GEN/ECON-Layoffs

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Apr 3, 2001 - 12:08 AM

Citing Downturn, DuPont Slashes 4,000 Jobs By Christopher Thorne Associated Press Writer

WILMINGTON, Del. (AP) - Softening markets for apparel and textiles prompted DuPont Co. to announce plans to cut its work force in those areas by 4,000 employees. As the nation's economy has weakened, so has demand for material like nylon, polyester and the Lycra fabric. DuPont, the world's biggest maker of chemicals, announced Monday that it was going to start making less of those materials and close some factory lines.

Executives said the overall savings to the company, which has 93,000 workers worldwide, would amount to about $400 million. Most of the savings would be seen in 2002.

Chairman and CEO Charles O. Holliday Jr. said the job cuts were not across the board, but were targeted to come from business units - like the nylon division - that were deemed "uncompetitive."

He described the cuts as an acceleration of cost-savings plans written earlier, but said these layoffs are significantly different from those that saw the Delaware-based company trim its global workforce by a fifth in the early 1990s.

"The actions we announced today are not about cutting costs for the sake of short-term earnings," he said.

Sales of most DuPont products are tied to demand in other manufacturing sectors, like the company's sales of auto coatings and paints to car makers.

The need to trim costs in the long-term is being driven by increasingly pessimistic views of the nation's economy.

"The downturn we're in is going to be deeper and longer than people thought 60 or even 90 days ago," said DuPont Chief Financial Officer Gary Pfeiffer.

About half of the job cuts will be cut from DuPont's nylon, polyester and Lycra fabric divisions. About 700 jobs will be lost at the chemical company's headquarters in Wilmington.

Although output of some textile lines will be trimmed - and lines in some factories shut completely - DuPont officials said they will not be closing any plants.

The company expects to take a one-time second-quarter charge of 40 to 45 cents per share because of the cuts, mostly due to severance pay.

With the announcement, the chemical giant joins a litany of other major companies making job cuts, including Lucent Technologies, DaimlerChrysler, Procter & Gamble and Motorola.

Analysts questioned whether Monday's announcement was just the beginning of deeper layoffs to come, such as what happened during a round of layoffs that started in the late '80s and escalated.

"Initially, there was this minor head count reduction, then it went deeper and deeper until by '93 it reduced head count by 20 percent," said Andrew Cash, an analyst with UBS Warburg, in New York City.

In 1991, DuPont embarked on a major cost-cutting campaign, eliminating 30,000 employees from the rolls by the end of 1993, leaving a worldwide work force of 114,000. By the end of 1995, the work force was 105,000 and still dropping, reaching 93,000 employees in 70 countries this year.

"I just wonder if what we see to date might just be the beginning of something that is a little more pervasive," Cash said.

Shares of DuPont rose 26 cents to close at $40.96 on the New York Stock Exchange.

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On the Net:

DuPont site: http://www.dupont.com

AP-ES-04-03-01 0007EDT © Copyright 2001 Associated Press. All rights reserved.

-- Anonymous, April 03, 2001

Answers

Apr 3, 2001 - 12:07 AM

Inktomi Will Lay off 250 Workers as Results Miss Expectations By Michael Liedtke The Associated Press

SAN FRANCISCO (AP) - Inktomi Corp., an Internet networking and search company that became one of the New Economy's first success stories, will lay off 250 workers while it wades through deepening losses. In announcing the 25 percent reduction to its work force on Monday, Foster City-based Inktomi warned that its business during the just- completed quarter eroded much faster than management anticipated.

The company said its revenues for its fiscal second quarter ended March 31 will range between $36 million and $38 million, down sharply from the previous sales projections of $63 million to $67 million.

The severe sales slump will result in a loss of 23 cents to 25 cents per share, management said. Inktomi had been expected to lose 4 cents per share, based on the consensus estimate of analysts polled by First Call/Thomson Financial.

In response to diminishing demand, Inktomi said it will prune its 1,050-employee payroll through layoffs and attrition in the next 90 days. The company, which has been among the Internet's most prominent advertisers, also is trimming its marketing budget.

Inktomi also disappointed Wall Street in the previous quarter, but the company still managed to turn a small profit.

Echoing the sentiments of many other technology executives, Inktomi's management described the industry's current conditions in bleak terms.

"This is the most severe quarter in the technology industry that I have ever experienced," said Inktomi CEO David Peterschmidt, a 23- year industry veteran.

The company expects to provide a revised forecast for its full-year outlook April 19 when it releases its full quarterly results

Inktomi's struggles provide a telling snapshot of how much fortunes have changed for Internet companies in just one year.

At the same time last year, Inktomi celebrated its first quarterly profit as dot-com start-ups and well-established companies alike clamored for its online networking and search engine products.

Investors also saw a bright future for the company.

A year ago, Inktomi's stock closed at $195. The stock fell 43 cents to close at $6.22 Monday during trading on the Nasdaq Stock Market and then dropped an additional $1.67, or 27 percent, to $4.55 in after-hours trading that occurred after management delivered the latest dose of bad news.

Inktomi was so optimistic about its future last year that management signed a long-term lease to supplement its 260,000-square-foot headquarters with an additional 380,000-square-foot complex under construction just down the road.

The company figured it would need the extra space to accommodate the hordes of new workers that Inktomi expected to hire to meet the demand for its products.

The company still intends to move workers into the new campus when the offices are completed in November 2002, although the company is "always evaluating its options," a spokeswoman said.

During a conference call Monday, industry analysts questioned whether the company had enough cash to survive the current turbulence.

Jerry Kennelly, Inktomi's chief financial officer, assured analysts that the company had enough cash to "take us through a downturn of any duration."

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http://www.inktomi.com

AP-ES-04-03-01 0007EDT © Copyright 2001 Associated Press. All rights reserved.

-- Anonymous, April 03, 2001


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