Layoff Report: Banking, Bottling, and Boeing

Announcements come from BNY-Mellon, WaMu, Pepsi Bottling, Boeing, Harrah's, Akamai, Lawson Software, Pilgrim's Pride, and Sara Lee.
Stephen TaubNovember 21, 2008

Bank of New York Mellon Corp. says it will eliminate 1,800 positions, or 4 percent of its worldwide workforce of 43,000, continuing a week of job losses across a range of industries.

“It has become clear that we need to take additional steps beyond our merger synergies to reduce expenses, given the current weakness in the global economy,” says BNY-Mellon chairman and CEO Robert P. Kelly. “We will take advantage of natural turnover to lessen the impact on existing staff.”

The BNY-Mellon announcement, of course, comes after the shocking disclosure that Citigroup plans to reduce its workforce by 52,000. But BNY-Mellon’s decision was one of several in the week from banks considered relatively sound. JPMorgan Chase is expected to fire 10 percent of its investment-bank staff, according to the Associated Press. And Washington Mutual, which has had its banking operations acquired by JPMorgan Chase, plans to eliminate 1,600 jobs in the San Francisco area, according to, citing a company spokesman.

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Overall, on Friday Goldman Sachs warned clients that the U.S. unemployment rate could top 9 percent by the fourth quarter of 2009, according to Bloomberg News, citing a research note from Goldman economists led by Jan Hatzius.

Elsewhere, Pepsi Bottling Group Inc. said it would eliminate 3,150 jobs in the United States, Europe, and Mexico as part of a wider company restructuring. “We believe that these changes to our organizational structure, combined with the executive appointments we announced earlier this month, will enable us to increase our cost competitiveness, simplify our decision making processes, and provide better customer service,” said chairman and CEO Eric Foss.

In the manufacturing sector, earlier in the week Boeing Co. announced plans to cut about 800 jobs at its defense facility in Kansas next year. Boeing attributed the reductions to the end of some programs and the delay in the U.S. Air Force tanker-replacement program. The layoffs will have an impact on managers and both salaried and hourly workers. “We understand the disruptions that layoffs cause in personal lives and in our community,” said Scott Strode, vice president and general manager of Boeing Wichita. “However, a combination of events are limiting our business options and forcing us to reduce our current employee total. We also are taking steps to restructure our business in order to lower our rates and become more affordable for customers.”

Boeing later said in an employee memo that it expects job reductions next year that would exceed its “average annual attrition rate” of 4 percent to 5 percent, “and will be composed of a mix of normal attrition, hiring freezes, and layoffs,” The Wall Street Journal reported. These and other cost reductions are intended to align the company with an expected decrease in defense spending.

Of the other companies announcing smaller layoffs, some represented large percentage reductions.

Harrah’s Entertainment is closing its Memphis, Tennessee, office, for example, leaving 250 employees without a job, according to the AP. “The time has come for the company to consolidate its corporate functions in one location,” according to a statement by Anthony D. McDuffie, Harrah’s senior vice president, controller, and chief accounting officer.

Internet management company Akamai Technologies Inc. said it is shrinking its workforce by 110 employees, or about 7 percent. “The company expects to use the ongoing savings generated by this action and its continuing cash from operations to support investments in key growth opportunities for content delivery, application acceleration, and its advertising industry solutions, as well as for further international expansion,” it said in a press release. Lawson Software, meanwhile, is cutting 200 jobs, or 5 percent of its worldwide workforce.

Poultry producer Pilgrim’s Pride Corp. plans to cut about 335 jobs by the end of the month, according to the AP. And Sara Lee Corp. announced that it will close its kosher hot dog and meat-processing facility on or before January 30, resulting in a reduction of about 185 workers.