Timesizing® Associates

Downsizings in May-Jun/99
[Commentary] ©1998,1999 Phil Hyde, The Timesizing Wire, Box 622, Cambridge MA 02140 USA (617) 623-8080


6/30/99 Mead Corp., NYT, C4.
...Dayton, Ohio, a supplier of coated and specialty paper and office supplies, said it would shut four uncoated paper machines at a plant in Rumford, Me., affecting 200 workers.
[Now there's a nice euphemism! Leave it to the Times. The Globe pulls out the stops on this one, maybe since it's "local" - ]
6/30 Mead to slash 200 jobs at Maine paper plant, AP via Boston Globe, F7.
...Rod Jamison [union official] said he expects about 150 union-covered workers and 50 salaried workers to lose their jobs. About 1,200 workers will remain when the cuts are completed.... Salaried workers will receive severance packages based on their wages and years of service, as well as outplacement services.... The [United Paperworkers] union will negotiate its own severance package....
[So this is a (200/(200+1200)=) 14% cut in the workforce that should be a 14% cut in the workweek, meaning a workweek of (40hrsx86%=) 34.4 hours a week - not such a big change in backwoods Maine in return keeping everyone employed, loyal, motivated (& better rested in a dangerous industry - less liability problem). And there are lots of guiding precedents. As it is, Mead is tossing 200 people all together into a sparse Maine job market and we suspect a goodly number of those people plus their family & friends will avoid Mead products in future.
[The key to the future is "all sacrifice together, starting at the top" where it hurts least, and the fairest way to sacrifice together in a downturn is to cut hours and convert overtime into training.
[Remember t-r-a-i-n-i-n-g? Quaint idea, wasn't it? - but all these employers who cry "Labor shortage!" without doing any training are nothing but spoiled liars who have raised their job qualifications repeatedly to cut down the flood of resumes. The future will shift emphasis from job seniority to job versatility, and it will accomplish this with a mind-boggling amount of on-the-job training, pervasive throughout the economy, of all shapes and sizes: retraining, cross-training, continuous training.... All will be controlled by flexible market forces responding to an overall balance of labor and employment, workers and jobs, automatically balanced by a workweek fluctuating much lower than today, and linked to an overtime-to-training conversion program. Training and hiring will be switched from arbitrary and inflationary job creation to natural, market-demanded training and hiring controlled by the incidence of overtime as the monthly resetting of the workweek alters it. Overtime will target, trigger, pace and fund more and more training and hiring. Once it's set up it will need very little government fiddling except for enforcement, similar to the one-person-one-vote concept. This will be a one-person-one-workweek-range concept, a balancing, skills&spending-centrifuging principle that we call Timesizing.]

6/29 Shaw's parent gets OK to acquire Star - About 300 jobs to be lost; chain ordered to divest 10 Mass. stores, by Chris Reidy, Bos Globe, D1.
Shaw's Supermarket Inc. said its British parent [J Sainsbury PLC] received government approval yesterday of its acquisition of Star Markets Co....
[Scan down to our treatment of this mixed blessing in a 11/28/98 merger story and a follow-up 3/30/99 story about some last-ditch unionizing on our glimmers page.]
As a result of the deal, Star's Cambridge headquarters will close within three months, and nearly 300 jobs will be lost, said East Bridgewater-based Shaw's, which will be required by the FTC to divest 10 of the 179 stores run by both chains. All 10 stores are in Massachusetts....
By the end of the summer, plans call for five of the stores to be sold to Victory Supermarkets of Leominster and two to Foodmaster Supermarkets of Somerville. Three remaining stores are still being shopped around. The hope is that the roughly 1,000 employees who work at those 10 stores will be hired by the new owners, Shaw's said. [The] merged business [will have] more than 30,000 employees....
Sainsbury...had hoped it would have to sell only 5 stores to address antitrust concerns. Having to divest 10 stores reduced the originally announced pricetag of the deal from 490 to $476 million....

6/29 Scudder to lay off 200 in Mass. - Firm says cuts needed for move into on-line sales, by Steven Wilmsen, Bos Globe, D1.
...Scudder officials yesterday told employees that it plans to trim jobs at offices in Salem, Boston, and Norwell, said Scudder spokesman Steven Shapiro. Back-shop jobs - those that typically involve data processing or other tasks not readily apparent to customers - will be cut and farmed out to Boston companies, he said. Additionally, employees in the firm's direct mutual fund business, which markets two families of no-load mutual funds with some $110 billion in assets, will be laid off, he said. The mutual fund operations will be consolidated in Norwell as part of the move....
Scudder was formed 18 months ago when the closely held old-line Boston firm Scudder Stevens & Clark agreed to be acquired by Zurich Financial Services and combined with the Swiss company's Zurich Kemper Investments unit. The combined company, whose headquarters was moved to New York, employs about 4,600 worldwide, most of them in New York and Boston....
[Is anyone else getting the feeling that the simple matter of earning a living in this economy is too important to be left to what are becoming an increasingly short-sighted and narrowly interested management class? Our only way of disciplining them with tighter competition among themselves is to ration their access to employees in the aggregate, and so heighten their competition for employees that they resume treating them as more than disposable irritants. This can be done by thawing the 59-year freeze on the workweek and gradually bringing it down to a level where employees are once again getting paid for their productivity - a level appropriate to our high and rising levels of efficient work-saving technology. Timesizing does this. For - to adapt an old saying - if technology is efficient without purchasers, is it really of any use?
[In a story the following day (6/30 Scudder to cut jobs in shift to Internet, p. C11), the Times has the number of layoffs down to "up to 120" but says "The layoffs represent 2% of Scudder Kemper's 5,000 employees" which would put the layoffs down from the Globe's 200 to 100, and put Scudder's total workforce up from 4600 to 5000. Lordy, when we get this kind of variation in our data within a two-day period at the time of the events, how the hey are future historians supposed to get anything remotely correct?
[At any rate, to compare what stupid Scudder is doing with what smart Scudder should be doing, if they cut 2% of their workweek instead of their workforce, they'd have everyone employed, loyal, motivated, rested and a workweek of (40hrsx98%=) 39.2 hours a week - not such a big change for all those benefits - and one with lots of precedents. As it is, they're tossing 100-200 people all together into the job market and we suspect a goodly number of those people plus their family & friends will pull their assets out of Scudder as soon as they can.]

6/26 I.B.M. plans to cut 1,100 jobs in California, AP via New York Times, B3 (NE).
...in San Jose...roughly 10% of its northern Calif. work force, in preparation for moving its disk-drive factories to foreign countries...Mexico, Hungary and Japan. The company's Storage Systems division will remain in San Jose where it will focus on research and development of new storage technologies and high-end disk drive design, a spokesman said. The revamping, announced to employees a month ago, is intended to standardize IBM's product designs, reduce costs and shorten the time it takes to get products to market.
[The awful thing about this, now common, type of behavior on the part of CEOs, is the extreme unnaturalness of it. They routinely betray their fellow citizens for imagined monetary gain. And they expect (and get) applause from others among their fellow citizens elsewhere in the country, mostly among the most emotionally stunted citizens in the land, with jobs on Wall Street. This is probably why the nation as a whole never detects its danger in this type of compacting and collapsing period until jobs on Wall Street start disappearing in large numbers, and the robopaths who work there get some inkling of what they've been dishing out.
[Truly "hell is other people." Our current system actually uses up energy to create hell for other people. Let's call it Dark Capitalism, full of fear and insecurity, self-generated. But there is a Light Capitalism, heralded by Arthur Dahlberg in his "Jobs, Machines, and Capitalism" and by W. Edwards Deming in the center of his "14 points for management" (banish fear from the workplace). Deming realized that any iota of fear was an attack on faith, and that faith was the foundation of value. So any fear cut the value in an economy, no matter how much the ambivalently defined GDP might go up and the ludicrously defined unemployment rate might go down. And it is this Light Capitalism that fosters faith and goodwill and loyalty, that is the type we elaborate in Timesizing, Not Downsizing.]

6/26 Bedford Fair Inc., NYT, B3.
...Greenwich, Conn., a seller of clothing through mail-order catalogues, said it would lay off about 200 workers by July 31.

6/25  4 downsizings (CEO self mutilation - whatever happened to empire building? - or is that in a separate partition of the brain labelled "takeover"? Engulf, and kill people economically - repeat, -repeat - it really is a kind of warfare whose purpose is to telegraph to the perpetrator "you are important you are important you are important..." - the only problem is, it damages consumers and markets - that, in turn, evokes real war - but for now, here's an arms cutback - ):

  1. British arms cutback, Bloomberg News via New York Times, p. C2.
    Europe's biggest arms company, British Aerospace PLC, said it would close a plant and airfield [and] cut 2200 jobs...to improve its plane-making efficiency.... The company will soon complete the acquisition of Marconi, to create the world's third-biggest aerospace and military company after Boeing and Lockheed Martin.

    [Bigger, BIGGERRRRRRR!!!
    Never mind E. F. Schumacher's Small Is Beautiful, or Phil Hyde's "Diverse Is Beautiful."]

  2. CompUSA plans to cut up to 1,500 jobs [7%] as it reorganizes [closing 4 stores], AP via NY Times, C3.
    ...The personal computer retailer plans [the cuts] to increase profitability.... Considering closing as many as 10 other [stores]. It employs about 21,000 people....
    [And these are basically "McJobs" here, let's face it. Kate Jurow says they've hired teenagers and trained them little or nothing so they really need the "fundamental redefining" of their "entire business concept." But a good Step One would be letting everyone take a 7% cut in both hours and pay and keep their jobs, instead of firing 7%. A 37.2-hr workweek? Probably wouldn't even cause a blip in productivity, unless upward due to more prioritizing. Look at VW, Nucor, Lincoln Electric....]

  3. Nabisco is closing Houston bakery and cutting 450 jobs, Bridge News via NYT, C3.
    ...The largest United States cookie and cracker maker...said the closing [plan] followed a study showing that its existing bakery capacity exceeded its needs. It has also closed a Pittsburgh plant as part of a companywide reorganization. A Nabisco spokesman said that the company hoped that Houston would be the final plant to close, but....
    [Like they don't have the alternative of cutting their workweek instead of their plants and jobs - and markets? What limited brains.]

  4. Hirsch Speidel Inc., NYT, C3.
    ...Providence, RI, a maker of watchbands and jewelry, said it was laying off nearly 200 workers, almost half its work force of 420, because of lagging sales.
    [Speidel can be sure this strategy will lag its sales (and morale and productivity) further. Another story 5 months later explains more of this market-diminishing "strategy" -]
    11/30/99 Speidel manufacturing leaving R.I. for China, AP via Boston Globe, D9.
    Watchband maker...is moving most of its manufacturing operations from Rhode Island to China [and] selling the downtown Providence building it has occupied for nearly 100 years. The sale is part of a restructuring that includes laying off 200 employees. The layoffs began last summer and equal about half of the company's Rhode Island work force.... Speidel says it can no longer compete with watchband makers that manufacture their products overseas.... Speidel will move some equipment to an East Providence plant. Workers there will focus on marketing, sales, order distribution, and packaging.
6/24/1999 #1 American Greetings to cut 650 jobs and take a charge, Reuters via NYT, C4.
[We see it now...... "Greetings, you 650 people. You're fired."]
...[A] greeting card maker...said yesterday that it would cut 650 jobs in Canada...to integrate its operations in Canada and the United States.
[There's 650 people, their families and friends, who will never buy another American Greeting card again! - and probably a good number of their friends still working for the company too.]
American Greetings, based in Cleveland, said that the integration would be the first phase of an international restructuring....
[If these clowns are based in Cleveland, they can hop right over to Lincoln Electric in East Cleveland and take a free management seminar on how to maximize your employee morale and productivity by cutting hours, not jobs. Lincoln cut from 55 hrs/wk to 32 in the early 80s and never laid off a soul. They've since climbed back to 40 hrs/wk, had another dip below 40 in the late 80s and are now still coasting around 40 as far as we know. Lincoln believes in sacrificing together, starting at the top, and their futuristic policy keeps their skill set intact for the recoveries too.]
The $30 million charge reflects the costs of closing manufacturing and distribution facilities in Ontario and severance costs for 650 jobs at those plants. The shares...fell 56.25¢ (2%), to $29.
[Hey, at least Wall Street kicked them this time, instead of the usual applause.]

6/24/1999 #2 LeukoSite buys biotech firm ProScript, by Ronald Rosenberg, Bos Globe, D6.
...The purchase comes nearly 4½ months after LeukoSite completed the $14.5 million cash purchase of CytoMed Inc., a struggling biotechnology company with two drugs in clinical trials. All three firms are based in Cambridge, Mass.... ProScript, a seven-year-old company, has...downsized its operations [17 people, 40%] from 42 people earlier this year to about 25....
[Makes you wonder how many other downsizings we haven't heard about.]

6/23 Vista Eyecare Inc., Lawrenceville, Ga., the No. 2 American chain of eyeglass stores, laid off 85 people, NYT, C4.
...in May, when it closed a laboratory in Tempe, Ariz., to consolidate manufacturing and cut costs.
[The usual kamekazi excuses. Whatever happened to empire-building as a macho rush?]

6/22 [Swiss pharmaceuticals giant] Novartis plans to cut 1,100 jobs, Associated Press via AOL News via RadioTony.
...from its struggling agricultural division over two years in a bid to cut costs. The company hopes to make the cuts, which amount to 6.1% of the 18,000 people employed in the division, through early retirement and internal transfers but did not rule out layoffs. It expects the cuts will result in savings of $65 million a year. About 150-200 of the jobs lost will come from the company's Basel headquarters.
Agricultural division head Heinz Imhof said the move will give Novartis "full flexibility'' to maneuver in a changing environment in Europe and the Americas, and to adapt to lower farm subsidies and commodity prices.... Novartis became the world's third biggest pharmaceuticals company when it was created in the 1996 merger of Ciba-Geigy and Sandoz....
[See, contrary to popular belief, Europe doesn't get it either. Novartis should be cutting 6.1% of its workweek and keeping everybody employed and earning and spending, like VW, Nucor and Lincoln Electric, instead of cutting 6.1% of its workforce and spurring the global death spiral. And here again is the merger-downsizing link.]

6/22 Royal Bank of Scotland unit will purchase [United States Trust (UST) for $1.4b], Reuters via NYT, C4.
The Citizens Financial unit...strengthened its position yesterday as the No. 2 banking company in the Northeastern United States.... The transaction comes six weeks after Royal Bank and Citizens announced the $350 million purchase of part of the Boston-based State Street Corp.'s commercial operations.
The deal will result in the elimination of 800 jobs from the two banks and 30 branch closings. UST jumped...$6 a share [24%]...
[Here's the whole connection between mergers, job loss and stock jumps.]

6/19 Iomega Cuts 450 Jobs, AP via NYT website.
ROY, Utah - Iomega Corp. is cutting 450 jobs, or 10% of its workforce, as it struggles to recover from sluggish sales of its computer storage products and the loss of top managers.... Iomega disclosed Wednesday that it was losing three top executives and two other key company officials..\.. Iomega tied its disappointing results to weak sales of its Jaz drive and disks, a delay in shipping its Clik! PC Card drive and parts shortages resulting in slow sales of Zip drives....
[Ya know, CEOs really need a way of not bashing employees for "acts of God" in the economy and their own strategy mistakes. The obvious way is cutting hours and not jobs and skills. Iomega should cut 10% of its workweek, not its workforce. This is how Lincoln Electric and Nucor have done it for decades. We don't know what they call it but we call it Timesizing, not downsizing.]

6/19 Kaiser Permanente Is Shutting Down Its H.M.O. in the Northeast, by Milt Freudenheim, NY Times website.
[Same story on Bos Globe p. F1 but Globe spins as fuzzy "planned sale" and misbills as "nation's largest HMO" - see last paragraph below.]
Kaiser Permanente, one of the nation's largest health maintenance organizations, said Friday that it was closing its money-losing Northeast division, effective Jan. 1, 2000. The move affects 575,000 members in four states....
[Yeah well how many employees does it "affect"? Oh, we forgot, employees don't matter.]
The HMO said it lost almost $90 million on nearly $1 billion in revenue in the Northeast last year.... It was the fourth regional pullback by Kaiser, a nonprofit company that has been losing money for two years. Kaiser sold its Texas HMO, with 130,000 members in the Dallas-Fort Worth area, last year. It also plans to close health plans with 107,000 members in Charlotte and Raleigh-Durham in North Carolina this year....
[Geez mabeez, things must be pretty bad if even a big nonprofit in healthcare can't make it! Can it all be a question of style? - ]
The HMO was unable to attract enough customers in the Northeast... to support its West Coast style of managed care, which largely relies on large groups of 60 or more specialized physicians.... Patients in the Northeast have favored more loosely organized types of managed care, including networks of doctors operating from small separate offices.... Kaiser said its doctors were trying to move to other health plans in the hope that their patients would transfer with them rather than switch to new physicians....
[But what about its staff??]
Subtracting the Northeastern members, Kaiser will have about 8 million members, of which 5.8 million are in California. It also has HMOs in Washington, Atlanta, Baltimore, Cleveland and Akron, Ohio, the Kansas City area, Washington state, Oregon and Hawaii. Aetna U.S. Healthcare is larger, with about 11.3 million HMO members. Cigna and United Healthcare Group each have 6.9 million, according to estimates by Bernstein Research, a Wall Street firm. To stop its losses, Kaiser raised monthly premium charges "9 to 10% across the country in 1999," Ms. Hayon, the Kaiser spokeswoman, said.
[That'll also stop quite a few members.]

6/18 Kellogg may lay off 700, close part of Battle Creek plant - Firm seeks funds for new products and promotions, Bloomberg News via Boston Globe, p. C2.
...The cuts [of both hourly and salaried workers to "reduce costs"] would account for 4.8% of the company's work force of 14,500 worldwide.... Carlos Gutierrez, who took over as chairman and chief executive in April, has been firing workers and slashing costs to free up money for new products and for promotions such as coupons....
[Talk about a louzy excuse for layoffs - old W. K. Kellogg would turn over in his grave! He made Kellogg the first major American company to embrace the 30-hour workweek to provide employment to 800 more heads of household in the company's headquarters town of Battle Creek. It was December of 1930. They went from 3 shifts a day to 4. Employees loved it, even though they started with a drop to 35 hours/week of pay, but 5 years and 2 payhikes later they were back up to 40/30 = 40 hours of pay for 30 hours of work. For more info, scan down to the Historic section of our Working Models webpage.
[Shame on CEO Carlos Gutierrez. He is a disgrace to the innovative and creative Kellogg tradition! Unlike most dumb downsizers who are merely ignorant of American economic history in general, Guttierez is ignorant of his own company's history in particular. The whole story is told in Ben Hunnicutt's wonderful 1996 book, Kellogg's Six Hour Day. So now the CEO of Kellogg Cereals has become part of the problem instead of part of the solution.]
He's trying to boost cereal sales in a sluggish US market, where sales rose less than 1% the past year....
[One percent growth? What's the matter with that? He's lucky he's getting any growth at all the way he and his ilk keep downsizing American consumers! And with the outrageous prices he's charging for his breakfast foods these past few years, who's gonna have the dough?
[Back in the days of Kellogg's glory, CEOs came from all over the nation and the world to learn from Kellogg's pathbreaking experiment with the 30-hour workweek. Then-company president Lewis Brown had a well-read copy of Lord Leverhulme's 1919 Six Hour Day essay. Kellogg was the basis of Hugo Black's 30 hour work week bill that passed the U.S. Senate on April 6, 1933 (only to languish in the House, because of FDR's ignorance and jealousy). Nowadays disciples of the future attend Lincoln Electric's free monthly seminar, or visit Nucor to see how it's done - timesizing instead of downsizing.]

6/18 Compaq expects loss and plans more layoffs - Low PC prices, high costs blamed in 2d quarter, by Molly Williams, Bloomberg via Bos Globe, C2.
HOUSTON - ...The world's biggest personal computer maker said it will...shed an undisclosed number of employees, on top of the 17,000, or 20% of workers it eliminated after it bought Digital Equipment Corp. a year ago.... Compaq is struggling to cut costs to compete with nimbler rivals like Dell Computer Corp., which carry little inventory beause they build machines as orders come in....
[Well Compaq could double that nimbleness by copying Dell and going from a fixed to a fluid workweek like Nucor. Why don't CEOs get it? FLEX THE WORKWEEK, you morons! What, you think the 40-hour week was given on Mt. Sinai by God Himself? He only got it started then - with the six-day workweek for the Hebrews instead of all seven like the Philistines. It's up to you to carry it on and cut the workweek appropriately as your technology improves, instead of bunching up all the work on fewer and fewer people and wondering where all your markets have gone. So start acting like smart Chosen People instead of foolish Philistines!
[Lordy, CEOs excuse downsizing because their prices are too low like Compaq's or because their prices are too high like Kellogg's. The problem is not your prices, you idiots! It's your chronic habit of downsizing your own consumers! It's bad enough when just one of you does it, but you've ALL been doing it for the past 15 years and -surprise, surprise - it's taken a toll on your own markets! What do you expect when you've created a downward spiral of downsized employees - consumers - markets - employees - consumers - markets...?! The obvious alternative is sharing the vanishing work and skills, instead of thinking that government, which has never done this satisfactorily except in wartime, can create an adequate number of jobs to maintain YOUR consumer markets. Government couldn't do that during the Great Depression and can't do it now. So quit the fixed workweek. Try the fluid workweek. It's the ONLY WAY OUT of this death spiral.]

6/16 Ford Credit plans to revamp North American business, Reuters via NY Times, C3.
...The financing arm of the Ford Motor Co said yesterday that it would [consolidate] loan service functions now done at 141 branch offices into eight regional centers...to improve customer service....
[Oh that'll improve it a lot! Just like the phone companies "improved" directory assistance by moving it all to Texas, and putting on robots and people who couldn't speak English!]
About 4,000 people, or 67% [typo for 57%?! hello, editors, anybody there?] of Ford Credit's 7,000 North American workers, will be asked to relocate as part of the action.
[Let's face it. They're toast. They called them "workers" instead of "employees" didn't they? They're toast!]

[Raytheon continues cheating us of its taxes and laughing at our gullibility - ]
6/12 Raytheon to lay off additional 61 workers at Andover plant, by Ross Kerber, Bos Globe, F1.
[But then we've got mighty gullible state reps.... See also yesterday's story - scan down to 6/11 "Raytheon rapped for layoffs after tax break" on our economic collapse page.]
Raytheon Co. said yesterday that it will lay off 61 employees from a plant in Andover because of falling demand for satellite components, a move that is likely to increase criticism of the company's continued job reductions.
[Can't you almost hear fat Raytheon execs pouting - "If the Federal gov't ain't gonna order enough stuff from us, we'll just make the State gov't pay!"]
Raytheon said the cuts will include 31 hourly and 30 salaried employees from its Advanced Device Center facility in Andover. Employment for those workers will end next week, said David Polk, spokesman for the Lexeington-based defense contractor....
[Ever notice how even salaried professionals get refered to as "workers" when they're getting laid off? - like they've suddenly become a bunch of undesirable Marxists?! This is like "I helped the poor & got called a saint, I asked why they were poor & got called a Commie" or like the Vietnam euphemism "body count" for killed people.]
The layoff relates to only a small part of the company's 13,800 employees in the state, but comes at a sensitive time because of criticism Ratheon has violated the spirit of an agreement it reached with legislators in 1995 that has saved it tens of millions of dollars.
[Yeah, to save jobs our brilliant legislators agreed to toss Raytheon taxcuts if they'd maintain payroll, so guess what - they continue slashing jobs and just add their former pay to top executives' bloated bankrolls. "Hey, we kept our part of the bargain." Yeah sure.
[What our dumb state reps should be requiring is that Raytheon execs cut their corporate workweek each time, not their workforce, and keep everyone employed, same as France did under the Robien Law of 1996-97. Let's see, if Raytheon has had 5700 jobcuts out of its 1995 workforce of 19,500 - in flagrant violation of its commitment to the taxpayers of this state - that's 29% of its people it's terminated.
[We're saying that it now has a workweek of 40 hrs and a workforce of only 13,800 but it should still have a workforce of 19,500 and a workweek of only (40-29%=) 28.3 hrs - for everyone, including top executives. Any overtime (OT) must be completely optional and must trigger, target, pace and fund OJT (on-the-job training) on the part of both employer (who must reinvest overtime-over-hiring profit) and employee (who must reinvest overtime earnings) - on pain of a confiscatory employer&employee overtime tax designed to allow the government, the reinvestor/trainer of last resort (instead of the charity of last resort and the employer of last resort), facsimilate the necessary OJT for them. This is the most self-solving form of the solution to our core economic problem of this century, and we call it Timesizing.
[Why does Timesizing work? Because when you cut jobs (rarely top executive jobs), the money "saved" has an uncanny way of finding a path to the pockets of the richest in the land (including top executives), who have neither time nor inclination to spend it. Ergo flat and flailing consumer markets, fully two thirds of the economy and the anchor and stay of the whole. When you maintain jobs with timesizing - with everyone sacrificing together, starting at the top - you keep money (and freedom from financial anxiety!) in the hands of people with the time and inclination to spend it, so the nation's consumer markets take a minimal hit. And the small hit that's taken is absorbed by the fact that you keep people tied to a corporate function while giving them more free time - during which you may well find that they come up with creative ways to help their company recover. They shore ain't gonna be doin' THAT if you lay them off!
[The old 1930s argument about "workforce discipline" (see Tugwell's "The Industrial Discipline," 1933) that argued for keeping workweek hours in the 40s instead of cutting to 30 now argues for keeping jobs - even at reduced hours - instead of cutting them completely. Timesizing is essentially cutting hours a little for everyone, instead of cutting jobs completely for a few, and a few more, and a few more....
[To facilitate timesizing, our state reps should be looking into the barriers to hiring in our state legislation, all the little things that make overworking existing employees easier than hiring new employees. They should be detaching benefits from a frozen concept of "full time," so when "full time" starts fluctuating - mostly downwards - benefits can easily be maintained, or in cases of corporate crisis, prorated downwards along with the definition of "full time." They should be making individual firing for cause easier while making group "firing" on the pretext of market conditions harder and finally impossible, except immediately prior to reducing the workweek below, say, 10 hrs/wk (a referendum call, the new definition of bankruptcy), or liquidation. This alone solves the burgeoning contradictions in our current convoluting "capitalism." See also our comments on today's Japan article - 6/12 Japan plans to add 700,000 jobs - on our glimmers of hope page.]

[Burn, baby, burn! America continues its self-hatred.]
6/10/1999   P&G to cut [15,000] jobs, close [10] plants - Pace of restructuring too slow for Wall Street; stock falls, by John Nolan, AP via Bos Globe, D2.
CINCINNATI - ...Maker of the household mainstays Tide, Crest, & Pampers will eliminate 15,000 jobs & close 10 plants

  • in a revamp [happytalk for "contraction"]
  • designed to cut costs [happytalk for "cut production of stuff there's no longer a market for"]
  • introduce new products faster [happytalk for "dream up high-end products for the luxury markets that are still expanding"]
  • increase sales [happytalk for "stop decreasing sales"]
    The worldwide cuts amount to 13% of P&G's work force of 110,000 people...4,300 jobs in North America...10,000 [cut] by the middle of 2001....
    [Boy, just think of how much better it would be if this clown cut 13% of his worldwide workweek and kept all those people working and shopping. With a (40-13%=) 34.8-hour workweek, they'd have more time for shopping too, and they'd be so gratefully loyal to P&G for being different from other stupid downsizers that they'd be a great core market and marketers. Now 15,000 people will stop buying P&G products as soon as they run out (some, in anger, will trash even what they're using now), stop boosting P&G, and so will many of the other 87% of P&G employees - like, why bother if your once-loyal company is now the same as all the rest?]
    P&G has been criticized for its slow-moving bureaucracy and...investors gave the six-year plan a chilly reception, sending P&G stock tumbling yesterday, as it became clear that there would be no quick fixes..\..
    [As Jesus saith, "A wicked generation asks for a sign...." or as He'd say today, "A bunch of short-sighted speculators - which is all Wall Street has become - asks for quick fixes." Even Hitler took 2½ years to fix his economy with ur-Keynesianism from 1933 to 1936, while FDR spun mostly propaganda until (at last!) the Japs bombed Pearl Harbor we could get back to removing ragingly redundant labor hours from the job market by killing people again - and of course, building monuments to them in every American hamlet when they didn't come back. (This is what they're gonna do in Japan to ease layoffs - see the 6/10 story on our glimmers of hope page. When will we ever learn?]
    P&G management said the "Organization 2005" restructuring is essential if the company is to meet its stated goal of improving profits and doubling its worldwide sales within 10 years - despite intense competition in United States and foreign markets.
    ["Armageddon 2005" more likely. With every dumb CEO in the world slashing markets by slashing jobs, the only way P&G is going to double its worldwide sales is only in terms of market share, not absolute figures, and only by buying out companies that have the market share they need and lobbying for war to create demand. Of course, if CEOs get smart and start slashing workweeks (timesizing) instead of jobs and markets, it's a different story.]
    "The result will be bigger innovation, faster speed to market, and greater growth," said..\..Its new chief executive Durk Jager [German for "knife hunter" - Durk, diesen Tagen brauchst du mehr als ein Messer zum Jägern = these days you need more than a knife for hunting - you need the management skills to cut hours and keep all your employees & skills intact]...who took over Jan. 1 as P&G's leader....
    ["Leader" is English for Fuehrer - Heil Durk, der neue Fuehrer, der fünfzehn tauzende Arbeiter töten wird = Hail, Durk, the new leader, who fifteen thousand employees will kill.]
    The 29-year veteran at P&G said it will be the most dramatic change ever in the way the company does business....
    [Well, drama isn't usually very practical, Durk. In fact, evolution is a gigantic trend away from greater violence and drama towards greater gentleness and variety. In fact, down here at the end of the article , it indicates that your unrealistic goal of doubling sales to $70 billion in 10 years is no change at all.]
    The company's former chief executive, John Pepper, had said in 1995 that P&G sales would double to $70 billion in 10 years....
    [Too bad Jager didn't learn from Pepper's mistake and keep his big mouth shut. That's Wall Street cares about most - doing what you say you're gonna do - and when 90% of the CEOs in the world are hell bent on downsizing their own markets, one downsized compay at a time, there's no way Kurt is going to meet his "enormous challenge" requiring sales growth of 9% a year.]

    [America continues self-carving & cannibalization as two big industrial firms demonstrate the close connection between corporate combinations and jobcuts, market cuts soon to follow - ]
    6/08 AlliedSignal to buy Honeywell - Companies to slash 4,500 jobs in $16.3b stock and debt deal, Washington Post via Boston Globe, p. C2.
    ...The market leader in flight-safety systems and also a...player in \aircraft parts (engines, brakes...) and repair, and specialty chemicals will buy\ a company that invented the home thermostat but has since expanded [in] electronic and software-driven controls for homes and businesses [and] guidance and control systems for..\.."smart" bombs and aircraft cockpits...to form an aerospace giant.... Both sides made great concessions to pull it off. AlliedSignal won in having the combined company based in Morristown, NJ rather than in Minneapolis - Honeywell's longtime HQ. But the company will bear the Honeywell name..\..Larry Bossidy...the hard-driving head of industrial conglomerate AlliedSignal Inc. wanted to do one more deal before he [retired next year].
    [We're telling ya, folks, we gotta get to them when they're still in B school if we're ever gonna stop this kannibalistik, kevorkian and kamekazi kind of management.]
    Bossidy [don't some of these guys have the perfect names though?! This one's a combination of boss, bossy and cassidy, as in 1940s cowboy Hopalong Cassidy and 1970s cowboy flic Butch Cassidy] said the addition of Honeywell will allow both companies to cut some $500 million in costs, along with 4,500 employees over the next 1½ years. Much of Honeywell's corporate HQ staff is expected to be cut or relocated [regardless of performance or years of dedicated service, all for the sake of an old man's vanity.]
    [More mergers! Faster! More downsizing! Less jobs! More megawealth into Wall Street! More concentration and less circulation! Let's embrace Armageddon, drink the hemlock and cut the suspense!!! Kevorkian forever!]

    6/08 DuPont to slash 1,400 jobs, AP via Bos Globe, C2.
    ...from its troubled polyester division as a decline in demand for its products has forced the company to look for ways to reduce costs and restructure the business. The [Wilmington, Del.-based] company announced that 800 employees and 600 contractors will be laid off. That accounts for about 14% of the polyester division's global work force....
    [What should these masachistic managers be doing? They should be cutting their workweek, not their workforce. That is the only response to technological efficiency or shrinking markets that is sustainable and not merely slow suicide. They should be timesizing, not downsizing. DuPont here should be slashing 14% of its workweek and keeping everyone employed, instead of slashing 14% of itself and its best boosters and markets - its own employees. Dumb dumb dumb. And depression-inducing shure as nightmares.]

    6/05 Cabletron [Systems] chairman-CEO resigns - Replacement named in wake of stock slump, big job cuts, by Ross Kerber, Bos Globe, F1.
    Cabletron Systems chairman, president, and chief executive Craig Benson resigned yesterday and handed over the top posts to Piyush Patel, who has been running the only successful division [engineering] of the Rochester, N.H., computer-networking company.
    [Whaddayawanna bet that engineering has been the only division that hasn't been subjected to jobcuts and consequent demoralization?]
    Benson said he is stepping down to allow Patel...to re-energize the company.... Patel said...he will try to make Cabletron into "the BMW of networking"..\.. [Cabletron's] stock trades at a fraction of its high...in May 1997.... Cabletron has also eliminated hundreds of jobs in recent months.
    [Our original 3/23 story on this downsizing indicated 300 cuts from closing of its plant in Ironton, Ohio, plus 900 cuts if you count the 600 pink slips going to employees at Cabletron's Rochester, NH plant being bought by Toronto-based Celestica Inc., hopefully to be rehired by Celestica, but some to be rehired on contract who won't receive benefits.
    [But hey, the wording is kinda fuzzy in this story (thanks Ross) but if it's true that the jobcuts here played a role in pressuring a pink-slipping CEO to resign, maybe we shoulda put this story under "glimmers of hope"?!]

    [Boy did they ever bury this doozy - on the 2nd-last page of the biz section - we nearly missed it!]
    6/04 Lockheed [Martin Corp.] will cut as many as 2,000 jobs [20% of division, 1.2% of total workforce], Bloomberg News via Bos Globe, E11.
    ...The largest US defense contractor will cut as many as 2,000 jobs, mainly at its plant in Marietta, Ga., because of slow sales and high costs associated with its C-130J cargo plane. The jobs will be eliminated in the next year at Lockheed's Aeronautical Systems division, representing about a fifth of the division's 9,550 workers and 1.2% of the company's total work force of 165,000. The cuts will address inefficiencies at the Marietta plant and reduce costs both for the company and its customers, [Bethesda, Md.-based] Lockheed said, while it awaits a US C-130J order scheduled to start production in 2004....
    "The cuts are not targeted to any one program, but to reduce overall infrastructure," said Thomas Burbage, the division's president....
    [Better to cut 20% of your overall division's workweek then, Tom, and keep everyone employed (à la Nucor or Lincoln Electric), instead of scaring and demoralizing everybody by cutting 20% of your people completely. Fearful and demoralized employees are not highly productive employees and it seems like you already have a productivity problem - ]
    Production problems have delayed deliveries of the C-130J, which is priced at $50-60 million each. The...company delivered only 19 of 30 planes it expected to deliver last year.

    [Ahso, INSO!]
    6/04 Inso [Corp.] faces SEC probe, to lay off 20% of workers, Bloomberg via Bos Globe, E3.
    ...A [Boston-based] maker of software that opens files of other computer software yesterday said it would...close and consolidate some of its offices worldwide, firing a fifth of its 654 employees..\..and that it's under investigation by the SEC [relative to its] restatement of its 1998 results.... It will take a charge of $5-7 million in its fiscal 2nd quarter for the job cuts.... Results for Inso's first three quarters were restated because it recognized some revenue under international distribution arrangements that it shouldn't have. Inso discovered the problem while reviewing its 1998 results. Also yesterday, Inso said its final loss for its fiscal first quarter was $21.9 million.... Revenue fell 30%.... The SEC would neither confirm nor deny an investigation of the company....
    [What the heck is going on here?? Sounds like a lot of work to rationalize amputating a fifth of your corporation. Are they really under investigation by the SEC? Why would the SEC bother investigating a company that's coming clean on its own initiative? And what about this "discovery" of big bucks it shouldn't have stated under revenue? Granted downsizing has become less of an occasion for CEO chest-thumping, but this is quite a melodramatic production to be able to say, with Aldunlap-infected CEOs everywhere, "We were forced to cut jobs."
    [Be that as it may, timesizing still offers a much better way out of any corporate financial squeeze than downsizing, and as we said in the story above, better to cut 20% of your workweek and keep everyone employed (à la Nucor or Lincoln Electric) and not scare and demoralize everybody by chopping a fifth of your company completely.]

    5/25 Thermo Electron announces further restructuring moves - Will take $450m pretax charge, sell units, cut jobs, by Rose Kerber, Bos Globe, D1.
    ...The Waltham [Mass.] equipment and instruments maker yesterday said...an unspecified number of jobs will...be cut as [it] reduces the number of publicly traded subsidiaries to 11 from 23. Thermo Electron was once seen as a technology incubator, known for its unusual strategy of spinning out subsidiaries into publicly traded companies while retaining majority control....

    5/22 In unusual move, Beth Israel to cut 80 management jobs, by Alex Pham, Bos Globe, F1.
    ...The move, which would thin out Beth Israel Deaconess' management ranks by 23.5%, is unusual for a hospital that has set itself apart by refusing to lay off workers to save money, instead relying on attrition to trim its payroll. With [the hospital] now losing money at an increasing rate, hospital officials felt they could no longer [avoid] cutbacks.... .Said [Beth Israel CEO] Dr. Herbert Y. Kressel..."Layoffs are, and continue to be, the last resort."
    [Then, Dr. Kressel, you should have copied Nucor and Lincoln Electric and cut your workweek, not your workforce.]
    Of the 80 positions, about 25 are vacant.... Many hospitals throughout the country have reported staggering losses and subsequent cutbacks in recent months as the twin pincers of managed care and Medicare reimbursement cuts continue to squeeze hospitals. In recent weeks, Brigham and Women's and Mass. General hospitals have also announced staff reductions.... Said Ann Thornburg, a health care consultant with Price Waterhouse-Coopers in Boston..."The only question is: When will it end?"
    Kressel did not rule out further layoffs at Beth Israel Deaconess, which employs 4,700 full-time employees. The hospital earlier this year embarked on a top-to-bottom restructuring project called Genesis.... "Layoffs have been occurring in health care with increasing regularity, said Kressel. "It's a reality."
    [No it isn't. It's a lack of imagination on your part, Dr. Kressel, and it's leading you destroy morale at the hospital you head. Poor pity any sick person who gets taken to the Beth Israel in the near future!]
    Aside from its financial woes, [the hospital] has the additional burden of smoothing out a problematic merger that took place in 1996 between Beth Israel Hospital and Deaconess Medical Center. Deep cultural differences have led to the exodus of a number of physicians, particularly surgeons and anesthesiologists. The latest blow came when Dr. Roger Jenkins and his liver transplant team left earlier this year for Lahey Clinic in Burlington.
    [So are we talking Genesis here? or Exodus! - or creeping Armageddon, like the rest of our supposedly "booming" economy.]

    5/19 R.I. health care merger envisions 200 job cuts, AP via Bos Globe, D9.
    [At least they're being up frontC:\HTDOGPRO\HYDE\ about it for a change.]
    ...Lifespan and Care New England...filed a merger application with the Rhode Island attorney general's office.... The system would save $50.1 million through the elimination of the equivalent of 200 full-time jobs, or 1.4% of the total, under the merger plan.
    [See, you're not even safe as a part-timer any more.]
    More than three-quarters of those people would probably be able to find jobs elsewhere in the system, architects of the plan \to\ compete with Boston hospitals...say..\.. But patient care services would not be jeopardized....
    [Yeah sure. Any time you strike employee morale, you're jeopardizing service and productivity. Better to cut the workweek an almost unnoticeable 1.4% to 39.4 hrs/wk than to destroy people's livelihoods, however briefly you say. That's the way two of the most competitive companies in America do it, Lincoln Electric and Nucor Steel.]

    5/18 Compaq to shut [Salem] N.H. plant [that employs 900], lay off hundreds, by Ross Kerber, Bos Globe, p. E3.
    ...and move most of the jobs to facilities in [Houston] Texas and [Fremont] California. Some workers in Salem will be offered relocation packages...but most will be laid off when the plant is closed six to nine months from now in order to cut costs.... The facility was not expected to be targeted as part of the massive layoffs resulting from consolidation of the two companies....

    [Yesterday ConAgra, today Boeing - what's with the figure 7,000 already?! This is lucky - NOT!]
    5/14 Boeing planning to cut 7,000 jobs, AP via Bos Globe, E2.
    ST. LOUIS - ...The aerospace firm announced that a decline in orders for its F-15 fighter plane will force the elimination of up to 7,000 jobs.
    [A decline in orders NEVER "forces the elimination of jobs" because there is ALWAYS the option of eliminating hours for all instead of jobs for some. It's time Boeing big chiefs took a page from one of America's last-surviving but here-to-stay steel companies, Nucor of North Carolina, and got themselves a modern flexible corporate structure that expands and contracts the workweek as the orders rise and fall instead of the workforce.] The job cuts will take place at the company's massive St. Louis manufacturing operation and will represent roughly 35% of the work force there. The cuts will come from the ranks of management and union members.
    [That's 7,000 fewer voters to maintain America's airforce budget and Boeing's Pentagon market.]
    Boeing has previously announced that it planned to eliminate anywhere from 43,000 to 53,000 jobs in coming years. The company said that yesterday's announcement pushes its estimate to the higher end of that range. In July, Boeing predicted that its total work force of 238,000 would be reduced to roughly 185,000-195,000. Boeing currently employs 219,000. Boeing has blamed most of its job cuts up until now on reduced demand from Asian customers who were suffering from that region's prolonged recession. But Boeing suffered another blow last month when the Greek government signed a contract buy Lockheed Martin's F-16. F-15's cost about $55 million each, while the F-16, an advanced fighter, goes for about $30 million.
    [Well, there's your answer. The usual "management mistakes and employees paying for them." And we can't even crow about "beating swords into plow shares" - "beating planes into work shares" would be just fine, but these execs are too dumb and deathwish-fulfilling to imagine such a thing.]

    5/13 ConAgra to close plants, lay off 7,000 workers, Bos Globe, D2.
    ...The second-largest US food company [and] maker of Butterball turkeys, Peter Pan peanut butter and Armour food products said it will fire 8.4% of its 83,000 workers and close 15 of its 250 production plants..\.. and storage depots as part of a plan to save $600 million a year.... The company, which saw profit rise just 2% in its 1998 fiscal year after four years of double-digit earnings growth, targeted 14% annual profit growth....
    [Here's a perfect example of how an economy dies. A CEO gets spoiled by fluky double-digit profits, freaks out when one year returns to normal, and guarantees that 7,000 people are going to cut down on their food consumption because their jobs and earnings are gone. Oh sure they can get other jobs - but with how long a wait - and how much less pay? And with dozens of businesses doing this every day - because the Boston Globe only picks up a tiny fraction of the downsizings - this is a dramatic object lesson in how short-sighted business leaders induce Depression in their own economy.
    [And as our old refrain goes, ConAgra should be cutting 8.4% of its workweek instead of 8.4% of its best boosters and buyers - its own workforce. And we've got plenty of successful experience with this approach.]

    5/07 Photoelectron to cut work force by 50%, Dow Jones via Bos Globe, C5.
    ...Lexington[-based maker of] the Photon Radiosurgery System, which is used primarily to treat brain tumors..\..expects to reduce operating costs by about 65% with a plan to reduce its staff by about...25 people.... Photoelectron said the staff cuts will allow it to operate through Dec. 31, given current cash on hand. The company had said Jan. 2 that it had enough cash to operate for six months....
    [This is one of the few situations in the news these days where downsizing will still be legal in 100 years - a case of corporate extremis.]

    5/07 MacGregor Group buys Merrin Financial [& downsizes 30 jobs?], Bloomberg via Bos Globe, C5.
    The MacGregor Group Inc., a closely held Boston company providing trade-order systems to institutional fund companies, said it acquired larger rival, Merrin Financial, boosting its share of the market. It acquired Merrin of New York from ADP Brokerage Services Group, a unit of Roseland, N.J.-based Automatic Data Processing Inc., said Steven Levy, Macgregor's chief executive. Terms weren't disclosed. MacGregor will take 65 people of the 95 employed by Merrin and 70 customers, said Levy. The new companies will have 100 employees, more than 80 customers, and offices in Boston, New York, London, and Madrid he said....
    [We believe this means a tacit downsizing of 30 people or 32%. Sort through the wording yourself and see if this is what you think they're trying not to say. Why would they bother to try hiding it? Here's a possible clue - ]
    MacGregor's acquisition involved an investment group that included Bain Capital Inc.
    [Bain Capital is where Mitt Romney, son of George Romney, works. Mitt ran against Teddy Kennedy for Senate in 1994, is now involved in cleaning up the tarnished Olympics-related image of Salt Lake City, and may have further political ambitions.]

    5/06/99 National Semiconductor to quit PC chip business - California firm to cut 550 jobs; shares rise 21%, Bloomberg News via Boston Globe, p. C2.
    SANTA CLARA, Calif. - ...The maker of chips for cars, phones, and computers said it will exit its money-losing personal computer processor business.... The company expects to become profitable in the quarter ending in November after it cuts...4.8% of its workforce, and sheds a South Portland, Maine, plant that makes the PC chips. National is bowing to pressure from Intel Corp., which slashed prices to compete with National's Cyrix unit.... National bought Cyrix in November 1997 for $560 million in stock.... Spokeswoman LuAnn Jenkins...told the Associated Press that none of the [Maine] plant's 570 regular employees would be affected by the sale.
    [National could have cut 5% of its workweek instead of 5% of its workforce - and kept everybody employed and spending money and maintaining the economy....]

    5/01/99 AT&T, union discuss [2,400 to 3,000] layoffs, AP via Boston Globe, p. F1.
    AT&T is in negotiations with its biggest union...the Communications Workers of America [the CWA, over] "the proposed downsizing of 2,400 to 3,000 technicians who maintain the AT&T network nationwide." AT&T spokesman Burke Stinson confirmed that...the company has proposed to the union a package - including 80 to 104 weeks of severance pay based on seniority - to persuade a number of US employees to leave voluntarily. If employees don't agree to leave, AT&T would implement layoffs, he said. AT&T employs 140,000 people worldwide, with about 65,000 people in nonmanagement positions. The CWA represents 42,000 US workers at AT&T. Eliminating the jobs would save...$200 million a year....
    [Let's see. 2700 (+/- 300) proposed layoffs divided by 42000 union members is 6.5%. If the CWA had any sense, they'd be proposing a 6.5% hours cut for all their 42000 members at AT&T instead of losing the 2400-3000 members. That's the way the nurses' union (the Massachusetts Nurses Association) handled it three years ago on a smaller scale when Brockton Hospital wanted to lay off 86 nurses - see our ' working models' page, scan down to the 'smaller companies' section.]



    Click here for downsizing stories in Mar-Apr/99.

    Click here for downsizing stories in Jan-Feb/99.

    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.

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