Cisco has laid off hundreds of employees in the US, including 250 at its California headquarters, in the first wave of a series of job cuts.
The company has so far cut its head count by 0.5%, and may cut 1,500-2,000 jobs by the end of the year, the Wall Street Journal reported.
Beleaguered Canadian kit vendor Nortel has announced plans to shed a further 3,200 jobs worldwide. These new reductions are incremental to the previously announced 1,800 workforce reductions.
http://www.telecoms.com/itmgcontent/tcoms/news/articles/20017622134.html
AP
Tuesday February 3, 4:48 pm ET
By Jeannine Aversa, AP Economics Write
PNC Financial Services Group said it plans to cut 5,800 jobs. Airplane maker Hawker Beechcraft Corp. said 2,300 employees will lose their jobs before the end of the year and warned more layoffs may be coming. Liz Claiborne Inc., will eliminate 725 jobs, or 8 percent of its work force, one day after Macy's Inc. said it was axing 7,000 jobs, or 4 percent of its work force. King Pharmaceuticals Inc., will get rid of 520 jobs.
Military contractor and aerospace company Rockwell Collins Inc. is cutting 600 jobs and freezing salaries at last year's level for all executives and managers. UPS Inc. is freezing management pay and is suspending its matching contributions to employees' 401(k) plans. And General Motors Corp. said it will offer buyouts to all of its hourly workers.
Telecoms.com
24 February 2009
As it struggles against market forces in Western Europe, Vodafone on Tuesday announced plans to cut 500 jobs at its UK operation.
http://www.telecoms.com/itmgcontent/tcoms/news/articles/20017621325.html
Feb. 23 (Bloomberg) -- Vodafone Group Plc, the world’s largest mobile-phone company, plans to cut hundreds of jobs in the U.K. to reduce costs and protect earnings amid the economic slowdown, two people with direct knowledge of the plan said.
http://www.bloomberg.com/apps/news?pid=20601204&sid=a3RoKiK0x8v8&refer=technology
WASHINGTON (Reuters) – The number of U.S. workers drawing unemployment aid jumped to a record high of nearly 5 million, the government said on Thursday, as a worsening economy made it increasingly hard to find jobs.
The data from early February suggested the 13-month-old U.S. recession was deepening, a conclusion supported by a report that showed factory activity in the country's Mid-Atlantic region contracted sharply in February.
"The data indicates an accelerated deterioration ... jobs are being lost and the pool of unemployed is growing faster," said Kevin Logan, senior U.S. economist at Dresdner Kleinwort in New York. "People cannot find jobs."
The number of unemployed still on the benefits rolls after drawing an initial week of aid surged 170,000 to 4.99 million in the week ended February 7, the Labor Department said.It was the highest reading on records dating to 1967 and it took the insured jobless rate to 3.7 percent, the highest since 1983, when the economy was emerging from a 16-month recession.
20-Feb-09 By Victoria Klesty Victoria Klesty
STOCKHOLM (Reuters) – General Motors' loss-making carmaker Saab Automobile on Friday sought legal protection from creditors to allow it to restructure and seek new funding for continued production.
AP
Feb. could be worst month yet for jobless claims
Thursday February 19, 5:01 pm ET
By Martin Crutsinger, AP Economics Writer
The government reported Thursday that new jobless claims for last week totaled 627,000, the same level as the previous week but higher than economists expected. It also was near the recent high of 631,000 hit three weeks ago, which was the most new weekly claims since 1982 when the country was in another severe recession. The three straight weeks of seasonally adjusted claims above 600,000 also is the longest stretch in more than 26 years.
"The labor market is in disarray," said Mark Zandi, chief economist at Moody's Economy.com. "We are seeing job losses across nearly every industry and every region of the country."
Based on current trends, net job losses for February could well top 700,000, Zandi said. That would surpass the 598,000 jobs lost in January, which had been the biggest total since 1974.
Number of layoffs since Nov. 1, 2008, at America's 500 largest public companies*:
Latest layoffs:
Feb. 18: Goodyear
Feb. 17: General Motors
Feb. 17: Agilent Technologies
Feb. 17: Four MDU Resources
Feb. 17: Johnson Controls
Feb. 17: Smithfield Foods
See layoffs by month:
But "the worst is yet to come," according to Howard Davidowitz, chairman of Davidowitz & Associates, who believes American's standard of living is undergoing a "permanent change" - and not for the better as a result of:
"The average American used to be able to borrow to buy a home, send their kids to a good school [and] buy a car," Davidowitz says. "A lot of that is gone."
AP
Wednesday February 18, 8:21 am ET
By M.R. Kropko, AP Business Writer
General Motors Corp. presented a survival plan that calls for cutting a total of 47,000 jobs globally and closing five more U.S. factories, a move that represents the largest work force reduction announced by a U.S. company in the economic meltdown. Chrysler LLC said it will cut 3,000 more jobs and stop producing three vehicle models.
http://finance.yahoo.com/news/GM-seeks-up-to-30B-in-aid-to-apf-14392724.html
http://news.yahoo.com/s/nm/20090217/bs_nm/us_trump
AP
Monday February 16, 2:31 pm ET
AP
Friday February 13, 8:20 pm ET - By Marcy Gordon and Sara Lepro, AP Business Writers
12-Feb-09
DETROIT (Reuters) – Toyota Motor Corp on Thursday offered buyouts to some 18,000 U.S. workers and said it would cut pay for executives and blue-collar workers in its North American manufacturing operations in response to plunging auto sales.
AP
Japan's Pioneer to cut 10,000 jobs globally
Thursday February 12, 3:04 am ET
AP
Tuesday February 3, 4:48 pm ET
By Jeannine Aversa, AP Economics Writer
PNC Financial Services Group said it plans to cut 5,800 jobs. Airplane maker Hawker Beechcraft Corp. said 2,300 employees will lose their jobs before the end of the year and warned more layoffs may be coming. Liz Claiborne Inc., will eliminate 725 jobs, or 8 percent of its work force, one day after Macy's Inc. said it was axing 7,000 jobs, or 4 percent of its work force. King Pharmaceuticals Inc., will get rid of 520 jobs.
Military contractor and aerospace company Rockwell Collins Inc. is cutting 600 jobs and freezing salaries at last year's level for all executives and managers. UPS Inc. is freezing management pay and is suspending its matching contributions to employees' 401(k) plans. And General Motors Corp. said it will offer buyouts to all of its hourly workers.
Nokia is to scale down its R&D operations in Finland as it continues to respond to weakening global demand for its handsets. Approximately 320 jobs will be lost at its mobile devices site in Jyväskylä - which will be closed down altogether - while another plant in Salo will see temporary lay-offs.
In Salo, Nokia will scale down production to reflect market demand, temporarily laying off 20 to 30 per cent of the 2,500 employees there in stages on a rotational basis.
http://www.telecoms.com/itmgcontent/tcoms/news/articles/20017617173.html
With consumers shutting their wallets and corporate revenues plunging, the business landscape may start to resemble a graveyard in 2009. Household names like Circuit City and Linens 'n Things have already perished. And chances are, those bankruptcies were just an early warning sign of a much broader epidemic.
Moody's Investors Service, for instance, predicts that the default rate on corporate bonds - which foretells bankruptcies - will be three times higher in 2009 than in 2008, and 15 times higher than in 2007. That could equate to 25 significant bankruptcies per month.
We examined ratings from Moody's and data from other sources to develop a short list of potential victims that ought to be familiar to most consumers. Many of these firms are in industries directly hit by the slowdown in consumer spending, such as retail, automotive, housing and entertainment.
But there are other common threads. Most of these firms have limited cash for a rainy day, and a lot of debt, with large interest payments due over the next year. In ordinary times, it might not be so hard to refinance loans, or get new ones, to help keep the cash flowing. But in an acute credit crunch it's a different story, and at companies where sales are down and going lower, skittish lenders may refuse to grant any more credit. It's a terrible time to be cash-poor.
[See how Wall Street continues to doom itself.]
That's why Moody's assigns most of these firms its lowest rating for short-term liquidity. And all the firms on this list have long-term debt that Moody's rates Caa or lower, which means the borrower is considered at least a "very high" credit risk.
Once a company defaults on its debt, or fails to make a payment, the next step is usually a Chapter 11 bankruptcy filing. Some firms continue to operate while in Chapter 11, retaining many of their employees. Those firms often shed debt, restructure, and emerge from bankruptcy as healthier companies.
But it takes fresh financing to do that, and with money scarce, more bankrupt firms than usual are likely to liquidate - like Circuit City. That's why corporate failures are likely to be a major drag on the economy in 2009: In a liquidation, the entire workforce often gets axed, with little or no severance. That will only add to unemployment, which could hit 9 or even 10 percent by the end of the year.
[Want to land a plum job without paying taxes? Here's how.]
It's possible that none of the firms on this list will liquidate, or even declare Chapter 11. Some may come up with unexpected revenue or creative financing that helps avert bankruptcy, while others could be purchased in whole or in part by creditors or other investors. But one way or another, the following 15 firms will probably look a lot different a year from now than they do today:
Rite Aid. (Ticker symbol: RAD; about 100,000 employees; 1-year stock-price decline: 92%). This drugstore chain tried to boost its performance by acquiring competitors Brooks and Eckerd in 2007. But there have been some nasty side effects, like a huge debt load that makes it the most leveraged drugstore chain in the U.S., according to Zacks Equity Research. That big retail investment came just as megadiscounter Wal-Mart was starting to sell prescription drugs, and consumers were starting to cut bank on spending. Management has twice lowered its outlook for 2009. Prognosis: Mounting losses, with no turnaround in sight.
Claire's Stores. (Privately owned; about 18,000 employees.) Leon Black's once-renowned private-equity firm, the Apollo Group, paid $3.1 billion for this trendy teen-focused accessory store in 2007, when buyout funds were bulging. But cash flow has been negative for much of the past year and analysts believe Claire's is close to defaulting on its debt. A horrible retail outlook for 2009 offers no relief, suggesting Claire's could follow Linens 'n Things - another Apollo purchase - and declare Chapter 11, possibly shuttering all of its 3,000-plus stores.
[See 5 pieces missing from Obama's stimulus plan.]
Chrysler. (Privately owned; about 55,000 employees). It's never a good sign when management insists the company is not going out of business, which is what CEO Bob Nardelli has been doing lately. Of the three Detroit automakers, Chrysler is the most endangered, with a product portfolio that's overreliant on gas-guzzling trucks and SUVs and almost totally devoid of compelling small cars. A recent deal with Fiat seems dubious, since the Italian automaker doesn't have to pony up any money, and Chrysler desperately needs cash. The company is quickly burning through $4 billion in government bailout money, and with car sales down 40 percent from recent peaks, Chrysler may be the weakling that can't cut it in tough times.
Dollar Thrifty Automotive Group. (DTG; about 7,000 employees; stock down 95%). This car-rental company is a small player compared to Enterprise, Hertz, and Avis Budget. It's also more reliant on leisure travelers, and therefore more susceptible to a downturn as consumers cut spending. Dollar Thrifty is also closely tied to Chrysler, which supplies 80 percent of its fleet. Moody's predicts that if Chrysler declares Chapter 11, Dollar Thrifty would suffer deeply as well.
Realogy Corp. (Privately owned; about 13,000 employees). It's the biggest real-estate brokerage firm in the country, but that's a bad thing when there are double-digit declines in both sales and prices, as there were in 2009. Realogy, which includes the Coldwell Banker, ERA, and Sotheby's franchises, also carries a high debt load, dating to its purchase by the Apollo Group in 2007 - the very moment when the housing market was starting to invert from a soaring ride into a sickening nosedive. Realogy has been trying to refinance much of its debt, prompting lawsuits. One deal was denied by a judge in December, reducing the firm's already tight wiggle room.
[See why "Wall Street talent" is an oxymoron.]
Station Casinos. (Privately owned, about 14,000 employees). Las Vegas has already been creamed by a biblical real-estate bust, and now it may face the loss of its home-grown gambling joints, too. Station - which runs 15 casinos off the strip that cater to locals - recently failed to make a key interest payment, which is often one of the last steps before a Chapter 11 filing. For once, the house seems likely to lose.
Loehmann's Capital Corp. (Privately owned; about 1,500 employees). This clothing chain has the right formula for lean times, offering women's clothing at discount prices. But the consumer pullback is hitting just about every retailer, and Loehmann's has a lot less cash to ride out a drought than competitors like Nordstrom Rack and TJ Maxx. If Loehmann's doesn't get additional financing in 2009 - a dicey proposition, given skyrocketing unemployment and plunging spending - the chain could run out of cash.
Sbarro. (Privately owned; about 5,500 employees). It's not the pizza that's the problem. Many of this chain's 1,100 storefronts are in malls, which is a double whammy: Traffic is down, since consumers have put away their wallets. Sbarro can't really boost revenue by adding a breakfast or late-night menu, like other chains have done. And competitors like Domino's and Pizza Hut have less debt and stronger cash flow, which could intensify pressure on Sbarro as key debt payments come due in 2009.
Six Flags. (SIX; about 30,000 employees; stock down 84%). This theme-park operator has been losing money for several years, and selling off properties to try to pay down debt and get back into the black. But the ride may end prematurely. Moody's expects cash flow to be negative in 2009, and if consumers aren't spending during the peak summer season, that could imperil the company's ability to pay debts coming due later this year and in 2010.
Blockbuster. (BBI; about 60,000 employees; stock down 57%). The video-rental chain has burned cash while trying to figure out how to maximize fees without alienating customers. Its operating income has started to improve just as consumers are cutting back, even on movies. Video stores in general are under pressure as they compete with cable and Internet operators offering the same titles. A key test of Blockbuster's viability will come when two credit lines expire in August. One possible outcome, according to Valueline, is that investors take the company private and then go public again when market conditions are better.
Krispy Kreme. (KKD; about 4,000 employees; stock down 50%). The donuts might be good, but Krispy Kreme overestimated Americans' appetite - and that's saying something. This chain overexpanded during the donut heyday of the 1990s - taking on a lot of debt - and now requires high volumes to meet expenses and interest payments. The company has cut costs and closed underperforming stores, but still hasn't earned an operating profit in three years. And now that consumers are cutting back on everything, such improvements may fail to offset top-line declines, leading Krispy Kreme to seek some kind of relief from lenders over the next year.
Landry's Restaurants. (LNY; about 17,000 employees; stock down 66%). This restaurant chain, which operates Chart House, Rainforest Café, and other eateries, needs $400 million in new financing to finalize a buyout deal dating to last June. If lenders come through, the company should have enough cash to ride out the recession. But at least two banks have already balked, leading to downgrades of the company's debt and the prospect of a cash-flow crunch.
Sirius Satellite Radio. (SIRI - parent company; about 1,000 employees; stock down 96%). The music rocks, but satellite radio has yet to be profitable, and huge contracts for performers like Howard Stern are looking unsustainable. Sirius is one of two satellite-radio services owned by parent company Sirius XM, which was formed when Sirius and XM merged last year. So far, the merger hasn't generated the savings needed to make the company profitable, and Moody's thinks there's a "high likelihood" that Sirius will fail to repay or refinance its debt in 2009. One outcome could be a takeover, at distressed prices, by other firms active in the satellite business.
Trump Entertainment Resorts Holdings. (TRMP; about 9,500 employees; stock down 94%). The casino company made famous by The Donald has received several extensions on interest payments, while it tries to sell at least one of its Atlantic City properties and pay down a stack of debt. But with casino buyers scarce, competition circling, and gamblers nursing their losses from the recession, Trump Entertainment may face long odds of skirting bankruptcy.
BearingPoint. (BGPT; about 16,000 employees; stock down 21%). This Virginia-based consulting firm, spun out of KPMG in 2001, is struggling to solve its own operating problems. The firm has consistently lost money, revenue has been falling, and management stopped issuing earnings guidance in 2008. Stable government contracts generate about 30 percent of the firm's business, but the firm may sell other divisions to help pay off debt. With a key interest payment due in April, management needs to hustle - or devise its own exit strategy.
- With Carol Hook, Danielle Burton and Stephanie Salmon
http://finance.yahoo.com/news/15-Companies-That-Might-Not-usnews-14279875.html
http://biz.yahoo.com/ap/090209/as_japan_earns_nissan.html
You fail only when
you do not strive sufficiently to manifest infinite power.
As soon as a man loses faith death comes.
--Swami Vivekananda
WASHINGTON (Reuters) – U.S. employers slashed 598,000 jobs in January, the deepest cut in payrolls in 34 years as the national unemployment rate shot up to 7.6 percent, according to a Labor Department report on Friday that underlined a deepening recession.
January's job losses were worse than the 525,000 that had been forecast by Wall Street economists, who also had expected the unemployment rate to come in lower at 7.5 percent. The bleak employment data is certain to be cited by the Obama administration as a fresh reason for Congress to speed up debate over a multibillion-dollar package of proposals to try to stimulate economic activity.
Last month's job reductions were the largest since 602,000 in December 1974, while the jobless rate reached its highest level in more than 16 years.
http://news.yahoo.com/s/nm/20090206/bs_nm/us_usa_economy_jobsNEW YORK, USA: Cisco Systems Inc Chief Executive John Chambers forecast revenue will drop far more sharply in the current quarter than Wall Street expected, and said the network equipment maker is cutting up to 2,000 jobs.
Feb. 4 (Bloomberg) -- Panasonic Corp., the world’s largest consumer-electronics maker, will cut about 15,000 jobs and predicted its first loss in six years as the deepening recession hurts demand for televisions and cameras.
http://www.bloomberg.com/apps/news?pid=20601080&sid=abk2Uos3eZyw&refer=asia
| Bill Gates warns of tough economy |
| He foresees another 'three to four years' years of tough economy |
| David Lawsky |
| Thursday, February 05, 2009 |
If your company has just gone through layoffs and you didn't lose your job, you might feel relieved. Or you might feel so horrible you almost wish you didn't work there anymore, either.
It's been a brutal week at work, with U.S. companies - like Caterpillar, Boeing, Sprint Nextel and Target - cutting more than 80,000 jobs all told. Losing your paycheck in a recession is certainly awful, and those that hold onto their jobs are no doubt better off than their fallen colleagues. But coming into the office and watching colleagues pack their things and go - being filled with guilt that it wasn't you, anxiety that you might be next, exhaustion from the extra work you now must take on, even envy that certain people get to leave such a sullen environment - that's not much of a cause for celebration either.http://news.yahoo.com/s/time/20090202/us_time/08599187459200
