Phil "Mr. Timesizing®" Hyde
Downsizings in October/98
[Commentary] © 1998 Philip Hyde, PO Box 622, Cambridge MA 02140 USA
Phil "Mr. Timesizing®" Hyde
Downsizings in October/98
[Commentary] © 1998 Philip Hyde, PO Box 622, Cambridge MA 02140 USA
10/30 Agfa cuts 12% of worldwide workforce - Demand down for farm equipment, NPR News, WBUR Boston, 6 am.
10/28 Consumer confidence slumps; Layoffs, volatile market cited; report fuels fear of slowdown, by Diane Lewis, Boston Globe, frontpage Business section (p. D1).
..."The job market has a great influence on confidence levels," noted Lynn Franco, economist an dassociate director of the Conference Board, a nonprofit research organization in New York.... Economists consider the mood of American consumers a key guide to the future because consumer spending accounts for more than two-thirds of the US economy....
[So let's notice the chain of causation here - from job market to consumer confidence to consumer spending to consumer markets to market-supported productivity to financial markets.]
Challenger, Gray & Christmas, a national outplacement firm, reports that layoffs were 53% higher this year than they were in the first nine months of 1997. In September, more than 73,000 job cuts were announced in the electronics, computer, consumer products, banking, securities, and telecommunications industries - all which have led national job growth in the past. Both Gillette and Raytheon recently announced plans to cut thousands of jobs nationwide. According to Challenger, job growth also has dropped from an average of 200,000 a month since the early 1990s to only 69,000 in September, as firms braced for the possiblity of a downturn.
10/28 Salomon cuts 100 more jobs - Layoffs hit trading, stock sales workers, Bloomberg News via Bos Globe, D2.
[A little trimming here, a little trimming there... "Hey, where'd our consumer markets go?!" (And a little later, "Hey, what happened to our financial markets?!")]
10/28 Ocean Spray trims 85 jobs in Middleborough, by Chris Reidy, Bos Globe, D9.
...The cuts affect the same...plant that was hard hit by Ocean Spray's last layoff announcement 15 months ago. At the time, Ocean Spray announced plans to cut 315 jobs. After the cuts, Ocean Spray said it will employ about 2,000, with roughly 700 of them in Massachusetts. The Middleborough facility will continue to operate with a staff of about 70.
[Let's see, 315+85 = 400. Original workforce = 2000+400 = 2400. Percentage cut in 15 months = 400/2400 = 16.7%. If Ocean Spray had opted to cut its workweek instead of its workforce, it could have maintained morale, skill set, productivity, its customers' customers with a workweek of 2000/2400 x 40 = 33.3 hours/week - a welcome prospect to many single parents and a cushion instead of a spur to the growing recession. Note that under Timesizing, companies in trouble cut pay as well as hours, but companies not in trouble cut hours with no cuts in pay.]
10/23 Open Market loses $6.6m, to lay off 100 [20% of staff] - Burlington [Mass.] software firm hurt by Asia, fewer orders, by Ronald Rosenberg, Bos Globe, C1.
[Yo, Gary! (Gary Eichhorn, CEO) - instead of demoralizing your whole company by laying off 20% of your own employees (who, bear in mind, are customers' customers and a (hopefully tiny) fraction of your own market), why not just cut your company workweek by 20% and keep everyone employed? Let's see, 80% of a 40-hour workweek is 32. Think of the added freshness and creativity, think of the additional company loyalty and dedication, think of the added rest and health and cut in sick days, think of the decreased requests for time off to get to a doctor's appointment because your hours coincide with the doctor's, think of the increased "idears" in the suggestion box as employees see they're not going to be "suggesting their way out of a job"? And if you cut everyone's pay 20% including yours, you might not even have to cut 20%, you might only need 18% or 15%. So what's it to be, Gary? - are you a real company or just a fishbowl of paranas? Are you gonna do this in a way that minimizes the drop in your orders or magnifies it? Phone your colleagues at Lincoln Electric of Cleveland, OH or Nucor Steel of Charlotte, NC or VW of Wolfsburg, Germany if you want to see how this is done. (How about trying Lincoln's idea of giving HQ employees willing to learn marketing and go on the road a full 40-hrs pay for just the new reduced-hours workweek?)]
10/23 CML Group to cut 500 more NordicTrack jobs [60% of staff] - Acton [Mass.] firm to shut stores, mall kiosks, Bloomberg News via Bos Globe, C5.
The company said it will have 400 full-time employees left at NordicTrack, which has HQ in Chasta, Minn.
[ah, so Bloomberg writer, are the cuts in Acton, Mass. or Chasta, Minn.?? - fuzzy writing!]
...CML Group has cut about 700 jobs since March, including 300 announced last week.... CML's stock has lost 90% of its market value this year as it's struggled with lower NordicTrack fitness equipment sales. It closed yesterday at 5/16, down 1/16.... In the spring, John A.C. Pound was named chief executive, replacing founder Charles M. Leighton.
[So John, what's CML stand for - Chop Mangle Lose?]
10/22 Bear Stearns fires 40 in fixed-income unit, Bloomberg, via Boston Globe, C2.
...including traders, analysts and support staff...a week after the sixth-biggest securities firm said profit for its fiscal first-quarter fell 60% as volatile global markets hurt trading and investment banking [i.e., wild speculation induced by the astronomical concentration of wealth, as in "What are we to do with all this money?!"].
Russia's decision in August to devalue its currency and default on some of its debt caused millions of dollars in trading losses at securities firms in recent months and all but halted sales of new bonds. Those losses prompted Wall Street's biggest round of layoffs since late 1994 and early 1995, when the Federal Reserve raised interest rates several times and bonds tumbled. Bear Stearns shares fell 1-1/2 to 34-3/8.
[And now, the exception that proves the trend -]
10/22 Computer Associates [the fourth-largest US software company] to add 1,000 jobs in N.Y., Bloomberg via Bos Globe, C2.
...Computer Assocs. now has 2,300 employees, or 20% of its worldwide work force, on Long Island. The company said it expects to have more than 8,000 employees there within the next 10 years....
10/16 Arco to fire 900 [4.5%] as part of a two-year plan to save $500m, Bloomberg via Bos Globe, D4.
[You boys should just be acuttin your workweek 4.5% to 38.2 hrs/wk and keepin everybody employed. Already the demand for gas is falling - and so are oil prices - and these fired folks is gonna jus quit drivin aroun so much, ain't they!]
10/15 Global woes take toll on Bank Boston - Firm to close branches in Asia and cut 111 jobs [worldwide], by Lynnley Browning, Boston Globe, p. D1.
Only 10 of the positions are in Boston, mostly in the bank's emerging markets group.... Two are in London, and 99 are in the closed Asian branches. The setback comes as financial services companies face lower profits because of depressed stock and debt markets, an increased adversity to risk, and tighter access to credit in the wake of hedge fund collapses [there's been more than one??].
[In other words, we'll respond to depression by depressing another 111 people.]
["Peanuts!" you say. Only 111 layoffs and only 10 in Boston? But let's see what they've hidden on p. D2 -]
10/15 LSI Logic to cut 1,200 jobs, close 4 facilities, Bloomberg via Bos Globe, D2.
[Get this, folks, they're doin this to]...combat the effects of a worldwide economic slowdown, as the chipmaker's third-quarter profit fell 60%.
[That's funny, I coulda swore they was doin it to reinforce the effects of a worldwide economic slowdown. If they was to combat them, they'd be reducing executive salaries 70% and cutting the workweek 50% - and keeping everyone employed. But speaking of executive pay...]
10/15 15 Bradlees executives to share $3m bonus, by Chris Reidy, Bos Globe, D7.
[Let's see, that's $200 grand apiece if they divvy it evenly. Why so little?...]
The overall reorganization plan, which includes the special bonus, requires the formal approval of Bradlees' creditors, who balked at an initial retention bonus package of $5.4 million.
[Now the only unanswered question is, how much of their own market are these kamekazi artists going to clobber via layoffs in this "reorganization."]
[But back to downsizing. Hey, LSI is only stickin it to 1200 units of their own market and they're in California anyway (Milpitas) so who cares. But let's see what they've buried in the story right below on D2 without even puttin it in the title...]
10/15 Fed OK's Wells Fargo merger with Norwest [creating the nation's 7th largest bank], AP via Bos Globe, D2.
...After eliminating 2,000 positions [from California to Indiana], it will have more than 90,000 employees, about 20 million customers and more than 5,700 offices [until the next merger]. It will have more branches, more mortgage loans, and more Internet customers than any other bank in the United States.
[Hey, if the 11th and 12th largest banks can merge and only make it to 7th, you better believe the top 6 are big. Say, didn't we go through all this before in the 1920s?! Fewer, bigger banks chasing fewer, richer clients. By the way, that will be "20m customers" minus 2000 who now don't have any earnings, plus their dependents and some of the businesses they used to patronize.]
[And just to put a "cherry" on top...]
10/15 CML trims 300 jobs, all in NordicTrack unit, Bloomber via Bos Globe, D7.
...or about 25% of its work force...to reduce costs...most...in Chaska, Minn., and...Glencoe, Minn. The moves will result in a work force of about 1,200 full-time workers, CML said. In March, the Acton-based company said it took a charge of $11.4 million to cut about 400 jobs at NordicTrack.
[Now CML could just have cut the workweek 25% instead of the workforce, and KEPT EVERYONE EMPLOYED. Let's see, that would be a workweek of 30 hrs/wk - just the level that FDR pushed through the U.S. Senate on April 6, 1933 - before flipflopping and blocking it in the House, a mistake he admitted two years later, and a mistake that ranks right up there with the defeat of the abolition of slavery in the 1790s - by one vote - and Woodrow Wilson's defeat of his own peace treaty 1918-20 - by unwillingness to compromise and share the glory.
Leaving us still with Vampire Management - "Just a little blood here, it won't hurt. Now maybe a little over there.... you've still got PLENTY, myahahahaha...." All ready for Hallowe'en, kids?]
10/14 Merrill [Lynch] will lay off 3,400 [5%] - Move may open `floodgates' to financial industry job cuts, by Peter Gosselin, Bos Globe, C1.
NEW YORK - The Masters of the Universe are quaking, not over the latest initial public offering or merger gone bad, but over pink slips. After months of financial turmoil and weeks of frightening rumors, some of New York's money mavens are finally losing their jobs....
10/10 Pratt plans to cut 2,000 jobs, Reuters via Boston Globe, F1.
...1,000 jobs in Connecticut and another 1,000 in Florida, or about 6% of its global work force, starting later this quarter in a bid to boost profits and offset a decline in production.... The company, the largest private employer in Connecticut, said it was offering early retirement to hourly workers in the state to minimize the need for layoffs. The company also plans to move "several hundred" of its Florida employees to Connecticut.
[This updates a story below on 9/9. While it's good that Pratt is trying to buffer this by asking for volunteers for early retirement, the future is no more with a bulging population of retirees than it is with bulging prisons. The future is with Lincoln Electric's practice of lifelong employment borne of manipulating the workweek instead of the workforce. Instead of cutting their global workforce 6%, Pratt should be cutting their global workweek 6% from 40 to 37.6 hrs/wk, cutting payroll proportionately, keeping everyone employed, and MAINTAINING MARKETS. By cutting jobs instead of hours, they are guaranteeing that they will be cutting further in the future, and if they keep this up, they'll be going out of existence. But of course, that's too far away for current company leaders to worry about. (Except for the accelerating pace of change.)]
10/9 Packard Bell plans to cut [up to 1,000] 20% of US workers to trim costs, Bloomberg News via Boston Globe, p. C2.
[Packard Bell should be cutting not their workforce but their corporate workweek by 20% to 32 hrs/wk (including top executives), redeploying workload, keeping everyone employed and MAINTAINING MARKETS. As pioneered by Lincoln Electric Corp. of Cleveland, unless everyone "sacrifices together starting at the top" where it's least felt, America will have NO FUTURE, nor will the world. Note that the productivity hit of shorter hours is buffered by the automatic effects of more rest, and more prioritizing, on the part of your employees - and yourselves.
Whatsa matter, boys? - Can't handle redeployment? You're doing it anyway. Why not do it in a way that minimizes the cumulative firestorm effect on your own markets instead of amplifying it? Stop treating the job market as if it's an infinite resource that you can just keep dumping "excess employees" in. The oceans aren't infinite, the rain forests aren't infinite, ground water isn't infinite - why should the job market be infinite?]
10/9 Ziff-Davis [citing weakening computer markets] to cut 10% of their workforce, Fox News' (Boston Channel 5's) First Business, 5:45 am.
[Ziff-Davis should be cutting not their workforce but their workweek by 10% to 36 hrs/wk (including top executives), redeploying workload, keeping everyone employed and MAINTAINING GENERAL MARKETS. As pioneered by Lincoln Electric Corp. of Cleveland, unless everyone "sacrifices together starting at the top" where it's least felt, America will have NO FUTURE, nor will the world.]
10/9 In Raytheon we trust?, by Joan Vennochi, Boston Globe, p. C1.
[and you can add Fidelity to that, Joan!]
A Patriot missile could blast through the loophole in the 1995 law that gave Raytheon Co. and other manufacturers a tax break worth millions. In exchange for the tax savings, the companies must retain at least 90% of the payroll and property levels they had as of Jan. 1, 1996. And Lexington-based Raytheon, which Tuesday announced it would elminate 14,000 jobs by the end of 1999 - including some 1,200 in Massachusetts - says it is in complete compliance with the law. Here's the catch: We have to take Raytheon's word for it.
[Mass. taxpayers are suckers if they keep electing these patsies to the State House. With credulity like that, hey, we got a bridge (the Brooklyn) to sell them!]
10/8 Raytheon's job cuts will total 14,000 [or 16%] - 1,200 slots in state targeted as defense firm streamlines, by Joann Muller, Boston Globe, frontpage.
...5,300 more defense jobs on top of 8,700 already planned....
[The Herald frontpage today puts it at 5,600 more and a total of 16,000 by late next year. Meanwhile the company had $12.5 billion last year to buy GM's Hughes Aircraft Co. and Texas Instrument's defense business.
[Hey, aren't these the boys that came beggin' us for a taxbreak 4 years ago so they would keep their jobs in Massachusetts? - and we were dumb enough to give it to 'em?
[Raytheon should be cutting everyone's workweek by 16% to 33.6 hours/week (including top executives), reassigning work to fit, KEEPING EVERYONE EMPLOYED and maintaining markets. As with Lincoln Electric of Cleveland, unless EVERYONE SACRIFICES TOGETHER, STARTING AT THE TOP, America will have no future.]
10/8 Fidelity [Investments] to cut [65-75] jobs in overhaul of operations, by Beth Healy, Boston Herald, p.51
[Yet another cowboy, Robert Mazzarella, institutional brokerage president, wants "to get more focused on our customers" by chopping staff. Counter-intuitive? You bet! But then, the banks have been getting more technology, firing people and delivering less service for higher fees, why not the brokerages? And wasn't it Fidelity that we also gave a taxbreak recently so they wouldn't take their jobs out of state? We should have said, simply, "No. Goodbye and good riddance."]
[Both Fidelity and Raytheon chopping jobs. How's that for a slap in the face! Both big whining companies that we recently gave taxbreaks spit in our eye on the same day, October 8th, 1998 - Pearl Harbor for job-saving taxbreaks - a day of infamy for what we humorously call "private capitalism" in Massachusetts! If this ain't suicidal bandaid-bloated crutch-littered socialism of the most temporary kind, we'll eat our membership cards in both LPs (Libertarian Party and Labor Party)!]
10/8 Merrill Lynch poised to pare payroll [i.e., workforce] by 2,000 [or 5%], Bloomberg News via Boston Herald, p.51.
[Merrill Lynch should be paring payroll by paring workweek, not workforce. They should be paring their 40 hours workweek to 38, redeploying, KEEPING EVERYONE EMPLOYED, and maintaining markets. What's the big deal about dropping 2 hours a week to maintain morale (and markets) and keep your skill set intact for possible recovery? This idea comes from the UDF, a center-right political party in France. Keep downsizing and you guarantee there won't be a recovery.]
Click here for downsizing stories prior to Sept. 30/98.
Fateful words to search for in your own scan of the news - mergers, acquisitions, buyouts, bankruptcies, reorganizations - all the same stuff that went on without our bothering about it throughout the 1920s.