Timesizing® Associates - HOMEPAGE

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Downsizings, Sept. 1-15, 2001
[Commentary] ©2001 Phil Hyde, The Timesizing Wire, Box 117, Harvard Square, Cambridge MA 02238 USA (617) 623-8080

9/15/2001  2 downsizings, totaling 2,566 jobcuts, reported in NY Times (NYT) and Boston Globe (BG) -

1. Switzerland: Job cuts at Europe's biggest chip maker, Bloomberg via NYT, C2.
   ...STMicroelectronics NV has reduced its workforce by 2,500 people or 6% , this year in an effort to cut costs as demand slumps for semiconductors. Most of the reductions have been through attrition.... Some workers at a wafer plant in Ottawa might leave the company, while several are being offered transfers. At most, 650 workers will lose their jobs involuntarily this year, the company said.

2. Canada: Wireless job cuts, by Bernard Simon, NYT, C2.
   A provider of high-speed wireless networking products, Wi-LAN, is cutting 55% [66 people] of its workforce of about 120 people in response to weakening market conditions. In a further austerity measure, the jobs of chairman, president and chief executive will be combined. Wi-LAN, which is based in Calgary, Alta., reported an operating loss of Can.$18.9m in the six months to April 30. Revenues fell 11% in the period....

1. Teradyne slices another 11% of work force, trims salaries, by Jeffrey Krasner, BG, D3.
   ...The Boston maker of computer test equipment and electronics...is taking steps to cut another...1,000 employees, half from layoffs and half with voluntary severance programs, bringing the head count to 8,000. About 120 layoffs are expected at the company's Massachusetts facilities, in downtown Boston and North Reading..\..
   Those left after [this] round of layoffs and buyouts will be forced to accept salary reductions of up to 15%. And the company says there's no guarantee thins won't get worse....
   The pay cuts will affect most of the remaining employees. Only those making $35,000 a year or less will not have their salaries reduced. The top 500 employees will take the maximum cut of 15%. In addition, annual performance increases, usually awarded in July, were delayed until next July. The only silver lining is an additional helping of stock options, with an exercise price near the current market price of $28.58 on Monday. Those options will vest over a two-year period.
   The cuts are the latest in a precipitous comedown for one of the state's former high-flying tech companies. In 2000, Teradyne soared, posting a 70% increase in revenue and a 59% increase in profit margin. Earlier this year..\..George Chamillard, Teradyne's president and CEO...warned that Teradyne was threatened by a sudden turnaround in the cyclical semiconductor industry.
   [We doubt it's cyclical. More likely erratic and quite possibly down for the count.]
   But the fall has been harder than even he predicted..\.. "The tragic events of September 11th are proof that we live in a very unpredictable world.... [Even] before the attacks of this week, our customers were choosing...to delay spending as long as possible...."
   [A later article, "Bracing for slow period, Teradyne moves to raise cash," by Beth Healy, 10/18/2001 BG, C7, summarizes, "Employees have taken the brunt of the resulting job cuts, as Teradyne has slashed 2,000 people from its payroll this year, or one fifth of the 10,000 people it had on Jan. 1. The latest cuts came Sept. 11, when the company laid off 500 people and accepted 500 voluntary retirements."]

2. Australia: Airline shuts down, by Becky Gaylord, NYT, C10.
   Ansett Australia, the only national competitor to Qantas, said early on Friday [today] that it would immediately suspend all flights. The airline...is being run by administrators from PricewaterhouseCoopers, who said daily losses were so high and the finances so weak that Ansett had no choice but to stop flying.
   [ So now we've got unspecified layoffs. Yesterday's story on Ansett's bankruptcy stated, "Ansett will continue to fly, at least for now, the company said." See 9/13/2001.]

• Yearning for a big army, if only for the paycheck - A town depending on income from housing soldiers is soon to lose them, by Steven Erlanger, NYT, B3.
  [Photo caption -] A program of military reforms will close the sprawling barracks in Eggesin, transferring soldiers, increasing unemployment and further complicating economic woes in one of Germany's poorest regions.
  EGGESIN, Germany...100 miles north of Berlin...has no industry beyond housing nearly 2,000 soldiers. The town already has an unemployment rate of some 25%...
  Now the soldiers...will move on.... In May, the Defense Ministry said it would reform the largely army forces drafted to fight the Warsaw Pact, cutting them by 100,000 in the next five years, a reduction of about 22%. Some 59 bases will be closed, troop levels will be reduced to about 280,000, and the number of draftees inducted each year will be cut to 80,000 from 130,000....

1. Anixter International reduces sales and profit forecasts for year, Bloomberg via NYT, C2.
   ...[A maker of] communications wire and cables reduced sales and profit forecasts for the rest of this year and said it would cut 14% of its workforce and close some warehouses. The company...is based in Skokie, Ill.... Customers are spending less, especially on expensive projects.... Anister employs 5,000 to 6,000 people, the CFO, Dennis Letham, said.
   [14% of 6000 is 840 jobcuts.]

2. Finland: Nokia's sales falling, Bloomberg via NYT, C5.
   ...The maker of cellular phones [will] meet its forecast for third-quarter, helped by cost reductions, even though sales are declining.... Nokia has already said it plans to cut 1,500 jobs this year to reduce costs....
   [On 6/29/2001, #3, we heard of 1000 jobcuts. So now we must count 500 more.]

3. Key3Media Group lowers 2001 revenue forecast, Bloomberg via NYT, C2.
   ...A producer of information-technology trade shows and conferences, pared its 2001 sales estimates and said that the company would cut 10% of its staff...in an effort to save $5m a year.

1. Qwest Communications to cut 4,000 jobs and reduce its expenses, by Simon Romero, NYT, C6.
   ...The operator of large fiber optic and local telephone networks [will] eliminate...6% \of its\ workforce of 66,000..\..by the beginning of next year, adding to the woes of the telecommunications industry.... About a third of the cuts [are] planned in or near Colorado, where Qwest is based, the company's CEO, Joseph P. Nacchio, said. Slower economic growth in the western United States is one reason for Qwest's troubles, he said....

2. Michelin to cut 2,000 jobs in North America, Bloomberg via NYT, C4.
   Michelin North America [will] cut...about 7% of its workforce, citing a downturn in tire markets and the need to increase its long-term competitiveness.
   [We're afraid mass jobcuts and "long-term" are mutually contradictory.]
   The company hopes to complete much of the reduction through normal attrition and voluntary severance programs.... The moves will affect employment at the company's plants in Granton, Bridgewater and Waterville, NS and Kitchener, Ont....

3. Gateway leaves Ireland and Britain, Bloomberg via NYT, C6.
   ...A direct seller of personal computers [will] dismiss all of its 1,050 employees in Ireland and Britain as part of a plan to concentrate on sales in the United States. The company will lay off 900 workers at its Dublin plant, which also served as its European headquarters , and 150 in Britain, where it has 14 stores....

4. Etc. - Pulp & Paper of America, wire services via BG, C8.
   ...Northern New Hampshire's largest private employer...shut its Berlin and Gorham, NH, mills last month and laid off most of its 860 workers.... [It] owes millions of dollars in property taxes in New Hampshire....

5. Etc. - PRI Automation Inc., wire services via BG, C8.
   ...A provider of factory automation systems...has reorganized and expects to post a Q4 pro forma loss of 39-45 cents a share before changes.... The Billerica firm [will] take a Q4 charge of $15-20m to cover costs, including facilities consolidation and severance costs. The company...expected jobcuts to minimal.
   [Unspecified jobcuts.]

1. France: Moulinex seeks bankruptcy, by John Tagliabue, NYT, B3.
   The big European household goods maker...best known in the United States for its food processors and Krups coffee makers, said in April that it would shut factories and lay off workers -
   [See the "not counting" section at the top of 4/27/2001. Now that the NYT has mentioned that April layoff, we can count the 4,000 layoffs involved.]
   last month it foresaw closing 3 of 31 plants worldwide and laying off 2,900 of its 20,000 employees - because mounting losses from flagging sales and strong competition from inexpensive Asian manufacturers....
   [So putting these together, we get 4000+2900= 6,900 total jobcuts, which is 6900/(4000+20000)x100%= 29%.]

2. Chile: Cut in troops, by Clifford Krauss, NYT, A5.
   In a major money-saving move, the 50,000-strong Chilean Army is cutting the number of its troops by 10%...
   [So, 5,000 jobcuts.]
   ...and retiring 300 officers.
   [We'll be conservative and regard them as included in the 5,000.]
   Senior officials said the move reflected reduced tensions with Peru and Argentina.

3. Genomic Solutions to cut 25% of its work force, by Bloomberg via NYT, B4.
   [Here we have one of those delightful little braindead reports that tells you everything but the bloody number of layoffs.]
   ...The maker of instruments and software used to develop gene-based drugs \will\ close a plant in Lansing, Mich., as...the company, based in Lansing, Mich..\..tries to become profitable next year.... Genomics Solutions, which markets its products to drug makers and universities, [will] move research and manufacturing from Lansing to Ann Arbor, and trim positions in the United States and Britain by the end of this year.
   [Bottom line, unspecified jobcuts. Correction. We just received an email from Carey Schoenig of Genomic Solutions dated 9/11/01 10:36:27 AM EDT, which says, "Dear Mr. Hyde, In response to your request, Genomic Solutions' worldwide workforce was approximately 175." This means that the present jobcuts numbered 175x25%= 43.75, rounding up to 44 jobcuts.]

1. More layoffs at Motorola, Bloomberg via NYT, C4.
   Motorola said yesterday that it would add 2,000 more workers to its previously announced jobcuts, bringing the total in the last year to 32,000.
   [No, according to 8/16, #2, this is the total of this year's jobcuts to be completed by year's end.]
   The company said that sales had been slower than expected....
   [Well, as of 8/16, #2, Motorola had 147,000-30,000= 117,000 employees. So today's additional downsizing constitutes 2000/117000x100%= 1.7% of the pre-cut remaining workforce.]

2. Overhaul of shipments and pretax charge set, Reuters via NYT, C4.
   The Kmart Corp., already in the midst of a large effort to improve its stores...plan[s] to overhaul the flow of goods from warehouse to store.... As part of the plan, Kmart will shut distribution centers in North Bergen, NJ and Carson, Calif., shifting their operations to existing sites in Chambersburg, Pa. and Mira Loma, Calif. The closings may lead to job losses. The operation in Carson has about 300 employees and the North Bergen plant about 500.
   [Totalling 800 lost jobs.]

3. Westvaco is set to close two packaging plants, Bloomberg via NYT, C4.
   ...[The firm] which agreed last week to merge with the Mead Corp. [will] close two packaging plants, eliminate 430 jobs.... The plants, in Richmond, Va. and Memphis, make packaging for consumer products and will be closed by mid-November.... The work will be moved to other Westvaco plants. Both Mead and Westvaco are shutting plants and cutting jobs ahead of their planned $2.6B merger, which they have said will reduce expenses and make production more efficient as demand and prices decline. Mead is based in Dayton....
   [The partitioned brains go on and on, assuming that downturn is some kind of act of God that they have nothing to do with, when their own repeated jobcuts are generating it.]

4. Finwick & West, a law firm, announces layoffs, Bloomberg via NYT, C4.
   ...A prominent law firm in Palo Alto, Calif., that grew rapidly during the dot-com boom, announced the layoffs of 32 associates and 15 paralegals yesterday as a result of the slowdown in the economy.
   [Totalling 47 jobcuts.]
   The firm, the latest to show signs of the strain of retaining high-wage young lawyers when business is slow, will provide a severance package that includes full salary and benefits through the end of the year and outplacement assistance. Fenwick & West has also told about half of the lawyers starting work this fall that they may elect to receive a similar package and look for a job elsewhere, said Gordon K. Davidson, chairman of the firm.

5. Dim Rawlings report, Bloomberg via NYT, C4.
   FENTON, Mo....- The Rawlings Sporting Goods Co., the maker of Major League baseballs...had lower-than-expected fiscal 2001 earnings.... Rawlings will...take a charge as it closes two facilities and consolidates their operations....
   [Unspecified jobs lost.]

6. Investment service closes its web site, NYT, C6.
   Netfolio, a New York company that sold customized baskets of stocks to investors over the Internet, has shut down that operation less than a year after it started....
   [Unspecified jobs lost.]

1. American International Group will cut 1,500 jobs, Reuters via NYT, C4.
   ...The world's biggest insurer [will] cut...less than 2% of its overall workforce over the next 12-18 months as it integrate[s] the life insurer American General Corp. [which it] purchase[d]..\.. Most of the layoffs...will come from several AIG and American General locations.... Other jobs will be shed by attrition. AIG has about 85,000 employees worldwide after its $23B purchase of American General....

2. Hercules to lay off 300 workers in cost-cutting move, Bloomberg via NYT, C4.
   ...A top producer of paper-making che micals [will] lay off at least...3% of its workforce as part of its workforce as part of a plan to save $100m a year. The jobcuts are mostly in the United States, which has about half of of Hercules' 9,600 workers, with fewer reductions in South America and Asia. They will occur by Sept. 30. Separate jobcuts affecting about 3% of the company's European workforce may be announced soon.... The cuts are part of a cost-cutting program announced in June....

3. Zefer shuts Hub operations - Firm fires 300, sells some assets - One Zefer engineer said he would receive neither severance nor health benefits, by Stephanie Stoughton, BG, C4.
   Internet consultant...has quietly closed down its Boston operations, firing about 300 remaining employees and selling some of its assets to...NEC.... About 180 of the employees have been offered positions with NEC....

4. Cheap Tickets to close L.A. call center, Bloomberg via NYT, C8.
   ...The seller of discounted airline tickets and hotel rooms, being acquired by the Cendant Corp., is closing its Los Angeles call center as it consolidates the number of reservation centers it operates. About 110 jobs will be affected by the closing.... Cheap Tickets will take a Q3 pretax charge of $1.7m...for the closing of the center and employee severance packages....

1. Once-strong pillar of Houston's economy looks shaky - As Hewlett-Packard cuts jobs, Compaq workers may take the brunt, by Richard Oppel, NYT, C11.
   ...Today, executives said they would cut 15,000 jobs, or 10% of the combined work force, assuming the deal closes next year....
   [The lethal takeover-downsizing connection. Followup: "Hewlett to quicken layoffs," Reuters via 6/05/2002 NYT, C4, which states, "Jeffrey Clarke, one of two executives handling the integration of Hewlett and Compaq, said he expected 4,000 people to accept early retirement. Another 11,000 will be laid off, allowing Hewlett to trim 10% of its work force of 150,000." And HP used to be a good company, a company that valued employees and had a policy against layoffs, but since Fiorina came in, HP has lost its reputation as a good company to work for. Previous layoffs this year occurred on 7/27/2001 #3 (6000 layoffs), 4/19/2001 #2 (3000) and 1/27/2001 #2 (1700). This last Jan. story gives the HP workforce as 88,500, meaning the Compaq workforce must be 150,000-88,500-1700-3000-6000= about 50,800.]

2. British phone gear maker to cut another 2,000 jobs, by Alan Cowell, NYT, W1.
   LONDON - ...Marconi, Britain's battered telephone equipment maker, said [yester]day that...its would eliminate 2,000 more jobs, half of them in the United States. It also reported an operating loss of $329m in the quarter ended June 30....
   [This brings our running workforce total for Marconi of 52,000 on 7/05/2001 #1 down to 50,000 even.]

3. Britain: Layoffs at airline, Bloomberg via NYT, W1.
   Europe's largest airline, British Airways, said yesterday that it would cut 1,800 jobs, or 3% of its workforce, by the end of its fiscal year.... The job reductions will come through voluntary departures and through attrition.... British Airways cut 3,000 jobs in the last fiscal year.

4. Mead to close Atlanta plant and take $7m charge, Reuters via NYT, C4.
   ...The paper company that recently agreed to merge with the Westvaco Corp., said yesterday that it would close its Atlanta, Ga. plant...Nov. 5..\.. The plant has about 215 employees, the company said....
   [The lethal takeover-downsizing connection.]

• A software maker closes shop and will sell its assets, Reuters via NYT, C2.
  ...NetObjects Inc., 48% owned by IBM,...shut down operations and [will] sell its assets as quickly as possible. The announcement on Saturday ends the downward spiral that the company, based in Redwood City, Calif., has been riding for several months....
  [Unspecified lost jobs.]

1. Hitachi, facing a big loss, plans to cut 14,700 jobs - A rough 10 days for Japanese industry, by James Brooke, NYT, B3.
   ...Japan's largest private employer announced today that it would cut 4% of its workforce...by March - 10,200 in Japan and the remaining 4,500 overseas.... Of the [cuts] in Japan, 7,200 will be by attrition..\..
   The company, which exports electronic gear, said the need for staff reductions stemmed from the slump in high technology and from the company's expected loss this year of $1.2B. Hitachi joined a parade of technology companies - Fujitsu, Toshiba and Kyocera - that have announced cuts over the last 10 days.
   The news came as economists predicted that Japan, the world's second-largest economy, was experiencing negative growth and falling into recession.
   [Negative growth is no problem for a timesizing economy, just for a downsizing economy.]
   
   • During August, the Nikkei stock index tumbled 1,000 points, ending this week at lows not seen here since 1984.
   • Also during the month, the yen appreciated by 5.1%, squelching Japan's hopes for a traditional export-led recovery. Auto exports have fallen every month of this year, with July's exports running 6.3% below the level of July 2000.
   • "The climate surrounding the global information technology industry is getting worse and worse as each day progresses, and we cannot see a bright future for demand at the moment," Hitachi's president, Etsuhiko Shoyama, told a news conference here this afternoon. "We're in quite a tough situation right now," Mr. Shoyama said. ...He hinted that further job cuts could take place if the world economy did not rebound....
     [What colossal stupidity. How can it "rebound" if this moron and most of his colleagues are downsizing instead of timesizing, cutting jobs instead of trimming worktime and keeping everyone employed and spending?! As Edward Filene said in 1932, "Mass Production is...based upon a clear understanding that increased production demands increased buying.... For selfish business reasons, therefore, genuine mass production industries must make prices lower and lower, and wages higher and higher, while constantly shortening the workday...."]
     
   • This week, Japan announced that unemployment hit 5%, crossing an important psychological threshold and a high not seen here in over half a century. Real unemployment is believed to be around 8.5%, as government statisticians do not count people who give up looking for work or part-time workers, like home makers, who lose their jobs....
     
   • "The profit situation is terrible, overall profits will be down 20-30%," Ronald Bevacqua, an economist with Commerz Securities, predicted of midyear profits, which will be announced in mid-October.

2. Prime Tanning Co., NYT, B4.
   ...Rochester, NH, a leather processing company [will] close its plants in Rochester and Berwick, Me., by the end of the year, a move that [will] eliminate 550 jobs.

3. Westvaco to take $26m pretax charge, Bloomberg via NYT, B4.
   ...[A firm] which agreed Wednesday to merge with the Mead Corp. will...close a paper mill in Tyrone, Pa., that employs 265 workers. Production will be moved to other manufacturing sites in Luke, Md., and Wickliffe, Ky., by October.... Westvaco has about 17,000 employees. The rival paper makers are merging...to reduce expenses and better manage production [and price fixing? -ed.] as demand and prices decline.
   [The fatal takeover-downsizing connection.]

4. PSC eliminating 80 jobs, Bloomberg via NYT, B2.
   ...[A firm] making bar-code scanners..\..is eliminating 80 jobs, or 8.5% of its workforce, as the slowing economy cools customer demand and as the company focuses on its main business.... The company, based in Portland OR, currently employs about 933 people and operates in about 120 countries....

5. PolyOne, rubber compounds [and chemicals] maker, to close plants, Bloomberg via NYT, B4.
   The PolyOne Corp...is closing three plants in the United States and Canada and eliminating at least 77 jobs. Plants in Tillsonburg, Ont., Dyersburg, Tenn., and Chicago will be closed by the middle of next year...because of weak demand for the company's rubber compounds used for autoparts and construction materials..\.. The job cuts and shutdowns...are in addition to at least eight plant closings and the reduction of 525 jobs announced by PolyOne...based in Cleveland..\..in the last three months.
   The only thing we've picked up in the last five months was est. 833 cuts on 4/03, #2 and before that, 65 on 1/30, #7.]

6. Stamps.com, online postage seller, to cut its staff, AP via NYT, B4.
   ...The online postage seller became the latest victim of the dot-com shakeout yesterday, saying it would cut its staff by 25% as its struggles to achieve profitability. ...Stamps.com had cut 24 positions, leaving it with a total of 72 employees. Stamps.com has cut its workforce several times to cut costs....

Click here for downsizing stories in -
Aug. 17-31/2001.
Aug. 1-16/2001.
July 16-31/2001.
July 1-15/2001.
June/2001.
May/2001.
Apr.16-30/2001.
Apr.1-15/2001.
Mar.16-31/2001.
Mar.1-15/2001.
Feb.16-28/2001.
Feb.1-15/2001.
Jan.16-31/2001.
Jan.1-15/2001.
Dec.16-31/2000.
Dec.1-15/2000.
Earlier Y2000 months accessible via links at bottom of Dec.1-15/2000 page.
Dec/1999.
Earlier 1999 months accessible via links at bottom of Dec/1999 page.
December/98.
Earlier months accessible via links at bottom of Dec/98 page.

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