Downsizings in November/99
[Commentary] ©1999 Phil Hyde, The Timesizing Wire, Box 117, Harvard Square, Cambridge MA 02238 USA (617) 623-8080
11/27/99 Barmac, oil platform builder, plans [3,300] job cuts, Reuters via NYT, B4.
...A US-based...joint venture between two of the world's biggest oil industry supply companies \Halliburton Co. and J. Ray McDermott\ and the biggest employer in the Scottish highlands said yesterday that it would cut...most of its work force, in part because of last year's weak oil prices....
11/25 2 downsizings reported, totaling 900 jobs + unspecified -
11/24 3 downsizings reported, totaling 3350 jobs + unspecified -
- Goodyear to close Italian factory and cut 500 jobs, Dow Jones via NYT, C2.
The Goodyear Tire and Rubber Co. is closing its only tire factory in Italy...in the southern Italian town of Cisterna di Latina.... It follows nearly a year of steady reductions in the size of the plant's work force. At the start of 1999, the plant employed an estimated 900 people and produced 17,000 tires a day.
[Hey we better count 900 here then, because we didn't hear about them before.]
Goodyear is in the midst of a worldwide effort to streamline its far-flung manufacturing operations.
[We're getting a strong feeling that Goodyear is masking a global shrinkage-type retrenchment under the damage-control term "streamlining."]
- Ford hopes to unify its luxury dealerships, Reuters via NYT, C6.
...The world's No. 2 automaker..\..wants its luxury-brand dealerships to combine into single sites that would
keep separate showrooms but merge back-office functions.... Volvo and Jaguar dealers in Europe and Japan would also be included in the plan, which would take several years to execute.
[Now they're trying to nickel&dime the rich. Sounds like a formula for falling sales & sure enough, the report goes on -]
Previous efforts by Ford to consolidate its 6,000 dealerships in the United States have struggled, as dealers resisted the move and sales fell short of expectations.... Ford's Premier Automotive Group, which oversees the luxury brands, would not force dealers into the new sites....
[You know, these guys really need to learn something ancient and true, namely, "If it works, DON'T FIX IT."]
11/23 3 downsizings reported, totaling 100 jobs + unspecified -
- [Another installment of those 95,000 layoffs a year between 1995 and 2000, predicted 4 years ago for the banking industry alone.]
KeyCorp plans to lay off 3,000 employees, by David Johnston, NYT, C3.
...The Cleveland financial company that in five years has grown from a regional bank into a broader financial services concern with...operations from Maine to Alaska, said yesterday that it would lay off...11%...in its work force..\..to cut costs.
[There's a fatal contradiction that passes for management strategy today - markets are good, and theoretically markets require a well employed population to come up with the money to spend, but let somebody else do the employing.]
The company would not specify how the...reduction...would be carried out over the next 13 months except to say that it would flatten its management structure....
[The good news? For once -]
Analysts were skeptical. [They] criticized..\..Robert W. Gillespie, the chief executive...for lurching from one strategic initiative to another without generating expected growth in revenue....
[Yeah well, revenue growth requires markets, and not to put too fine a point on it, "markets require a well employed population to come up with the money to spend."
We're getting more and more desperate employers scrambling for fewer and fewer solid markets. And guess who's been undermining them. If employers don't want to maximize employment, they're not going to maximize markets and revenue growth either, especially by cutting employment further. There's no free lunch, and you can only "work the float" for just so long between your cuts and everybody else's cuts before the whole thing collapses.]
- Hillenbrand [Industries] reducing staff in its health care unit, Dow Jones via NYT, C4.
The holding company...said yesterday that its Hill-Rom Company health care unit would cut about 350 positions, or 5%, over nine months. The reduction will primarily eliminate administrative positions.... The unit employs approximately 6,600 people worldwide, with about 2,000 in the Batesville, Ind., area, where it is based.... Hillenbrand's shares fell $3.8125 each, to $32.
[Some companies seem to want a symmetry between the often long lead-time required for upsizings (one 7500-job upsizing last summer was going to stretch across 10 years!) and the often short or no lead-time practiced in downsizings. Here Hillenbrand is going to stretch 350 job cuts over 9 months. We'd argue that this is counter-productive, however, because it just drags out the anxiety and the mourning. The "walking wounded" are not particularly productive employees, and some of them may turn into saboteurs, or even "go postal." Far better to cut the dramatics and just trim the workweek a little for everyone, rather than completely for a few, whether quickly or slowly. Because that "few" is often followed by a few more next year, and a few more the following year, and.... You get the idea. Once the world switches over to timesizing, not downsizing, we're going to look back in disbelief at the barbarity of our current ways.]
- Cole to close optical departments in Ward Stores, Bloomberg via NYT, C4.
...A retailer of eyeglasses and lenses said yesterday that it would close its 150 optical departments in Montgomery Ward stores to focus on businesses like Pearle Vision and Sears Optical stores....
11/20/99 2 downsizings reported, totaling 6400 jobs -
- International Business Machines Corp., NYT, C4.
...Armonk, NY...said it had cut more than 100 workers in its software unit, or about 0.5% of the employees in the division, in its 3rd round of reductions in six weeks.
[Don't recall that they shared with us the previous 2 rounds....]
- Pinn National Gaming Inc., NYT, C4.
...Wyomissing, Pa., plans to purchase all the assets of two Mississippi casinos from Hollywood Park Inc., a gaming and entertainment holding company based in Inglewood, Calif....
["All the assets" - and none of the employees. We're starting to get wise to the various code phrases for layoffs. Here's another example -]
- Tufts Health to quit N.H., R.I., Maine - Cites $45m in losses in leaving 3 states, by Matthew Brelis, Boston Globe, D1.
[The only good news here - ]
...Dr. Harris Berman, the chief executive of Tufts Health Plan...said "the good news is 87% of our business is in Massachusetts, and we expect to make a modest surplus here."
[Ah, with what care he avoids the nasty word "profit."]
11/19 1 downsizing reported -
- Royal Bank [of Canada] cuts jobs; earnings rise, Bloomberg via NYT, B2.
...The nation's biggest bank said it would cut up to 6,000 jobs over the next 2 years. The bank also reported that its fiscal 4th-quarter profit rose 11% to...US$331m on higher trading and underwriting revenue....
[Hey, Royal, ever hear "If it works, don't fix it"? Canada is really in trouble if it has dummies like this running its biggest bank. Just as central banks like the Fed stymie growth by not raising interest rates while prosperity reigns, so companies "plateau" their own markets by not hiring during prosperous periods. And if they downsize during prosperity, they induce disaster by fueling wealth concentration and marginalization.]
- Sale of financial holding to Arthur Andersen is set, Reuters via NYT, B3.
General Motors has agreed to sell assets that handle more than $250 billion annually in financial transactions to Arthur Andersen for an undisclosed amount....
[And what are these wondergul "assets" that handle over $250B/yr in financial transactions without the intervention of human hands? Looks like GM and Arthur Andersen really went out of their way to traumatize the employees involved - a "neutron bomb" acquisition - everything taken over but the humans.]
About 400 GM salaried employees are affected by the deal, and all will be given the opportunity to transfer to Arthur Andersen....
[And just what do they have to do to "take advantage" of this great "opportunity"? Guess pay and benefits are complete questionmarks.]
11/18 5 downsizings reported, totaling 22,200 jobs lost + unspecified -
- Newbridge [Networks] to cut 600 jobs, by Timothy Pritchard, NYT, C4.
A Canadian phone equipment maker...said it would cut...about 10% of its work force, and contract with outside manufacturers and service companies. The company also confirmed an earlier warning of unexpectedly poor results....
- [Here's an example of a second considerable downsizing that took place today but was not picked up by the NY Times or the Boston Globe -]
Boston Communications of Woburn, Mass. lays off 250, phoned in by caller "Larry" to 1/05/2000 Somerville (Mass.) community TV show "Timesizing with Phil Hyde" on Somerville channel 3.
[Larry was laid off in this downsizing but he re-interviewed, took a paycut and got another job at the company. We did not put this in our count because we did not enter it here until 1/05/2000 and we have no newspaper backup for the story. This case is instructive because where there's one, there's ten, maybe even dozens, of downsizings that don't get picked up by the Times or the Globe (or then from them by us here.]
11/17 4 downsizings reported, total 5605 jobs lost + unspecified -
- NTT plans to cut 21,000 jobs [9.4%] in effort to be more nimble, by Stephanie Strom, NYT, C4.
[Hey, if they want "nimble," why not downsize 223,999 (all-employees-but-one)! Nothing beats the one-employee company for "nimble"!]
TOKYO, Nov. 17 - Nippon Telegraph and Telephone, one of the world's largest phone companies, officially confirmed today that it planned to eliminate 21,000 jobs [9.375% of its workforce] and sharply curtail investment over the next three years in an effort to enhance its competitiveness.
[What is it with the Japanese and the number 21,000? On Oct. 19, Nissan said it would be bagging 21,000 employees too! Some kind of "coming of age" number? Well OK, we have 21,000's too, but in total company workforces (CompUSA 8/31, Polaroid in '83 12/17/98, GM's Canadian workforce 10/20, Federal prison work program 10/26), not layoffs. But then, we got an early start on this brilliant downsizing strategy in the early 80s and by now probably don't have any companies big enough left to lay off 21,000.)]
...Unions representing NTT employees leaked word of the plans a month ago....
[That would be on Oct. 22 (click & page down from Oct. 31).]
NTT's job cuts will be done Japanese style, through attrition, hiring freezes and what is known as shukko, or pushing excess workers onto affiliates....
[Oh well, that's a relief. It'll be nice for current employees, but still damaging to the Japanese economy - but what do today's top executives care about the longer term, even their own?!]
NTT, which has 224,000 employees throughout the its affiliates and subsidiaries, said dit would send employees only to growing affiliates, like the NTT Mobile Communications Network and NTT Data. Junichiro Miyazu, the president of NTT, made it clear that the company had no intention of adopting Western-style tactics in job elimination. "Sales at NTT East and West are falling..\.." NTT was once the government-owned monopoly for domestic telephone services. Now, smaller companies like DDI and Japan Telecom as well as foreign companies like Cable & Wireless and British Telecom are pressing NTT to cut costs and change its ways. The company was recently forced to cut the price of a flat-rate Internet access service to roughly $75 a month at current exchange rates, almost half the price it had originally intended to charge.... SpeedNet...is hoping to offer consumers a $48...service....
[Japan has really entered the deathspin down the morbid maelstrom. We've managed to infect them with our short-term downsizing virus, and we've nudged them into the lethal rock'n'roll between downsizings, market losses, price cuts, and more downsizings. And unlike us, they've already exhausted their ratecut "solution." Interest rates in Japan have already effectively zeroed. Hmm, let's see. We've trashed Russia, we've got Japan swirling down the drain. If only we can hamstring Europe, we'll keep lookin' good, whatever we do to ourselves.]
- Dow AgroSciences to cut 700 jobs and close a plant, AP via NYT, C4.
...700 jobs worldwide and close a seed plant in Minnesota next year in an effort to shore up profits amid the downturn in the farm economy.
[Oh? There's a downturn in the farm economy? Don't hear much about that amid the Internet-blindered self-congratulation!]
The company, a maker of pesticides and biotechnology products for farm use, said yesterday that it would close a Mycogen Seeds plant in Eagan, Minn., on July 1. Much of the plant's work will be consolidated in Indianapolis, where Dow has its HQ and...a large research center....
- Kennametal plans [3.6% (500)] cutbacks and may sell subsidiary [JLK Direct Distribution], AP via NYT, C4.
The machine tool maker...plans to cut as many as 500 jobs [3.57%] from its work force of 14,000 worldwide and close or cut back operations at several plants because of declining earnings.
[Gee, but how can all these earnings be declining if the economy is so GOOOOOD?]
...The company had not yet decided which of 14-18 of its 200 sales offices, plants and warehouses to close, consolidate or reduce in size....
- Lone Star Technologies to buy Fintube assets [& strand their employees, numbering ??], Dow Jones via NYT, C4.
[We've developed a strong hunch that "buy the assets of" is analyst-speak for "take over everything but the employees." Ergo, a downsizing with unspecified jobs lost. And here's another one - ]
- Wells-Gardner Electronics Corp. [to acquire the assets of American Gaming & Electronics, and strand their employees, numbering ??], NYT, C4.
...A [Chicago-based] video products company plans to acquire the assets of...North America's largest independent distributor of gaming parts and service....
11/16 2 downsizings reported, total 3000 jobs lost + unspecified -
- [Here's a big one occasioned by a takeover - ]
Quest will close some labs, lay off up to 2,500 people, Reuters via NYT, C4.
The clinical laboratory testing company Quest Diagnostics Inc. said yesterday that it would close some labs or cut back their size and lay off 5-10% of its work force....
[Bloomberg via the Boston Globe (D3) has simply "10%."]
...[stemming] from the integration of SmithKline Beecham's clinical laboratories into the company.... The $1.3b purchase [was completed] in August. Labs will close or be substantially reduced in size in [7 towns from Islip, NY to] Dallas.
- [And you don't get the takeover-downsizing connection clearer than this - ]
CK Witco to trim 500 [salaried] jobs because of recent merger, AP via NYT, C4.
...[A maker of] dyes and food and drug ingredients \yum!\ plans to cut about...5% of the company's work force..\..by the end of the year because of redundancies created by its recent merger...of the Crompton & Knowles Corp. and the Witco Corp. In addition to [$40m annual] savings from the job cuts, the company expects to realize another $20m in savings in 2000 through the consolidation of plants and offices....
[Hey, at least we're starting to get the toff British term "redundancies" for the short-sighted cannibalization of our own consumer base. If we're gonna "pull an EgyptAir," we might as well go in style.]
- Azurix Corp., NYT, C4.
...Houston, a water company formed by Enron Corp...dismissed 85 employees, or almost a third of its work force, after warning 2 weeks ago that Q4 earnings will fall short of estimates.
- Fresh Samantha trims projections, lays off 20, AP via Boston Globe, D9.
...Saco, Maine-based... seven-year-old..\..juice company...blamed a seasonal sales slowdown for the layoff of 20 workers....
[Question 1 - they've been in business seven years and they still don't know their seasonal sales patterns? Question 2 - we're talking seasonal fluctuations and they're still handling them by firing and rehiring, i.e., biannually maximizing disruption and demoralization, instead of just modulating their workweek like Nucor & friends?]
Now, officials anticipate that sales will rise from $32m this year to $75m in 2001 [instead of $100m as projected]. The company laid off 6 of its Maine employees last week...and another 12-15 layoffs along the East Coast will be finalized this week. Most...were cut from the distribution dept.
11/15 1 downsizing reported, total 60 jobs lost -
- [Philipp] Holzmann appeals to creditors, Bloomberg via NYT, C4.
Germany's biggest construction company...said it would ask Deutsche Bank AG and other creditors to help shoulder a charge of...$1.3b so it can stay in business. The company said it woud dismiss more than 3,000 employees, or 10% of its work force, to save money and help meet the charge, which stems from real estate investments in Cologne and in eastern Germany. It is the 2nd time since 1996 that Frankfurt-based Holzmann has asked creditors for a bailout.
- Infogrames [Entertainment] gets control of GT Interactive , Bloomberg via NYT, C13.
PARIS, Nov. 15 - ...Europe's No. 1 maker of videogame software said today that it had bought a controlling [70%] stake in...the maker of popular games like Total Annihilation and Deer Hunter.... GT Interactive, based in New York, said in June that it had hired...Bear Stearns & Co. to seek a merger or sale. That announcement came one month after the company dismissed 35% of its work force as part of an effort to reorganize and streamline itself.
11/13 2 downsizings reported, total: 3900 jobs lost -
- Three giant advertising agencies take actions to accommodate their growth in the global market, by Stuart Elliott, NYT, C20.
...The resignation of a large account...involved Ogilvy & Mather Worldwide, part of the WPP Group, which gave up its North American advertising and marketing assignments from the Shell Oil Co.... The resignation...will require the closing of the Ogilvy office in Houston that has handled the account since 1960.... The 55-60 employees in Houston will be offered jobs at other Ogilvy offices or other WPP units....
11/12 2 downsizings reported, total 25 jobs lost + unspecified -
- Trainmaker cuts jobs, Bloomberg via NYT, B2.
Europe's biggest industrial company, DaimlerChrysler A.G., will cut 16% of the work force of its Adtranz unit, halving production capacity, in yet another effort to turn around the unit, which is the world's biggest train maker.... The latest [of 3 plans in 3 years] is aimed at saving 300m euros/yr by closing 6 manufacturing sites in Germany, Switzerland, Norway, Portugal and the U.S. Adtranz, which has lost money every year since 1996, will eliminate 3,000 jobs: 1,000 in production, 1,400 in administration and 600 in engineering.
[3 years of losses must mean declining sales - like, how many new trains can Europe need every year? Quality too high? Need more "built-in obsolescence"?]
- Filene's Basement to close almost half its stores, Reuters via NYT, B3.
...An off-price retailer...which sells brand-name apparel at a discount..\..said yesterday that it would close nearly half its stores and cut 900 jobs out of 3900 (23%) in a plan to emerge from Chapter 11 bankruptcy protection. [It] said it would close 18 stores and keep 22 open in New York, Chicago and Massachusetts, including its flagship Boston store. The retailer...based in Wellesley, Mass., filed for bankruptcy protection in August....
11/11 4 downsizings reported, totaling 5394 jobs lost -
- Sight Resource to close 2 manufacturing labs, Boston Globe, C5.
Sight Resource Corp. of Hopkinton [Mass.] said it will close its optical manufacaturing laboratories there and in Metairie, La., and lay off about 25 employees in a cost-cutting measure. Plants in Muskegon, Mich., and Cleveland will remain open.... It will also close 3 unidentified underperforming stores. [It] currently has 130 stores in 9 states, including Cambridge Eye Doctors stores in Mass. and N.H., and Vision World stores in R.I.
- IMC Global to close plants and cut production, Reuters via NYT, C3.
The agricultural products maker...said yesterday that it would permanently close 2 plants...the Nichols plant in central Florida and the Payne Creek phosphate rock mine..\..and temporarily shut several others [e.g., its Faustina, La., phosphoric acid plant] as part of a sweeping retrenchment announced last month in the wake of disappointing earnings. IMC also said it was deciding how many jobs would be cut as a result of the plant closings.... The Taft, La., plant, which ceased operations in July, will remain shut indefinitely.
11/06 Gillette to ax 100 S. Boston jobs, by Chris Reidy, Boston Globe, C1.
- Allstate to cut 4,000 jobs, sell over the Internet, Bloomberg via Boston Globe, C2.
NORTHBROOK, Ill. - ...The largest publicly traded US car and home insurer will cut about...10% of its nonagent staff, and start selling over the Internet to revive its profit growth.
[We don't think there's a pot of gold on the Internet yet, except in selling IPO stocks in low-revenue startups. There's just this exciting mass Internet hysteria - must be what lemmings feel.]
The job cuts, expected to be completed by the end of next year, are part of an overhaul in which Allstate also will start using toll-free call lines and other direct-to-consumer methods to sell its policies.
[At least their not cutting their sales staff (agents) like Avid in downsizing #3 below. Incidentally, the NYT version of this story was written with so little nose for news that we passed over it with a yawn, never realizing the huge downsizing buried in paragraph 6. Title? "Allstate poised to sell insurance over telephone and Internet" [so who isn't?!], by Joseph Treaster, NYT, C6. Wakey, wakey, Joe.]
- Nortel to cut as many as 1,000 jobs next year, Bloomberg via NYT, C4.
...North America's No. 2 phone-equipment maker after Cisco Systems Inc. will cut...about 1.5% of its work force next year to reduce overlap and contract out more business.... The reductions will be made largely in administrative positions like payroll and information systems. By the end of the year, Nortel plans to provide details on some of the cuts, which add to 11,500 other cuts announced in the last 14 months. Nortel is looking for ways to improve profitability as it faces competition on equipment prices from Lucent Technologies and Cisco. On Tuesday, it slashed prices on routers to half that of comparable products from Cisco.
[There it is again. The "2D" depression symptoms of downsizing and deflation, job cuts and price cuts. CEOs today have 3 fateful roads to temporary survival - (1) continue going after mass markets but be forced to cut prices because those markets aren't getting the wages to afford their own productivity, (2) acquire other companies for their market share and at least get the illusion of growth for your company, or (3) go for the luxury markets, like Chase Investments and possibly British Air, if they're really going to cut economy seats.]
- Avid Technology to cut 200 jobs for $20 million a year, Dow Jones via NYT, C4.
...[A provider of] digital video and audio tools for information and entertainment applications..\..said yesterday that it would eliminate...11% of its work force, in a cutback intended to save the software company $20m a year. The cuts will primarily involve workers at company headquarters in Tewksbury, Mass., and sales and marketing staff in the United States and Europe.
[Wow, yet another kamekazi company trying to save money by cutting sales and marketing! Are they teaching this brilliant strategy in B-schools now, else where in heck did it come from? What geniuses our CEOs are in these depression-inducing periods - they either cut their best markets by cutting employees in general, or they cut their revenues directly by targeting their pink slips specifically to their sales and marketing people. A bizarre "St. Vitus' dance."]
- Wholesale grocer job cuts, Bloomberg via NYT, C6.
OKLAHOMA CITY - The Fleming Cos., the 2nd-largest American grocery wholesaler, plans to cut 194 jobs - about half of 1% [=0.5%] of its work force - as it closes a San Antonio distribution center...in March after transferring work in January to a larger distribution center in Garland, Tex..\..
[Hey, at least it's not in Mexico.]
...Fleming, which employs 39,000 people, [will] eliminate 90 clerical and management positions and 104 production jobs....
...The Boston-based razor maker..\..confirmed plans to reduce its 2,800-member work force at its South Boston plant by 100 jobs. "We hope most of the job eliminations will come from early retirement and attrition," said a Gillette spokesman Eric Kraus. The job cuts should be completed by February as a disposable razor product line is transferred to a plant in Mexico.
[Oh classic! Hear again Perot's "giant sucking sound" as Gillette's short-view top executives transfer American jobs to Mexico. How many Mexicans compared to Americans buy Gillette razors, boys? Why not take a straight razor to your own throats and do your market-slashing corporate kamekazi act a little more quickly and honestly?]
The job cuts are part of a larger restructuring plan announced last fall. At that time [9/29/98, Gillette] said it would reduce its worldwide work force by 11%, or 4,700 jobs, over an 18-month period that began Jan.1. Gillette declined to say how many jobs have been cut so far....
11/05 5 Downsizings Reported (totalling 545 jobs + unspecified) -
11/04 3 More Downsizings Reported (totalling 545 jobs) -
- Dole to slash jobs, AP via NYT, C4.
The world's largest producer of fresh fruit, vegetables and flowers, the Dole Food Co., will eliminate 9,000 jobs and shut down banana production in Nicaragua and Venezuela in a worldwide cutback forced by weak European sales and the devastation of Central American operations by Hurricane Mitch. Thousands of jobs will be cut in Central America and sales and distribution employees will be laid off in Europe....
- Big Coca-Cola bottler sets job cuts and streamlining, AP via NYT, C4.
The Coca-Cola Bottling Company Consolidated said yesterday that it...would cut as many as 300 jobs. The company, which is based in Charlotte, NC,...31%-owned by the Coca-Cola Co., [and] the 2nd-largest Coca-Cola bottler in the U.S., will consolidate 8 operating divisions into 6. Workers who lose their jobs will be offered severance packages.
Coca-Cola Bottling's chairman and chief executive Frank Harrison, said the cuts reflected the current environment in a competitive soft drink industry. Beverage-industry analysts expect Coca-Cola to raise concentrate prices by as much as 7%, sharply increasing costs for bottlers.
[So let's get this straight - the environment is competitive and the mother company is RAISING prices? Why not do it cleaner and faster and just dial 800-KEVORKIAN? These troglodite CEOs, lacking growing markets now they've suctioned up all the profits from technological productivity, are just cannibalizing one another. The airlines are doing it to one another and to travel agents and to customers (remember legroom?). Coke mothership is doing it to Coke bottlers. Banks are doing it to customers & making them pay for it (ATMs). "More for ME! More for ME!" say the CEOs. "I gotta get 100 billion like Bill Gates!" All so boring and unnecessary - when futuristic Nucor Corp. is modeling a big chunk of the solution right there in Charlotte, NC.]
- IBM to lay off 3%-6% [let's cut the fog & just say 4½%] of server work force, Bloomberg via Boston Globe, C2.
...The world's largest computer maker said it plans to cut 3 to 6% of its server work force after warning of lower profit in the fourth and first quarters. IBM will decide which positions to cut during the next 5 weeks.... IBM said profit would be hurt as customers put off mainframe purchases because of Year 2000 issues....
[You know, IBM used to be a good company for employees, but laying people off right before Christmas? That's pretty low. And then there's going to be a bump in orders after New Year's that these geniuses are not going to be ready for. And the fact that IBM is putting off MAKING the mainframes until after New Year's suggests that they agree with their customers and there really still are Y2K problems in the pre-2000 computers. Dumb strategy & dumb PR, Big Blue. Time to collect your Dinosaur Club card.]
- For workers at the prospective partners, healthy doses of uncertainty - Some relocation and job losses are expected, but no one is talking numbers, by Maria Newman, NYT, C19.
MORRIS PLAINS, NJ, Nov. 4 - It was a day like any other day outside the world HQ of Warner-Lambert [which] makes...Bubblicious gum and Listerine..\.. But the normal appearance ran counter to the continuing boardroom drama that would affect the fate of...3,000 employees at this suburban corporate campus. Company officials announced during a midday news conference that they would be merging with American Home Products, which...makes...Advil and Chapstick \and\ is just 10 miles away [also] in Morris County..\..bringing some uncertainty to the future of the work force....
Said Steve Balumbo, director of finance..."As for layoffs...there might be something there, but it's hard to know right now."... A limousine driver, William Allison, said the merger was the talk among his passengers for the last two days.... "They were saying that the companies will probably have to relocate some people or let others go"....
But even as they spoke, the news of Pfizer's bid emerged, so the fate of Warner-Lambert was [more] unclear. At American Home's Madison [NJ] operation, employees were also uncertain about the Pfizer action would mean for them....
[Keep up the uncertainty, boys, and you'll never get the kind of broad-based wage raises that you need to get consumer spending caught up to productivity. Target wage-push "inflation," and you'll not only widen the already wide income gap, but you'll so unbalance the centrifugal-centripetal forces on money that the resulting depression will make the 30s look like a picnic.]
Pfizer, which is based in Manhattan, also has offices in Morris County.... Christopher Marra, executive director of the Morris Area Development Group...said..."Initially, you have to be concerned that one of [the] facilities won't be kept.... Obviously, they're going to try to find economies of scale, and maybe initially they will want less space."
[It's that temporary "initial" period that becomes more and more significant in a pre-depression period, as more and more mergers seize upon the hope of future growth to make jobcuts now. Employees, of course, live in the "now" and when their income stops, they're spending drops, dramatically. The more fashionable it becomes to downsize, the more significant this "temporary, initial" spending phenomenon becomes across a whole economy. Oh, it can be diluted by consumer borrowing, but there's always those credit lines and minimum payments. And rising personal bankruptcies, which banking is lobbying Congress to curtail. Hey, why not just bring back debtors' prison? Maybe we can make prisons the foundation of our economy once the stock market caves?]
- Fruit of the Loom plans to pare its product line, Bloomberg via NYT, C4.
...One of the largest U.S. makers of underwear and T-shirts said yesterday that it would discontinue some products and might close some plants in an effort to return to profitability. The company plans to eliminate about 1,000 products, representing a total of less than 2% of sales. The company also is considering closing some sewing plants. Fruit of the Loom said it had a Q3 loss of $166.4m...compared with net income of $50.4m...a year earlier....
[Iiiiit's coming. Iiiiit's building up, just like the 1920s. The cracks in the foundation of our 1980s and 90s "permanent plateau of prosperity" are spreading. And these little daily stories, insignificant one by one, are telling the tale, setting the beat, giving the "word to the wise." Will there be more people listening and ready this time?]
11/03 3 Downsizings Reported (totalling 3803 jobs) -
- [The fateful takeover-layoff connnection again - ]
Raytheon to sell unit; layoffs due - Firm criticized on Quincy deal, by Ross Kerber, Boston Globe, front page.
Raytheon Co. said yesterday that it has agreed to sell its microelectronics unit to a New York components maker, a deal that will lead to the closure of a big facility in Quincy and the layoff of most of its 400 employees [i.e.,].... Raytheon said it expects between 250 and 300 workers will lose their jobs within a year as the business and its machinery are transferred to privately held Imrex LLC of Great Neck, NY.... Financial terms of the agreement were not disclosed..\..
The move brought swift criticism from some labor and political leaders, who said the Lexington-based defense contractor isn't meeting the spirit of a controversial 1995 tax-cut agreement meant to save jobs in the state.... The closure comes as a blow to Qunicy, where the facility has been a key employer for decades. "They kept us informed they might sell it, so it came as no shock, but everybody took it that way when they told us," said Kathleen Quinn, a parts assembler who has worked at the plant for 23 years....
- Donna Karan [International] to trim work force, close [seven] stores, AP via NYT, C4.
...The New York-based fashion company..\..will slash 8% of its work force, close seven [underperforming] outlet stores and consolidate its women's divisions [Donna Karan New York and DKNY] in its latest reorganization...to save $6m a year.... It will lay off 175 people and integrate its marketing and PR departments into a single unit. The company said it was refining the merchandise selection and store format at its outlets in an attempt to return the division to profitability....
- General Binding Corp., NYT, C4.
...Northbrook, Ill., said it would cut 70 jobs, shut its Auburn Hills, Mich. plant and stop paying dividends after realizing a loss in its third quarter.
11/02/99 Lucent to eliminate 1,680 jobs, or 1% of its work force, Bloomberg via NYT, C4.
- NEC pulls plug on brand, LA Times via Boston Globe, D2.
Japan's NEC Corp. said that it would lay off about [85%] of its staff [2200 jobs is not just "80%"!] at the one-time personal computer giant Packard Bell NEC. NEC told the company's 2,600...employees that all but 300-400 would be out of jobs at the end of the year. Low-cost personal computer innovator Packard Bell will shut its factory in Sacramento and move its headquarters to Mountain View in the Silicon Valley, and stop using the Packard Bell name in the U.S. NEC, which owns 88% of Packard Bell, decided to pull the plug after years of losses and two previous rounds of cutbacks. Workers began learning their fate in face-to-face meetings yesterday morning.
[Say, wasn't Packard Bell the outfit that Dilbert's Scott Adams worked for?? No wonder they can't do math. 2600-400=2200. 2200/2600 is 84.6%, not just 80%.
[How the heck TPTB (the powers that be) think they can have more and more people "escaping" to work on the most work-saving technology there is (computers) and still have an economy - without reducing the workweek to spread around the vanishing work (and remunerated hours & spending power) - is beyond us.]
- AmeriServe Food takes steps to cut its costs, Bloomberg via NYT, C4.
[Texas-based] AmeriServe Food Distribution [supplier of foods to national chains like Red Lobster, Pizza Hut and Taco Bell] said yesterday that it would eliminate 1,500 jobs, or about 15% of its work force, as one of several measures [including asset sales and inventory reductions] meant to cut costs and bolster cash reserves....
[Here we go. The suppliers of fast food restaurants are now getting . How far behind can the restaurants themselves be? And this at a time when every European that visits us goes, "Whoboy, are there ever a lot of FAT Americans!" And the next item suggests we aren't trying to lose weight - ]
- Jenny Craig planning major cutbacks, AP via NYT, C4.
With sales and profits shrinking, the weight-loss chain Jenny Craig Inc. said late on Monday that it would close 86 of its weighit-loss centers in the United States and reduce staff by 15% at its headquarters in the San Diego suburb of La Jolla. The company, hurt by a trend of do-it-yourself dieting and the introduction of a new line of snack bars and drinks that cannibalized existing product lines, also reported a loss for the quarter that ended Sept. 30. The centers slated to be closed, about 16% of the total in the United States, were losing money. A total of 103 jobs, including 26 at the La Jolla headquarters, are being eliminated.
[Let's see now. 103 jobs, minus 26 at HQ, means only 77 people took care of the 86 weight-loss centers that are being closed?! That's more than one and one tenth employee per center. Maybe they used a lot of contractors.]
... to reduce expenses at the unit responsible for sales to businesses...the Business Communications Systems unit. Lucent plans to cut 1,200 jobs by asking employees to resign...
[Oh, that's novel. Does that save the company severance costs and unemployment insurance benefit payments? What if these lucky employees refuse to cooperate in their own murder?]
...and to eliminate 200 managers responsible for them. It is dismissing 280 people at offices in Tucson and Silver Spring, Md. Fiscal fourth-quarter sales in the Business Communications Systems unit, which supplies companies with office-phone equipment and software, were unchanged from the period a year earlier, at $2.47 billion.
[In other words, another company that's going to "fix" something that works. Plus demoralize their sales force. Where do these guys come up with these ideas?]
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