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Downsizings, August 1-15, 2002
[Commentary] ©2002 Phil Hyde, The Timesizing Wire, Box 117, Harvard Square, Cambridge MA 02238 USA (617) 623-8080

8/15/2002   3 downsizings, totaling 26,020 lost jobs, reported in (NYT) NY Times &/or (WSJ) Wall St Journal (not counting "Flextronics will lay off 5,261 workers," in NYT, C10, because they are "being laid off under a plan announced in October to eliminate 10,000 workers" and we counted that whole plan on 10/26/2001 #1) -

  1. Ames is going out of business, closing its 327 department stores, by John Hechinger, WSJ, A3.
    Ames Department Stores, unable to compete against Wal-Mart Stores Inc. and other national rivals, [is] leaving 21,500 employees out of work. The decision to liquidate comes a year after the Rocky Hill, Conn., company filed for US bankruptcy-court protection.... But with suppliers leery of doing business with Ames before the back-to-school and holiday season, the company decided to shut its doors.... The company, which has stores in the Northeast, Midwest and Mid-Atlantic states, blamed its financial deterioration on a souring economy.... Analysts also said the company had made a mistake in its late 1998 acquisition of Hills Dept. Stores for $130m....
    [Again, the toxic takeover-downsizing connection. The NYT version of this story modifies the casualty count -]
    Ames to liquidate and close stores, by Sherri Day, NYT, C3.
    ...While only 420 Ames employees were laid off yesterday, Ames said 21,500 people would lose their jobs when the stores close....
    [Assuming this doesn't mean "a total of 21,500 people would lose their jobs by the time the stores close," we have an extra 420 layoffs to add on here, so the total is 420+21,500= 21,920 lost jobs.]

  2. Agere to lay off 4,000 workers, by Dennis Berman, WSJ, B4.
    ...The Allentown PA telecom-equipment company, which was spun off by Lucent Technologies Inc. in June..\..is leaving one of its primary businesses, resulting in layoffs of nearly 1/3 of its workforce and restructuring costs of as much as $1.1B...bringing its total headcount to 7,200..\.. It will either sell or shutter its optoelectronics unit by no later than June 30.... The company will cease operations at plants and facilities in Texas, Calif., Penn., and Mexico..\.. The company employed 18,500 in March 2001, when its shares were first sold to the public..\..
    Optoelectronics are devices used in fiber-optic networks to manipulate and transmit the laser-light pulses that carry telecom traffic. Agere was considered a leading player in the field, and at the peak of the telecom boom in late 2000, the division accounted for nearly 30% of the company's revenue....
    [That coincides with the nearly 33% layoff.]
    A glut in network capacity [or a scarcity of network customers - ed.] and the industry's subsequent financial collapse have drastically shrunk demand for the components, which now comprise only 10% of Agere's sales....
    [Another example of how our current economic design has not spread the work and the spending power enough to support its own expansion with sustainable markets, a classic depression-inducing deficiency. The brief NYT version of this story is -]
    Agere Systems will cut 4,000 jobs, by Andrew Zipern, NYT, C10.
    [This version is interesting because it states "it w[ill] cut 4,000 jobs, or more than a third of its workforce." So let's resolve this. If they're left with 7200 employees, the 4000 cuts are 4000/(7200+4000)= 35.7 or 36% of the total workforce, which is indeed more than a third, so the WSJ version is wrong and suspect of white-washing.]

  3. Work force will be cut by 7% and facilities consolidated, Dow Jones via WSJ, C2.
    Advanced Energy Industries Inc....will trim its workforce by 7% and consolidate facilities to cut costs, reduce redundancies and bring a recent acquisition into better alignment with the company. The Fort Collins, Col., company, which makes components used to produce semiconductors, in January acquired Aera Japan Ltd., a supplier of mass flow controllers to the semiconductor industry. After a 6-mon review of potential cost efficiencies, Advanced Energy said it will lay off 100 employees and within the next 90 days shut down mfg at an Austin TX plant where Aera-brand products are made.
    [Another case of the toxic takeover-downsizing connection. Why bother acquiring another company if you're just going to diminish it? To kill off competition? - because you don't have enough faith in the competitiveness of your own products/services and pricing? Pathetic.]
    A facility in Aera's HQ of Hachioji, Japan, will assume mfg for the Austin plant, which will continue to serve as a sales and service office....

8/14/2002   1 downsizing, totaling 9,613 lost jobs + unspecified, reported in (NYT) NY Times &/or (WSJ) Wall St Journal (not counting general story, "Office vultures circle still-warm desks left empty by layoffs," by Suein Hwang, WSJ, B1 - very revealing about the WSJ's attitude to layoffs: they seem to regard them as a big joke, referring to them as "casualties of war," "picking through the remains," "warm bodies that have been rightsized, early-retired or just plain kissed off," "the dearly departed," etc.) - 8/13/2002   2 downsizings, totaling 7,400 lost jobs, reported in (NYT) NY Times &/or (WSJ) Wall St Journal (not counting the story on NYT C2, which is included under 'Followup' below on 8/07 #2) -
  1. American Airlines to retrench in bid to beat discount carriers - Amid big losses, carrier plans overhaul of 'hub' system and a loss of 7,000 jobs - Longer waits for connections, by Scott McCartney, WSJ, A1.
    ...Struggling to end its huge losses,..the world's largest airline..\..will undertake a sweeping overhaul...grounding additional jets and fundamentally changing the way it connects passengers at its hub airports.... The moves will result in...fewer jobs among its work force of 110,000, and are expected to save the company about $1.1B/yr.
    [So the 7000 layoffs will avoid $1.1B/yr in costs and they will avoid how much in business, due to the negative multiplier effect of disemploying 7000 of their customers' customers? Have any of our sycophantic economic "scientists" ever troubled to calculate that?   7000 of 110000 is 6% of the total workforce.]
    The reorg, TBA today, reps an attempt to pull [AA] out of a tailspin brought on by the loss of full-fare passengers amid an industry-wide recession. US airlines have already lost nearly $4B in just the first 6 mons of this year, and American's parent, AMR Corp., accounts for more than $1B of that....
    American Airlines to reduce its number of buildings, Bloomberg via 8/23/2002 NYT, C3.
    ...American said it had cut 17% of its workforce since early 2001.

  2. Technology on docks: Fears despite promises - A rosy forecasst is just too rosy for many longshoremen," by Steven Greenhouse, NYT, A13.
    ...Management's contract proposal.., to install new technology to cut costs and speed cargo handling, would eliminate 400 longshoremen's jobs on the West Coast, management officials acknowledge....
    [Here we have another rebuttal to the misleading faith that "technology creates more jobs than it destroys," although management makes the usual long-term promise of more jobs -]
    In his office in San Francisco..\..Joseph Miniace, president of the employers' group, the Pacific Maritime Assoc..., took out a chart to show tht under his proposal jobs would dip by 400 over three years and then increase, surpassing current levels in 2007..\.. Mr. Miniace said he worried that the 10,500 West Coast longshoremen would conduct a slowdown or walk out....
    [Do you mean to tell us that Miniace isn't smart enough, when he claims he's going to rehire that number in 5 years anyway, to figure out how to avoid any current turbulence whatsoever by keeping them on through the interval? Well, we're not that stupid and we have a way - and it's simply to adjust working hours slightly for all 10,500 longshoremen, first downward, then back upward. There's no reason and no excuse for the kind of disruption that firing and rehiring involves. It's a primitive, stupid, brutal, jerky, traumatic, market-bashing and demand-damaging excuse for a strategy that all too many of our CEOs have fallen into.   400 is only 4% of the total workforce of 10500, and reducing the workweek by 4% (less than 20 minutes a day) instead of the workforce, even if he didn't have the money to avoid reducing pay by 4% too, is a lot less traumatic and recession-inducing than reducing the workforce (and ambient consumer base) by that number, plus, for the consumer base, their numerous dependents. Current management projections out FIVE years are extremely iffy, to put it mildly, and if damaging short-term "strategies" conduce against rosy long-term projections, they're even iffier. Wall Street and economists are forever claiming that the long term (for them 1925-2000) proves things are going to get better. They overlook that the only factor that pulled our *ss out of the sling of the Great Depression was not some kind of automatic economic recovery cycle ("invisible hand" etc.) but something disastrous and external to economics, namely world war. What the economy did "automatically" was sink into depression, and that's what it's doing again. Why? Because the centripetal forces on income and wealth, when we respond to techolgoy by downsizing instead of timesizing, overwhelm the centifugal forces, and when spending power concentrates in unspendable black holes in the top income brackets, demand collapses, the consumer base shrinks and depression results. And last time we checked, there were still plenty of CEOs responding to technology and to practically everything else with insecurity&depression-inducing downsizing, instead of security&growth-inducing timesizing.]
    In 1960, union and management reached a turning point with the Mechanization and Modernization Agreement. In that pact, the union let shipping lines use containers, and management promised job security and high wages [now c.$80k/yr] and benefits.
    Now, the companies say it is time for another technological leap. They want to use optical scanners, the Internet and satellite geopositioning to monitor shipments and speed trucks into ports....
    [So why is management short-sightedly trying to downsize its workforce and consumer base in 2002 instead of maintaining or growing them as in 1960? Because in 1960, the postwar babyboomers still hadn't entered the job market, so the general worldwide balance of job seekers and jobs (perceived as a shortage of labor or manhours by management) persisted and gave labor bargaining power that has since long disappeared, as first the babyboomers, then housewives and mothers, then the great Democrat immigration binge of the 1990s, and all along, wave after wave of worksaving technology, impacted the job market. Basically, our economy and our economists are toast until and unless they drop downsizing and ump into sharing the vanishing (human) work a la timesizing or something very much like it, or unless they turn luddite and start blocking and reversing technological worksavings.]

8/12/2002   5 in 1 downsizings, totaling 8 lost jobs + unspecified, reported in (NYT) NY Times &/or (WSJ) Wall St Journal - 8/10/2002   1 downsizing, totaling unspecified lost jobs, reported in (NYT) NY Times & (WSJ) Wall St Journal - 8/09/2002   3 downsizings, totaling 3,090 lost jobs, reported in (NYT) NY Times & (WSJ) Wall St Journal  (not counting the unspecified economywide downsizing discussed in "The friendship recession - With layoffs up and money tight, the old drinks-all-around mentality is fading - and some folks are wondering where all their friends went - ...The new betrayal," by Nancy Ann Jeffrey, WSJ, W1) -
  1. Champion Enterprises to close plants and cut jobs, Reuters via NYT, C3.
    The manufactured home maker [will] cut 1,500 jobs, or 15% of its work force, as it closes plants and sales centers to cope with slumping demand. Champion, which is based in Auburn Hills, Mich., [will] close or consolidate 64 of its 181 retail sales centers and 7 of its 46 plants across the United States.

  2. CableVision Systems will retrench by shedding jobs and stores, by Seth Schiesel, NYT, C4.
    Trying to avoid running out of cash next year,...the biggest cable TV company in the NYC area outlined a retrenchment plan yesterday that includes cutting jobs, reducing spending, selling movie theaters and closing electronics stores. The "need" [our quotes - ed.] for such a plan was underscored as the company announced that its revenue grew less than 1% in the 2nd quarter and that it would lose as many as 45,000 of about 3m cable subscribers this year.
    [But that's only 1½% and only a forecast - why the hysteria?]
    The company, which also controls the Wiz electronics retailing chain, Madison Sq Garden and the Knicks and Rangers professional sports franchises, [will] cut about 7% of its work force, or about 1,500 jobs. It is based in Bethpage NY and most of its operations are in the NYC area.
    In addition, the company [will] close 26 of the 43 stores in the Wiz chain, probably by the end of the year.... It also [will] try to sell its Clearview Cinema chain of movie theaters, which has 59 outlets and 279 screens.... Though CableVision tried to cast its plans as hard-nosed steps that would put it on a stable financial footing, investors at a meeting with analysts and company executives yesterday in Manhattan appeared to perceive the announcement as an attempt to paper over weaknesses while avoid difficult issues like the company's continued satellite ambitions and its complicated relationship with the News Corp. The CEO of the company, James L. Dolan, was also unwilling to answer detailed questions at the meeting. ...As a result...its shares lost more than 15% of their value yesterday.... Moody's...lowered its rating...and said it would consider additional downgrades....
    [It's like some of these top executives suddenly hit a wall and have a nap attack. They get tired of CEOing and start screwing up bigtime. The most "traumatic" thing Dolan needs to do if he really thinks he's going to lose 1.5% of his customers next year is just trim 1.5% off his corporate workweek +/- 1.5% of his whole company's weekly pay if the still-rising corporate revenue really requires that. But by panicking and going into over-reaction, he's worsening the ambient economic deterioration and helping slit his own career throat.]

  3. RealNetworks Inc. - Work force to be cut by 10%; Focus to shift to Helix server, WSJ, B5.
    ...The Seattle maker of software to broadcast audio and video on the Internet...will cut about 90 full-time jobs out of more than 800..\..and restructure its business units in an effort to reach profitability.... RealNetworks...is...reorganizing is international unit around 2 lines of business, systems software and consumer [software?]. The company is also reducing its discretionary spending.
    [Oh that'll help the economy - not.]
    RealNetworks, like many technology companies, has faced sluggish spending within the weak market.

8/8/2002  1 downsizing, totaling 900 lost jobs + unspecified, reported in (NYT) NY Times & (WSJ) Wall St Journal - 8/07/2002  5 downsizings, totaling 2,392 lost jobs + unspecified, reported in (NYT) NY Times & (WSJ) Wall St Journal -
  1. Aquila to quit wholesale energy trading and cut jobs, Bloomberg via NYT, C6.
    ...The utility owner that was the country's 4th-largest power trader [will] quit wholesale trading and eliminate most of a subsidiary's 500 jobs to ease a cash shortage and reduce risk. The company, which owns utilities in Missouri and Kansas and employed 7,377 people at the end of 2001, has already cut 550 jobs in wholesale energy trading and marketing since May.
    [We've seen no previous announcements so we'll now count all 500+550= 1,050 jobcuts.]
    It will exit the business by the end of next month [and] stop all speculative trading as energy prices fall and credit tightens in the wake of the Enron Corp.'s demise.
    [Assuming there were no cuts between Jan. and May, we have a downsizing of 1050/7377x100%= 14% of the total workforce that could have more easily been done with a timesizing of 14% of the workweek instead.]

  2. Charles Schwab weighs a new round of job cuts, by Suzane Craig, WSJ, C1.
    ...The nation's largest discount-brokerage firm, worried about investors' shaken confidence, is considering additional layoffs as part of a broader effort to cut costs as it hunkers down for a protracted market slump.
    [How can a stock brokerage be in trouble when stock volatility is way up?]
    Some analysts, sizing up a new reality on Wall Street, estimate that Schwab could let go of as many as 1,000 people, or about 5% of its 19,100-member workforce, by year's end. Others say the cuts will be even deeper.... Wrote Mr. Schwab in a memo signed by 9 other senior executives, "...Downsizing of our workforce seems inevitable." The news is particularly significant considering that Schwab already has cut deeply into its staff, and had been hoping to avoid further cuts. The San Francisco-based firm has slashed its workforce by about 27%, or 7,200, since it peaked at 26,300 at the end of 2000. In early 2001, it asked many of its employees to take Fridays off, unpaid, in an attempt to cut costs....
    [This valiant incursion into timesizing took place on 1/31/2001.]
    Seeing long trading slump, Schwab sets more cutbacks, by Patrick McGeehan, 8/13/2002 NYT, C2.
    The Charles Schwab Corp. said yesterday that it would shut one of its 5 customer call centers, eliminate 375 jobs and look for ways to save an additional $200m/yr.... Executives at Schwab...said they would cut an undetermined number of additional jobs, in addition to about 7,500 eliminated in the last 18 months....
    [So, so far they've reached 375 of the estimated 1000 additional cuts we already counted.]

  3. Plan to align costs, revenue includes cutting staff by 20%, Dow Jones via WSJ, B9.
    Digex Inc. will cut its workforce by 29%, or 200 employees, as the Laurel, Md., Internet-hosting company seeks to align expenses with revenue. ...The cuts are part of an initiative to become financially self-sustaining and to focus resources on serving customers. In June, the company announced a separate staff cut of 7%, or 86 employees,...
    [We saw no sign of this announcement, so we'll now count all 200+86= 286 jobcuts.]

  4. Telecommunications equipment maker to cut jobs, Bloomberg via NYT, C6.
    Tut Systems [will] cut 39% of its jobs and close a design center in Bridgewater, NJ, to save $5-8m/yr. The reductions, which will affect 56 people, will leave the company with 86 employees.... Ten of the 56 people work in the Bridgewater center....

  5. Settlement with workers, by Steven Greenhouse, NYT, A15.
    More than 80 workers have accepted a $675,000 settlement with Quadrtech, a California jewelry maker whose plan to move operations to Mexico was barred as illegal retaliation for a vote to unionize, the workers' union, the Communications Workers of America, said.... The settlement will award workers an average of $4,600 in back pay and $3,400 in severance payments for workers the company plans to lay off this month.
    [Unspecified jobcuts.]

8/05/2002  1 downsizing, totaling 232 lost jobs, reported in (NYT) NY Times & (WSJ) Wall St Journal - 8/03/2002  3 downsizings, totaling 5,220 lost jobs, reported in (NYT) NY Times & (WSJ) Wall St Journal -
  1. Germany: Layoffs at Siemens, by Victor Homola, NYT, B3.
    ...Germany's biggest employer plans to cut at least 5,000 more positions at its telecomms businesses as a slump in demand deepens, said an IG Metall labor union rep, Wolfgang Mueller. Siemens, whose 13 businesses also include power plants and light bulbs, may cut 4,000 jobs in the phone networks unit and 1,000 in mobile phones.... The latest eliminations would bring the total announced in the last two years to 42,000, or 9% of Siemen's workforce. The CEO, Heinrich Pierer, said last month that fiscal Q4 earnings would fall after orders declined.
    ["Declining orders," "slumping demand" - all signs of depression. If 42,000 is 9%, the 100% is 466,666 employees. So this last decrement is 5000/(466666-(42000-5000))x100%= 5000/466666-37000x100%= 5000/429666x100%= 1.2% of the most recent plateau.]
    Europe/Asia/Mideast -...Briefly -...Germany's Siemens, 8/22/2002 WSJ, A10.
    ...will cut 1,300 more jobs at its unprofitable IC Networks unit. Siemens board member Peter Pribilla told the Sueddeutsche Zeitung newspaper the jobs would be cut at ICN's Munich base, after union officials said more cuts were coming.

  2. Germany: Insurer cuts back, Bloomberg, NYT, B3.
    Gerling Reinsurance, the world's 6th-largest reinsurer, [will] stop writing new business in the U.S...after it lost $575m last yeat after 9/11.... Its U.S. subsidiary, the Gerling Global Reinsurance Corp. of America, will continue the administration of existing policies, keeping about 100 of its 220 employees.
    [So that means 220-100= 120 layoffs.]

  3. Sony may cut 100 jobs at its music unit, Reuters via NYT, B4.
    ...or about 2% of its staff. The music unit, Sony Music Entertainment, is one of five major worldwide record labels and has more than 5,000 employees in the U.S. The music industry as a whole has struggled in recent years with weak CD sales.

8/02/2002  2 downsizings, totaling 3,450 lost jobs + unspecified, reported in (NYT) NY Times & (WSJ) Wall St Journal
(not counting 44,000 "early (temp-)retirements" according to "Brazil: Weak economy shortens draft," by Larry Rohter, NYT, A6, which states, "Struggling with budget cuts, the army...plans to send 80% of its draftees home before their one-year term of duty ends....") -
  1. ADC Telecommunications to sell or close a business, Bloomberg via NYT, C3.
    ...and that it planned additional jobcuts on top of the 3,300 positions it has eliminated since last November....
    [We have seen nothing of these 3300 cuts, so we'll count them now = 3300 + unspecified.]

  2. Morgan Stanley cuts more than 150 jobs in midst of slump, Dow Jones via WSJ, C10.
    NEW YORK - As the investment slump continues, Morgan Stanley is laying off more than 150 investment bankers this week, including some senior ones, according to people familiar wiith the situation. The firm is also laying off a small number of people in its research department.... Morgan Stanley had 58,538 employees at the end of May, according to the latest data available. That's down 7% from the year-earlier quarter and off 2% from the first quarter ended in February..\..
    [Well, 150/58538x100%= a 0.3% downsizing of the total, plus unspecified researchers.]
    Other Wall Street firms are also either paying back of considering trimming staff as the equity-underwriting and mergers-and-acquisitions [M&As] business remains weak....
    [So Wall Street is reaping what it sowed, since the Street has supported and profited-from business practices such as takeover (M&As) and downsizing (mass layoffs) that are unsustainable for the economy and suicidal for itself. Sooner or later both Wall Street itself and the Wall Street Journal will wake up to the timesizing imperative - unless they want to get more clearly suicidal and advocate the grisly alternative again - world war.]

8/01/2002  3 more downsizings, totaling 3,858 lost jobs + unspecified, reported in (NYT) NY Times & (WSJ) Wall St Journal -
  1. Elan revamps by cutting jobs, assets, Reuters via NYT, C4.
    ...The Irish drug maker..\..unveiled a sweeping restructuring plan, including cutting two thirds of its 4,700 work force, shedding $1.5B of its assets, and narrowing the company's focus to 3 therapeutic areas....
    [2/3 of 4700= 3,133 jobcuts.]
    Since January, the company's shares have fallen more than 95%, following concerns about its accounting practices, which precipitated investigations into those practices by regulators in the U.S. The stock was further hurt by the failure of an Alzheimer's drug.... The company also reported a...net loss of $802m...for the second quarter, compared with net income of $134.3m...a year earlier....
    [Followup -]
    Drug maker in Ireland posts heavy losses, by Brian Lavery, 2/06/2003 NYT, W1.
    DUBLIN... - Elan Corp...which has an increasing U.S. presence, shed divisions and dwindled to 2,900 employees from 4,700....
    [Hmm, 4700-2900= 1,800 jobcuts, or 38%, which sounds closer to a one-third cut than the two thirds mentioned above. So we may have overcounted here by 3133-1800= 1,333 cuts.]

  2. Alcoa to reduce production at three U.S. plants, by Gautam Naik, WSJ, D5.
    Alcoa [will] idle or eliminate production at 3 plants, cutting 377 jobs, because of high energy and labor costs.... Alcoa will temporarily reduce output at its aluminum plant in Badin, NC, which produces 120,000 metric tons/yr. It will also close and dismantle a plant in Troutdale, Ore., and the idled portion of its Rockdale, Tex., unit.

  3. Weyerhaeuser to cut 142 jobs in Kentucky, Bloomberg via NYT, C5.
    ...The lumber and paper producer...will close a cardboard-corrugating machine in Kentucky and eliminate...less that 1% of its work force, as a result of its purchase of Willamette Industries....
    [Again, the toxic takeover-downsizing connection.]
    The machine in Hawesville, Ky., will be shut down in the next 60 days, eliminating 200,000 tons of capacity.... The closing follows the shutdown of a corrugating machine in Plymouth, NC, which reduced capacity by 215,000 tons....
    Weyerhaeuser said last month that it would eliminate 206 jobs and close plants in Col., La., and Ore. after the Willamette purchase.
    [So, 142 jobcuts in Ky. and 206 in Col., La., and Ore. that we didn't catch last month total 348 cuts altogether, plus unspecified cuts in NC.]
    Weyerhaeuser has been closing plants as demand for paper used in boxes, magazines and books has declined with the slumping economy.

Click here for downsizing stories in -
Jan. 16-31/2002.
Jan. 1-15/2002.
Dec. 16-31/2001.
Dec. 1-15/2001.
Nov. 16-30/2001.
Nov. 1-15/2001.
Oct. 16-31/2001.
Oct. 1-15/2001.
Sep. 16-30/2001.
Sep. 1-15/2001.
Aug. 17-31/2001.
Aug. 1-16/2001.
July 16-31/2001.
July 1-15/2001.
Earlier Y2000 months accessible via links at bottom of Dec.1-15/2000 page.
Earlier 1999 months accessible via links at bottom of Dec/1999 page.
Earlier months accessible via links at bottom of Dec/98 page.

For more details, our laypersons' guide to our great economic future Timesizing, Not Downsizing is available at bookstores in Harvard Square, Cambridge, Mass. or from *Amazon.com online.

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