I got a great email from Rose King of Accountingdegree.com the other day. She shared with me a blog entry they authored about 13 Huge Layoffs. Below is an excerpt from it.
I’ve always been fascinated by layoff announcements. Not in a positive way, but in a curious way. It prompts questions about what went so wrong? I tend to group these reductions in one of two ways.
– The first is as a communication to their shareholders that they are working to reduce the imbalance built up in the cost structure. Usually, this is when the number of people is very high. A classic example is when orders have fallen off over an extended period and the company needs to face the music.
– The other is when the bottom line is going to be missed and the executives need to find a few million dollars. Usually this isn’t a high number, but rather its individuals with high compensation.
But both are an admission that the strategy isn’t panning out. The company should state what is changing in their business plan or their focus. Is the product portfolio no longer innovative? Can extraneous business units be sold off? and so on.
The sports fan in me is wondering when we’re going to hear about mass layoffs by the NFL? I guess pay cuts have already begun.
The other aspect of this blog entry that grabbed my attention is how most of these are fairly recent (within the last decade).
These days, many Americans are suffering at the hands of layoffs,
but mass job cuts are hardly a new thing. Often a result of new
efficiency or simply running low on cash, thousands of employees can be cut at a time. Here we’ll take a look at 13 massive layoffs in American history.
- Intel:
In 2006, Intel announced a major restructuring that included the layoff
of 9,500 employees, and an additional 1,000 managerial jobs. Then in
2009, Intel closed chip plants, resulting in up to 6,000 layoffs.- Microsoft:
In its then-34th year of business without mass layoffs, Microsoft cut
an initial 5,000 jobs, and even more by the end of 2009. The layoffs
came in response to a major loss in profits and a need to reduce
operating expenses and capital expenditures.- Airlines:
- Citigroup:
In 2008, Citigroup laid off 52,000 employees, making up for massive
write-downs. The number of jobs cut by Citi is about the same as the
total amount of cuts in the entire US financial services industry in
2006. As New York City’s second largest private employer, Citi’s
layoffs had a major impact on the city, as well as Citi stock.- Merck:
- Dow Chemical:
- US Postal Service:
The public workforce is not immune to layoffs, as evidenced by the USPS
cut of 7,500 administrative positions. This cut impacted 2,000
postmasters, which will likely mean closing the post offices they
operate.- HP:
After an acquisition of Electronic Data Systems Corp, HP cut 7.5% of
its workforces fo realize savings. That amounted to a cut of 24,600
jobs over three years. Additionally, HP announced plans to spend $1
billion and cut 9,000 jobs over three years to move to fully automated
commercial data centers, with job cuts stemming from automation and
productivity gains.- Borders:
The popular bookstore Borders announced plans to close 200 of 488
superstores as part of a bankruptcy protection filing. These closings
resulting in the laying off of 6,000 employees out of 19,500.- IBM:
IBM made drastic new cuts in 1993, letting go of 35,000 jobs as part of
an $8.9 billion program to cut costs. The company also let go of some
factories and equipment, shuttering plants. The measure was applauded
by investors, and was praised for being a clean, drastic cut, rather
than dragging out painful layoffs over several years. Employees were
given incentives to leave, and there was also an early retirement
program to encourage a positive outcome for both employees and the
company.- NASA:
- Automakers:
- Pfizer:
Working Thoughts 