Human Capital & Careers

Companies Launch New Wave of Layoffs

Just last week, Alcoa, Ameritrade, Winn-Dixie, and Ford announced job cuts in the thousands.
Stephen TaubJune 27, 2005

Given the number of companies that announced sizable job cuts last week alone, it seems that a new surge of worker layoffs might be afoot. On Thursday, for example, Alcoa said it would cut about 6,500 jobs as part of a global restructuring plan.

The company estimates that the cuts will save it about $200 million annually before taxes. “While eliminating jobs is unsettling, we will do our best to minimize the impact on our employees and the communities where we operate,” says Alain Belda, Alcoa chairman and chief executive officer.

Also on Thursday, Ameritrade Holding Corp. reported that it plans to erase about 1,500 jobs, or one-third of its total workforce, within 18 months after it completes its purchase of TD Waterhouse USA from Toronto-Dominion Bank, according to Bloomberg. “We would look at all of our resources and all of our assets,” Ameritrade CEO Joseph Moglia told the wire service. ”You don’t need two [human resources] departments for the firm. You don’t need two finance groups.”

The big announcement of last week, however, came from bankrupt grocery chain Winn-Dixie Stores, which on Tuesday said it would sell or close 326 stores and cut 22,000 jobs, or 28 percent of its total workforce, as part of a major restructuring. The company also recently asked the bankruptcy judge for permission to set aside a pool of about $14 million to keep about 290 senior executives from leaving, according to thedeal.com.

Ford Motor Co. also announced a large number of layoffs. The struggling carmaker said it would cut 5 percent of its salaried positions, or about 1,700 workers, in its North American operations by October 1. Ford is also assessing ways to reduce personnel-related costs outside of North America. “Although we have increased our earnings guidance for the second quarter, challenges continue to mount, especially in our North America automotive operations,” says CFO Don Leclair. “We’re taking steps immediately to reduce further our salaried-related costs this year; these are a continuation of a series of actions we plan to take to address our operating challenges.”

Ford will also eliminate all bonuses this year for salaried management employees worldwide. Further, it suspended the company’s 401(k) matching grant for salaried employees, effective July 1.

Also on Thursday, bankrupt Interstate Bakeries Inc. announced plans to cut about 350 jobs as it continues to look for ways to reduce costs.

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