Human Capital & Careers

Week of the Falling Jobs

Even employees of established global businesses haven't been spared.
Stephen TaubJanuary 30, 2009

In a grim reminder that the economic crisis is clearly a global affair, Tokyo-based electronics giant NEC announced Friday that it would cut 20,000 jobs.

What’s more, even employees of companies with established international businesses haven’t been spared. For example, Boeing said it would eliminate 10,000 positions, according to published reports. That includes 4,500 previously announced cuts, pointed out.

The airplane maker, however, was hardly the only major company to announce massive cuts last week. Eastman Kodak Co., which for the past three decades has been in what has seemed like an almost constant restructuring mode, said it would shed another 3,500 to 4,500 jobs, or 14 percent to 18 percent of its workforce. The move includes actions the company took in late 2008 that will be implemented in 2009.

Kodak reported that the job cuts, which include executive positions, have already begun and that most of the cutting will be done in the first half of this year. The company’s latest restructuring actions will result in charges against earnings in 2009 of between $250 million and $300 million.

Another manufacturer, Corning Inc., said it would reduce its workforce by about 3,500 employees, or 13 percent, before the end of the year as part of a wider restructuring. About 1,500 of the reductions are salaried employees. The company said it’s also in the process of reducing more than 1,400 temporary workers.

The specialty glassmaker said its corporatewide restructuring actions would spur first-quarter pretax charges ranging from $115 million to $165 million, in addition to fourth-quarter restructuring charges of $22 million. About 90 percent of the charges is for cash termination benefits, most of which will be paid in 2009. A number of companies that Corning co-owns are also evaluating restructuring actions in the first quarter.

“We experienced a significant momentum shift in many of our core businesses in the fourth quarter as the recession took hold,” said Wendell P. Weeks, chairman and chief executive officer. “As a result, we are adjusting our operations to reflect anticipated lower sales in 2009. We are also moving aggressively to reduce operating expenses and capital spending to continue to meet our goals of positive free cash flow and a healthy balance sheet.”

A number of tech companies also announced layoffs. Chipmaker Texas Instruments said it would cut 3,400 jobs, which would include 1,800 layoffs and 1,600 voluntary retirements and departures. It will take a $300 million charge for those reductions.

The company said annualized savings from the reductions, plus savings involved from cuts announced in October as part of the restructuring of its wireless business, will be about $700 million.

Electronics-parts maker Jabil Circuit announced plans to cut 3,000 of its worldwide workforce of 85,000. It added that 10 percent of the head-count reductions would take place in the United States. Further, IBM is cutting about 2,800 jobs in North America, according to Reuters.

Elsewhere, Ashland Inc. will cut its workforce by 1,300 jobs by the end of 2010; Ford Motor Credit will eliminate about 1,200 staff and agency positions, or about 20 percent; Bon-Ton Stores will shed about 1,150 corporate and store jobs; and Black & Decker said it would cut about 1,200 jobs.

Starbucks announced plans to close about 300 additional underperforming company-operated stores in the United States and Australia, which could result in a reduction of as many as 6,000 store jobs in fiscal 2009. Further, the coffee company will fire 700 nonstore partners in the United States and other countries.

All of the above followed the announcements on Monday of at least 57,000 layoffs by Caterpillar (20,000 job cuts) and four other U.S. companies.