7 companies with mass layoffs in 2012
The job market improved last year, but pink slips kept coming at major names like HP, Pepsi and Citigroup. One common thread was troubled CEOs.
Whatever recovery the jobs market posted in 2012, the number of mass layoffs remained high. Dozens of companies each fired thousands of workers, with failing firms at the top of the list based on total cuts.
Hewlett-Packard (HPQ), which is so badly off that investors now question its viability, fired 27,000 people in May. That number could rise rapidly as some of its core tech divisions struggle for sales. The botched buyout of Autonomy almost certainly will cause more job cuts in that division, which has, according to HP, much lower profits than forecast. CEO Meg Whitman has said HP sales may not improve for two years or more.
Hostess moved into Chapter 11 so quickly that the public only watched the process in its late stages, when it became clear that Twinkies might disappear. Friction between management and labor did not improve during negotiations, and 18,500 people lost work.
From tech to food to travel: AMR, the parent of American Airlines, also in Chapter 11, fired 13,000 people as the company attempted to show it can be profitable. The actions were part of a plan to emerge from bankruptcy either as an independent or an attractive target for another large carrier. Those plans have come to fruition. US Airways Group (LCC) probably will buy American. A new consolidation between the airlines will cause another round of job cuts.
Across many sectors
Most of the companies that laid people off en masse have at least two things in common. They have been run by CEOs who lost jobs amid pressure to improve results, or they are run by chief executives who could be ousted soon for the same reason. Also, they are companies where future cuts are nearly certain.
Showing that large layoffs were not concentrated in one sector or two, Citigroup (C) cut 11,000 people. Its board of directors apparently did not think those cuts were enough. It fired CEO Vikram Pandit and replaced him with cost-cutting expert Michael Corbat. The new chief executive is expected to set another round of “downsizing” as he shutters underperforming divisions and tries to improve mediocre profits.
The snack and soft drink industry was the source of more job cuts. PepsiCo (PEP), which has battled slow sales of its flagship drink, cut 8,700 jobs. They may have been sacrificed as CEO Indra Krishnamurthy Nooyi effectively saved her job after Wall St. pressure to bolster the company’s share price.
Two of the nation’s weakest retailers cut jobs, and those cuts probably have not ended. Regional grocery chain Food Lion fired 4,900 people. That company has about 1,200 stores. And J.C. Penney (JCP), the most troubled major retailer in the United States, cut 4,700 people as well-paid CEO Ron Johnson made decisions that pressured revenue down by 20%.
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Our highways, Trains, electrical grids, Water storage and treatment. All are near collapse. China even has high speed rail. Venezuela has cars that run on ethanol and sells its oil. And these places have crap for government. The one thing that has made the USA great was innovation and growth with infrastructure.
Its not spending that's the problem its what we are spending the money on. If you run a business and don't grow it or maintain it it fails. Same with a government or Country.
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