Downsizings in Mar-Apr/99
[Commentary] ©1998,1999 Phil Hyde, The Timesizing Wire, Box 622, Cambridge MA 02140 USA (617) 623-8080
4/30/99 Filene's plans to trim 275 [back-office jobs] in Boston, by Chris Reidy, Boston Globe, p. E7.
...[or at least] transfer [them] to St. Louis [credit dept] and South Windsor, Conn [accounts payable]...to gain efficiencies.... It's still too early to say how many employees will decide to leave Filene's or to accept transfers to other states or other departments.... Filene's employes about 7,500 people in Massachusetts, including about 1,700 people in Greater Boston..\.. Filene's is a division of May Department Stores Co. of St. Louis, which also operates such chains as Lord & Taylor and Robinsons-May....
4/30 Inso [Corp.] restructuring to include layoffs, Dow Jones via Bos Globe, E7.
...Boston-based...provider of software for the management, exchange, and delivery of critical business information..\..said it plans a restructuring that would entail reductions in staff [how many??], closing of certain support facilities, and the write-off of property, equipment, and other capitalized costs....
4/29 Aspen Technology fires 200 employees, Bloomberg via Bos Globe, D9.
...[A Cambridge, Mass.-based firm] whose software manages production at refineries and chemical plants \fired\ about 12% of its work force, to cut costs.... It's consolidating operations because of "difficult economic conditions" in those markets. After the firings, the company will employ about 1,400 people, spokesman Joshua Young said....
[Another suicidal corporation that should be cutting its workweek 12% (to 35.2 hrs/wk) instead of cutting its workforce and its own throat 12%. If any Aspen Tech masochists see this site, be sure to check out our roster of companies who cut costs the smart way without clobbering their own best boosters, their own team of employees.]
4/23 Etonic lays off 70 in Richmond, Maine, AP via Bos Globe, E5.
About 70 of the 100 employees at the [Etonic World Wide Corp.] shoe plant...have been laid off in a move that some workers blamed on low-wage competition from abroad. "...Everybody in the whole town will be hurting," said Helene Crouse...who cleaned out her belongings from the plant after she got the news. "Production is down. Everything is going overseas...." [The plant,] purchased by Chicopee-based Spalding in 1996, manufactures high-end golf shoes and had long been Richmond's largest employer. [It] will remain open with 25 to 30 employees. Workers estimated that production which averaged 50 cases of shoes a day could drop to as low as seven cases.
4/22 Abitibi [-Consolidated Inc.] Cuts 1,300 jobs, AP via AOL News, 17:19 EDT.
MONTREAL - ...The world's No. 1 newsprint producer announced Thursday (4/22) a restructuring that includes eliminating up to...10% of its work force... expected to save the company $68 million per year.... A plan to lay off or encourage the retirement of about 900 workers at four pulp and paper mills by the end of next year is already under way, said spokeswoman Susan Rogers. In addition, the company expects to let go of as many as 400 additional workers "in due course" at its head office and other mills, she said.
The layoffs are the result of
4/17 16 at Globe to receive early retirement offer, by Richard Kindleberger, Bos Globe, F2.
...16 employees in the collective bargaining unit that represents most GLobe editorial and advertising workers. The program, described in a memorandum to employees as "part of our continuing effort to control costs," comes as the Globe, like other newspapers, has been grappling with declines in circulation and classified advertising revenue....
4/16 [LA-based] Mattel to shut plants, fire over 3,000, Bloomberg via Bos Globe, D2.
Mattel said it will...fire more than...one-tenth of its work force, as chairman Jill Barad seeks to cut costs and revive profit at the world's largest toy maker....
[Women sometimes say that if they ruled the world, things would be better. Well, here's a female CEO who's just as stupid as most of her male counterparts. Does she cut 10% of her workweek and keep everybody employed? No, she cuts 10% of her workforce like so many other market-bashing CEOs. Does she make life easier for the growing number of single parents in her employ, most of them women like herself? No, she makes it tougher by destroying the livelihoods of some of them, and, if she takes the usual course (which she's done in every other respect here), pressuring the rest to work harder and take up the slack. 'Working harder' usually means 'working longer', so the workweek continues it upward trend toward sweatshop levels, and families deteriorate even faster. CEOs commoditize, sell and destroy the future of America, even for themselves. Dumb, dumb, dumb.
[Jill should be copying the sustainable, market-conserving patterns at Nucor and Lincoln Electric, who have not had a layoff for decades.]
4/16 Solar Turbines Cutting 600 Workers, AP via AOL News, 18:08 EDT.
SAN DIEGO - ...A subsidiary of heavy-equipment manufacturer Caterpillar Inc..\..hard hit by the oil industry slump [and reduced demand for its products], is eliminating...about 10% of its work force...in Latin America and Europe. \The\ maker of gas turbines said the cuts will affect a combination of permanent full-time workers along with temporary and part-time employees. [The firm] said Wednesday [4/14] it had issued layoff notices to 100 employees in San Diego and another 50 at offices in other cities across the country this week while "several hundred" others have left voluntarily or through attrition. The company, with 5,900 employees, makes turbine engines for oil and gas production and for industrial power generation and transmission. The layoffs are part of a broader cost-cutting program at the firm.
4/15 Drug-maker Perrigo To Cut 150 Jobs, AP via AOL News, 20:41 EDT.
ALLEGAN, Mich. - Perrigo Co. announced Thursday (4/22) it will cut 120 to 150 jobs in a bid to save between $5-6 million next year. The maker of store-brand over-the-counter drugs said the job cuts will affect professional, managerial, administrative and support staff - but not production workers. The company said the cuts will focus on salaried workers.
[How about focusing on top executives?]
The company said it anticipates 80 to 100 jobs will be eliminated through attrition, redeployments and early retirements. The other affected workers face layoffs. "The staff reductions are based on our need to tightly manage costs and are not a reflection on the quality of work or the commitment of those people being displaced," Michael Jandernoa, the company's chairman and chief executive, said in a statement.
[So much for commitment. How do these clowns expect to maintain predictable demand for their products and services without a predictable job market for consumers? Do they really expect to get predictability and security for themselves out of unpredictability and insecurity for everyone else?]
4/14 [S.D. Warren pulp] mill closing shakes Maine town [of Westbrook & cuts 315 jobs], AP via Bos Globe, E9.
...Sappi, the mill's South Africa-based owner...bought the Westbrook plant from Scott in 1994..\..said...it would have cost $50 million to bring the operation into compliance with new environmental regulations by 2001.... Sappi is committed to its remaining operations...a fine [and] specialty paper [mill].... The...paper mill dates to the mid-1800s...the pulp mill is newer, dating from the 1950s [when] its work force exceeded 3,000....
4/13 Tyco International to cut 4,000 more AMP jobs - Firm expects revenues to double in 6 years, by Rachel Layne, Bloomberg via Bos Globe, C3.
[Oh yeah? Based on what markets once you've cut everyone's job?]
HAMILTON, Bermuda - ...The top maker of electrical connectors after its [$12.2b takeover last week] of AMP Inc.... The cuts come on top of 4,200 already planned by AMP...and represent about 9% of AMP's workforce and 3% of Tyco's....
[Tyco/AMP should be saving its best markets, its skillset and its morale by cutting 3% of its workweek, not its workforce, as Nucor and Lincoln Electric have done for decades.]
4/10 Raschel's [Inc.] will close stores [& lay off 200], by Chris Reidy, Bos Globe, F2.
...An off-price retailer [the largest independent retailer in the country catering to children] that has clothed local children for 25 years and is beloved by many customers, is going out of business.... Raschel Gray, the founder of the prinavetly owned company...said many customers broke down and wept when they learned the news. "It's [all the over-retailing in the area,] the big chains," she said. "It's the Internet and the catalogs."
[What if it's under-spending and not over-retailing?
What if it's depressed wages and not booming stores?
What if it's an obsoletely long workweek and a surplus of mutually impoverishing jobseekers rather than obscenely long store-open hours and a surplus of mutually impoverishing retail clerks?
What if it's a resultant settling of astronomical spending power in the highest income brackets far beyond what can realistically be spent even at the rich folks' shops, instead of a glut of regular folks' shops?
What if our repetitive weakening of our economic centrifuge mechanisms since the War (WW2) has gradually left a huge unbalanced result (Black Hole) from our runaway centripetal mechanisms? - gotta loooove that "astrophysical economics"!]
Gray operates two stores, one in Foxborough, the other in Westborough [Mass.] The precise date of the stores' last day has not been fixed, she said, and no details were available on what kind of severance might be offered to the company's 200 employees....
[Gray's list of competitors? Target, Old Navy, the Gap, Babies "R" Us, OshKosh B'Gosh, Levi Strauss. Sayonara independents.]
4/10 Fleet Financial unveils 'generous' severance plan [for about 5,000], by Lynnley Browning, Bos Globe, F1.
4/09 [Burlington, Ont.-based] Laidlaw [Inc.] to cut 2,200 jobs, take 3d-quarter charge, Bos Globe, C2.
...The biggest North American provider of ambulance, school, and intercity bus transportation said it's cutting...2% of its workforce because of lower ambulance revenue. The cuts are mostly in the northeastern and southern United States and will be completed during the company's third quarter ending May 31....
[Laidlaw should be minimizing the revenue cuts on its workforce and future markets by cutting 2% of its corporate workweek, not 2% of its corporate workforce. The way they've done it just lets 98% of their staff pretend everything's fine, instead of thinking about the problem and maybe coming up with some ideas. Downsizing is the ethnic cleansing of the corporate world and it's just as self-destructive. The alternative is "all sacrifice together, starting at the top" like Lincoln Electric of Cleveland - share the pain as well as the gain. An economy that tries to share the gain but not the pain soon finds that it's not sharing either. As it keeps cutting jobs, it goes into a death spiral, because fewer jobs, fewer markets.]
4/09 AIDS Action lays off 19 (20%), plans to shift focus, by Dolores Kong, Bos Globe, front page.
In a sign of the nation's battle fatigue in the fights against AIDS, the largest AIDS agency in Massachusetts laid off...yesterday nearly one-fifth of its staff, in an effort to make up a nearly $1 million shortfall. The first majaor layoff in the 16-year history of the AIDS Action Committee of Massachusetts comes largely in response to a steep dropoff in money from the annual AIDS Walk, its primary fund-raiser.
[Worse than the AIDS epidemic is the pandemic of downsizing that these dummies have just become infected with. Instead of downsizing 20% of their workforce and making 19 people pay the whole price of flagging fund-raising, AIDS Action should be downsizing 20% of their workweek for the whole workforce so that all sacrifice together - but just a little. A 32-hour workweek would make their whole staff better rested and probably more productive as they all prioritized and innovated better. This is what Nucor and Lincoln Electric have done for years - flexing the workweek instead of the workforce.]
[Here's another big concept in a pre-Depression period - "glut", "overproduction", "overcapacity" (but God forbid we should ever admit a labor glut or an obsolete 40-hr workweek!) - ]
4/08 Cranberry glut trips prices, triggers layoffs - Ocean Spray [Cranberries Inc.] to cut 100 jobs..., by Chris Reidy, Bos Globe, D1.
...at its Lakeville [Mass.] headquarters by the end of the month..\..Back-to-back surplus harvest's have taken a toll on the country's cranberry industry, driving down prices nationwide and leading to another round of layoffs locally.... The layoff is the cooperative's third since mid-1997.
[So much for the idea that cooperativism is the best middle way between capitalism and socialism.]
Taken together, those three layoffs will downsize Ocean Spray's work force by 500 jobs, 335 of which are in Massachusetts operations. Two years ago, Ocean Spray employed 2,600. When its latest round of layoffs goes into effect, Ocean Spray will employ 1,900 workers, including 600 at its headquarters. Another 200 jobs have been eliminated through attrition and early retirement.
[The major problem for our current primitive form of "downsizing capitalism" - how do we get customers without jobs?]
Massachusetts, the second-largest cranberry-growing state behind Wisconsin, is estimated to employ 5,500 workers in the cranberry industry, and they earn a total of about $200 million a year.
[Or at least they used to.]
For the first time in memory, Ocean Spray has also suspended 1999 redemption payments to some growers looking to cash out Ocean Spray stock. That decision has hurt some older growers who were counting on the payments to help finance retirement....Growers who belong to the cooperative are required to buy sttock. Traditionally, when growers leave the cooperative, Ocean Spray buys back the stock over five years in annual installments....
[As we said above, so much for the cooperativism idea. International Cooperative Association (ICA) take note. Lord God, when not even a cooperative has the sense to cut hours instead of cutting jobs, we're really in trouble.]
4/07 Brigham and Women's [Hospital] to cut 110 positions - 20 to lose jobs as hospital faces $10m deficit, by Alex Pham, Bos Globe, E5.
...Because the majority of positions are currently vacant, only about 20 workers will actually lose their jobs, said Vincent Petrini, spokesman for Brigham, which employs 9,600 full-time workers. Petrini said the jobs being eliminated are management of supervisory. The move is expected to save...$6 million a year. In addition, Brigham is considering boosting its price for medical services.... "Demand for our services has never been greater," [said Jeffrey Otten, Brigham's president.] "Yet, despite high patient volumes, the revenue we receive for each case continues to decline."
[Another hallmark of a pre-depression, wealth-compacted period. Jeff and his fellow doctors may just have to take a cut in that astronomical pay they racked up in the fat times for health care. Cutting jobs completely for a few instead of cutting hours and pay a little for everyone, including the doctor-lord high muckymucks of healthcare, is just more "death by degrees" for our economy.]
4/07 Family's dream downsized, by Eileen McNamara, Bos Globe, B1.
Bigger is better. Mergers are good. Layoffs are no big deal in a booming economy where a new job with some startup might offer those who have been "downsized" an even rosier future. But... [Then there's the personal experience of cascading family problems triggered on Mar. 30 when a pregnant wife on disability leave was downsized along with 21 others from the Bird-Johnson Co. of Walpole, Mass. in the wake of last year's takeover by Ulstein Maritime Industries Inc. of Norway. Does this bear any resemblance at all to the constantly media-bemoaned "labor shortage"?
[Instead of completely cutting 6% (22) of their 353-person workforce (and best boosters), Ulstein should have cut their workweek by 6% (to 37.5 hrs/wk) for everyone including top management, prorated pay accordingly, and kept everyone employed. "Everyone sacrificing together, starting at the top" à la Lincoln Electric raises morale, loyalty, skills and innovation, lowers employee pilferage and sickdays, and heads off workplace sabotage and "going postal." Plus it avoids adding to the self-fueling firestorm of downsizing that is weakening everything in our economy except executive pay, and according to the news the last few days, even that is starting to feel the pinch (witness Intel today 4/07, Polaroid yesterday 4/06, and BankBoston 3/17 on our goodnews pages).]
4/03 Peritus [Software Services Inc.] president resigns, [Billerica, MA-based] firm laying off 40 workers, AP via Bos Globe, B4.
...mainly in sales and marketing....
[Somebody explain to us again why on God's green earth a company in trouble would lay off people in sales and marketing.]
4/01 Mitsubishi to slash 14,500 jobs - Becomes latest Japanese giant to target workers, AP via Bos Globe, D3.
...One of Japan's biggest elelctronics makers said it will eliminate [10% of its global workforce] over the next three years, in addition to planned cuts of 2,600 this year..\..in an effort to erase growing losses.
[Yeah? And just how do you erase losses, probably due to sagging markets, by cutting your own best markets = your own employees? Mitsubishi would be smarter to cut 10% of its workweek, not 10% of its workforce, like and other super-flexible companies like Lincoln Electric of Cleveland.]
The company will trim 8,400 jobs in Japan by the end of March 2002 and cut 6,100 jobs at overseas subsidiaries. Mitsubishi, which makes everything from semiconductors to nuclear power plants, currently employs 146,000 people worldwide.
The move was the latest in a series of cutbacks for corporate Japan as companies struggle through the country's deepest-ever postwar recession and the region's economic crisis. Job cuts of similar magnitude were also recently announced by NEC Corp. [15,000 on 2/20 below] and Sony Corp.[17,000 on 3/09 below] - two more of Japan's electronics behemoths.
[Hey, that's what happens when we give all the money to 1% of the people and lay the rest off.]
4/01 BP Amoco buying Arco in $27 billion stock swap - Purchase likely to affect thousands of US jobs, by Nancy Brooks, LA Times via Bos Globe, D3.
...the world's third-largest publicly traded oil company..\..has agreed to buy...the seventh-largest US oil company.... Analysts are estimating that BP Amoco will aim to cut $1 billion a year in costs, which could mean huge layoffs, perhaps 10,000 or more. Arco's workers, who number 18,000 worldwide, can expect to suffer the same fate as the Amoco work force, which is bearing the brunt of the 10,000 job cuts resulting from..\..the $62 billion marriage of British Petroleum of London with Amoco Corp. of Chicago..\..only three months ago.... BP Amoco CEO John Browne has been dubbed "Neutron John," an allusion to the neutron bomb [which destroys all the humans but leaves property intact]....
[Oh yeah, real macho men - Neutron John and Chainsaw Dunlap - kamekazi managers who love killing livelihoods. You know, John, sooner or later you might need some customers, but you'll find that you and your shortsighted fad-following buddies in the executive suites of the land have downsized and impoverished them all. The more we think about it, the more we like the metaphor of astrophysical economics, where a star collapses under its own gravity, perhaps into a shrunken neutron star, or maybe all the way into a black hole at its center. And a black hole economy ain't pretty, and it shore ain't safe for anyone, leastwise for the dummies that engineered it.]
These mergers are part of an oil industry consolidation that is fed by the need to cut costs in the face pf 18 months of rock-bottom oil prices brought about by over-production [or just stable production] and falling demand [bingo - due to 15 previous years of downsizings mayhap?]. Two of the largest deals occurred in December, with Exxon Corp. and Mobil Corp. announcing a $79 billion merger and French oil company Total agreeing to buy Belgian refiner Petrofina for $11.8 billion.
3/30 Peritus sees loss, layoffs, Bos Globe, D7.
Peritus Software Services [is] expecting...a loss of [up to] $2.5 million for the current quarter.... The Billerica company said...it would be forced to significantly reduce its work force in the next several weeks, with the exception of employees needed to fulfill current obligations. As of the end of last month, Peritus employed 453 full-time workers.... Peritus, which provides Y2K solutions, announced layoffs twice last year amid sagging demand for its software and services.
[Sagging demand for Y2K solutions as we approach the last minute, right up to which everyone has left the problem? There must be something they're not telling us.]
3/29 Wells Fargo to cut about 4,600 jobs, 8 am radio news, Morning Edition, WBUR-Boston.
...in the wake of its merger with Norwest this year and next. Most of the job cuts are expected to be handled by attrition....
[Even by attrition, those jobs are still gone.]
3/25 Durable goods post sharpest decline [5%] since '91, AP via Bos Globe, D2.
...Analysts had been [misled] by...gains in durable goods orders [in Dec. and Jan.]. But factory layoffs continued despite the increase in orders. Job losses total 337,000 over the past year....
[OK, here's the official announcement of the layoffs that TheStreet.com picked up on 3/21 below - ]
3/25 AOL announces revamp, layoffs - Moving to integrate Netscape, firm to lay off 700-1,000, split into 4 units, by Shannon Henry, Washington Post via Bos Globe, D2.
...AOL closed yesterday at 117 1/8, down 3 7/8..\..
The pink slips will be roughly equally divided between AOL and Netscape workers, largely in administrative areas such as human resources and accounting rather than technical jobs like engineering.... Premerger AOL had 9,500 employees, about 3,500 of them working at the company's Dulles, VA., headquarters. Netscape has about 2,500 workers, most of them in California.
[Again, when CEOs value them, employees are called "employees." When they don't, employees are called "workers," as if they're all communists.
[AOL should be cutting their workweek, not their workforce = their own best market and advertising. They should be trimming hours and pay a little for everyone and keeping everyone employed, instead of cutting jobs completely for a few, then a few more, then a few more.... The many companies that indulge in the self-defeatism of downsizing immediately lose employee innovation. Why should anybody help the company to greater efficiency if it only benefits the top executives and hurts all the rest of the company? Lincoln Electric instituted timesizing, not downsizing in 1959 for this very reason - it wanted employee innovation.
[So innovation is another big casualty of downsizing.]
3/25 Lifespan hospitals in R.I. to lay off 269, cut 237 vacant jobs, by Alex Pham, Bos Globe, D6.
Anticipating financial hardship [$8.6m in 99Q1] from reductions in Medicare reimbursement [the federal health insurance program for the elderly and disabled,] Providence's Miriam and Rhode Island hospitals yesterday announced plans...to trim more than 7% of the hospitals' labor force...on of many wrrenching cutbacks to hit hospitals nationwide. Just last week, Mass. General Hospital...in Boston said they will trim 130 positions.... Medicare is in the second year of a five-year plan to trim $112 billion in medical expenses.
[Taking a purely scientific approach here, it is most interesting to note how many mistakes go into the creation of a huge major depression. Instead of cuts to Medicare, the federal government should be maintaining (but not increasing) spending of all kinds and levels until implementing the kind of massive automatic reinvestment at the grassroots that will characterize economies throughout most of the Third Millennium. Once that kind of solid bottom-up growth dynamic is operational, then and only then should the government reduce spending.
[How should government pay for all this spending in the meantime? Not by sales taxes, which slow down currency circulation and economic dynamism - they and all use taxes should be discontinued. How then? By centrifuging the astronomically concentrated wealth of the rich via restoring steeply graduated income taxes, to solidify the economic "boom" - rather than letting it continue to hollow out into a more and more fragile bubble. Steeply graduated income taxes come in during wartime anyway, and wartime is exactly what we are heading for, because our current primitive form of capitalism has no other way of dealing with its huge and growing labor surplus, especially in view of its inability to even acknowledge the existence of this wage-indicated labor surplus. Wages are flat. Why? Labor surplus. The unemployment rate is carefully groomed to indicate but a tiny fraction of the problem. Disability, homelessness, prisons, forced part time, forced self employment are all carefully kept partitioned off as "externalities" that economists can ignore.]
3/23 Manufacturing job loss leveling off in Mass., by Kimberly Blanton, Bos Globe, C9.
[Misleading headline - the article provides no figures that indicate what mfg job loss is doing - only that productivity "surged" at the same time, and as Kimberly should know by now, job loss can actually raise your productivity-per-employee figure.]
...The state's manufacturers lost 7,200 jobs in the final three months of the year.... Yet...manufacturers...are beginning to recover from a slowdown in exports to Asia that began more than a year ago. In the fourth quarter of 1998, production surged at a 7.9% annual rate; for the year, growth was 3.5%....
[A higher productivity figure is not a "beginning to recover," and we wonder what Kimberly is calling a productivity "surge" - it could only be reflecting the 7,200 jobs lost.]
3/23 Cabletron narrows quarterly loss, plans to cut 300[+600] jobs - N.H. firm to close Ohio plant, outsource manufacturing, Globe Wire Services via Bos Globe, C6.
ROCHESTER. N.H. - ...A maker of computer networking products yesterday reported...it would...outsource manufacturing to Celestica Inc. as part of a previously announced restructuring.
[Oh, if it was "previously announced," then it's all right. But wait, isn't this in the 2nd-hottest area within high tech, networking?! Doom, DOOOOOM!]
The loss of jobs would stem from Cabletron's closing of its Ironton, Ohio, plant. In addition, about 600 employees at the Rochester [NH] plant being bought by [Toronto-based] Celestica will get pink slips from Cabletron in the next 60 days and will be rehired by Celestica....
[So why the pink slips? To rattle them enough so they'll accept paycuts? Great idea - NOT. We like to dream, but bottom line - Canadians aren't any brighter than Americans. Check out Toronto-based Celestica's upcoming shell game in New Hampshire - ]
Celestica will relocate its operations to Plymouth...from Exeter.... [It] will close the Rochester plant and transfer all of Cabletron's former North American manufacturing operations to the Portsmouth...area [all] within 18 months.
[Oh here we go - ]
Most Rochester workers rehired by Celestica will be given benefits and pay equivalent to Cabletron.... Some, however, will be rehired on contract and won't receive benefits....
[CEOs are like a bunch of chimpanzees trying to visualize the obvious maximum-flexibility company that Nucor and Lincoln Electric are already modeling - have been for years - but most CEOs are managing only to demoralize their employees by downsizing rather than timesizing.]
The outsourcing is part of a larger restructuring that is expected to save the company about $80 million [and lose another chunk of its own markets. It is] dubbed Project Ignition....
[Project Extinction more likely.]
[And so it begins - ]
3/21 [TheStreet.com] Report: AOL to cut 30% of Netscape staff [750 jobs], AP via Bos Globe, C3.
...Netscape's [2,500] employees mostly work at its Mountain View, Calif. headquarters. The report comes just two days after [Dulles, VA.-based] AOL, the largest provider of Internet access and on-line "service" [sorry, couldn't resist injecting quotes], completed its $10 billion acquisition to create a new Web giant....
3/20 First Union to cut 7% of jobs (5,850), AP via Bos Globe, C1.
...to save $300 million in 1999...in a restructuring plan related to last year's [$16.1b] merger with CoreStates Financial [that made it the nation's 6th-biggest bank] . The cuts...will hit hardest in the Carolinas and Pennsylvania....
[Of course, they could minimize the impact on their morale, skill set, productivity and markets by simply cutting their corporate workweek down by 7% instead of their workforce. Let's see, that would give them a workweek of 37.2 hrs. That should be pretty popular with the single (or double) parents within their ranks. Of course this would mean a prorating of pay down to 93%, including that of top executives, bur everyone would remain employed, earning, and spending.
[The "Hoovering" of our economy proceeds apace, even at the Mass. General, the world-famous heart hospital.]
3/20 MGH will cut 130 jobs, raise prices - Budget shortfall, Medicare cuts cited, by Alex Pham, Bos Globe, C1.
Massachusetts General Hospital...will...raise retail prices for its services by 10% across the board in order to cope with a multimillion dollar shortfall in its budget. ...The...staff reduction is one of many wrenching cutbacks likely to hit Massachusetts hospitals because of a planned five-year reduction in Medicare reimbursements that began last year. Mass. General, which employs 11,825 full-time workers, lost nearly $5 million in the first quarter of its fiscal year 1999 ended Dec. 31, despite record numbers of patients cared for at the Boston teaching hospital.
[Hmm, sounds like Amazon.com's problem - selling record numbers of books and still not profitable.]
Because the majority of the positions being eliminated are currently unfilled, only about 10 people are expected to be laid off....
3/16 Boeing to cut 6,700 more than projected, AP via Bos Globe, C2.
...thanks to reduced overtime and other manufacturing efficiencies in its commercial airplane division....
[There's something they're not telling us. Reducing overtime, work being steady, means more jobs, not less. That probably means there's a ton of new robots in the glossed-over "manufacturing efficiencies" that they're not mentioning.]
Boeing's profits...have been severely depressed during most of the past two years, the result of production line snarls, parts shortages, and late aircraft deliveries. The troubles began as Boeing was cranking up assembly lines to record production rates and asking workers to log vast amounts of overtime....
[Oh here we go. Make that "pressuring workers to log vast amounts of overtime." Everybody knows that people make more mistakes during overtime and get angry when they're pressured, further reducing efficiency. It's the frequently seen poor management in America today - when the contracts roll in, they're too lazy to hire more employees, even from a temp agency, so they squeeze their existing employees to the breaking point. It's all part of a big shift in management thinking the last 20 years - employees have become a pain in the neck for American management and never mind what it does to their own markets, the less payroll they can carry, the better.
[Thus, we are living in the lag time between (A) when they inject new technology and jump productivity without jumping wages and spending, and (B) when they are faced with the realization that productivity without markets is meaningless. At point (B), the financial markets usually collapse, depression ensues, and the depression is eventually resolved by disease or war, reducing the labor glut and (by the ensuing market forces which follow supply and demand) forcing the rich to spend money at a rate not seen since their anti-employee mood began. This has happened several times before (e.g., 1929) and maybe it's time we learned from history so we can quit repeating the nightmare. We quit by automating reinvestment in employees (wages and benefits) so that when management has their little pouting tantrum, it can't cut their high levels of reinvestment in their own markets and turn them all into short-sighted looters engineering their own collapse.]
Since then, sales have slackened due partly to recessions in Asia and other markets and Boeing plans to reduce its production rates over the next two years.
[OOOOkay here's the rest of the story. Sales slacken mainly because of late aircraft deliveries and possibly poor-quality work. And due to slack sales (attributable to increased, not decreased, overtime), they make further jobcuts.]
..\..Total job reductions by the end of the year will be at the high end of a 28,000-38,000 range that the company announced earlier, Boeing said.... It announced late last year it would reduce employment from its mid-1998 peak of 238,000 to 185,000-195,000 by the end of 2000. Machinists' union officials say the new job cuts are uncalled for. Seattle based Boeing's stock fell 7/16 to 34 11/16.
[A dramatic contrast with the short-sighted trauma-inducing top executives at Boeing is presented by the flexible and far-sighted management at Nucor Steel. Nucor has a strong commitment to job security for its employees, because it values their skills. So it only promises them 3 days work a week at $8 an hour. But when the contracts roll in, it expands up to 7 days a week and $20-22 an hour in wages.
[Nucor is the most flexibly structured corporation in the world today in one of the shakiest American industries - it's one of the last surviving American steel companies. In a steadier industry, the variation could be confined between 2 and 5 days a week and $10-20/hour. With the forced bankruptcy of the "free-trade" panacea, the contract flow could be steadied at the high end and the wage variation narrowed at the high end, leaving us with the 2-5 day worktime variation.]
3/16 Wellington Management closing Atlanta office, [three fund managers laid off], Bloomberg via Bos Globe, C9.
...Closely held Wellington employed five portfolio managers [out of] the smallest of [its] three investment operations. After the change, all its investment employees will be based in Boston and Radnor, Pa., where they manage most of the company's more than $211 billion in assets, including about $88 billion for Vanguard Group, the number two mutual fund company in the United States [after Fidelity].
3/15 Fleet to acquire BankBoston, [four to five] thousands are expected to lose jobs in the region, by Diane Lewis, Bos Globe, front page.
...In all, 60,000 people now work for the two banks worldwide, many of them employed at BankBoston's 427 branches or at one of the 1,150 branches Fleet operates across the Northeast. Senior company executives said yesterday the banks would close about 24 branches, and many other locations would be sold to satisfy antitrust regulators concerned about preserving competition in the banking industry. Botho banks have been shedding jobs for years, as a wave of consolidations and mergers has swept through the industry nationally. Fleet laid off nearly 6,000 people between 1993 and 1996 after it absorbed the failed Bank of New England and other banks, and instituted a cost-saving program. The 1996 merger of BayBanks Inc. and BankBoston resulted in the elimination of 2,000 jobs.... Fleet has been criticized in the past for its heavy-handed approach to layoffs. By contrast, the job cuts [by] BankBoston...were praised for their sensitivity.
[What's the difference. You mega-rich CEOs are still wiping out thousands of your own best customers and boosters, and their families, and losing goodwill [remember goodwill? - sounds rather quaint today, doesn't it] with their friends and neighbors.]
With the Internet, ATM machines, and electronic transfers playing a greater role in banking, the two banks probably will reduce brick-and-mortar operations.... "In the short term...some will be let go," [said Robert Reich].
[Oh careful, you're all in danger of admitting that work-saving technology destroys jobs!]
At the same time, the combined institution is likely to hire more information technology workers as its reliance on new technology increases.... "If the merger enables [the two banks] to become stronger competitors in the financial market, it could ultimately mean more jobs and better jobs," [said Reich].
[Phew! That assurance saves the day. Or does it? "Likely to hire" is a lot different than "will result in the layoffs of," and Reich's "if" is a big "if" in view of the national and global layoff picture and the parallel history of the 1920s. Reich sounds as confused as Tugwell did in 1933. He's sounding more now like a salve to sinking status quo than he did when he was Secretary of Labor!]
"Within five years [when] a more significant percentage of banking will be done on the Internet, [Fleet and BankBoston] will be looking at cutting fixed costs, and a big chunk of those costs will be branches," [said Laurent Jaque, a professor at Tuft's Fletcher School]...."There will be a lot of anxiety within Fleet and BankBoston about what this merger will mean to employees," [said Lisa Lynch of the Fletcher School]....
[And anxious employees make bad customers and don't exactly attract customers, and they're not the most productive employees either. Recall Deming's 8th "point for management" - "banish fear from the workplace." And the best and the brightest won't wait for the layoff announcements - they will already be dusting off their resumes . And the smart people will be leaving the banking industry and going into...pure information technology. But watch out - even in high tech there's a 17% unemployment rate in the over-50 age group (same in banking - see below). Best bet for job security? America's biggest new industry - prison construction.]
The...merger is part of...an ongoing push to crteate large national and international banks that can compete worldwide.
[Yeah, we hear ya - bigger and bigger banks fighting ever more viciously for smaller and smaller scraps.]
As a result, bank layoffs have been widespread. Chase Manhattan Corp., for example, the nation's third-largest bank, has announced the layoff of 4,500 workers, or 6.5% of its employees, since a 1996 merger with Chemical Banking Corp.
[Ever notice how they're socialist-sounding "workers" when they're getting the axe, and nice capitalist-sounding "employees" when they're not? Plus -
"The good news is that the economy is so strong that if you lose a job, there is always the possibility [not even probability!] of finding five others.... So, if you are...in your 30s, no big deal. If, however, you are in your 50s, there could be difficulties," [noted Jaque].
[All so unnecessary. Let's see. 5,000/60,000 = an 8.3% cut. Suppose they cut their workweek instead of their workforce. This would minimize the trauma by sharing it - sort of a new kind of unemployment insurance where the premiums are paid in time and not money - and with a workweek of 36.7 hrs/wk, employees would be more rested, focused, productive and loyal anyway. This is the way VW, Nucor, and Lincoln Electric do it. We call it timesizing, as opposed to downsizing. It maintains and solidifies the otherwise shrinking markets for the targets of big investment dollars and it reverses the deterioration of CEO personal security (recall the pies thrown in Bill Gates' face) because it's basically "all sacrifice together, starting at the top." See also our 3/15 entry on our Mergers page.]
3/15 In N.H., pink slips issued en masse - 500 in schools notified of layoffs in Portsmouth, by Alice Giordano, Bos Globe, B1.
...In what could be the first of several simliar actions across the state, the entire Portsmouth public school department staff - ...educators and administrators - received layoff notices on Friday [indicating] that their jobs could be eliminated as of the end of this school year [unless the signing of a new] school contract indicates [a new system for funding New Hampshire's public schools is found].... The New Hampshire Supreme Court ruled in 1997 that the state's reliance on property taxes to fund education is unconstitutional [huh? - after all these years? - so] the House of Representatives has passed a bill authorizing a first-ever state income tax [which Gov. Jean] Shaheen has said she will veto....
[This bizarre "education crisis" is sparked by the fact that the state of New Hampshire is one of the few places in the world to have embraced Henry George's 19th-century ideas about a "single tax on land."]
3/12 French telecom firm Alcatel to cut 12,000 jobs, by Melissa Pozsgay, Bloomberg News via Bos Globe, C2.
PARIS - ...Europe's second-largest phone-equipment maker said it will eliminate...a tenth of its work force over the next two years to cut costs and boost profits. A large part of the job cuts will come from restructuring the group's US operations....
3/12 Ingram to cut 1,400 jobs, issues earnings warning, Bloomberg via Bos Globe, C2.
Ingram Micro Inc., the largest wholesale distributor of personal computers said it's cutting...10% of its workers, and warned that Q1 earnings will lag forecasts because of price cutting in the United States and slowing sales abroad....
[That's two companies today who should be cutting 10% of their workweek instead of their workforce. And the first one was French - so they should know better because of their 1996-97 experience with the Robien law, which gave French companies 7-year taxbreaks if they'd cut their workweek 10% instead of their workforce.
[Here's a question for you. How do we know when we're into a depression? We've got US price cutting (= deflation) and "slowing sales abroad" as this story exemplifies. We've got global unemployment (America splits its unemployed between a tiny number actually on unemployment and counted, growing numbers on disability and soup kitchens, declining numbers on welfare and nearly one in 150 Americans in prison or jail, a world record). But the catch? The owners of our tightly consolidated media have no incentive to admit any serious problems, and considerable incentives in the form of self-inflating stock prices to spin whatever happens as "the best of all possible worlds."]
["We toooooold you so" Dept. - ]
3/12 Unions say Raytheon broke job promise - the tax break 'has not saved one manufacturing job since 1995', AP via Bos Globe, C3.
[This article proves again that Mass. state legislators are chumps.]
...Robert Haynes, president of the Massachusetts AFL-CIO, said labor will be working to strip Raytheon of the special tax breaks or at least tighten the legislation that tied the tax breaks to a company's payroll, but not necessarily jobs. "We're extraordinarily disappointed that at Raytheon alone we've lost 1,800 manufacturing jobs over the past couple of years," Hayes said.
[Go for stripping the tax breaks and take your medicine without our having to do them favors while they screw you. You'll NEVER pin them down. If you union guys want to do something more than whistling in the wind, get back on your grandfathers' issue and get back some bargaining power by engineering an overall labor shortage. How to do that short of war or pestilence? By shorter hours. Don't shorter hours mean less pay? Look at the long trend. We worked 80+ hours/week in 1776. The workweek fell and wages rose for over 150 years. How? Technology. You either get back on this issue or you are gone gone gone - replaced by robots. You cannot have all three of (1) a long workweek, (2) high technology, (3) well-paying secure jobs. You don't control (2), but you can get (3) by changing (1).]
[Corporate suicide proceeds apace - ]
3/10 Hit by slump in oil, Fluor Corp. to cut 5,000 jobs, close 15 offices, Bloomberg News via Bos Globe, C2.
IRVINE, Calif. - the largest US engineering and construction company...will be eliminating 10% of its work force by the end of 1999..\..as low oil prices and recessions in Asia and Latin America crimp revenue.... "We are reacting to deteriorating business conditions," CFO Jim Rollins said. "Capital spending on a global basis is declining."
[And note this, ye wealthy - it's not as if there aren't PLENTY of people in this world who don't want to spend the money, but they can't, because you have so much. To translate this 'because' into a more remediable form, 'because' there has been no standard guideline as to the relatively colossal levels at which you should be reinvesting money at its sources, instead of skimming it and accumulating it in the financial markets, where despite the rhetoric, it is just not getting efficiently back in play.
[Stock prices are a huge (but inherently limited, like a loan) sponge that cannot expand forever. They are based on productivity (per person), but not just any productivity - market-supported productivity. And the more money Bill Gates and you concentrate, the less centrifuged spending power there is out there to form those productivity-supporting markets. The only published solution to this almost completely ignored but totally central and lethal underlying 'bug' in our current 'mixed market capitalism' is in chapters 7,8,9 of Phil Hyde's 'manual' - Timesizing, Not Downsizing, available on *Amazon.com.
[For example, in Fluor's case, Jim Rollins should be cutting 10% of Fluor's corporate workweek and keeping everybody employed and relatively secure, instead of 10% of the corporate workforce, who will then immediately slow down their spending, including spending with Fluor's customers. Fluor is accelerating the economy's death spiral, not retarding it. And of course, since cost savings are needed, Rollins could observe Lincoln Electric's rule "all sacrifice together, starting at the top" and prorate everyone's pay, including his own. Consider how much this enhances his personal security by reducing the chances that anyone will 'go postal.']
[Gee, how'd this get into the paper? Must be those Japanese execs haven't yet figured out how to hush up downsizings (or hush downsizings up) - ]
3/09 Sony to cut 10% of work force, Bloomberg News via Bos Globe, C2.
TOKYO - ...the world's second-biggest consumer electronics company said it will...take four years
and [make] 17,000 job cuts [and reorganize]....
[As Dilbert's pointy-haired one said on 2/25 below, "Then we'll reorganize, because that's all we know how to do."
[Again, Sony should be cutting 10% of its workweek instead of 10% of its workforce (like VW, Nucor, Lincoln Electric, the Robien plan in France...) and saving jobs, and earnings, and markets. Japan has 10,000 cases a year of "karoshi" (death due to overwork) anyway, and chopping jobs chips your markets. Multiple companies chipping markets adds up to chopped markets for all, and more rounds of job chops and chipped markets....]
3/3 GE to lay off 200 [jet engine production] workers at Lynn plant - Blames Asian slump and loss of contract, by Kathy McCabe, Bos Globe, C3.
LYNN, Massachusetts - ...Before the layoffs are completed at the end of this month, the total number could rise to 225, with about two-thirds of the cuts coming from the ranks of hourly workers, and the remainder from salaried employees, GE officials said.... Employment at the Lynn plant, hit for several years by job cuts, will fall to an all-time low of about 4,800, [said Richard Gorham, GE's spokesman in Lynn].
Just last week, GE suffered a major loss when [rival] Pratt & Whitney won a $3 billion contract from United Parcel Services Inc. to supply engines to power its cargo planes. "...We've won our share of contracts to be sure, but when you drop a big one, you have to adjust to it," said Robert N. Risch, GE's government relations manager in New England.
[Richard, how can we communicate with you that throwing people out of jobs is the stupidest, most suicidal-for-you way "to adjust to it"? That just maximizes the trauma. Now you have 4800 scared employees, the best of whom are going to be dusting off their resumes and the worst of whom are going to be "yes-man-ing" you to sleep so they don't get pinkslipped next. The centerpiece of Ed Deming's 14 points for management was "abolish fear in the workplace."
[How do you do that? You cut the workweek, not the workforce. That's how you "adjust to it" without maximizing it. Let's see, cutting 200 out of (4800+200) employees means you only need 4% cuts. A 4% cut in your workweek from 40 to 38.4 hrs/wk would be scarcely noticeable and might even raise productivity because of the paradoxical prioritizing effect that Juliet Schor notes on p. 154-55 of her 1991 opus, The Overworked American.
[Plus it would make management and labor more, not less, loyal to each other, deliver much more employee innovation, and avoid contributing to the general decline in American spending power which could only hurt your markets by, for example, cutting business for UPS, whose next contract might well go to you instead of Pratt. If it's money you're trying to save, make sure when you cut the workweek and prorate pay, that you include everyone, include yourself and the rest of the executive suite. One of Lincoln Electric's 3 principles for their lifetime guarantee of employment is "all sacrifice together, starting at the top (where it hurts least)."
[Who listens to CEOs yelling "class warfare" when they're the ones that declare it by downsizing instead of timesizing, which means cutting hours for all instead of jobs for a few, and a few more, and a few more.... The struggle to replace downsizing with timesizing, and the well-meaning but hopeless dream of eventually sufficient job creation with immediately sufficient work sharing, is the abolitionist movement of the 21st Century. By 2100 AD we will look back on downsizing with the same mixture of horror and pity as we today look back on slavery.]
3/3 Muscovites lose Dunkin' Donuts [& 20+ lose jobs], AP via Bos Globe, C2.
...The Randolph, Mass.-based coffee chain closed its two shops in Moscow.... The economic crisis led to shutting one downtown shop that employed 20 [where] sales have been cut in half since August..\..by the economic collapse.... The other closure was due to a poor relationship with a franchisee who was also selling liquor and meat pies [oh noooooo!].
3/02 Hancock to revamp sales system, remold  staff agents, by Lynnley Browning, Bos Globe, D3.
...As part of its change, Boston-based Hancock, one of the nation's 15 largest life insurers, will phase out its 850 career agents [who] can either join the ranks of some 2,150 general Hancock agents - independent contractors affiliated with but not formally employed by Hancock - or leave....
Click here for downsizing stories in December/98.
Click here for downsizing stories in November/98.
Click here for downsizing stories in October/98.
Click here for downsizing stories 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.
Questions, comments, feedback? Phone 617-623-8080 (Boston) or email us.