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Job cuts circle the globe
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April 17, 2001: 12:54 p.m. ET
Kodak, Philips, Cisco, Scholastic, Comair cut staff; TI, Ericsson may follow
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NEW YORK (CNNfn) - The slowing of the U.S. economy will be hitting home to workers around the globe, as such prominent companies as Eastman Kodak Co., Philips N.V., L.M. Ericsson Co. and Cisco Systems Inc. either announced job cuts or were reported to be on the verge of announcing them.
Photography leader Eastman Kodak (EK: down $2.40 to $41.10, Research, Estimates) announced plans Tuesday to cut between 3,000 and 3,500 jobs worldwide, saying the move would save $200 million to $250 million a year by the end of next year.
The company blamed the layoffs on the its diminishing hopes for a economic rebound in the second half of the year. Daniel Carp, the CEO, told CNNfn's Before Hours that the spate of layoff announcements is one of the factors giving the company concerns going forward.
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"We see troubled waters ahead. It's primarily driven by so many layoffs occuring and some weakness in the Asian markets."
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Daniel Carp
CEO
Eastman Kodak Co. |
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"We see troubled waters ahead," he said. "It's primarily driven by so many layoffs occurring and some weakness in the Asian markets." (333KB WAV) (333KB AIFF)
Philips (PHG: down $2.67 to $25.58, Research, Estimates), the Dutch electronics and chipmaker, said Tuesday it would cut up to 7,000 jobs and post a second-quarter loss due to the downturn in the telecom and personal computer market. The company said the cuts are necessary to keep costs in line with revenue levels.
"We see no signs that the slowdown in economic activity in certain parts of the world, particularly the USA, is near its end," said its statement.
Children's publisher Scholastic Corp. (SCHL: up $0.14 to $41.09, Research, Estimates) said Tuesday that it will cut 100 employees, or about 1 percent of its staff, due to a decision not to discontinue updating "Literary Place," its basal textbook reading program, for any future state adoptions and to refocus its educational publishing efforts.
Other layoff announcements expected
Published reports Tuesday said U.S. chipmaker Texas Instruments Inc. (TXN: up $0.29 to $33.30, Research, Estimates) and Swedish telecom equipment maker Ericsson (ERICY: down $0.41 to $5.58, Research, Estimates) are also due to announce job cuts soon due to weakening demand, particularly in the U.S. market.
Texas Instruments, which was already offering early retirement to 2,600 people and closing a 600-employee plant, is set to announce up to 2,000 layoffs as soon as Tuesday, according to the Wall Street Journal.
The Financial Times reported that Ericsson, the world's largest telecom network equipment maker, will cut more than 6,000 jobs this week, bringing the number of jobs eliminated this year to about 15,000.
The announcements are in keeping with weaker employment and economic statistics in the United States released recently. The March employment report showed the largest drop in total U.S. employment in 10 years, along with the highest unemployment rate in nearly two years.
Tuesday's announcements of other layoff notices Monday. Computer networking equipment provider Cisco Systems (CSCO: down $0.84 to $16.36, Research, Estimates) increased the number of job cuts it previously announced to about 8,500, as it warned that sales and earnings would be below previous guidance in its current quarter. The company had previously set a job cut target at 5,500 to 8,000 positions.
There are reasons other than the slowing economy for some of the recently announced cuts.
The acquisition announced Monday of North Carolina bank Wachovia Corp. (WB: down $0.09 to $61.96, Research, Estimates) by in-state rival First Union Corp. (FTU: down $0.86 to $30.34, Research, Estimates) is expected to lead to the elimination of 7,000 jobs over the next three years, although about half those jobs are expected to be phased out through attrition.
Comair Inc., a feeder airline unit of Delta Air Lines (DAL: unchanged at $41.00, Research, Estimates), announced Monday that it would cut 200 jobs and trim the size of its fleet due to a strike by pilots that began March 26. 
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