ECON-More Job Layoffs

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Morgan Stanley to Cut 1,500 Jobs

By Alan Clendenning The Associated Press Published: Apr 24, 2001

NEW YORK (AP) - A month after reporting a steep decline in first quarter profits, Morgan Stanley Dean Witter & Co. said Tuesday it plans to eliminate 1,500 jobs. The cuts in Morgan Stanley's securities and investment management units will come through a combination of early retirements and layoffs, said spokeswoman Judy Hitchen.

Most of the cuts will be U.S. jobs, though some positions in Europe and Asia will be eliminated. Hitchen declined to be more specific.

The company's brokers and workers in its Discover credit card division won't be affected. Earlier this month, Morgan Stanley denied a report in the Wall Street Journal that it was considering cutting 1,000 brokers.

The move by the New York-based brokerage follows similar actions by several competitors, including UBS Warburg, Merrill Lynch & Co., Goldman Sachs Group Inc., Bear Stearns Cos., Charles Schwab Corp. and Credit Suisse First Boston.

The firms' troubles were prompted by the steep stock market decline, which has cut brokerage fees, and sharply reduced revenue generated by arranging mergers and acquisition deals and helping companies issue new stock. Morgan Stanley's earnings dropped 30 percent for the first quarter compared to the same period a year earlier.

Shares of Morgan Stanley rose 10 cents, to $63.90, in morning trading on the New York Stock Exchange.

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On the Net:

http://www.morganstanley.com

AP-ES-04-24-01 1051EDT

-- Anonymous, April 24, 2001

Answers

Goodyear Reports Loss, to Cut 600 More Jobs The Associated Press Published: Apr 24, 2001

AKRON, Ohio (AP) - The Goodyear Tire & Rubber Co. reported a first- quarter loss of $46.7 million, though less than Wall Street's expectations, and said it would be cutting an additional 600 jobs. Goodyear previously said it expected to cut 7,200 jobs during 2001. It confirmed Tuesday that it has eliminated about 2,800 jobs in the first quarter and now expects the total reduction for the year will reach at least 7,800, about 7 percent of its work force.

The news of further job cuts came as Goodyear said its first quarter losses would be 30 cents per share. In the year-ago period, Goodyear earned $48.2 million, or 30 cents per share.

Excluding one-time gains and losses, Goodyear lost $3.5 million, or 2 cents per share. The Thomson Financial/First Call consensus estimate was a loss of 8 cents per share.

Investors responded by sending shares up 90 cents to $25.48 in trading on the New York Stock Exchange.

"The continued decline in orders for tires and engineered products by auto and truck manufacturers in North America had a substantial impact on our results," said Samir Gibara, Goodyear chairman and chief executive.

He said the company has been reducing its production to bring inventory in line with projected sales by the end of June.

Sales in the quarter amounted to $3.41 billion, down nearly 7 percent from the $3.66 billion in the first quarter of 2000. Goodyear said its sales in the replacement tire market in North America grew 4 percent.

Goodyear spokesman Keith Price said that the additional job cuts are spread throughout the company and include employees opting for early retirement.

Goodyear eliminated 3,500 jobs last year, when the payroll was trimmed to about 105,000.

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On the Net: http://www.goodyear.com

AP-ES-04-24-01 1059EDT

-- Anonymous, April 24, 2001


JDS Uniphase Eliminates 5,000 Jobs, Posts $1.3 Billion Loss for Latest Quarter

The Associated Press Published: Apr 24, 2001

SAN JOSE, Calif. (AP) - JDS Uniphase Corp., a leading maker of optical network components for telecommunications, lost nearly $1.3 billion in its latest quarter and plans to eliminate 5,000 jobs, or 20 percent of its worldwide work force. The job cuts announced Tuesday are the latest to rock the slumping technology sector and are much larger than the 3,000 reductions that JDS had previously indicated it planned to make by the end of June.

The company said it plans to consolidate manufacturing of several products, consolidate product lines and shift some manufacturing to plants in China. It also plans to close several operations but did not say where.

JDS, which has headquarters in San Jose and in Ottawa, Canada, said the realignment will cost $375 million to $425 million, and will cut annual expenses by more than $250 million.

The 5,000 job cuts match the number announced last week by Nortel Networks, one of JDS Uniphase's biggest customers.

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On the Net:

http://www.jdsuniphase.com

AP-ES-04-24-01 0954EDT

-- Anonymous, April 24, 2001


Compaq First Quarter Net Income Drops 74 Percent; Cutting 2,000 More Jobs

By Mark Babineck Associated Press Writer Published: Apr 24, 2001

HOUSTON (AP) - Shares of Compaq Computer Corp. fell nearly 7 percent in early trading Tuesday after the world's second largest personal computer maker reported a 74 percent drop in first-quarter net income. Compaq also said Monday it was cutting 2,000 more jobs, bringing the year-to-date total to 7,000, or 10 percent of its work force.

Compaq posted net profit of $78 million for the first three months of 2001, or 5 cents per share, compared with $296 million, or 17 cents per share, in the first quarter of last year.

Excluding a one-time restructuring charge of $249 million and investment income of $75 million, the company earned $200 million, or 12 cents per share, down 29 percent from $281 million, or 16 cents per share in the same quarter a year ago. The consensus estimate of analysts surveyed by Thomson Financial/First Call was 13 cents.

The consensus estimate was 18 cents until March 16, when the company said profits would be between 12 to 14 cents per share because of price pressure from competitors and weak U.S. personal computer sales. Compaq also announced then it was cutting 5,000 jobs.

Shares of Compaq tumbled in early trading, dropping $1.40 to $19.25 on the New York Stock Exchange.

Houston-based Compaq said it will have terminated 4,500 workers - 2,700 in the United States - by the end of next week and expects to lose another 2,500 through attrition.

"We're making the tough decisions now so we'll be better prepared to take advantage of the market when it strengthens, which it will," chairman and chief executive officer Michael Capellas said.

Capellas expects profits to rebound "strongly in the second half, regardless of market conditions."

However, Capellas warned investors further reductions in product inventory and the restructuring, which is expected to save $500 million annually, will take their toll in the near term. He said he expects the company to earn 5 cents per share in the second quarter because of the one-time charges.

Industry analyst Eric Rothdeutsch, of Robertson Stephens, was impressed by Compaq's vows to reduce inventory and to continue moving toward rival Dell Computer Corp.'s direct sales scheme.

"I think once the market improves, there will be very quick reflection on the financial performance of Compaq," Rothdeutsch said.

First-quarter revenues were $9.2 billion, down from $9.5 billion in the year-ago quarter.

The company's willingness to slow production to reduce inventory appeared to please analysts. Executive vice president Mike Winkler said Compaq will reduce the amount of product in sales channel from four weeks' supply to less than three this quarter.

"We're biting the bullet on the inventory issue," Winkler said. "While it's at a record low levels now, we're going to take it down dramatically to establish a more cost-effective model."

One personal computer device Compaq is ramping up is the popular iPAQ handheld device, which offers twice the profit margin of a desktop computer. Winkler said Compaq will make 500,000 pocket PCs this quarter, up 66 percent from the first three months of the year.

Pocket iPAQs accounted for 11 percent of Compaq's first-quarter personal computer sales, Winkler said.

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On the Net: http://www.compaq.com

AP-ES-04-24-01 0945EDT

-- Anonymous, April 24, 2001


Report: Disney Plans Major Cutbacks in Feature Animation Unit

The Associated Press Published: Apr 24, 2001

LOS ANGELES (AP) - The Walt Disney Co. is planning major cutbacks in its feature animation unit with dozens of jobs to be eliminated and salaries to be slashed by 30 to 50 percent, according to a newspaper report. The Los Angeles Times reported Tuesday that Disney executives over the past two weeks have held meetings with department heads, animation supervisors and directors to discuss the high labor and production costs associated with animation.

Disney President Robert Iger told The Times that all units, including animation, are being asked to devise "efficiencies" to increase profitability. He denied that the animation division is retrenching, saying that it has "a full slate of films planned through 2006."

Without commenting on pay cuts, Iger acknowledged that the competition that drove up the salaries for animators a few years ago has dissipated.

The success of the "The Lion King" in 1994 generated more than $1 billion in profit for Disney and lead other studios to seek workers for newly started animation units.

The recent meetings with employees in the animation department made it clear that cutbacks are on the way, said Steve Hulett, business agent for Motion Picture Screen Cartoonists Local 839.

"They're not fingering anybody at this point. But they're saying: 'Here it comes. The tsunami is coming,'" Hulett said.

It is unclear how many animation jobs may be lost. It is estimated that Disney has about 2,000 animation employees at its facilities in Burbank, Orlando, Fla., and Paris.

Disney already is cutting 4,000 jobs companywide in an attempt to boost profits and to appease stock investors.

The company lately has been favoring animated films with smaller budgets that have the potential to reap bigger profits. In one recent meeting, executives noted that "The Tigger Movie" was made at a cost of $6.5 million, but grossed $45.5 million domestically, $28.3 million internationally and generated $78.8 million in video revenue.

Disney executives also said in one of the meetings that the last traditional animated feature that performed well at the box office and in ancillary markets was the 1995 release of "Pocahontas."

Disney will release the animated film "Atlantis" in June.

AP-ES-04-24-01 0930EDT

-- Anonymous, April 24, 2001


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