Job cuts slated for Office Depot, Yahoo, EA
Technology companies and retailer add to what has been a particularly difficult month for the world's workers.
NEW YORK (CNNMoney.com) -- Office Depot, Yahoo and Electronic Arts have added to the mounting job losses in the global economy, with more than 4,000 positions slated for elimination.
The retailer, based in Boca Raton, Fla., also said it would close 112 retail stories and six distribution facilities. These closings are responsible for the majority of the job cuts, the company said, affecting 45 stores in the Midwest, 40 in the Northeast and Canada, 19 in the West and eight in the South.
"The stores being closed are under-performing stores or stores that are no longer a strategic fit for the company," said Office Depot, in a filing to the Securities and Exchange Commission.
Office Depot's stock jumped nearly 9% on the news. The company said that charges for these actions, to take place in 2008 and 2009, will be between $270 million and $300 million.
The company is following through with plans it divulged in October to cut staff by 10%, which means about 1,500 positions. Yahoo unveiled this plan after announcing that its third-quarter net profit plunged by 51% from the year before, to $54 million, or 4 cents per share.
"As we announced during [third-quarter] earnings, we are reducing our global workforce by 10% by the end of this year and we are now notifying the majority of impacted employees," said Yahoo spokeswoman Kimberly Rubey, in a written statement on Wednesday.
Rubey said the company plans to save $400 million annually through the cost-cutting, which she said was "part of an ongoing effort to foster a culture of efficiency and cost discipline."
What appears to be an internal Yahoo memo, posted on the Web site Valleywag.com, outlined the dos and don'ts that managers are required to observe when informing employees of the cuts: Limit the meetings to 15 minutes, get directly to the point without wasting time on small talk, don't "own the employee's feelings" and don't say that you disagree with the decision.
Rubey would not confirm the authenticity of the internal memo.
This follows a round of 1,000 job cuts that Yahoo implemented last January.
"I think further job cuts are inevitable, if you just look at the financial performance of this company over the last couple years," said Hamilton Faber, analyst for Atlantic Equities.
Faber said this could result in a return to negotiations with Microsoft (MSFT, Fortune 500) and Google (GOOG, Fortune 500) to acquire Yahoo's online search engine, in a bid to raise money. Earlier this year, Yahoo rejected a bid to be acquired outright by Microsoft, and its ensuing advertising partnership with Google fell apart.
EA (ERTS), the electronics gaming company based in Redwood City, Calif., announced staff reductions Tuesday as it lowered earnings guidance for fiscal year 2009. The company's stock plunged about 15% on the news.
EA, which makes gaming software for Playstation and Xbox, said it would "pursue cost saving initiatives" and make "additional associated headcount reductions and facility consolidations."
The company is moving forward with plans, originally announced in its quarterly earnings report on Oct. 30, to reduce 6% of its workforce. The company had 9,000 full-time workers, including 5,100 outside the U.S., according to its annual report on March 31. Based on that, the company plans to cut some 450 jobs.
Eric Handler, analyst for Barclays Capital, said that EA will also move U.S.-based video animation jobs overseas, to cheaper markets in China and Rumania.
"The problem with EA is product," said Handler. "They don't have the must-have products right now, and that's hurting them."
Other overseas-based companies announced sweeping job cuts, though their impact on the U.S. job market was unclear.
The British mining company Rio Tinto said Wednesday it would cut 14,000 jobs worldwide.
SKF, a Swedish manufacturer of bearings, also said Wednesday that it was laying off 2,500 workers worldwide, or 6% of its workforce, because of slowing demand in the auto sector. The company said that 1,300 of these cuts were to temporary workers.
Warren Gondolf, spokesman for SKF USA, said that 224 staff workers will lose their jobs in the U.S., out of 6,000 SKF employees in this country. The cuts will occur at a seal-making plant in Elgin, Ill, and at one of the two seal-making plants in Utah, Gondolf said.
December has been a particularly brutal month for the job market, with more than 50,000 job cuts announced so far from a variety of companies across the different industries.
On Tuesday alone, six companies - Sony Corp., (SNE) Danaher Corp (DHR, Fortune 500)., Wyndham Worldwide (WYN), the National Football League, Principal Financial Group and Novellus Systems (NVLS) - announced job cuts exceeding 15,000, although many of the job cuts will be outside the United States.
The U.S. economy lost 1.9 million jobs through November of this year, according to the Labor Department.