Wire, Box 117, Harvard Square, Cambridge MA 02238 USA (617) 623-8080
12/30/2000 3 downsizings reported, totaling 1,969 lost jobs -
12/29/2000 7 downsizings reported, totaling 30,756 lost jobs,
- LTV seeks bankruptcy, citing slower economy and steel imports, by David Barboza, NYT, B1.
...In November, the Wheeling Pittsburgh Steel Corp., another big steel producer, filed for bankruptcy protection. Earlier this week, the company said that it would temporarily lay off 1,400 employees in Ohio and Pennsylvania....
["Temporarily" with no end date is "indefinitely," especially given the current crisis in the US steel industry, and people can't live without income indefinitely, so we're counting this as a straight downsizing.]
- Covad Communications [Group] to lay off 400 more workers, Bloomberg via NYT, B3.
...A money-losing provider of fast Internet service [will] lay off...about 14% of its remaining staff. Sales, marketing and other employees in the eastern and central parts of the country will be affected. The company, based in Santa Clara, Calif., also [will] shut down service in about 10% of its coverage area. Covad [also] eliminated 400 jobs [11/28, 3d item].... The company's major rivals, ...NorthPoint Communications Group..., RCN...and SoftNet...have all announced jobcuts since November.
- Cybex International Inc., NYT, B3.
...Medway, Mass., a maker of fitness equipment, [will] lay off 26% of its workers and post losses for Q4 and the year. The company will take a $1.5m charge against Q4 earnings related to the layoff of 169 of its 650 workers and the departure of 4 senior executives....
12/28/2000 7 downsizings reported, totaling 2,192 +unspecified lost jobs,
- Montgomery Ward to close its doors, by Kaufman & Deutsch, NYT, C1.
...The company..\..once the greatest American retailer [now] owned by General Electric, \will\ go out of business after 128 years...close its 250 stores...and dismiss the 28,000 associates who run them in the coming months. It filed for Chapter 11 bankruptcy court protection yesterday for a second and final time and eliminated 450 national jobs immediately.... Ward said the disappointing holiday season was the final straw. "Sadly, today's action is unavoidable," said Roger Goddu, chairman and CEO....
[Really? Wonder what would have happened if they'd never been taken over by GE.]
- American Standard to cut 1,200 jobs and close a plant, Bloomberg via NYT, C3.
...A [Piscataway NJ-based] manufacturer of automotive and building products [will] cut costs by eliminating 1,200 jobs, or about 2% of its workforce, and by closing one of its plants, though it had not decided which one. The moves stem from a yearlong re-evaluation of the company's operations by its chief executive of 14 months, Frederic M. Poses....
- LTV says it may file for Chapter 11 protection, Bloomberg via NYT, C3.
...The company told officials in Ohio, where it has several plants, that falling steel prices and 8 consecutive quarters of losses had pushed it to the brink...despite cost-cutting moves like the 500 layoffs announced Dec. 6....
[And not picked up by the NYT then.]
- J. Baker hit by Bradlees bankruptcy, by Chris Reidy, Boston Globe, C1.
...On top of the 9,800 Bradlees employees who could be out of work after the chain completes a liquidation it proposed to a US Bankruptcy Court earlier this week...the 411 J. Baker employees who work at 105 Bradlees discount department stores probably will be laid off when Bradlees closes its stores..\.. Canton-based J. Baker Inc. now operate licensed shoe departments for a number of retail chains, including Bradlees....
- ECI Telecom to cut 400 jobs as part of a revamping, Bloomberg via NYT, C3.
...Israel's largest telecommunications equipment maker [will] eliminate 400 jobs, or about 12% of its workforce, to reduce costs. The cuts are part of a reorganization that is scheduled to break ECI into 5 separate companies at the end of the year....
- Breakaway Solutions eyes loss, layoffs, Bloomberg via Boston Globe, C7.
...An Internet consulting company...will cut 20% of its workforce, after originally planning to fire 10%, in a move that will save the company $10m annually. ...Boston-based Breakaway, whose shares have fallen 97% this year, will cut 185 jobs. The company has about 925 workers....
- A.T. Cross to close distribution site, Bloomberg via Boston Globe, C7.
...A ballpoint and fountain pen maker [will] close its distribution facility in Ireland and cut about 60 full-time jobs, or about 8% of its worldwide workforce, to trim costs.... Cross eliminated 100 jobs at the plant in February [2/19, 2d item], when it consolidated manufacturing operations in Rhode Island and said it would use the Ireland facility as a distribution center for markets in Europe, the Middle East, and Africa....
[The NYT version is shorter but does have some additional info -]
A.T. Cross Co., NYT, C3.
...Lincoln, RI, the pen maker [will] close its distribution center in Ballinasloe, Ireland, and eliminate the remaining 60 fulltime jobs there....
but first, an industrywide story, in three versions -
Dot-com job cuts hit new record in December - report, Reuters 08:24 12-27-00 via AOLNews via RadioTony.
Jobcuts at Internet companies rose 19% in December to a record 10,459, according to a report released Wednesday by recruitment firm Challenger, Gray & Christmas Inc [CGC]. The previous one-month high was November's 8,789 cuts.
[That's quite a name. First it's a challenge to all the happytalk and to all the salaries of all our "smart" people, who are ineffectual at solving the problems the CGC reports present. Second, those reports present a pretty gray picture of our present and our future. And third, this gray picture is quite a contrast to the warm colors of Christmas.]
Challenger, Gray has recorded 41,515 jobcuts at 496 companies since December 1999, when it began tracking layoffs in the dot-com world. [By comparison,] for the 12-month period, the services sector - such as consulting, financial and information - accounted for [only] 19,535 cuts.... Retail accounted for [a mere] 9,523 cuts....
Recent casualties included:
[Then they give an alternate list to the one we've presented below (12/20, 2d item). We present only their two additions, but again, we won't add them to our YTD figures lest we get too far removed from figures originating in the New York Times and the Boston Globe -]
[Two of their other figures diverge from ours. They say Salon.com reduced its staff by 20% or 15 employees; we got 20% or 25 employees below on 12/21. They say Ask Jeeves cut 25% of its workforce of 180. Based on an AP report we dug up on 12/13, 5th item, they should have said "cut 25% or 180 of its workforce of 720." Now some extra info from the Business Wire and the AP version that appeared in the NYT -]
- Digital software maker Sonic Foundry, which cut its staff [of 408] by [163 positions or] 40%, to 245 employees, citing a slowdown in the personal computer market.
- E-mail marketer MessageMedia Inc., which cut 100 jobs.
More than 2,300 jobs cut at Bay area Internet firms in December, Business Wire BW2109 DEC 28,2000 12:50 EASTERN via AOLNews.
The hopes and dreams of Internet startups have turned into nightmares in 2000. For the last three years, working for an Internet company was the hottest and coolest place to be. But startups that promised to change the world have done little more than lose millions of dollars of investor money.
[No, they did one other extremely important thing - they got investors to put that money where somebody could actually spend it, prop up consumer demand, and postpone the collapse of spending and demand and supply and output and jobs and earnings and spending power and more consumer demand - in short, they postponed the vicious circle of depression. Now the question is, is there anything else so glitzy that it can seduce "investors" into spending on the same scale and continue the postponement of the next great depression?]
The month of December has been a particularly rough period for employees at Internet companies in the San Francisco Bay area. According to figures compiled by Bay Area employment site ValleyJobs.com....more that 2300 layoffs have been announced at over 20 firms [in both] public and private [sectors, such as (mentioning only the ones we haven't seen before -]
Dot-com cuts rise in December, AP via Boston Globe, E5.
- ...Ventro...a builder of b2b online exchanges in Mountain View is cutting 235 workers...
- Organic, a San Francisco consulting firm...270...
- Riffage, an online music site...60...
- Spinway, a provider of free Internet service...closed and its service is now run by Bluelight.com..\..100
..."The two halves of 2000 were like night and day for dot-commers," the company's chief executive, John Challenger, said.... Between Jan. and June...the Internet sector cut [only] 5,097 jobs. From July through Dec., 36,177 reductions were made..\.. "In the first six months, all you heard about were job fairs, lavish recruiting parties, and after-hours mixers where would-be entrepreneurs hoped to meet free-spending venture capitalists. Now, pink-slip parties are the rage."...
Although December marked the 7th consecutive month in which Net job cuts rose over the previous month, the rate of retrenchment has slowed, the group said. The number of layoffs in November represented a 55% increase from October, when the sector cut 5,677 jobs. But Challenger said he was pessimistic that Net firms would stop losing jobs any time soon. "My guess is there's more pain to come," he said....
[And now, today's slice of that pain -]
12/27/2000 2 downsizings reported, totaling 98 + unspecified lost jobs -
- Union Pacific planning to cut about 2,000 jobs, Bloomberg via NYT, C3.
...The railroad company based in Omaha \will\ cut 2,000 mgmt and union jobs, or 4% of its workforce, early next year.... U.P. and other railroads have reported declining shipments of chemicals, grain and other products in December as the U.S. economy slows.
- Digital Broadband [Communications (DBC)] files for Chapter 11 - DSL provider to go out of business by Jan. 12, by Peter Howe, Boston Globe, E1.
...DBC plans to shut down for good and lay off the roughly 75 employees that remain \after\ firing 450 people [2 weeks ago - see 12/15 below].... ...The 2-year-old startup [based in Waltham, Ma.], which landed a potentially lucrative contract to supply Internet access to Bay State schools and municipal buildings, said it found no buyers for its DSL business and no other "strategic alternatives" to stay in business....
- Compaq shuts development unit, by John Markoff, NYT, C3.
Compaq Computer...cut about 50 [25%] of the 200 jobs in its corporate research [center], shutting down a business-development and marketing division and closing an Australian advanced-development group.... Compaq said the layoffs, which took place on Dec. 20 and included support and marketing employees, would allow it to focus more resources on 2001 initiatives like wireless technology development and new software initiatives..\.. The research center...was acquired in Compaq's merger with Digital Equipment [and] has been responsible for a number of technical innovations, including the Alta Vista search engine....
- Bilingual Web site, Quepasa.com, going out of business, AP via Boston Globe, E5.
...A bilingual website geared toward Hispanics...has been seeking a buyer since May. It fired 38 of its 58 employees [66%] Nov. 14, the day before announcing Q3 losses of $7.9m.... The Quepasa site includes a search engine, free e-mail, free webpages, Spanish language newsfeeds, chat rooms, games, maps and message boards.
- Another dot-com fails..., by Beth Healy, Boston Globe, E8.
...The online funeral service Legacy.com of Evanston, Ill...fired half [= 50%, say 17] its 33 employees in a restructuring.
[This one sounds like the all-time stupidest dot-com concept.]
- Founder of BabyStripes.com crafted site out of business, by Josh Hyatt, Boston Globe, E4.
...A year ago it would have been inconceivable that [former president and CEO Larry] Siff's well-crafted [Newton, Ma.-based] venture, which employed 12 people [100%], could have disappeared so abruptly. But by last summer, just around the time he happened to be looking for additional funding, investors had completely soured on Internet retailing. "We anticipated the bubble's bursting, but...not to the degree that it burst," Siff notes....
["BabyStripes" - sounds like B&D for babies.]
- Another dot-com fails: BizBuyer.com, by Beth Healy, Boston Globe, E8.
...A Santa Monica, Calif., company that handled online requests for quotes for businesses, will shut down. The company said it had $35m in cash, according to the VentureWire news service, but will return the money to investors because profitability was still far off....
[So, unspecified layoffs.]
12/24/2000 1 weekend economywide-downsizing story, totaling 480,000 lost US jobs Jan-Nov/2000 (excluded from our YTD company-specific total) -
- EarthWeb selling most of its Web sites and news services - A Silicon Alley company suffers along with other Internet businesses, by Jayson Blair [=Times reporter who resigned leaves long trail of deception, 5/11/2003 NYT, A1], NYT, C3.
...One of the first Silicon Alley [NYC] content companies to make a splash with its IPO...plans to lay off...98 of the company's 350 employees [28%]..\.. EarthWeb officials said they would continue to operate their business as a recruiting company for technology workers.... EarthWeb [was] founded in 1994 to design Web pages..\.. EarthWeb, which has its HQ on Park Ave. in Manhattan, [will] close its offices in Boston, San Francisco and Boulder, Colo....
- Oji Paper Co., NYT, C3.
...Tokyo, Japan's biggest papermaker [will] set up a sales venture in July 2001 with three of its affiliates, a move that could accelerate consolidation in the Japanese cardboard business. Oji and the three affiliates, Takasaki Sanko Co., Chuo Paperboard Co. and Hokuyo Paper Co., will together seek to reduce costs by 1.5B yen by pooling marketing operations in Japan and cutting staff...
[So, unspecified layoffs.]
12/23/2000 3 downsizings reported, totaling 5,500 + unspecified lost jobs -
- Job cuts and layoffs beginning to pile up across US, by Terril Jones & Lisa Girion, LA Times via Boston Globe, E10.
...further evidence that the end of an unprecedented stretch of economic growth might be heaving into sight.
[These sound like the words of a couple of holding-out-to-the-last true-believer cheerleaders. And here's a B-school prof -]
...Says Ray Hilgert, professor of management and industrial relations at the Olin School of Business at Washington University in St. Louis..."People forget that part of a marketplace economy is adjustments, and we're long overdue for one."
[Note the pre-1930s assumption that a "marketplace economy" is self-adjusting in the sense of "adjusts itself back to a healthy near-full-capacity operating level." This assumption was completely blown away by the Great Depression, during which indefinite equilibrium was reached at levels much much lower than near-full-capacity. Notice also the inference that the current downward "adjustment" was part of a self-adjusting "act of God" when arguably it was triggered prematurely by the Fed's rate increases in hopes of avoiding wage-push "inflation" (actually closure of the income gap) and/or deeper "adjustment" later. There is some hope embedded here rather inarticulately however, because Terril and Lisa mention 2 forms of timesizing without actually distinguishing them -]
More than 480,000 layoffs have been announced through November this year, 53% of them since July, according to the Challenger [Gray & Christmas] report.
[We have a year-to-date (YTD) total so far of 631,650 layoffs, but that figure also includes any layoffs outside the U.S. that happen to be mentioned in either the New York Times or the Boston Globe (or occasionally on AOLNews).]
The automotive sector was leading all others with 59,621 announced job cuts for the year through November, followed by retail with 56,623.
Rust-belt workers are being largely spared from widespread layoffs for now because auto makers and other manufacturers are taking steps such as eliminating overtime. Affected workers suffer some limits in income, although auto workers maintain 95% of their pay during downtime....
[Actually, eliminating overtime is not characterizable as "downtime" or payable at 95%. Both refer rather to the kind of sporadic weeklong furloughs that the Big 3 have been having at various plants (notice how we can't refer to auto production facilities as "factories," only "plants" = the apotheosis of the auto worker?). So (1) we have overtime elimination here, which is a good timesizing-not-downsizing strategy except under timesizing, the overtime would have been harnessed to target and fund training&hiring and would never have been allowed to become anything but an emergency recourse, in contrast to many of the auto plants where is has apparently been allowed to drift into permanency - in blatant violation of the clear intention of the overtime section of the Fair Labor Standards Act (FLSA) of 1938 and of workers' self-interest (though unions today are often as stupid and near-sighted as CEOs in terms of standardizing crisis management and perpetuating overtime). Granted the FLSA was so poorly designed that it failed to guarantee its intention, but that's where the timesizing modifications come in. And (2) we also have here weeklong furloughs at less than full pay, another good timesizing-not-downsizing strategy, though under timesizing this is a lot less jerky and ad hoc - timesizing does it by trimming hours off the workweek, not weeks off the workyear or workmonth. And timesizing does not wait this long to start, but is more frequently making adjustments, for example, once a month, rather than waiting with its fingers crossed and its eyes tightly shut hoping the sales slump will go away. So never mind all the really disastrous personal situations of the people who completely lost their jobs. Cheerleaders Terril and Lisa focus on the most cushioned employees of the downturn, the auto workers, and explain how it's still bad -]
But their lighter paychecks and the psychological uncertainty that goes with it translate to lower consumption, so there is a ripple effect as consumers choose not to trade in the family clunker.
["Ripple effect" - that's the term when an accepted (though destructive) capitalist process rolls along. Can't use the term "domino effect" because we identified that one too closely with the negatively spun communist process of taking over southeast Asia country by country.]
Pressure from Wall Street on corporations to boost profits has intensified, especially with the bust of so many dot-com companies originally believed to have high potential.
[= The desperate insistence of fat speculators.]
Demands by the Street and influential investors have forced companies to make tough decisions sooner than they might have in previous years.
[So these speculators, let's call them what they are, have made short-term oriented CEOs even more short-term oriented. Truly an economic design that allows pressure to be exerted by those with the shortest-term view and the least extended self-interest is a formula for a huge deep downturn and waning competitiveness compared with economies that have even a slightly longer term view, such as Europe.]
There was a time when employers were reluctant to lay off workers at the holidays. But since 1995, December layoffs have been significant, led by 103,166 in 1998.
[But this Dec. may beat that.]
12/22/2000 5 downsizings reported, totaling 20,368 lost jobs -
- Outboard Marine makes bankruptcy filing, Reuters via NYT, B14.
...The company, based in Waukegan [Ill.] also plans a significant reduction in its North American work force, potentially affecting 4,000 salaried and hourly employees....
- European arms maker may cut jobs, Bloomberg via NYT, B14.
The European Aeronautic, Defense & Space Co. [EADS] said this week that it might eliminate 1,500 jobs, or about 9% of the work force at its missile and military electronics division, to restore it to profits at a time of shrinking military budgets.... About 550 jobs could be lost in Germany and 950 in France, mostly in military electronics and administration..\.. Plant closures are also possible, it said..\.. [EADS will] also sell poorly performing divisions, subcontract out some work now done in-house and make acquisitions to complement existing businesses..\..
The company, which is...the Continent's largest aerospace company...is accelerating a restructuring after it suffered a first-half loss before interest and taxes of...$57m this year....
- Dairy to shut factory faulted in food scare, AP via NYT, B14.
[Japan's] largest dairy company...is shutting a factory that allegedly produced tainted milk, which sickened 13,000 people in [the nation's] worst food poisoning case. The announcement by Tokyo-based Snow Brand Milk Products was make as the company tries to bring closure to an incident that dealt a heavy blow to its sales and to public trust in the food-processing industry.
[Ergo, unspecified layoffs.]
12/21/2000 1 downsizing reported, totaling 25 lost U.S. jobs -
- New consumer pessimism sends a chill through factories, by David Leonhardt, NYT, C6.
...Yesterday, Lucent Technologies...disclosed layoffs....
[No figures, so we search AOLNews and find -]
Lucent to take charge, restate 4th-qtr, person says, Dec/21/2000 2:36 ET Bloomberg via AOLNews.
Lucent Technologies Inc...plans to take a charge of at least $1B for slashing jobs and to restate its fiscal Q4 sales a 2nd time, according to a person familiar with the situation....
[Oh there's a real quotable source!]
Chairman and CEO Henry Schacht is counting on a restructuring that may include thousands of jobcuts to return Lucent to profitability.... Lucent is waiting for a final headcount this quarter to finish calculating the number of positions it needs to eliminate, the person said..\.. Tom Lauria, an analyst at ING Baring Securities Inc...said he expects the company to cut about 10,000 jobs, largely in areas such as voice switching, public relations, finance and sales....
[We always lose a lotta confidence in troubled companies that cut sales staff.]
- Report: Bradlees to liquidate, AP-NY-12-22-00 0953EST via AOLNews.
Discount retailer Bradlees Inc. is on the verge of liquidation, which could put thousands of workers on the street...the Boston Herald...reported Friday.... The Braintree, Mass.-based company may file for bankruptcy protection soon to ensure an orderly liquidation.... The company reportedly has 10,000 workers. Frank Magiotta, a spokesman for a union that represents about 1,800 Bradlees workers at 16 New Jersey and New York stores, said, "We have not been officially informed by the company of any of their plans...."
[This finally showed up in the NYT -]
Thousands of Bradlees employees to lose jobs as bankrupt discount chain closes its stores, by Eun Koh, 12/28/00 NYT, A20.
As the regional discount retailer Bradlees prepares to close its doors within the next 2 months, 4,700 employees in 54 of its stores in NY, NJ, and Conn. will soon find themselves without jobs.... The chain has 51 other stores in Ma., Me., NH, and Penn., and employs [a total of] 9,800 people.
[9800, 10,000 - close enough.]
- Sensient Technologies, NYT, C4.
...Milwaukee, which supplies flavors to the food industry [will] take a Q4 charge of $19m...as it consolidates manufacturing plants in Europe and the U.S. As part of the plan, Sensient is eliminating 200 jobs, or about 5% of its workforce, mostly in positions outside the U.S.
- As consumers turn pessimistic, factory workers feel the chill - Lower sales, shrinking hours and more layoffs, by David Leonhardt, NYT, front page.
...Soon after Thanksgiving, Frigidaire announced that it would lay off 130 workers almost immediately. Last week, plant managers told workers that 28 more people would lose their jobs before the end of the year....
[So, 130+28 totals 158 jobcuts at Frigidaire.]
- New consumer pessimism sends a chill through factories, by David Leonhardt, NYT, C6.
...Murata Wiedemann in Charlotte NC...employs 110 people, down from 120 earlier this year....
[So, 120-110= 10 jobcuts at Murata Wiedemann.]
(We are carefully avoiding doing any searches on AOLNews today that might break the illusion that there is only one group of people losing their jobs this 4th day before Xmas.)
12/20/2000 2 downsizings reported in the NYT (& Boston Globe), totaling 1,323 lost U.S. jobs -
- Salon.com is cutting work force 20%, Bloomberg via NYT, C4.
...An online news company...based in San Francisco..\..which runs a money-losing Web news magazine, [is] cutting 25 jobs...in a bid to cut expenses and speed a plan for the company to earn a profit....
We went on AOLNews to decide whether "Fedders temporarily shutting its 3 main plants," Reuters via NYT C3 constituted a downsizing story (too little information to include as either downsizing or timesizing), and while we were there we decided to see if there were any other downsizing stories not picked up by either the New York Times (NYT) or the Boston Globe. We searched on 'downsizing,' 'job cut,' and 'layoff.' The result was an eye opener. Just taking stories with downsizing obvious from their titles, we got an additional 9 unique downsizing stories, all filed on 12/19 except one filed on 12/18 at 10:36 am (Cavion). The 9 are: Cummins 1500 jobcuts, Onvia.com 180, Answerthink 150, Intermet 150, Analysts International 120, Standard Chartered Grindlays Bank 100 in India, VirtualFund 91, Cavion Technologies 69, and Beenz.com 25 US & 18 UK, totaling 2403. This gives us some idea of what the NYT and the Globe are missing, and we didn't even explore the many stories listed from the searches but with nothing explicit in their titles. Maybe this is where JWT Reports gets the extra downsizings they list - though published a week late (see top of page, intro para.). We also found a good general article, "Employers begin paring jobs," by Adam Geller, AP-NY-12-19-00 0012EST via AOLNews, which begins -]
- Norfolk Southern to cut 5% of hourly work force, Bloomberg via NYT, C3.
...[that is,] eliminate more than 1,300 union jobs [and is] considering laying off managers for the first time in 15 years. Norfolk Southern has been trying to cut costs in the 18 months since it divided Conrail with the CSX Corp., leading to traffic snarls and delays. The high cost of fuel and the falling volume of freight made cost-cutting more urgent, the company said. Earlier eliminations of management jobs [15 years ago??] were carried out through voluntary early-retirement offers....
[So does this imply they're going to try to do it this way for the 1,300 union jobs? Or just for further (15-yr-later?) management jobs if they decide to lay off managers again? All in all, a poorly written article.]
- DDB Worldwide to cut staff at Griffin Bacal, by Stuart Elliott, NYT, C5.
...after losing its large Hasbro toy and game creative account. Of the agency's 68 employees in New York, about a third will be laid off by March 31 and another third will be shifted to DDB, which gained the toy account.
[Shell game alert!]
The remaining third will stay at Griffin Bacal....
[So a third of 68 is 22.6 or 23 jobcuts rounded.]
'Tis the week before Christmas, but some employers are hardly delivering messages of good cheer to their workers.... Instead, a growing number of firms are cutting jobs with unnerving zest, evidence that a national economic engine that once seemed unstoppable is beginning to cough and sputter a bit.... "It's like 'Merry Christmas. You're laid off,'" said Dave, an employee at Gillette's South Boston shipping and receiving docks who asked that his last name not be used. "We heard this was coming months ago. They tell you not to listen to the rumors, and now they're all turning out to be true." Elaine Korisianos, a...Northeastern Uninversity student about to complete an internship at the company, agreed. "Everyone's morale is going to be affected," she said. "This is going to be hard to take."... Many analysts say the layoffs are in line with their projections of a "soft landing" for the economy early next year bringing slower, but sustained growth with minimal inflation.
["Soft landing" on what assumed solid surface?? "Sustained growth" sustained by what?]
But others see signs of danger. "As a snapshot, it is not bad. But if you look at it in the longer term, as the economy slows even further, yes, this is definitely going to become a much bigger problem," said..\..Mallika Ishwaran, an economist at the Levy Institute Forecasting Center....who forecasts a recession by the middle of next year.
[The Fed still has a long way down to go in interest rates, but when the unbalanced concentration of income and wealth gets so tight that not even zero interest rates help, as in Japan, then only centrifuigation via Timesizing will help. So far the spreading crevasses beneath the surface have only penetrated our big sycophantic media to the point where Greenspan has only quit upping rates. See today's "Investors show displeasure as the Fed lets rates alone," by Kenneth Gilpin, NYT, C1, and "Fed , shifting goal, stresses fighting risk of recession - Fears over inflation dim," by Richard Stevenson, NYT, front page. Alan isn't yet ready to start rates on the down path, though that in itself self-defeats: it makes it easier for companies to borrow and expand but by lowering the 'money rent,' it decreases the inducement for lenders to shoulder the heightened risk of lending into a shrinking consumer base. Guess we should just be grateful for the crumb - that is loosening his fixation on inflation and that leaves possible recession, i.e., un(der)employment and choked-off spending on the plate.]
12/19/2000 record 13 downsizings reported, totaling 9,724 + unspecified lost jobs mostly in the U.S.,
breaks previous record of 10 downsizings on 12/07/2000 (3,285 cuts) -
12/17/2000 1 weekend industrywide downsizing reported -
- Aetna to shed customers and jobs in effort to cut health care costs, by Milt Freudenheim, NYT, front page.
[Hey at least this company's being honest about wanting to cut customers as well as employees.]
...The nation's largest health insurance company [will] shed 2m of its 19m customers over the next year as it raises premium charges and struggles to make its troubled managed care business more profitable. The company also announced plans to eliminate 5,000 jobs, about 13% of its workforce. The cuts, more than half from attrition, will include some reductions among its 2,300 employees in New Jersey.
About 1.5m of the departing customers will be employees of companies that drop Prudential Health Care insurance rather than pay steep premium increases...[of] 11-13% [which] risks losing some of its best customers - the younger, healthier ones who have relatively few problems and who can look for better buys at other insurance companies..\.. Aetna bought the Prudential unit in 1998.
[So this is another big example of the destructiveness of merger mania.]
Aetna plans to close unprofitable HMOs that insure 340,000 Medicare beneficiaries and sell or close HMOs that cover 300,000-350,000 employees of private companies.
[Keep going, ye captains of American industry! You'll bring American healthcare down and the whole once-solid American economy as well.]
Companies in other industries, including credit card companies, are also trying to discourage unprofitable customers by raising fees, while many other companies, including airlines and department stores, woo the type of customers they find most attractive and give them extra service or better prices, or both....
[Yes, today's desperate CEOs only want to serve the wealthy, and 'tuff noogies' if that creates class divisions - as usual, they'll just turn around and accuse their employees of starting "class warfare." The wealthy better hurry up and explore systemic ways of centrifuging wealth and reinvesting profits in rebuilding general consumer markets, such as Timesizing, or they're going to constitute the only surviving markets, as in the Depression, and be so bothered by desperate salesmen, it'll be like sleeping in a swamp with no mosquito netting.]
- Gillette to cut 8% of work force, pointer digest (to C2), NYT, C1.
Gillette [will] shut down 8 factories and 13 distribution centers and lay off 2,700 employees [as] a result of new technology that allows the company to increase its productivity and efficiency.
[Oh but according the mainstream economists like Paul Samuelson, this simply cannot be true, because "technology creates more jobs than it destroys" and anybody who says differently is spouting the "lump of labor fallacy" - the ignorant lie that there's only so much employment out there right now and - what nonsense! - we actuallly have to divide or share it by cutting the workweek instead of just laying off as many workers as we want and consigning them to the scads and scads of job openings out there. And as for the idea that the "lump" of employment may actually be shrinking - IMPOSSIBLE! Yes here it is in our latest edition of Paul Samuelson, appropriately the 13th, of 1989, p.687 -]
The Lump-of-Labor Fallacy - In periods of high unemployment, people often think that a solution lies in spreading the existing amount of work more evenly.... The lump-of-labor argument implies that there is only so much useful remunerative work to be done in any economic system, and that is indeed a fallacy. It is more correct to say that an economy can adjust to create jobs for willing workers.
[Yeah, Paul, they're called sweatshop jobs for long hours and low pay, or government makework.]
In the longer run...
[Sorry Paul. We're only talking about the immediate "run" here. Anything can happen in "the longer run," but people are getting laid off in droves here and now, and that's what we've got to deal with.]
...A look at history or across countries shows that there is no fixed lump of labor to be distributed -
[Apparently "history" for Paul Samuelson only begins with World War II. He seems quite unaware of the previous 160 years of American history when, far from expanding or being "fixed", the lump of labor was actually diminishing, and that's why things worked out so well when we spread or distributed the work more evenly by cutting the workweek in half over that period, from 80-84 hours per week per person in the 1830s and before to 40 hours per week per person in 1940. What gall to cite history and limit it to less that the last two generations. And as for "across countries," he himself said "The lump-of-labor argument implies that there is only so much useful remunerative work to be done in any economic system" and here he is trying to argue against it on the basis of other economic systems. We're not talking about the longer term or multiple economic systems. And if we look at a huge company like Gillette as an economic system unto itself, let's just rub Paul's nose in the news story - "Gillette [will] shut down 8 factories and 13 distribution centers and lay off 2,700 employees [as] a result of new technology that allows the company to increase its productivity and efficiency." But Paul Samuelson must have lived a very sheltered life. This situation is inconceivable to him. Back to him -]
- there is no need to ration out scarce work among...unemployed workers.
[No Paul, you would just let them starve, we suppose. Blame the victims. "Why aren't they just going and picking up a job in "history or across countries"? Your arguments imply that there's no such thing as "lightening the burden by sharing the load." Consider that we could map this whole discussion over into the realm of food, and you'd find yourself arguing against the Lump of Food Fallacy (with typical malapropism, you'd call it the Lump of Hunger Fallacy of course), as if starvation is a game and people never really starve because "in the longer run" there is "no need to ration out scarce food" among starving people. Truly you are so immersed in rationalizing the status quo, however distorted, that any mention of systemically sharing anything scarce in economics triggers flights of pre-emptive ICBMs, however irrelevant, out of your well-fed cloister.]
- Solutia to cut 700 to 800 jobs because of fuel costs, Bloomberg via NYT, C4.
...The St. Louis-based specialty chemical mfr [will] eliminate [let's call it 750] jobs, trim its senior mgmt ranks by 20% and look for other ways to cut costs because the high price of natural gas, both an energy source and a raw material for the company's plants, has eroded its results....
- InfoUSA to cut 325 jobs, Bloomberg via NYT, C15.
OMAHA - ...[A manager of] databases of consumers and businesses for marketing purposes [has] shut some divisions and eliminated 325 jobs to cut costs. Many of the cutbacks came at the company's Internet operation, InfoUSA.com. The company [has] closed its VideoYellowPages.com unit, scaled back BusinessCreditUSA.com and incorporated ListBazaar.com into its small-business group....
- After 5½ years, a labor war ends at 2 Detroit papers, by Steven Greenhouse, NYT, A20.
...Under the contract, the newspapers [Detroit Free Press and Detroit News] are to rehire 185 strikers, but are waiting for slots to open.
[Don't worry about it. "In the longer run" Paul Samuelson (see 3 above) assures us that there is no fixed number of slots.]
The newspapers [had] filled many positions with permanent replacement workers. About 200 other strikers are hoping to get their jobs back, but the company says it will not rehire them, insisting they were fired for wrongdoing.
[200 employees "done wrong" - doesn't really sound like "case-by-case firing for just cause."]
Most say they have done nothing wrong and are suing to get their jobs back.... "In terms of who won, the employer won..\..Steve Babson, a labor expert at Wayne State University in Detroit said.... "Mgmt basically implemented unilaterally what they had been trying to force the unions to accept in 1995 [open shop & no equivalent dues]. [But] they lost a lot of money [$200m] and pretty much trashed these papers [circulation dropped 30% during the dispute]."
- Adero Inc. slashes jobs in second wave of cutbacks, by Healy & Bray, Boston Globe, C3.
...A maker of software that moves information faster on the Web is in dire straits after having run through nearly $105m in 13 months. On Friday, the 2-yr-old Waltham [Ma.] company fired...as much as [188 staffers,] 75% of \the\ 250 people [it had] in September....
[When are venture capitalists going to smarten up to the fact that they need markets for the productivity they invest in, and if they, the venture capitalists, have concentrated past a certain threshold of money in their own pockets, there just isn't the active spending power out there to support their out-of-scale investments. We have been dismantling our centrifugal mechanisms in this economy for sooo looong now, going back before JFK weakened the graduated income tax in 1963 to as far as the Taft-Hartley Act which curiously, right after the War when labor still had some power, was able to deal employees several devastating blows that guaranteed an eventual dessication of active spending power and markets. You want all the money? Then forget about markets for your investments. You want to hold all the cards? Then forget about the game. The ocean may look infinite when we're just abusing it a little, but when we're abusing it a lot, it ain't infinite. Same with our consumer base.]
- Prudential Insurance is phasing out investment banking unit - Some housekeeping before becoming publicly traded, by Joseph Treaster, NYT, C8.
The Prudential Insurance Co. of America took a big step yesterday toward shutting down its long-struggling investment banking business as part of its reorganization into a publicly traded company. The subsidiary, Prudential Securities, dismissed 160 investment bankers [in favor of selling] through brokers.... Arthur F. Ryan, Prudential's CEO...has cut the company's workforce by 40,000 people and sold several units..\..since he was recruited from Chase Manhattan six years ago....
- Trading in Stan Lee [Media] halted, Bloomberg via NYT, C4.
...A creator of animated programs for the Internet, TV and the movies...on Friday...suspended production and laid off 140 employees from its HQ in Encino, Calif. The company had secured bridge financing and an equity line of credit, but those were contingent on a stock price that stayed about $1 a share [now 13 cents]. The company's founder, Stan Lee, created such comic book characters as Spiderman, the Incredible Hulk, and the X-Men.
- Layoffs at web portal, Reuters via NYT, W1.
The Chinese Internet portal Sohu.com Inc. [will] eliminate more than 100 jobs, or one-sixth [17%] of its workforce to cut costs.... The company said it was overstaffed after acquiring Chinaren.com in October.
- MVP.com lays off half its staff, AP-NY-12-18-00 1832 EST via AOLNews via RadioTony.
...The online sports and outdoors store \backed by\ Michael Jordan, John Elway and Wayne Gretzky...said Monday [12/18] it is laying off nearly half its staff of 166 and closing offices in Boulder, Colo., and Austin, Texas. The 79 layoffs [47.6%]affect 39 people in Austin and 20 each in Boulder and the company's HQ in Chicago. ...The job cuts were related partly to the company's acquisitions this year of Web retailers PlanetOutdoors.com and IgoGolf.com. Many of the functions of those sites were integrated into MVP.com. ...The firm has been hurt by the economic slowdown that hit Internet businesses first [and needs] to cut costs....
- Adero Inc. slashes jobs in second wave of cutbacks, by Healy & Bray, Boston Globe, C3.
...LearningBrands.com [in the Boston area] quietly shut down two weeks ago, firing all 50 employees. The designer of online courses for the marketing of products and services ran out of money just a few months after its summer move to bigger office space. Founder Ted Henderson...couldn't raise the $10m second round he was seeking in the fall....
- Red Herring [Communications] lays off 32, Bloomberg via NYT, C4.
...The [publisher of] the business and technology magazine Red Herring is cutting 7 editorial jobs and 25 engineering and programming jobs..\..or 9.4% of its workforce, as it closes an office in Cupertino, Cal., and combines its online and magazine editorial depts....
- G.M. to pare back vehicle lines to reduce its costs, Bloomberg via NYT, C4.
...After announcing last week that it would phase out the Oldsmobile brand and about 15,000 jobs..\..the General Motors Corp. said yesterday that it planned to eliminate one-fifth of its car and light-truck models by 2004 to further reduce costs....
[...presumably involving unspecified further layoffs.]
One of the three GM minivans will be among those eliminated.... The plan will reduce GM's line to 63 from 67 vehicles; a decade ago the company offered 115.
12/16/2000 3 downsizings reported, totaling 490 lost U.S. jobs -
- Canada taking larger role in movie trade, by Miki Turner, Boston Globe, N11.
TORONTO - This city always reminds you of someplace else. Detroit. [God forbid.] Philadelphia. [OK.] New York. [Peter Ustinov called Toronto "New York run by the Swiss."] Even Paris. [Well, not as much as Montreal or Quebec City.]
And now, Hollywood.
[Except that -]
..."The crews are wonderful, and it's first-rate in front of and behind the camera."
[- according to comedian/actor/director Robert Townsend.]
..\..If you happen to be wandering the streets of Canada's largest city these days, you're likely to run into more than a dozen film crews on Bay Street alone.... More than 50 feature films and cable movies were being shot in Toronto during my visit.... Toronto is the 4th-largest filmmaking market in the world and one of the centers of what those in the film industry call "runaway" production: the exodus of filmmakers fleeing the United States for the comforts of Canada....
[Have you Yankees any idea how gratifying this is to Canucks, whether anglo or franco, who have long had an acute case of peripheralitis?]
Nearly 81% of all runaway productions are shot in Canada.... Canadian production earnings for the past 6 months are topping $300m, up 15% from last year.
...Is the U.S. taking a beating today? ...According to..\..a study last year..\..commissioned \by\ the Screen Actors Guild along with the Directors Guild of America [DGA]...runaway production resulted in the loss of 20,000 jobs and $10.3B in revenues in 1998.... DGA president Jack Shear said, "...It is important to remember that the people who are being hurt by this are people who depend on steady work to feed their families and repay their loans and send their kids to college."
- ...lower production costs
- tax incentives
- a strong exchange rate [in Americans' favor]
- the fact that this city, with its
can be made to look like of lot of cities in the U.S. and even Europe.
- maple tree-lined,
- cobblestone streets [gee we don't remember those!]
- quaint cafes
- picturesque waterfront
- stately Georgian brick homes
- unattractive factories
[Oh is that so, Jack. What about the "tight job market" in the U.S. that we hear so much about?]
...Said..\.. Mark Winemaker, a Canadian producer..."There's an anti-Canadian sentiment in Los Angeles..."
[Oh beautiful! Canada and Canadians have always been so terminally nice that you could spell it b-o-r-i-n-g. Maybe now we can see the light at the end of the tunnel of L.A.'s and America's cultural imperialism. What has L.A. got to offer the rest of the world anyway but violence, urban sprawl and poor public transportation? Toronto has a subway so clean, you can eat off the floors of the stations. And being in Canada, it has buttertarts, which backward bakers and blind entrepreneurs have not even made available on the Web yet! Just try typing them in on any search engine. You can buy Xmas trees and even tumbleweed on the Web, but no Canadian buttertarts. Recipes galore but where there should be an outfit offering to express you a dozen of any one of the major brands (Country Oven, Flamingo, Grannie's) not to mention the incredible deepdish ones by the Mennonite farmers' wives near Markham, the Web offers nothing but recipes. (And God forbid, if we ever started foolin' with those recipes & learned how to make'em ourselves, we'd be far more obese than we are.) Check out our other big Buttertart Boost & Lament on 8/13/1999.]
- National City Corp. to quit financing auto leases, Bloomberg via NYT, B3.
...and [will] no longer offer mortgages through outside lenders, because neither activity lived up to profit expectations. \The\ bank holding company based in Cleveland [will] eliminate 200 jobs....
- A high-tech domino effect - As dot-com's go, so go the e-commerce consultants, by Jonathan Glater, NYT, B1.
[See "Cutbacks at another consultant" on 12/08 below for a list of the other 4 hurtin' e-consultants.]
...On Thursday [12/07], Agency.com, based in New York, announced that it was eliminating 11% of its employees....
[Multiple problems. No figure for actual number of jobcuts. And when we search AOL News for for that figure, all stories agree on 190 jobcuts but the only one that gives a percentage, "AgencyCom [sic] to fire 190, take 4th-qtr charge of up to $14 mln," Bloomberg Dec/14/2000 17:34 ET via AOLNews, says it's "about 8.8% of its staff." So where could the 11% have come from? A story on this from Reuters mentions in the first paragraph "a fourth-quarter charge of $11 million to $14 million"...? Jonathan was sloppy about the jobcuts. Let's assume he was sloppy about the percentage too and prefer Bloomberg's 8.8%. That would also put us in line with a tried&true principle of textual critics, the scholars who compare variant readings in ancient texts such as those of the Bible. The principle is "Legius difficilior potest" = 'the harder reading prevails,' 8.8 being harder to remember than 11 on at least two levels.]
- Shockwave.com sets AtomFilms takeover, by Amy Harmon, NYT, B3.
...Ron Burgess, chairman of Shockwave and of the unnamed new company [formed with newly acquired AtomFilms(.com?)] said that by consolidating the websites, adding Shockwave's technology expertise and its library of interactive animations and games to Atom's film library, and cutting about 100 [33%] of their 300 employees, the combined operation could be profitable next year.
Click here for downsizing stories in -
prior to Sept. 30/98.
For more details, our laypersons' guide to our great economic future Timesizing, Not Downsizing is available at bookstores in Harvard Square, Cambridge, Mass. or from *Amazon.com online.
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