5 Big-Name Companies Cutting Jobs

by Alyssa Oursler | November 6, 2013 6:30 am

5 Big-Name Companies Cutting Jobs

Jobs Newspaper 5 Big Name Companies Cutting JobsIt was hardly shocking when BlackBerry (BBRY[1]), which continues to circle the drain, announced plans to cut 40% of its workforce[2] in September — 4,500 layoffs in all.

But the dying smartphone pioneer isn’t alone — plenty of other companies are struggling.

In the past few months, numerous big-name companies have announced plans for big-time layoffs. They see layoffs as a way to cut costs and boost profitability in the absence of substantial organic growth.

Of course, large layoffs also create a bit of a self-fulfilling prophecy. Organic growth — both here and across the pond — probably won’t start revving until employment crises come to an end. And yet unemployment is exasperated by that original lack of organic economic growth.

It’s not a pretty landscape, but it’s worth zooming in on anyways. Here are five companies that recently announced large layoffs.

Kellogg

kelloggs 5 Big Name Companies Cutting JobsNumber of Layoffs: 2,200
Layoffs As % of Workforce: 7%

Kellogg (K[3]) announced on its earnings call Monday that layoffs are looming for 7% of its global workforce over the next four years. Based on FactSet data showing Kellogg has 31,000 employees, that means looming layoffs for roughly 2,200 workers.

The reason for the layoffs? Cereal.

Yes, Kellogg cited slowing cereal sales as the catalyst for cut costs via layoffs and other moves. Competition from on-the-go breakfast items and from other companies has taken a toll on Kellogg’s breakfast foods business.

The resulting four-year cost-cutting program is called Project K, which will consolidate supply chain infrastructure in addition to cutting jobs. It aims to strengthen existing businesses in core markets and increase growth in developing and emerging markets.

By the end of the program, Kellogg expects cash savings to tally between $425 million and $475 million per year.

Thomson Reuters

tri1 5 Big Name Companies Cutting JobsNumber of Layoffs: 3,000
Layoffs As % of Workforce: 5%

Financial news giant Thomson Reuters joined the layoffs parade in late October by announcing plans to boot around 3,000 of its workers thanks to tough competition and tepid sales.

The move comes on top of earlier layoffs, too. That means the Thomson Reuters workforce of 60,000 will lose just under 10% of staff thanks to 2013 layoffs. This second round of layoffs will mainly affect the financial and risk division, which is the company’s biggest unit.

Like Kellogg, Thomson Reuters said the layoffs are meant to help the company focus on growth markets. On top of that, the company is also trying to simplify its product lines.

Other media firms including Gannett (GCI[4]) and Disney (DIS[5]) have also announced staff layoffs this year.

Teva Pharmaceuticals

tevaPharmaceuticalLogo e1282226604614 5 Big Name Companies Cutting JobsNumber of Layoffs: 5,000
Layoffs As % of Workforce: 10%

Possibly the most controversial group of layoffs came courtesy of Teva Pharmaceuticals (TEVA[6]), an Israeli drug manufacturer.

In mid-October, Teva announced plans to lay off 5,000 workers in 2014 — around 10% of its workforce — as part of the company’s goal to save about $2 billion per year by 2017.

The announcement created an uproar, since CEO Jeremy Levin did not consult the board[7] before announced the controversial cost-cutting plans. The Israeli government and labor unions were also opposed to the plan. And in the end, it cost Levin his job.

Other names in the pharma sector have been making similar moves, too. Merck (MRK[8]) recently said it would cut 8,500 jobs across its research and development operations as part of a move to trim costs by $2.5 billion by 2015[9]. And medical devices company Boston Scientific also announced it is cutting 6% of its workforce[10].

Citigroup

Citigroup 5 Big Name Companies Cutting JobsNumber of Layoffs: 1,000
Layoffs As % of Workforce: 8% of mortgage lending unit

Citigroup (C[11]) announced in late September that it would lay off around 1,000 workers in its mortgage business, which tallies about 8% of that unit’s workforce.

That’s a small slice of the overall Citigroup employee pool, but it’s part of clear broader trend. The nation’s largest lenders, including Wells Fargo (WFC[12]), Bank of America (BAC[13]) and JPMorgan Chase (JPM[14]), have also been laying off workers in an effort to cut costs.

The main reason: Fewer people are applying for mortgages and refinancing as interest rates rise from rock-bottom levels. On top of that, increased competition in the sector is also putting a squeeze on profits.

Siemens

siemenslogo 5 Big Name Companies Cutting JobsNumber of Layoffs: 15,000
Layoffs As % of Workforce: 4%

Last but not least, this last round of layoffs wins the prize for sheer size.

In late September, industrial giant Siemens (SI[15]), which builds products ranging from gas turbines to high-speed trains and ultrasound machines, announced it would fire about 15,000 workers[16] worldwide as part of a cost-cutting effort to save $8.1 billion.

About one-third of those layoffs will come in Germany, with 2,000 jobs to be cut at the company’s industrial unit and another 1,400 at its energy and infrastructure business.

The 15,000 layoffs were also double the company’s original target, which easily puts Siemens at the top of the layoff list.

As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.

Endnotes:
  1. BBRY: http://studio-5.financialcontent.com/investplace/quote?Symbol=BBRY
  2. 40% of its workforce: http://news.yahoo.com/blackberry-lay-off-4-500-employees-194011647--finance.html
  3. K: http://studio-5.financialcontent.com/investplace/quote?Symbol=K
  4. GCI: http://studio-5.financialcontent.com/investplace/quote?Symbol=GCI
  5. DIS: http://studio-5.financialcontent.com/investplace/quote?Symbol=DIS
  6. TEVA: http://studio-5.financialcontent.com/investplace/quote?Symbol=TEVA
  7. did not consult the board: http://stream.wsj.com/story/latest-headlines/SS-2-63399/SS-2-368267/
  8. MRK: http://studio-5.financialcontent.com/investplace/quote?Symbol=MRK
  9. as part of a move to trim costs by $2.5 billion by 2015: http://investorplace.com/2013/10/merck-to-cut-thousands-of-jobs-in-cost-cutting-move/
  10. 6% of its workforce: http://investorplace.com/2013/10/boston-scientific-cut-1500-jobs/#.UnfMQXCsiSo
  11. C: http://studio-5.financialcontent.com/investplace/quote?Symbol=C
  12. WFC: http://studio-5.financialcontent.com/investplace/quote?Symbol=WFC
  13. BAC: http://studio-5.financialcontent.com/investplace/quote?Symbol=BAC
  14. JPM: http://studio-5.financialcontent.com/investplace/quote?Symbol=JPM
  15. SI: http://studio-5.financialcontent.com/investplace/quote?Symbol=SI
  16. it would fire about 15,000 workers: http://www.reuters.com/article/2013/09/29/us-siemens-jobs-idUSBRE98S07G20130929

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