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Downsizings, June 2002
[Commentary] ©2002 Phil Hyde, The Timesizing Wire, Box 117, Harvard Square, Cambridge MA 02238 USA (617) 623-8080


6/29/2002  1 downsizing, totaling 5000 jobcuts, reported in (NYT) NY Times & (AR) Arizona Republic -

  1. California: Cuts for health system, AP via NYT, A12.
    Los Angeles County supervisors have voted to close 11 of 18 public health clinics and eliminate 5,000 jobs in what could become the largest cutbacks ever in the county's health care system. The county health director, Dr. Thomas Garthwaite, had recommended shutting clinics to help the county reduce an $800m deficit by $150m....
6/28/2002  4 downsizings, totaling 16,590 jobcuts, reported in (NYT) NY Times & (AR) Arizona Republic -
  1. Motorola to cut another 7,000 jobs, pointer digest (to C13), NYT, C1.
    ...or 7% of its work force, and incur $3.5B in charges in a cost-cutting move that virtually completes its two-year revamping. ...The cuts [a]re part of an effort to reduce expenses in several areas, including manufacturing.

  2. European consulting giant will cut 5,500 employees, by Kerry Shaw, NYT, W1.
    PARIS...- Citing grim market conditions with no foreseeable rebound, Cap Gemini, the largest computer consulting company in Europe, [will] lay off up to...one tenth of its staff, and restructure the company to cut costs.
    [So its total staff was 5500x10= 55,000 and is now 55000-5500= 49,500.]
    ...The CEO, Paul Hermelin, told reporters on a conference call, "We can no longer wait for a hypothetical recovery at some point in the future."
    [The spoiled skill-less-ness of CEOs during the labor glut at the end of a Kondratieff wave is boundless. Hermelin should have cited his own laziness in trying to grow by takeover instead of by grooming employees, services and markets -]
    ...In the U.S...it bought Ernst & Young's consulting arm for $10.5 billion in 2000. That expensive acquisition was "a good one, but the timing was deplorable," said Fabrice Vennin, a fund manager at Financiere Meerschaert, who holds Cap Gemini shares. "The integration was difficult from the start," Mr. Vennin said, noting that he does not plan to buy any more shares in the company.
    [In short, no acquisition is a good one, especially if it's expensive. This cheerleader finally admits as much.]
    Cap Gemini, which has offices in 30 countries and is based in Paris, said 2,500 jobs would be eliminated immediately in its telecommunications and financial services divisions, costing 140m euros ($137.3m) this year but saving 230m euros annually.
    [and "saving" a lot of their customers' customers too as 2500 layoffees immediately curtail their shopping.]
    Earlier this year, Mr. Hermelin was insisting publicly that the company was done with its major cost-cutting efforts, which included a similar-size round of layoffs....
    ["Oh, this is a one-time downsizing!" Sure, sure.]
    ..\..Like its rivals, Cap Gemini has experienced a sharp shrinkage in revenue in the last year..\.. Bowing to market reality, the company [will] reorient itself to focus less on information technology and more on other kinds of management consulting....
    [Sounds like a plan now they're experts in "building" your company via costly takeovers and repeated downsizings. But then, there are so many other experts in this kind of corporate Kevorkianism these days.]
    [Followup -]
    Cap Gemini Ernst & Young, Dow Jones via 2/28/2003 WSJ, C13.
    ...Layoffs trimmed its staff almost 9% to 52,683 employees at the end of the year....
    [Quite a different story from trimming 10% to 49,500 at midyear above. What gives??]

  3. Germany: Bank to cut jobs, Reuters via NYT, W1.
    Germany's largest bank, Deutsche Bank, [will] cut nearly 4,000 more jobs as it presses "ahead" [our quotes - ed.] with a drive to reduce costs by 2B euros ($1.97B) over the next 18 months. The...move brings jobcuts since the start of the year to about 13,000, or more than 13% of [its] workforce.

  4. Modem Media plans job cuts, NYT, C7.
    ...An interactive services agency based in Norwalk, Conn. [will] close offices in Hong Kong, Munich, and Toronto and lay off employees in most of its other offices. Modem executives cited reductions in expected revenue as the reason for the cutbacks. The agency will dismiss 90 employees, or 22.5% of its total staff of 400....

6/27/2002  1 downsizing, totaling 17,000 jobcuts, reported in (NYT) NY Times & (AR) Arizona Republic - 6/26/2002  1 downsizing, totaling 29 jobcuts, reported in (NYT) NY Times & (AR) Arizona Republic  (not counting 1,128 statewide industrywide cuts in "Ariz. lost 1.1% of its high-tech jobs in '01," by Jane Larson, AR, D1) - 6/25/2002  2 downsizings, totaling 77 jobcuts, reported in (NYT) NY Times & (AR) Arizona Republic -
  1. Loudeye to trim jobs, Bloomberg via NYT, C10.
    ...A maker of software for broadcasting audio and video over the Internet [will] dismiss 37% of its workforce, including the CFO, and cut executive pay to save more than $10.2m annually.... Loudeye's executives agreed to a 10% paycut..\.. Loudeye, based in Seattle, will be left with 130 employees....
    [So let's see, if 130 employees account for the remaining 63%, the total before cuts was 203 and the cuts numbered 73.]

  2. Cooper-Hewitt shake-up and layoffs reverberate, by Celestine Bohlen, NYT, B1.
    ...Two weeks ago, [director Paul] Thompson summoned his staff and announced that he was abolishing four positions..\..at the Cooper-Hewitt National Design Museum....including the registrar and two of four top curatorial jobs at a museum noted for its rich collections of wall coverings, textiles and decorative arts. Mr. Thompson [is] a Briton whose last job was director of the Design Museum in London....
    [What are they doing hiring a Brit to direct a US national museum?]
    But in fact the loss of senior people at the museum on Fifth Avenue and East 91st Street has been much greater than announced. Over recent months, more than a dozen administrators, curators, researchers and part-time consultants have left the Cooper-Hewitt, fleeing an atmosphere described by a former employee as "draining" and by another as "total misery." "It is very sad because there is an enormous institutional memory that has walked out the door," said Linda Dunne, the former deputy director....
6/22/2002  2 downsizings, totaling 199 jobcuts, reported in (NYT) NY Times & (AR) Arizona Republic -
  1. Pipeline company cuts workforce of traders, Bloomberg via AR, D2.
    TULSA, Ok. - Williams Cos., the No. 2 US natural-gas pipeline company, will cut 16% of its energy marketing and trading workforce next week because of a decline in that business.... The company has about 800 trading and marketing staff in Houston and its HQ in Tulsa....
    [So, 16% of 800 is 128 jobcuts.]
    It also fired 11 traders, or 13% of its trading staff in London.
    [So the total jobcuts here are 128+11= 139 total jobcuts. If 13% is 11, 100% is 11/13x100%= 85. Let's assume that's the essentially all of the London office so we can get an overall percentage for this downsizing = (128+11)/(800+85)= 139/885= 15.7, say, still a 16% cut overall.]

  2. Northwest power firm is laying off workers, Bloomberg via AR, D2.
    BOISE, Id. - Idacorp Inc., the electric utility that serves 700,000 people in Idaho, Oregon and Nevada, will wind down its power-marketing business and fire about 60 employees amid a lack of credit-worthy trading partners.... The cuts in the unit's 120-person workforce will be made over 18 months and Idacorp will slash working capital for the business by half, to $100m....
    Energy trading is shrinking in the United States as regulators probe sham transactions in the wake of the collapse of Enron Corp., which ran EnronOnline, the biggest online market. Dynegy Inc., which tried to buy Enron [how dumb can you get?!] this week shut its computer-trading system because the number of electricitiy and natural-gas transactions is declining amid industry credit concerns.
    [Re Dynegy, see yesterday's #2.]

6/21/2002  2 downsizings, totaling 990 jobcuts, reported in (NYT) NY Times & (WSJ) Wall St Journal -
  1. Europe - Reuters Group plans to cut 650 more jobs, WSJ, A6.
    Britain's global financial-data and trading-systems company \will\ cut 650 additional jobs to improve its margins, fanning worries that [its] revenues are under pressure due to the downturn in financial services.... The latest round of job cuts - mostly in Reuter's senior and middle management ranks -...brings the company's total job cuts since last year to 2,750. Reuter's had a total work force of 19,000 at Dec. 31.
    [So its current workforce is 19000-2750= 16,250 and the current 650 cuts amount to a 650/(16250+650)x100%= 3.8% downsizing.]
    CEO Tom Glocer said "market conditions remain challenging."... Reuters is the primary data provider from several statistical tables in The Wall Street Journal, and its real-time data feeds are used to calculate various Dow Jones Indexes.
    [And with Reuters doing all this morale-dropping downsizing instead of morale-raising timesizing, no telling what little errors may creep in, completely accidentally of course.]
    [Followup - apparently we should have counted more here because, of the 2750 since last year, we had so far only counted 200, on 2/13/2002 #8. We'll straighten this out on 2/19/2003.]

  2. Dynegy halts energy trading online, by Mitchel Benson, WSJ, A3.
    ...The Houston energy-trading company..\..confirming a broader restructuring, said it would lay off 340 of its 6,100 employees - including 50, or 16%, of the 300 in its trading operation. A spokesman said there was "no direct correlation" between the trading layoffs and the shutdown of..\..its Dynegydirect online system....
    [Ri-i-ight! Anyway, this is the first known occasion where we have found an article from the big business cheerleader (WSJ) that tells more bad news than the not-so-big biz cheerleader (NYT), whose version of this article - "Dynegy shuts its online trading system," AP via NYT, C4 - doesn't breathe a word about layoffs and in fact, emphasizes the temporary nature of the shutdown. In addition, the NYT completely missed our first downsizing du jour (above). This means that we will be gradually switching from the combo of the NYT and a regional paper, usually the Boston Globe, for our badnews coverage, to the NYT and the WSJ. This will give us a better liberal-conservative balance in our sources anyway, and satisfy the several people who have asked why we draw on the BG instead of the WSJ (our answer is that the last time we did a thorough check of the WSJ, the cheerleading completely drowned out the bad news and what news there was was scattered throughout 3 sections and difficult to find).

6/20/2002  1 downsizing, costing 1000 jobs, reported in (NYT) NY Times & (BG) Boston Globe - 6/19/2002  2 downsizings, totaling 1500 jobcuts, reported in (NYT) NY Times & (BG) Boston Globe -
  1. Peregrine Systems to cut work force, Reuters via NYT, C4.
    The software maker [will] cut its work force almost in half in the next few weeks as the company reels from an accounting scandal, a management reshuffling, and weak demand. Peregrine, based in San Diego, [will] reduce the number of its employees to about 1,500 from about 2,900. Peregrine makes software that enables businesses to track physical assets.
    [2900-1500= 1,400 jobcuts or 48% of total workforce.]

  2. Manufactured-home maker to cut jobs and shut stores, Bloomberg via NYT, C4.
    Champion Enterprises Inc. [will] have a wider-than-expected Q2 loss, ...lay off about 100 employees and close 33 stores and a plant as industry sales continue to slow....
    [This case would seem to belie the trend mentioned in another article, another paper today, "Housing starts soar, lifting economy," by George Hager, USA Today, front page.]

6/18/2002  1 downsizing, totaling 300 jobcuts, reported in (NYT) NY Times & (BG) Boston Globe - 6/17/2002  2 downsizings, totaling 28 jobcuts, reported in (NYT) NY Times & (BG) Boston Globe -
  1. 2 agencies shut offices as work falls off, by Saul Hansell, NYT, C8.
    ...Arnold Worldwide in Boston is closing its San Francisco office, citing the continued weak advertising economy there.... Work for...clients like Gulf Lubricants and Keynote Software will be completed in the next few weeks and then the 17...employees of the office will be laid off. ...The office...became part of Arnold when Arnold acquired Ingalls Moranville in 1999....
    [Again the lethal takeover-downsizing connection.]

  2. 2 agencies shut offices as work falls off, by Saul Hansell, NYT, C8.
    ...Grey Worldwide, part of the Grey Global Group, is closing its office in Fort Worth, as a client, the Texas Dairy Queen Operators Council, shifts its account to Loomis in Dallas. Eleven employees are being laid off....
    The Fort Worth office became part of Grey in 1998 when Grey acquired the Council's agency, Regian & Wilson....
    [And again, the lethal takeover-downsizing connection.]

6/15/2002  1 downsizing, totaling 390 jobcuts, reported in (NYT) NY Times & (BG) Boston Globe - 6/14/2002  2 downsizings, totaling 29,115 jobcuts, reported in (NYT) NY Times & (BG) Boston Globe (not counting statewide, industrywide story, "Indiana: retailing jobs lost," by Jo Napolitano, NYT, A27, which says, "The state lost 12,000 retail jobs in the past two years [and] has shrunk 2.1% since April 2000..\..a higher rate than any other state.... A study by Indiana University...showed total nonfarm employment in the state fell 3.7%, or 110,300 jobs.") -
  1. Britain's privatized Post cuts deliveries and jobs, by Andrew Sorkin, NYT, W1.
    LONDON...- Because of ballooning costs and falling demand and revenue, Britain's postal service, Consignia PLC, reported the biggest annual loss in its 367-year history [yester]day. The company, which has already shed 12,000 jobs this year to cut costs, [will] have to eliminate 17,000 more if it is ever to return to profitability.
    [Well, we've seen no layoff reports from "Consignia" in the past 1½ years, so we now have to count 12,000+17,000= 29,000 jobcuts.]
    It also said it would change its name - again. "Consignia" was adopted just 15 months ago in a £2m ($2.9m) effort to remake the image of the former Post Office Group. But the name has drawn nothing but scorn from the public.
    [Couldn't they have done a £200 survey instead?]
    So by the end of 2002...its letterhead will read Royal Mail Group PLC....
    [Much better.]
    In its most radical move yet, and one that is likely to draw a flood of criticism from the public, Consignia [plans] to stop twice-daily deliveries to most addresses, a level of service that the British and many other Europeans have enjoyed long after it disappeared in North America..\.. The onetime monopoly lost $1.6B before taxes in the year ended March 31 [and] said it would save about $515m a year by eliminating second deliveries. \It was\ the first time since 1978 that it has been in the red for the year. It is troubled by fresh competition from delivery services using more efficient technology....
    [Followup -] Royal Mail loss halves, sees profit this year, by Victoria Cutler & Sudip Kargupta, Reuters 05/22/2003 09:39 ET via AOLNews.
    LONDON...- British postal service operator Royal Mail said on Thursday its losses nearly halved last year and aims to be back in profit this year.... The state-owned company is cutting tens of thousands of jobs and outsourcing non-core operations in a bid to return to profit amid stiff competition in its markets. Around 16,000 people have left the firm in the past financial year....
    [For more of this followup story, see 5/23/2003 #2.]

  2. Tyco International to cut jobs and sell several buildings, AP via NYT, C3.
    CONCORD, N.H. - ...About 115 corporate jobs will be eliminated....

6/13/2002  1 more downsizing, costing 500 jobs, reported in (NYT) NY Times & (BG) Boston Globe - 6/12/2002  1 downsizing, costing 132 jobs, reported in (NYT) NY Times & (BG) Boston Globe - 6/11/2002  2 downsizings, totaling 129 jobcuts, reported in (NYT) NY Times & (BG) Boston Globe -
  1. Essential Therapies sets layoffs, Bloomberg via BG, C2.
    Waltham MA-based...develop[er of] drugs to fight life-threatening diseases...is cutting 80 jobs while eliminating several early development research programs to shift funding to clinincal product development....

  2. Tenor Networks laying off 49 employees, Bloomberg via BG, C2.
    ...An Acton MA telecommunications start-up is laying of 49 [41%] of its 120 employees and closing its research office in Edinburgh. ...It is "reducing the size of its global workforce over the next two quarters" so it can conserve cash and remain in business through at least 2004. Tenor...makes optical telecom switches enabling phone companies to convert "bandwidth" into specialized services but has reported no sales.
    [Oh but contemporary economists and analysts don't care because they've got "productivity" (regardless of marketability).]

6/08/2002  1 more downsizing, totaling 50 jobcuts, reported in (NYT) NY Times & (BG) Boston Globe - 6/07/2002  1 downsizing, totaling 47,000 jobcuts, reported in (NYT) NY Times & (BG) Boston Globe - 6/6/2002  2 downsizings, totaling 18,922 jobcuts, reported in (NYT) NY Times & (BG) Boston Globe -
  1. Analysts say WorldCom plans up to 16,000 new layoffs, Bloomberg via NYT, C4.
    The struggling telephone company...based in Clinton, Miss. will pare its workforce of 80,000 "to align costs with revenue," a spokesman, Brad Burns, said.... The cuts, reported yesterday in USA Today, will be in addition to a 7% reduction in WorldCom's staff since March 2001....
    [Well, all we've counted of this "7%" is 3700 cuts on 4/4/2002 #1, although 7,000 cuts were rumored the previous day. So we're talking about a pre-March workforce of 80000/(100-7)x100= 86,022, dropping by 7% = 6,022, of which we have yet to count 6022-3700= 2,322. So we must now count 16000+2322= a total of 18,322 jobcuts. So what percentage is that? 18322/(80000+2322)x100% = 22% of total pre-cut workforce.]
    [Followup - "WorldCom, seeking loans, intends to cut 16,000 jobs [20%]," Bloomberg via 6/15/2002 NYT, B4.]

  2. KPNQwest lays off a third [30%] of Dutch headquarters staff, by Suzanne Kapner, NYT, W1.
    ...moving the embattled company, which owns Europe's largest fiber optic network, a step closer to collapse.... Koen van Zijl, a KPNQwest spokesman, said in an e-mail message that the company had laid off 600 of the 2,000 employees at its headquarters in Hoofddorp [Netherlands]....

6/05/2002  1 downsizing, totaling 3095 jobcuts, reported in (NYT) NY Times & (BG) Boston Globe - 6/04/2002  2 more downsizings, totaling 460 jobcuts, reported in (NYT) NY Times & (BG) Boston Globe - the world continues its disastrous blindfolded adjustment to work-saving technology -
  1. DDi will cut work force by 13%, Bloomberg via NYT, C4.
    The DDi Corp., which makes printed circuit boards, [will] cut [260 employees] and close or sell manufacturing plants in Dallas and Moorpark, Calif. The company, based in Anaheim, Calif., has about 2,000 employees.... Bruce McMaster, DDi's CEO, said the moves - to be completed within 60 days - would permit the company to "lower our cost structure without compromising our ability to respond to market demand."...

  2. Oracle lays off 200 software developers to cut costs, Bloomberg via NYT, C4.
    ...yesterday...in a move to combine business-software divisions and reduce costs. Most of the workers were at Oracle's headquarters in Redwood City, Calif.... The cuts, made Friday, represent 2% of Oracle's 10,000-person development staff. Oracle has about 42,000 employees worldwide. Oracle is trying to increase sales of its Web-based business programs after customers and analysts said the software had too many flaws.

6/01/2002  2 downsizings, totaling unspecified jobcuts, reported in (NYT) NY Times & (BG) Boston Globe -
  1. J. Crew Group reports a widened loss in first quarter, NYT, B4.
    ...The fashion retailer [was] hurt by a double-digit decline in same-store sales and a charge related to the elimination of 20% of its workforce during the quarter.
    [Unspecified jobcuts.]
    J. Crew, which is based in New York, has struggled for months with declining sales and fashion missteps. The company...aims its merchandise at customers in their late 20's....
    [Hmm, isn't that agism? Other companies aim at the Latino market, etc. Seems agism and racial profiling are bad everywhere but in marketing.]

  2. Farmland Industries in bankruptcy after rejecting Smithfield bid, Bloomberg via NYT, B4.
    ...The nation's largest farm cooperative...plans to shed jobs, sell assets and reduce debt..\..
    [Unspecified jobcuts.]
    The cooperative, which is based in Kansas City, Mo., has already sold its domestic grain business and closed its international trading unit to cut costs and pay interest on its debt after a 4-year slump in demand for fertilizer, seeds and fuel it sells to its 600,000 members.
    [Never mind a "slump in demand" from its own members, which should be predictable - what's up with that "international trading unit"??]


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