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Entries in Layoffs (27)

Friday
Oct262012

Are Layoffs on the Rise?

Jupiterimages/Thinkstock(NEW YORK) -- Many big corporations have announced weak third quarter profits, which could have an impact on layoffs. 

The jobs firm Challenger, Gray & Christmas says layoff announcements rose nearly 5 percent last month compared to August.  But they are still 71 percent lower than a year ago.

Bloomberg News also reports an increase in job cuts since the beginning of September.

But the situation could get considerably worse if Congress fails to take action to avert the impending "fiscal cliff."  A study out Friday by the National Association of Manufacturers finds that inaction could lead to the destruction of nearly six million jobs through 2014 and send the unemployment rate up to nearly 12 percent, according to the Washington Post.

Copyright 2012 ABC News Radio

Thursday
Oct112012

CEO Says He May Lay Off Employees if Obama Re-elected

Jupiterimages/Thinkstock(NEW YORK) -- Outspoken time-share mogul David Siegel surprised his thousands of employees in an email this week that indirectly stated that layoffs could be likely if President Obama is re-elected, which some analysts say have crossed the line as a CEO.

Siegel founded Westgate Resorts in Orlando in 1982.  In an recent email to employees, he said he did not want to tell them how to vote, but wrote:

"You see, I can no longer support a system that penalizes the productive and gives to the unproductive.  My motivation to work and to provide jobs will be destroyed, and with it, so will your opportunities.  If that happens, you can find me in the Caribbean sitting on the beach, under a palm tree, retired, and with no employees to worry about."

Siegel closed the email with: "Signed, your boss."

The Orlando Sentinel received an anonymous email about Siegel's message by someone who said, "I feel like my boss is threatening me."

Siegel confirmed with the newspaper that that he wrote the email, saying he felt "an obligation to keep them informed."

Siegel did not respond to ABC News' multiple requests for comment.

"Four years ago when Obama got elected we were doing a billion dollars a year in sales with 12,000 employees," he told the Orlando Sentinel.  "As a result of the last four years, we are down to 7,000… We're still a viable company, but if they start taking money out of my pocket with higher taxes and ObamaCare, there's going to be less money to build resorts."

Stephen Bronars, chief economist with Welch Consulting, said it is unlikely the letter violated any labor law, but as a CEO who is responsible to stakeholders and employees, "people would view it as unwise."

"One of the toughest tasks for the owner of a company is to deliver a message that things aren't going well and that there will be cutbacks," Bronars said.  "If you panic your employees you are most likely to lose the ones with the best outside options -- exactly the ones you would hate to lose."

Though it is a private company, firms with 100 or more employees must tell employees at least 60 days in advance of a mass layoff or plant closing.

"But not like this," Bronars said.

Bronars added that his "only caveat" is that Siegel may know his employees "better than critics on the outside looking in."

Copyright 2012 ABC News Radio

Monday
Oct012012

At White House Request, Lockheed Martin Drops Plan to Issue Layoff Notices

Kari Goodnough/Bloomberg via Getty Images(WASHINGTON) -- Defense contractor Lockheed Martin heeded a request from the White House Monday -- one with political overtones -- and announced it will not issue layoff notices to thousands of employees just days before the November presidential election.

Lockheed, one of the biggest employers in the key battleground state of Virginia, previously warned it would have to issue notices to employees, required by law, due to looming defense cuts set to begin to take effect after Jan. 2 because of the failure of the Joint Select Committee on Deficit Reduction -- the so-called supercommittee, which was created to find a way to cut $1.5 trillion from the federal deficit over the next decade.

Such massive layoffs could have threatened Obama’s standing in the state he won in 2008 and is hoping to carry again this November.

On Friday, the Obama administration reiterated that federal contractors should not issue notices to workers based on “uncertainty” over the pending $500 billion reduction in Pentagon spending that will occur unless lawmakers can agree on a solution to the budget impasse, negotiations over which will almost definitely not begin until after the election.

Contractors had been planning to send out notices because of the WARN Act (Worker Adjustment and Retraining Notification Act) which according to the Department of Labor requires “most employers with 100 or more employees to provide notification 60 calendar days in advance of plant closings and mass layoffs.”  

In a statement Friday, GOP Senators John McCain, Lindsey Graham and Kelly Ayotte accused Obama of putting “his own reelection ahead of the interests of working Americans and our national security by promising government contractors that their salary and liability costs will be covered at taxpayer expense if they do not follow the law that requires advance warning to employees of jobs that may be lost due to sequestration. … Apparently, President Obama puts politics ahead of American workers by denying them adequate time to plan their finances and take care of their families. The people who work in the defense industry and other government contracting companies deserve as much notice as possible that they are on track to lose their jobs.”

In July the Labor Department issued legal guidance making clear that federal contractors are not required to provide layoff notices 60 days in advance of the potential Jan. 2 sequestration order, and that doing so would be inconsistent with the purpose of the WARN Act.

In Friday’s memo, the Office of Management and Budget reiterated that notice, urging agencies’ contracting officials and CFOs to “minimize the potential for waste and disruption associated with the issuance of unwarranted layoff notices.”

The guidance issued Friday told contractors that if the automatic cuts happen and contractors lay off employees the government will cover certain liability and litigation costs in the event the contractor is later sued because it hadn’t provided adequate legal warning to its employees, but only if the contractor abides by the administration’s notice and refrains from warning employees now.

After “careful review” Lockheed announced Monday that it will abide by the administration’s guidance.

“We will not issue sequestration-related WARN notices this year,” Lockheed announced in a written statement. “The additional guidance offered important new information about the potential timing of DOD actions under sequestration, indicating that DOD anticipates no contract actions on or about 2 January, 2013, and that any action to adjust funding levels on contracts as a result of sequestration would likely not occur for several months after 2 Jan.  The additional guidance further ensures that, if contract actions due to sequestration were to occur, our employees would be provided the protection of the WARN Act and that the costs of this protection would be allowable and recoverable."

“We remain firm in our conviction that the automatic and across-the-board budget reductions under sequestration are ineffective and inefficient public policy that will weaken our civil government operations, damage our national security, and adversely impact our industry.  We will continue to work with leaders in our government to stop sequestration and find more thoughtful, balanced, and effective solutions to our nation’s challenges,” Lockheed said.

Copyright 2012 ABC News Radio

Sunday
Sep232012

Bank of America's Cost-Cutting Plans a Reflection of Banking Industry's Woes

Jin Lee/Bloomberg via Getty Images(NEW YORK) -- It may not be a happy holiday holiday season for thousands of Bank of America employees. The bank could be cutting 16,000 jobs by the end of December, accelerating the 30,000 layoffs it had previously said would take a "few years."

The Wall Street Journal reported a document provided to top management that described the details of the 16,000 job cuts, which would leave 260,000 in the remaining headcount, the lowest number since 2008.

After closing 178 bank branches last year, the bank is also planning to close 200 branches this year, a person familiar with the matter told the Journal.

Last September, Bank of America announced a cost-cutting plan that would include reducing 30,000 jobs, the biggest layoff announcement last year by a company, according to outplacement firm Challenger Gray & Christmas.

"As the decisions are implemented, employment levels in the areas under review during Phase I are expected to be reduced by approximately 30,000 jobs over the next few years," the bank said in a statement at the time.

Jerome Dubrowski, a spokesman for Bank of America, declined to comment on published reports about the company's cost-cutting plans and the number of jobs the company has reduced so far.

Shares of the company closed down 0.82 percent to $9.11 on Friday.


If the bank is accelerating its planned job cuts or slimming down operations, that would actually reflect a healthy business move as opposed to a sign of a troubled company, said Anthony Polini, an analyst for investment firm Raymond James.

Even with the possible job cuts and branch closures, the bank will still be considered the largest retail bank, Polini said, with a strong presence coast-to-coast.

"The company is doing great," Polini said. "It's in another phase of expense control."

Polini said the environment of low-interest rates (the Federal Reserve has committed to keeping the federal funds rate near zero at least until 2015), has negatively affected banking profitability.

Regulatory issues have also affected banks' costs, Polini said. The capital requirement burden, with banks required to have higher capital ratios as a result of the financial crisis, has also been a "burden" for banks, he said.

Polini said the closure of bank branches is likely to persist in the industry as more customers bank online and on smartphones.

"There is no country more overbanked than the U.S.," Polini said. "I don't know what you see more of in New York City: Starbucks or bank branches."

Copyright 2012 ABC News Radio

Friday
Aug312012

Labor Day 2012: 8 Biggest Layoff Announcements

PRNewsFoto/Verizon Wireless(NEW YORK) --  It seems it's going to be another tough Labor Day for labor. The U.S. unemployment rate is 8.2 percent, with most jobs lost this year from local and federal government.

In the private sector, many companies are shedding headcount not so much due to a flailing economy, as in previous years, but because of the state of its business or industry, said John Challenger, CEO of executive outplacement firm Challenger, Gray & Christmas.

While many companies quietly and slowly reduce headcount, here are some of the biggest layoff announcements this year that crossed news headlines, according to Challenger, Gray & Christmas.

1. Hewlett-Packard Co.
Technology company Hewlett-Packard announced in May that it expects "approximately 27,000 employees to exit the company, or 8.0 percent of its workforce, as of Oct. 31, 2011, by the end of fiscal year 2014."

The multi-year restructuring plan that included the reduction came after HP reported lower-than-expected third-quarter financial results. The company, based in Palo Alto, Calif., had 350,000 employees as of Oct. 31, 2011.

With competitive pressure from other computer makers, HP is facing a big legacy in a slow growth business, Challenger said.

2. American Airlines
American Airlines, which filed for bankruptcy in November, had initially announced in February that it would eliminate 13,000 positions in a restructuring process, but it has since narrowed those cuts to 10,000.

"American Airlines is restructuring its business and must significantly reduce its labor costs, which will be done by implementing new, consensual labor contracts and changes via a court-supervised process," the company said in a statement to ABC News. "Over time, the company will eliminate 10,000 positions, which is substantially fewer than originally contemplated earlier this year. Fortunately, through voluntary separation programs, we expect far fewer people to be affected than the number of positions."

The company has been negotiating with its pilots' unions over contracts. American and American Eagle have almost 88,500 full-time and part-time employees worldwide, according to its website, while 77 percent of them are represented by one of three labor unions: Allied Pilots Association, Association of Professional Flight Attendants and Transport Workers Union.

3. PepsiCo
PepsiCo hasn't had an easy summer in its Purchase, N.Y., headquarters.

New York City Mayor Michael Bloomberg announced in June he wanted to ban large soft drink sales from the city. And this week, the state attorney general, Eric Schneiderman, announced he's opened an investigation into the energy drink industry. Last month, Schneiderman issued a subpoena to PepsiCo, maker of AMP Energy.

Food and beverage company PepsiCo announced a number of strategic changes in February, such as increasing advertising by $500 to $600 million this year and reducing headcount by 8,700 across 30 countries. The reduction represents about three percent of its global workforce and less than two percent domestically.

4. Food Lion
In January, grocer Food Lion, owned by Delhaize America based in Salisbury, N.C., announced 4,900 employees were exiting the company, some related to the closure of 113 Food Lion stores. The company has about 74,000 total employees.

A spokeswoman for the company said they were able to find retail jobs for a number of the individuals affected by the announcement.

5. Procter & Gamble
Last year, consumer products company Procter & Gamble announced plans to reduce its global non-manufacturing enrollment by 10 percent, or about 5,700 roles, over two years ending June 30, 2013.

In February, the company said it planned to cut 1,600 jobs of the 5,700 by June. The company has reduced 3,000 roles to date, a company spokeswoman told ABC News.

6. Old Country Buffet Inc. (Buffets Inc.)
In January, Buffets Inc., the owners of Old Country Buffett and HomeTown Buffet, said it was filing for bankruptcy and it planned to close 81 restaurants nationwide, which Challenger, Gray and Christmas estimates is leading to a cut of 3,000 positions.

Buffets Inc. did not return a request for comment.

Buffets Inc. filed for bankrupty previously in January 2008, closing 51 restaurants and laying off 2,300 employees.

7. Albertsons (Nevada & California)
In June, grocer Albertsons announced it was laying off up to 2,500 workers in California and Nevada beginning that month.

Albertsons and Food Lion face similar struggles, as they are reflective of very thin margins in the food business, Challenger said.

The supermarket chain has more than 450 locations in about nine states and is a subsidiary of SuperValu, based in Boise, Idaho.

Albertsons did not return a request for comment.

8. Best Buy Co. Inc.
In July, electronics retailer Best Buy announced it was laying off 2,400 workers, including 600 Geek Squad (aka tech support) representatives.

The company has struggled with sales, reporting earlier this month a near 90 percent drop in profit in its second quarter.

Challenger said tight sales margins are in part due to competition from companies like Amazon and the ability of consumers to quickly compare prices between stores.

Best Buy did not return a request for comment.

Copyright 2012 ABC News Radio

Thursday
Aug232012

Sony Mobile to Lay Off 1,000 Employees

AFP/AFP/Getty Images(NEW YORK) -- Sony Mobile Communications announced Thursday that it plans to lay off 15 percent of its workforce, approximately 1,000 employees, by 2014.  The decision will mainly affect employees stationed at Sony Mobile’s headquarters in Lund, Sweden.

In October, the division’s headquarters will also relocate from Sweden to Toyko.  The Lund offices will remain, with a focus on mobile software and application development.

In a statement, the president and CEO of Sony Mobile, Kunimasa Suzuki, said, “We are accelerating the integration and convergence with the wider Sony group to continue enhancing our offerings, and a more focused and efficient operational structure will help to reduce Sony Mobile’s costs, enhance time to market efficiency and bring the business back to a place of strength.”

Last February, Sony acquired full ownership of Sony Ericsson Mobile Communications and renamed the company Sony Mobile.  Today’s announcement signals an effort to streamline operations at the struggling mobile division, which has lagged behind such competitors as Apple and Samsung.  Sony Mobile Communications’ flagship product is the Xperia line of smartphones.  In the rough-and-tumble smartphone marketplace, Sony’s products face an uphill battle, but Sony said it anticipates that uniting the mobile division with the broader company will make it better positioned to compete.

Copyright 2012 ABC News Radio

Monday
Aug132012

Google Plans to Slash 4,000 Jobs at Motorola Mobility

KIMIHIRO HOSHINO/AFP/Getty Images(NEW YORK) -- Google will remake Motorola Mobility, the cellphone maker it bought this year, beginning with job cuts.

The search engine giant plans to lay off 20 percent of Motorola Mobility’s workforce and close a third of its worldwide offices.  One third of the 4,000 job cuts will be in the U.S.

The cellphone maker has suffered from a slide in market share, losing out to Samsung and Apple, the dominant players in the global market.

The New York Times reports “the turnaround effort will also be a referendum on the management of Larry Page, Google’s chief executive, whose boldest move has been the $12.5 billion acquisition.”

Under its new management, the company is said to be cutting back on the number of different phones it makes and ending production of low end devices.

Copyright 2012 ABC News Radio

Thursday
Jun142012

Nokia to Slash 10,000 Jobs, Close Facilities by End of 2013

Henrik Kettunen/Bloomberg via Getty Images(NEW YORK) -- Finnish cellphone maker Nokia announced on Thursday it's cutting up to 10,000 positions worldwide in an effort to reduce its operating expenses and return the company to profitable growth.

The job cuts are expected to be rolled out by the end of 2013.

"These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength," Nokia's President and CEO Stephen Elop said in a statement.

[CLICK HERE TO READ THE COMPANY'S FULL STATEMENT]

Some of those actions include closing down facilities devoted to research and development projects in Ulm, Germany, and Burnaby, Canada, and a manufacturing facility in Salo, Finland.

The company says these measures will help reduce costs by an additional 1.6 billion euros by the end of 2013.

Copyright 2012 ABC News Radio

Wednesday
Jun062012

Are Layoffs Wall Street's Answer to Down Stock Markets?

Hemera/Thinkstock(NEW YORK) -- The industry that America loves to hate or envy may have a tough summer ahead, especially for its highest paid executives.

Reports indicate Wall Street firms are far from recovering the numbers lost during the financial crisis and may impose additional layoffs this summer or in coming months.

Due to uncertainty from the European fiscal crisis, the stock market has seen much of its gains from the year disappear.  Goldman Sachs and Morgan Stanley may lay off workers in the coming weeks as the European financial crisis continues to affect U.S. markets, the New York Post reported.

Though the Dow Jones Industrial Average closed up 0.22 percent on Tuesday to 12,128, the index had four prior days of declines as world leaders discussed the possibility that Spain and Cyprus will need financial aid.

Brian Foley, pay consultant and managing director of Brian Foley & Co. in White Plains, N.Y., said the recent reports of 50 layoffs at Goldman and 100 at Morgan Stanley, "if true, are certainly very tough on those laid off, but they are too small at present to make for a broad significant new downturn by themselves, given the size of the firms in question."

Morgan Stanley, which has about 62,000 employees, already cut its staff by 2,935 in the year that ended on March 31.

Mary Claire Delaney, spokeswoman for Morgan Stanley, declined to comment.

Goldman Sachs reportedly laid off 50 employees last week, many of whom were managing directors who make a base of $500,000 and receive an annual bonus, the New York Times reported.  Goldman Sachs reported it had 33,300 employees, including consultants and temporary staff, at the end of 2011.

At this stage, Foley said layoffs "will continue to generally be done on an 'opportunistic' basis here and there" in "smaller lower-profile waves," with some exceptions.

Copyright 2012 ABC News Radio

Friday
May182012

Hewlett-Packard to Slash 30,000 Jobs

PRNewsFoto/Verizon Wireless(NEW YORK) -- Hewlett-Packard may soon be reducing its workforce by at least 8 percent in an effort save money and offset declining sales.

According to multiple reports, the company is considering cutting between 25,000 and 30,000 jobs.  The layoffs come as HP struggles to sell computers amid the rising popularity of tablets.

Citing people familiar with the matter, Bloomberg reports Hewlett-Packard’s enterprise services group, which is responsible for selling a range of information-technology services, may be reduced by 10,000 to 15,000.

Copyright 2012 ABC News Radio







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