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Facility Closures & Downsizings: Telecommuting Turnabout at Yahoo!

Also this week: Tenant Satisfaction Reaches New High as 2013 Begins; and Space Availability Leads from: Intersil, JPMorgan, Saks, Macy's Kmart, P&G and many more
February 27, 2013
Yahoo’s new CEO Marissa Mayer -- determined to shake things up in an effort to turn the struggling company’s fortunes around - decided to end the company’s telecommuting program.

“To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side. That is why it is critical that we are all present in our offices. Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo!, and that starts with physically being together,” a Yahoo memo issued this past week reads.


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According to John A. Challenger, CEO of global outplacement firm Challenger, Gray & Christmas, there is some wisdom behind the memo’s sentiment.

“Yahoo is definitely in a fourth-and-long situation, so it needs to try new tactics. There is a collaborative advantage to having all of your employees in the office,” Challenger said. “However, there is also an advantage in having the best and brightest tech workers on your payroll. The question is whether this move will result in an exodus among the company’s top talent.”

The memo touched off a broad debate in the news and social media this week on telecommuting, to which Yahoo issued a public statement clarifying its stance.

“This isn’t a broad industry view on working from home -- this is about what is right for Yahoo!, right now," said a Yahoo spokesperson in an emailed statement to HuffingtonPost.com.


Tenant Satisfaction Reaches New High as 2013 Begins


Nearly nine out of 10 office tenants in the United States were satisfied with their space in 2012, according to Kingsley Associates’ Q4 2012 Office Industry Trends. Almost 88% of tenants rated their overall satisfaction as “good” or “excellent,” up from 85.1% in 2011. This represents the highest level of satisfaction ever recorded by Kingsley Associates.

Tenant satisfaction was higher in 2012 than in 2011 in almost every major office market in the United States. Only in Atlanta did the proportion of satisfied tenants decline during 2012-from 90.1% to 87.9%, a figure that still betters the national average.

“This unprecedented rise in satisfaction tracks well with what we hear from owners and investors,” said Jim Woidat, principal of Kingsley Associates. “Throughout the recovery, building owners and managers have turned their focus from asset appreciation back toward operations. This has led naturally to better customer service delivery aimed at tenant retention.”

This importance of retention has become especially pronounced because of the sluggish pace of employment growth.

Other information from office tenants in 2012 suggests that employment is picking up in some markets. More than 40% of tenant companies in both Atlanta and Denver reported increased headcount for the year, with Chicago, Miami and Washington, DC, close behind.

Alternative work arrangements are also particularly apparent in certain parts of the country. Employees of tenants in Atlanta, Boston and San Francisco are more likely to work from home on occasion, while those in New York have a higher propensity to share workspace.

Kingsley Associates surveys office tenants representing over 1 billion square feet annually on behalf of its clients. The findings outlined above are based on responses received between January 1, 2012 and December 31, 2012. For additional data and analysis, see Kingsley Associates’ Q4 2012 Office Trends.


Facility Closures & Downsizings


Intersil Corp. announced restructuring initiatives to be completed during the first quarter of 2013 and are expected to reduce annual operating expenses by $30 million. The refocusing effort will reduce the Milpitas, CA-based company’s global work force by approximately 18% (about 270 people). Costs savings are expected to be achieved through reductions in work force and increased focus on new product development efforts.

At investor presentations this week, JPMorgan said it would be looking to cut $1 billion from expenses this year. The reductions would involve the layoff of 4,000 positions, many eliminated through attrition.

Sheet2

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CompanyAddressCityStateClosure or LayoffNo. of LayoffsImpact Date

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Phoenix Children's Hospital 1919 E. Thomas Road Phoenix AZ Unknown1503/29/2013

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The Cheesecake Factory (Grand Lux Cafe LLC) 7014 E. Camelback Road, Suite 102ScottsdaleAZ Unknown893/17/2013

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Conifer Health Solutions1735 Founders Pkwy, Suite 200AlpharettaGAClosure873/24/2013

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Mercury Insurance Group375 Northridge RoadAtlantaGAClosure424/21/2013

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Proctor & Gamble3464 Mike Padgett HwyAugustaGALayoff1303/11/2013

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Bway Corp.2160 Lithonia Industrial Blvd.LithoniaGAClosure653/7/2013

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National Beef189 W BypassMoultrieGALayoff2804/13/2013

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Continental Commercial Products809 E Broad St.WrensGAClosure1213/24/2013

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Owens-Illinois Inc.Route 219 North, Plant #76BrockwayPALayoff774/30/2013

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PowerLink Settlement Services, L.P.345 Rouser RoadCoraopolisPAClosure1254/8/2013

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Teleperformance111 Roberts RoadGrindstonePALayoff2614/2/2013

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Johnstown Specialty Casting, Inc.545 Central Ave.JohnstownPALayoff363/4/2013

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Lincoln University1570 Baltimore PikeLincoln UniversityPALayoff714/8/2013

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Vincentian Regency9399 Babcock Blvd.McCandless TownshipPAClosure1003/21/2013

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Edmund Optics Inc.601 Montgomery Ave.PennsburgPAClosure383/31/2013

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Secured Lending Services290 Bilmar DrivePittsburghPALayoff824/2/2013

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HarperCollins Publishers LLC1000 Keystone Industrial ParkThroopPALayoff2174/1/2013

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K-mart Store # 30511133 York RoadWarminsterPAClosure853/10/2013

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Exco Resources LLC3000 Ericsson Drive, Suite 200WarrendalePALayoff704/5/2013

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Zimmer Spine5301 Riata Vista CircleAustinTXClosure873/15/2013

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JP Morgan Chase-Mortgage Bank1111 North Point DriveCoppellTXClosure1213/10/2013

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Saks Fifth Avenue13550 Dallas PkwyDallasTXClosure1236/15/2013

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Vertis Communications-Dallas8000 Ambassador DriveDallasTXClosure274/1/2013

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Royal Appliance Mfg. Co.7850 Hoover DriveEl PasoTXLayoff1513/31/2013

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Gulf Coast Window Covering7110 Bellerive DriveHoustonTXClosure1353/11/2013

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Macy's1110 Main St.HoustonTXClosure1053/5/2013

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ArjoHuntleigh4958 Stout DriveSan AntonioTXClosure953/8/2013

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Flextronics Americas10900 Cash RoadStaffordTXLayoff1474/1/2013



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