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Delphi cutting 8,500 jobs
No. 1 auto parts maker to cut about 5% of worldwide staff; warns of losses for quarter, 2005.
December 10, 2004: 8:32 AM EST

NEW YORK (CNN/Money) - Auto parts maker Delphi Corp. said Friday it was cutting 8,500 jobs worldwide and warned of losses in the fourth quarter and 2005.

Delphi Corp.
Layoffs and Downsizing
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The staff cut represents about 5 percent of the work force of Delphi (Research), the world's largest auto parts supplier.

About 3,000 of the jobs cut will be in the United States, and the cuts will be accomplished through attrition, incentive retirement plans and the transfer of some employees back to General Motors Corp., (Research) which formerly owned the parts maker.

The company said it expects to lose between $70 million to $90 million in the fourth quarter excluding special items, which works out to between 12 and 16 cents a share. Analysts surveyed by earnings tracker First Call had forecast earnings per share of 7 cents in the fourth quarter, down from 23 cents a year ago. Including special items such as restructuring charges, the company expects a fourth quarter loss of $123 million to $143 million.

For 2005, the company said it is looking at a $200 million loss, excluding special items. That works out to a loss of about 36 cents a share. First Call's forecast had been earnings per share of 59 cents for that year.

The company blamed weaker than expected sales due to low global production volumes, coupled with commodity price increases, such as steel and other raw materials.

The company said its fourth quarter revenues would come in between $6.9 billion and $7.0 billion, about $200 million less than its earlier guidance when controlling for changes in currency exchange rates. It expects 2005 revenue between $28.5 billion and $29.0 billion, which would be relatively unchanged from its new full year 2004 revenue guidance. First Call's revenue forecasts had been for $7.1 billion in the fourth quarter and $29.0 billion in 2005.

Shares of Delphi gained 11 cents to $8.75 in pre-market trading on Inet following the announcement.  Top of page

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