If you're hoping for a dose of holiday cheer, you may want to skip this for another CoStar News item. This week, we tallied the job cuts announced so far this month and made some back-of-the-envelope estimates on the impact all the custs could have on the real estate market.
Corporations have announced more than 116,270 job cuts so far this month. Assuming each eliminated position represents an average per employee of 250 square feet across all commercial property types, the headcount reductions represent the potential vacancy of 29 million square feet of commercial space.
In the same time frame, corporations have announced or transacted just 6.44 million gross square feet of major facility expansions or relocations.
The continuing high pace of job losses likely spells big trouble for future absorption this quarter and further dims the outlook for office and industrial space absorption next year.
What follows is a list of the major layoff and closure announcements the major corporations have announced since Dec. 1 through close of business Wednesday Dec. 17.
is closing its paper converting facility at 4400 Highway 51 North in Covington, TN, by the end of this year. The closing will affect about 1,100 employees are affected by these capacity reductions.
plans to reduce its fixed costs significantly and increase efficiencies through Phase Two restructuring initiatives including the consolidation of the company’s aluminum wheel facilities and redeployment of equipment in its component businesses. It will close its Cuyahoga Falls, OH, aluminum wheel manufacturing facility and relocated the work to Erie, PA. Consolidation of the aluminum wheel operations should be completed by the close of the third quarter of 2009. Currently, the Cuyahoga Falls facility employs approximately 130 workers.
Adobe Systems Inc.
in San Jose plans to reduce its headcount by approximately 600 full-time positions globally. The restructuring will result in anticipated pre-tax charges totaling approximately $44 million to $50 million.
based in Hartford, CT, will reduce its workforce by approximately 1,000 positions, or less than 3% of the company's 36,208 employees.
in Lehigh Valley, PA, is eliminating approximately 1,300 positions, or about 7% of Air Products’ global workforce. The reductions are targeted at reducing overhead and infrastructure costs, reducing and refocusing elements of the company’s technology and business development spending, and lowering its plant operating costs.
Air Transport Services Group Inc.
(ATSG) announced that its subsidiary ABX Air was officially notified by DHL, its principal customer, that DHL will discontinue a substantial portion of its U.S.-based domestic express package operations effective Jan. 4. ATSG said that DHL intends to close its sorting operations at its U.S. regional hubs, and all domestic daytime package sorting operations except a Sunday day sort operation on that date. Nighttime sorting operations will continue in Wilmington, DE, Air Transport headquarters location. The closure of these operations will result in the reduction of approximately 1,900 ABX Air positions, including about 1,000 positions in Wilmington, OH. The reductions will affect every department of the company.
plans to co-source and consolidate some operations. As a part of these initiatives, Alcatel-Lucent expects to reduce the number of managers by approximately 1,000 and the number of contractors by approximately 5,000. The company will also complete its existing restructuring initiatives as well as seek savings in real estate, support functions and discretionary spending.
American Capital Ltd.
based in Bethesda, MD, is closing of two offices and eliminating certain functions at other offices and cutting 110 positions or 19% of the combined United States and European work forces. Additional internal costs saving steps are also being implemented.
American Greetings Corp.
based in Cleveland, OH, eliminated 275 positions as part of a cost reduction effort. The positions eliminated were primarily at the company's headquarters. The company employs approximately 18,000 associates on a full-time equivalent basis with approximately 2,200 associates located at the company's headquarters.
plans to cut approximately 1,400 U.S. salaried positions in its beer-related divisions, affecting about 6% of the company's total U.S. workforce. About 75% of the affected positions are based at the brewer's corporate headquarters in St. Louis, at downtown offices or at its Sunset Hills campus, while other reductions will occur in field and brewery locations. In addition, more than 250 U.S. positions that are currently open will not be filled. An additional 415 contractor positions will be eliminated. Most of the reductions will occur by the end of this year, with the remainder taking effect next year.
announced a planned reduction of approximately 12,000 jobs, or about 4% of the company's total workforce, citing economic pressures, a changing business mix and a more streamlined organizational structure. Associated with these job reductions which will occur starting this month and go on throughout 2009, AT&T will take a charge of approximately $600 million in the fourth quarter of 2008 to pay severance to affected employees.
ATC Technology Corp.
approved the restructuring of its North American Drivetrain operations, which will include the closure of its Springfield, MO, automatic transmission remanufacturing facility at 2707 N. Farm Road 123 consolidating its operations to Oklahoma City. The closure of the Springfield facility includes the elimination of all hourly and salaried positions and should be completed by June 30, 2009. The lease for the facility will expire at the end of 2009.
in San Jose, CA, is taking new actions to reduce costs and manufacturing capacity. The actions include: an 11% reduction in the company's North American workforce; a 10-day shutdown for non-manufacturing employees; a hiring freeze, except for critical positions; and strict controls on all discretionary spending. These actions are in addition to the previously announced 11-day shutdown of the company's manufacturing facilities in Colorado Springs, CO.
Bank of America
based in Charlotte, NC, is working on a plan to eliminate up to 35,000 positions in the next three years reflecting the pending merger with Merrill Lynch & Co. Inc.
based in New York and the weak economic environment, which is affecting the level of business activity. The reductions are coming from both companies and affect all lines of business and staff units. Details as to specific reductions in communities or by business line have not been determined. As many reductions as possible will be made through attrition. Severance and other benefits will be provided for those associates whose jobs are eliminated and who cannot be offered another position. Bank of America expects to have a final plan early in 2009.
, a St. Louis, MO-based manufacturer of signal transmission solutions, plans to streamline its manufacturing, sales and administrative functions worldwide. The restructuring will result in a workforce reduction of approximately 1,800 associates (20%) and consolidation of some of the company's manufacturing operations.
Best Buy Co. Inc.
has decided to offer nearly all of its corporate employees a voluntary separation package in order to reduce its corporate expenses significantly. This package provides an incentive for employees who choose to leave the company by offering a significant increase in the company's base severance offer. The company also said that involuntary reductions in corporate staff may be required, depending on the outcome of the voluntary program. Best Buy did not say how many of its employees will be eligible for the buy out. Best Buys principal corporate office is in Richfield, MN, where its owns four interconnected buildings totaling approximately 1.5 million square feet (roughly room for 6,000 employees).
Black Gaming LLC
will temporarily reduce operations at the Oasis Resort Casino Golf and Spa in Mesquite, NV. The move will impact approximately 500 of Black Gaming's 2,000 plus employees. It is anticipated that this will be a temporary scaling back and short-term workforce reduction, but the length and depth of the action has not been quantified.
based in Auburn Hills, MI, is actively adjusting its cost structure by extended holiday shutdowns and cutting overall production. The company will have reduced 2008 global employee levels by approximately 2,900 people or 17% of its workforce by year-end. Most North American operations will shut down for extended holiday periods starting the week of Dec. 15 and will re-open at various times in January, depending on customer schedules.
Bristol-Myers Squibb Co.
plans to cut its workforce by another 10% through 2010 or roughly 3,300 employees worldwide. Of those, the company expects to cut 800 jobs by the end of this month. A year ago, the drug maker also announced it would cut about 10% of its workforce when it had about 43,000 employees.
Broder Bros. Co.
in Trevose, PA, has eliminated approximately 140 positions in its distribution centers, call centers, management and other corporate functions. The company initiated headcount reductions in anticipation of a further weakening in the U.S. economy.
Cell Genesys Inc.
agreed to terminate a lease with ARE-San Francisco No. 41 LLC (Alexandria) at 500 Forbes Blvd., South San Francisco, CA, that houses its corporate headquarters. The lease will terminate on Jan. 2 and Cell Genesys will pay $14.7 million by March 16, 2009 to get out of the deal.
based in Middlebury, CT, is implementing a restructuring program to reduce fixed costs by approximately $50 million. This initiative involves a worldwide reduction in its professional and administrative staff by approximately 500 people, which represents a reduction of about 20% of the professional and administrative population.
Constellation Energy Group Inc.
will lay off as much as 8% of its workforce, or more than 800 people, mostly from the commodities trading division. About half the job cuts will be in the Baltimore, MD, area.
in Auburn Hills, MI, plans to significantly expand the products manufactured at its Newport News, VA facility as part of the on-going consolidation of manufacturing operations in the company's Engine Systems business unit. The expansion will involve the relocation of diesel fuel injection products currently manufactured at the company's Blythewood, SC, facility. Continental plans to close the Blythewood facility, which currently manufactures diesel fuel injection products by the end of 2010. Currently, 440 people work at the 221,750-squar- foot Blythewood/Columbia Engineering facilities, which Continental opened in 2000.
Cooper Tire and Rubber Co.
has decided to close its plant in Albany, GA, at 3300 Sylvester Road cutting 1,300 jobs. Earlier this fall, Cooper Tire told workers it was facing higher costs and shrinking demand, and that it would have to make some cuts.
based in Zurich, Switzerland announced a number of strategic measures to cut costs. Part of the plan is to reduce its headcount by 5,300 people, primarily in investment banking, representing an 11% reduction of the bank's current overall headcount.. The strategic measures reflect, among other factors, the impact of weaker macroeconomic conditions, continued market volatility and fundamental shifts in client demand away from more complex products towards more liquid products. The vast majority of the cuts are to take place by the end of the first half of 2009.
Detroit Free Press
and The Detroit News
announced today a sweeping set of strategic changes to shift to digital delivery of the news. The changes include cancelling home delivery of its daily papers four days a week. Papers will now only be delivered on Thursday, Friday and Sundays. The papers did not say how many jobs will be cut because of the change.
Dow Chemical Co.
in Midland, MI, announced a series of aggressive actions to cut costs. Effective next month will shed high-cost assets and centralize functional structures. Dow will eliminate approximately 5,000 full-time jobs, close 20 facilities in high-cost locations and divest several non-strategic businesses. The job reductions represent a reduction of roughly 11% of Dow's global workforce. It will also temporarily idle about 180 production plants. These represent approximately 30% of our plants worldwide and are mostly split evenly between North America and Europe. That action will reduce its contractor workforce by about 6,000 people.
based in Wilmington, DE, plans to cut about 2,500 employees, principally in businesses that support the motor vehicle and construction markets in Western Europe and the United States. In addition, certain assets will be rationalized to improve future competitiveness.
based in Stockholm, Sweden, is reducing its number of employees by more than 3,000 in the fourth quarter of 2008 and in 2009 due to reduced appliance sales in North America and Europe. The cuts will come on both continents. In addition to these activities, Electrolux continues to move production capacity to low-cost countries in accordance with the restructuring program launched in 2004. The program, which will be completed in 2009 and 2010, will further reduce the number of employees.
Emisphere Technologies Inc.
is closing its research and development facility at Suite 300, 765 Old Saw Mill River R in Tarrytown, NY, and utilizing independent contractors to conduct essential research and development, the company estimates it will reduce its annual operating costs by approximately 60% from current levels. Key While the overall headcount will be reduced, key scientific, financial and commercial development employees of the plant will be relocating to Cedar Knolls, NJ.
Entorian Technologies Inc.
based in Austin, TX, plans to close manufacturing activities for its memory business next month and move manufacturing to third parties.
, a San Jose, CA-based supplier of high performance products that enable energy-efficiency, announced a company wide restructuring that is expected to cut worldwide workforce by approximately 1,100 people, or 12%.
Franklin Electric Co.
is continuing the rationalization of its manufacturing capacity. Initially the realignment plan includes the phased move of approximately 500,000 man hours of manufacturing activity to Mexico, approximately 80% of which will come from its three locations in Siloam Springs, AR. The transfer is expected to be largely complete by June 2009.
announced another significant reduction of planned production for the first quarter of 2009 due to the ongoing and severe drop in industry sales, which were down 36% in November overall and 41% for GM (2007 vs. 2008). The impact of these and recently announced actions to adjust production with market demand, will result in the temporary idling of approximately 30% of GM's North American assembly plant volume during the first quarter of 2009 and will remove approximately 250,000 units from production. The following U.S. plants will be impacted: Fort Wayne, IN; Wentzville, MO; Fairfax, KS; Arlington, TX; Shreveport, LA; Bowling Green, KY; Wilmington, DE; and Flint, Lansing Delta Township, Detroit-Hamtramck, Lansing Grand River, Pontiac MI;
, an Elmira, NY-based provider of advanced material-cutting solutions, has taken a number of actions to control expenses, including recent staff reductions of approximately 70 employees in its North American operations for a total reduction of approximately 160 employees during 2008. These recent actions were across all organizational functions, with the exception of engineering.
Honda Motor Co.
is reducing production again in response to dwindling sales. The automaker will cut another 119,000 units from its plan across all North American facilities in the remaining months of its fiscal year, ending March 31, including a 58,000-vehicle cut at its Marysville, OH, and East Liberty, OH, auto assembly plants. Honda will also make cuts at its newly opened Civic plant in Greensburg, IN. The company previously announced a 38,000-unit cut in October and an 18,000-unit reduction in November. Cuts also will occur at Honda’s Lincoln, AL.
Houghton Mifflin Harcourt Publishing Co.
, whose consumer book-publishing arm based in New York has suspended the purchase of most new manuscripts, is now restructuring its K-12 textbook division. At least several hundred of the company's 5,300 full-time employees are expected to lose their jobs.
Huhtamaki Plastics Inc.
is closing production plant and will cut 73 jobs at 402 N. 44th Ave. in Phoenix, AZ. That will lead to an overall reduction of approximately 170 employees during the first half of 2009.
plans to reduce its global workforce by approximately 30%, commencing in January 2009 and spanning a 12-month period, with the majority of the reductions completed in the first half of 2009. The company currently expects to incur restructuring charges in the fourth quarter of 2008 ranging from $5.3 million to $6.1 million. Approximately $1.3 million to $1.6 million of the charge is related to the planned headcount reduction, and consists primarily of severance payments, to occur during the fourth quarter of 2008 and over the course of 2009. The charge associated with facilities is estimated to be approximately $4.0 million to $4.5 million and consists of costs to vacate excess leased facility space primarily located at the company’s headquarters at 27500 SW Parkway Ave. in Wilsonville, OR. The charges related to facilities will be incurred in the fourth quarter of 2008 and the first half of 2009 as the space is vacated.
, a global supplier of automotive, commercial and industrial products based in Kongsberg, Norway, is restructuring its production operations in North America. Production at its Van Wert, OH, facility will be transferred to Mexico. This closure will affect approximately 105 jobs. The facility is expected to close sometime in the summer of 2009. This announcement is in addition to recently announced cut backs in this same location. In addition, production at the Haysville, KS, facility will be also transferred to Mexico. The Haysville facility is also expected to close sometime in the summer of 2009, and effect approximately 100 jobs.
Level 3 Communications Inc.
in Broomfield, CO, is initiating a workforce reduction of approximately 450 employees in North America, 8% of its total employee base. The reduction will take place before the end of this month and will result in a restructuring charge of approximately $12 million to $15 million in the fourth quarter 2008. The reductions are being made across multiple levels in the organization and multiple locations in North America only.
Micron Technology Inc.
announced that in light of prevailing market conditions, it had agreed with Intel to discontinue production of 200mm NAND wafers at its Boise, ID, facility at 8000 S. Federal Way.
Midway Games Inc.
, the video game maker of Mortal Kombat, plans to let go 180 full-time employees and close its Austin, TX, studio at 11400 Burnet Road Building 2, Suite 2110. Additional staff cuts will occur in Chicago and San Diego, it suspends production of several non-core prototype games. The reduction in force affects substantially all of Midway's functional groups.
NCI Building Systems Inc.
based in Houston, TX, approved a plan to close one engineered building systems manufacturing plant.
Neenah Foundry Co.
plans to close its Dalton Corp.'s Kendallville, IN, manufacturing facility. The plant will continue to operate through early March 2009.
Neurocrine Biosciences Inc.
entered into a lease amendment with DMH Campus Investors LLC, landlord for Neurocrine's corporate headquarters at 12790 El Camino Real and 12780 El Camino Real in San Diego, CA. The amendment provides for the renovation of 12790 to facilitate multiple tenant usage and establishes a mechanism for Neurocrine to terminate its use of the building. It will continue to occupy the 12780 in its entirety. Neurocrine will eat the cost of the renovation not to exceed $5.5 million.
New York Times
is closing City & Suburban, its distribution organization that delivers its newspapers and magazines to newsstands and retail outlets in the New York metropolitan region next month. Going forward, The New York Times will be distributed to newsstand and retail outlets through a combination of third-party wholesalers and the company's own drivers. Approximately 530 full-time equivalent employees will be affected by the closure. The company is currently negotiating to sell a City & Suburban location that it owns. The timing of the sale is not currently known.
cut its quarterly earnings estimates for the fourth quarter from nearly 30 cents/share to less than 10 cents/share. As such the company expects to cut from 8% to 10% of its salaried workforce (about 1,760 to 2,200 workers). In addition, the company is implementing temporary shutdowns at a number of manufacturing facilities in order to reduce inventory levels.
Commissioner Roger Goodell announced that the league is cutting more than 10% of its staff in response to the downturn in the nation's economy that could put a dent in ticket sales for next season. The NFL is eliminating about 150 of its staff of 1,100 in New York, NFL Films in New Jersey and television and Internet production facilities in Los Angeles.
Northern Trust Corp.
in Chicago is eliminating 450 positions and reducing other costs. These actions are expected to generate approximately $50 million to $60 million in annualized pre-tax savings. Position eliminations will begin after the first of the year, using attrition whenever possible.
Novellus Systems Inc.
in San Jose, CA, is expanding its cost cutting and restructuring plans, which will include a 10% reduction in its global workforce or about 370 positions through a combination of attrition and layoffs which will generally be concluded by Jan. 31.
Park Electrochemical Corp.
announced that New England Laminates Co. Inc., Park's electronic materials business unit in Newburgh, NY, is closing its operations there at 40 Governor's Drive in January. The market for such products in North America has eroded to the point where Park believes it is not possible for the New England Laminates operation to be viable.
Pressure BioSciences Inc.
is laying off eight full-time employees (40% of the workforce) and shutting down its R&D facility in Rockville, MD, at 9700 Great Seneca Highway and consolidating those activities in Massachusetts.
Somaxon Pharmaceuticals Inc.
is terminating its sublease with Avnet relating to the company's corporate headquarters at 3721 Valley Centre Drive in San Diego, CA. The effective date of termination will be July 28, 2009. In connection with such termination, the company is obligated to pay to Avnet a termination fee of $350,000 plus Avnet's costs to restore the subleased premises to their condition prior to the company's occupancy. Such payment will be due on June 28. The company is terminating the sublease because it believes that based on its anticipated need for office space and the current market for corporate office space in the San Diego area, the company may be able to significantly reduce its future rent expense. The current base rent is $84,512.04 per month. The sublease also calls for the payment of additional monthly rent consisting of a portion of common area and pass-through expenses in excess of threshold amounts. The termination will result in a work force reduction of 22 employees.
embarked on a series of measures to bolster profitability across the Sony Group. Particularly within its electronics business, where Sony has been most affected by the acute downturn in the economic climate, the company has already undertaken certain short-term measures, including adjusting production, lowering inventory levels, and reducing operational expenses. Going forward, Sony intends to adjust product pricing to mitigate the impact of the appreciation of the yen, curtail or delay part of its investment plans, and downsize or withdraw from unprofitable or non-core businesses. Furthermore, Sony plans to realign domestic and overseas manufacturing sites, reallocate its workforce and reduce headcount. As a result of these measures, by March 31, 2010, Sony plans to reduce headcount in the electronics business worldwide by approximately 8,000, out of approximately 160,000.
SRI/Surgical Express Inc.
will close its Plant City, FL, facility at 1802 Corporate Center Lane that assembles and distributes its disposable packs.
(Silicon Storage Technology Inc., a leader in flash memory technology in Sunnyvale, CA, is implementing a global reorganization that will reduce its headcount by approximately 120, or 17% of its global workforce and expects most of the reduction to be completed by year-end. The action is taking place in all locations worldwide, across all product lines and in all functional areas of the company. The workforce reduction and other restructuring actions are expected to reduce payroll-related expenses by approximately $13 million in 2009.
based in Denver, CO, is taking steps to close its contact center in Petersburg, VA.
Sypris Technologies Inc.
intends to invest in the expansion of its manufacturing facility located in Morganton, NC, with the addition of a targeted 203 jobs by the end of 2013. The project is significant and involves the transfer of all production currently performed by Sypris at its 500,000-square-foot facility located in Kenton, OH, where the company produces components for the commercial trailer industry. Production is targeted to commence during the first half of 2009. The Kenton plant will be closed permanently.
Titan Pharmaceuticals Inc.
based at 400 Oyster Point Blvd., Suite 505, in South San Francisco, CA, is cutting about 40% of its workforce to lower operating expenses and preserve capital. The layoffs include Marc Rubin, president and CEO, and Sunil Bhonsle, COO. The company's remaining staff is focused on reducing all current clinical and manufacturing development activities to the minimal level.
Toyota Motor Corp.
announced more production cuts in North America, trimming its output across the board to adjust for a sharp sales drop that has hurt both foreign auto makers and Detroit's Big Three. Toyota is expanding the number of nonproduction days at each facility this month and next month at varying levels, depending on the products and inventory. This adds to cuts announced last month, when two production days were taken out at all the plants in December and about 250 temporary workers were laid off.
U.S. Steel Corp.
is taking further steps to concentrate North American steelmaking production temporarily at Mon Valley Works near Pittsburgh, PA; Gary Works in Gary, IN; Fairfield Works near Birmingham, AL.; and Lake Erie Works in Nanticoke, Ontario. As a result, over the next few weeks the company will idle Keetac, an iron ore mining and pelletizing facility in Keewatin, MN; Great Lakes Works near Detroit, MI; and Granite City Works near St. Louis, MO. Approximately 3,500 employees will be affected.
Union Carbide Corp.
plans to shutdown of two manufacturing facilities (one in China) and a market development facility in early 2009, and reduce its workforce over the next two years. The company also expects to complete a divestiture in early 2009, which will result in a reduction of approximately 60 positions. As a result of the restructuring plan, the workforce reduction and the divestiture, approximately 325 jobs will be eliminated across several functions, geographies and businesses. The plan includes the shutdown of a facility that manufactures Nordel hydrocarbon rubber in Seadrift, TX, at 7501 State Highway 185 N.
based in New York announced restructuring that will include broad-based staffing reductions across all divisions of the company. This process will result in the reduction of Viacom's workforce by approximately 7%, or 850 positions. The company is also suspending senior level management salary increases for 2009. In addition, reflecting a comprehensive review of its operations, the company will write down certain programming and other assets.
plans to reduce its workforce by approximately 300 employees in the steel processing and metal framing business segments, approximately 4% of the total workforce. These actions are in addition to the October closings and job cuts. Its Dietrich Metal Framing will close its Lunenburg, MA, facility at 198 Summer St. by Feb. 28, and suspend operations at two facilities: Miami, FL, at 255 NE 181st St. by the end of February, and Phoenix, AZ, at 420 S. 53rd Ave. by the end of January. Dietrich intends to re-open the Florida and Arizona facilities if business returns.
, an Atlanta-based service provider of cleaning and maintenance solutions, today announced that, as a result of significantly lower customer orders, it is reducing non-sales headcount by 5% or about 500 positions. The company unexpectedly began experiencing a significantly lower order rate in October as a result of general economic conditions while continuing to experience high raw material input costs. The company initiated a new set of non-sales headcount reductions in November and is expected to have most of these reductions complete by the end of its second fiscal quarter.
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