Planned layoffs rose for second month in a row in February: Challenger

NEW YORK, Thu Mar 7, 2013 — Planned layoffs at companies rose for the second month in a row in February as the financial sector cut the most employees in over a year, a report showed on Thursday.

Employers announced 55,356 planned job cuts last month, up nearly 37 percent from 40,430 in January, according to the report from consultants Challenger, Gray & Christmas Inc.

February’s job cuts were 7 percent higher than the 51,728 job cuts announced the year before. For 2013 so far, employers have announced 95,786 layoffs, down 9 percent from the first two months of 2012.

The financial sector dominated cuts last month, with firms announcing 21,724 layoffs, the most since September 2011. That was nearly three times the amount of job losses announced in January.

Although there have yet to be any job cuts related to the $85 billion in government spending cuts known as the sequester, sectors including aerospace, defense, government and education are likely to see increased layoffs, said John Challenger, chief executive officer of Challenger, Gray & Christmas.

Also at risk are companies where the government is a major customer, such as technology, construction and transportation firms, Challenger said.

The report comes a day ahead of the key U.S. jobs report, which is forecast to show the economy added 160,000 jobs in February, while the unemployment rate held at 7.9 percent.

How planning and communication are the keys to handling a reduction in force

Jerry Miller, Vice President, Marketing, Executive Career Services

Over the past five years, layoffs have become an undeniable fact of life for millions of Americans, and even today as we slowly recover from the great recession, layoffs continue. For example, in June, there were 4.3 million total separations, according to the Bureau of Labor Statistics.

And as painful as they may be, layoffs are sometimes necessary to allow a business to reorganize or restructure to remain viable. If they are not handled correctly, however, a reduction in force could be devastating to the future of a company. Research done after the economic downturn in the 1990s found layoff survivors had high levels of distrust and lower levels of motivation. In addition, absenteeism increased and productivity decreased.

“The keys to effectively managing a layoff are planning, communication and treating people with dignity,” says Jerry Miller, vice president, marketing, at Executive Career Services. “Your goals should be to preserve morale and the intellectual capital of the organization and to avoid litigation.”

Smart Business spoke with Miller about how employers can mitigate the negative effects of layoffs when they become necessary.

What role should planning play with managing layoffs?

Planning encompasses numerous areas, so you need to first understand the reasons for having the layoff in the first place. What do you hope to accomplish? You need to determine what the company will look like going forward — post-layoff.

Then you’ll need to decide which positions are going to be eliminated and why. Also, how much notice will be given and what type of severance packages and other benefits will be provided, including outplacement assistance? While you don’t want the legal department to drive the layoff, you need to know the relevant laws and understand all the legal ramifications. Some of the more important laws to be concerned with include The Worker Adjustment and Retraining Notification Act (WARN) and laws dealing with age and other forms of discrimination.

Finally, and very importantly, you’ll want to formulate your communication strategy, both during and after the layoff. Once the planning process is complete, move swiftly. Don’t drag things out. Word travels fast in an organization and you want to stay ahead of rumors.

How does a good communication strategy look during a reduction in force?

Once the implementation phase begins, communication should be wide and frequent. A critical component of this phase is the notification meetings, which should be conducted by the immediate supervisor or department head, and if the meeting is expected to be especially sensitive, a representative from human resources. This is not a time to delegate. It is critical that these managers, particularly if they have never delivered a layoff notice, be coached in how to conduct the notification meetings. If you are using an outplacement firm, it will be able to provide this type of coaching.

What do managers and department heads need to keep in mind during a notification meeting?

Information packets should be prepared in advance with all the necessary information. Expect that impacted employees will likely be in a state of shock after learning of the job loss and much of what is said afterward will not be heard or understood. They need information to take with them to read when they are finally able to process the bad news. Notification meetings should be private and take place as early in the workday as possible on a day that is not immediately prior to a weekend, a holiday or a planned vacation.

The impacted employees must be treated with dignity and respect. They will share their experience with survivors, and if they are not treated appropriately, it could have a very negative impact on those remaining. Managers should imagine themselves on the other side of that table and treat their exiting employees as they themselves would like to be treated. Be brief and direct in the notification meeting. Anticipate emotional reactions and be prepared to deal with them. Don’t engage in small talk or allow your anxiety to cause you to say something to ease the immediate situation that can’t be lived up to. Explain that positions, not people, are being eliminated. You want to be sensitive to the employee’s situation but direct and firm, making sure he or she knows the decision is final and non-negotiable. Tell employees how much you appreciate their work and thank them for their contributions. Finally, direct them to the next step in the process.

How should an employer handle the remaining employees?

Oftentimes a company is so focused on the layoff itself that it loses sight of the impact on the survivors, but doing so can cause significant problems later. This is where leaders need to lead. Meet with the remaining employees to discuss the layoffs in an honest and forthright manner. Share the latest company news with them and commit to keeping them informed. Acknowledge their emotions and give them time to deal with them, but not too much time — don’t allow them to engage in endless carping or complaining. Work must go on. Managers should lead by example. Be positive but also realistic. Discuss the workload and how it will be distributed, perhaps even asking the team what they would recommend. Keep lines of communication open and check in regularly with individuals. Above all, be available to remaining employees. Don’t spend time in your office with the door closed.

Remember, how you treat people matters, to those impacted as well as to those who remain. If you plan effectively, communicate openly and often, and treat people with dignity and respect, a layoff can be done with minimal disruption and little or no negative impact on the organization going forward.

Jerry Miller is a vice president, marketing, at Executive Career Services. Reach him at (949) 251-5600 or [email protected]

Insights Human Capital Solutions is brought to you by Executive Career Services

Lexmark to dump inkjet printers, cut 1,700 jobs

LEXINGTON, Ky., Tue Aug 28, 2012 – Printer maker Lexmark International Inc. said it will stop making inkjet printers, cutting about 1,700 jobs, and focus on its more profitable imaging and software businesses.

Lexmark has been phasing out inkjet printers, used by consumers, and focusing on selling more sophisticated laser printers. It has also been beefing up its print services through several acquisitions over the last couple of years.

Revenue from the company’s legacy inkjet hardware business declined 66 percent in the first half of 2012, forcing the company to cut its full-year forecast.

Most printer makers are struggling with falling sales as printing, considered one of the most dispensable parts of a company’s budget, is always the first target of cost cutting.

Rival Xerox Corp.  cut its full-year profit outlook in July, while Canon Inc. trimmed its operating profit forecast, as the companies braced for tough economic conditions in Europe.

Lexmark laid off 625 employees related to manufacturing of consumer supplies in January.

The company said on Tuesday that it will take a pre-tax charge of $160 million related to the restructuring, with $110 million incurred in 2012, and the remaining in the next three years.

The company also said it is working with its strategic advisors to explore the sale of its inkjet-related technology, adding that it will close its Cebu, Philippines-based plant by 2015.

The company, which expects annual savings of $95 million once the restructuring is complete, also said it would buy back an additional $100 million shares in the second half of 2012.

Google to cut 4,000 Motorola Mobility jobs, take $275 million charge

Mon Aug 13, 2012 – Google Inc. said it would cut 20 percent of the workforce of Motorola Mobility, the money-losing cellphone maker it bought for $12.5 billion last year, and shut nearly a third of Motorola’s offices worldwide.

The news sent Google’s shares up as much as 1.5 percent and Morgan Stanley also upgraded the company to “overweight.”

Motorola Mobility has lost money in fourteen of the last sixteen quarters and in its latest quarter reported an operating loss of $233 million on revenue of $1.25 billion.

“These changes are designed to return Motorola’s mobile devices unit to profitability,” Google said in a filing with the U.S. Securities and Exchange Commission.

Google had evaded questions about its plans for Motorola Mobility when it reported quarterly results last month, saying it was yet to complete its homework on the various businesses.

“While lower expenses are likely to lag the immediate negative impact to revenue, Google sees these actions as a key step for Motorola to achieve sustainable profitability,” Google said on Monday.

Morgan Stanley said Google may bring more discipline to Motorola Mobility than was assumed.

“We see management becoming somewhat more communicative, having recently enumerated key strategic growth areas, and cancelling underperforming projects,” analysts at the brokerage wrote in a client note.

“We believe that Google is planning to reduce Motorola Mobility’s smartphone portfolio to a few reference Android devices, and perhaps a couple of tablet devices.”

Google expects to take a severance-related charge of up to $275 million mostly in the third quarter, it said in the filing.

Google, which expects to record the remaining severance-related costs by the end of 2012, said it could also incur other related restructuring charges mainly in the third quarter.

Morgan Stanley considers shutting offices, cutting staff: sources

NEW YORK, Tue Aug 7, 2012 – Morgan Stanley, under fire to boost profit margins in its retail brokerage arm, is considering closing brokerage offices, laying off support staff and requiring some branch managers also to generate revenue as advisers under a cost-cutting drive, three people briefed on internal discussions said.

Morgan Stanley, which controls the Morgan Stanley Smith Barney venture owned jointly with Citigroup, last week reduced the number of regions to 12 from 16, eliminating four manager jobs. Only about eight months earlier the firm had consolidated its regional manager ranks from 19.

Recruiters, citing conversations with advisers and managers at the firm, say additional cost cutting measures are expected to be announced in the coming weeks.

Among the changes under discussion, they said, is a 10 percent cut in the venture’s 120 branch “complexes”, which are groups of branch offices in a city or region that share compliance and administrative staff.

Morgan Stanley spokeswoman Christine Jockle declined to comment.

Morgan Stanley is eager to slash spending in the brokerage division after all of its nearly 17,000 brokers were transferred last month onto a common technology platform. Redundant offices from Morgan Stanley’s and Smith Barney’s nationwide networks will be closed, and support jobs will be eliminated.

General Mills to cut about 850 jobs globally; restructuring moves set

MINNEAPOLIS, Tue May 22, 2012 – General Mills Inc. will cut about 850 jobs, or 2.4 percent of its workforce, and take other restructuring measures to support growth, the company said on Tuesday.

The company, which has been facing higher costs of raw materials, will record total restructuring charges of about $109 million pretax, including about $94 million in the fourth quarter ending on May 27.

The remaining costs will be recorded in fiscal 2013, General Mills said.

The maker of Progresso soups, Cheerios cereal and Green Giant vegetables said the job cuts would occur across the company and would largely affect administrative and support positions.

General Mills said in March that third-quarter net income had fallen to $391.5 million, or 58 cents per share, from $392.1 million, or 59 cents per share, a year earlier.

On Tuesday, General Mills said it was backing its earlier forecast of earnings between $2.53 and $2.55 a share for the year.

The company’s shares were down 1 cent at $38.54 on the New York Stock Exchange.

Reynolds American to cut 10 percent of U.S. workforce

WINSTON-SALEM, N.C., Wed Mar 14, 2012 − Cigarette maker Reynolds American Inc. said it will reduce its U.S. workforce by 10 percent by the end of 2014, as it looks to cut costs to sustain profit growth.

Reynolds American, which makes Camel and Pall Mall branded cigarettes, expects to incur a pretax restructuring charge of about $110 million related to the job cuts in the first quarter.

By the end of this year, the company expects savings of $25 million from the move, an amount that will increase to about $70 million annually from 2015.

The job cuts come after Reynolds American and some of its operating companies suchas R.J. Reynolds Tobacco Co. and RAI Services Co completed a three-month long business analysis.

A majority of the people are leaving the companies on a voluntary basis, Reynolds American said in a statement.

The company’s shares closed at $41.86 on Tuesday on the New York Stock Exchange.

Video game industry looks for new plan to reach players

SAN FRANCISCO – Mon Mar 5: The $64 billion global video games industry, shaken up by the likes of Zynga in recent years, may be on the verge of another identity crisis.

Hardware and software sales for consoles keep dropping, market-leading Activision Blizzard, which makes the “Call of Duty” and “World of Warcraft” mega franchises laid off 8 percent of its staff in February, and a proliferation of games on app stores is making it costlier to stand. So, an estimated 20,000 video game industry types, executives and game designers will descend on this week’s Game Developers Conference in San Francisco looking for answers.

The interactive entertainment industry has been trying to cope with the rapid growth of online and mobile gaming for a few years, but now even the companies making games in these burgeoning areas are finding it harder to turn a profit.

Also, young companies that are not as big as Zynga or Electronic Arts are finding it difficult to stand out in increasingly crowded app stores on mobile devices without spending heavily on ads, executives say.

“The number of apps is growing exponentially and with that, costs of user acquisition is going up. If you are not a company with a series of franchises like us, it becomes a lot tougher,” said Ben Liu, the chief operating officer of PocketGems, the makers of hit casual mobile games “Tap Zoo” and “Tap Pet Hotel.”

The increasing marketing burden is driving some fledgling companies into the arms of deeper-pocketed partners.

Philip Holt, CEO of Row Sham Bow, said it has 5,000 daily active users but it was getting expensive to attract players to its Facebook strategy game “Woodland Heroes,” where raccoons fight to make the forest safe from an evil bear.

The Orlando-Fla.-based company said last week it had signed a revenue-sharing agreement with Zynga, where the gaming giant promotes the animal game on Facebook and on its own new platform, Zynga.com.

“Working with Zynga was better than going to spend money on Facebook ads to acquire users and spending per click. For an independent developer without a lot of cash, you end up with a significant marketing spend,” Holt said.

How Nick Fortine expanded his sales force while cutting back in operations to set up long-term growth

Nick Fortine, president, CSC Worldwide's Retail Specialty Group

Nick Fortine had to face a 40 percent drop in business as the retail sector put on its capital expenditure brakes in 2009.

Fortine, the president of CSC Worldwide’s Retail Specialty Group, which makes fixtures such as fitting rooms, display walls and cash register stands, was startled, but he knew he had to act soon.

“I was particularly surprised by the level at which capital expenditures stopped in the specialty retail sector,” Fortine says. “We had to create a strategy rather quickly based upon our new reality.”

Once Fortine examined the landscape, he made a bold decision to downsize personnel but to invest ― by adding people ― to the sales team. The company hired a handful of sales associates at the time it was laying off an equal number on the operations side.

“At the beginning of ’09, we knew the future was far from certain,” he says.

“We also knew that if we took our foot off the gas on our selling efforts, our pipeline would quickly dry up.”

Fortine knew that in many businesses, including fixture manufacturing, relationships with prospects and opportunities to sell usually take from several quarters to years to develop.

“So when spending picks back up, you need to have new opportunities queued up,” Fortine says.

In the meantime, when the dust is settling, it’s time to get started with your new strategy.

“As a leader during periods like these, first of all, your team needs to know you have a plan,” Fortine says. “Then they need to understand the plan, believe in the plan and buy in to the plan. They need to know that you are a part of a plan. You are there to support and assist them and to successfully execute that plan.

“A natural result of adversarial times in a workforce is tension, fear, doubt and uncertainty about the future,” he says. “During periods like those, open and frequent communication about the state of the business, the strategy, the goals and measurements against those goals is really critical. In fact, it’s always critical in a business, in good times or bad.”

A key factor is to make sure that everyone understands the steps you are taking to move the business forward given the environment.

“People are much more effective at doing their jobs when they know that they are aligned with the overall goals of the company,” Fortine says. “People perform much more effectively when they are not running scared but rather when they feel like they are empowered to go make a difference in the business. That is the biggest challenge and how you overcome it is by making sure that the people left truly understand what their role is in turning this situation around.”

You need to be positioned to find and win new opportunities all the time.

“While the economic environment is still unpredictable, you have to keep selling throughout,” he says. “You need to be positioned to find and win new opportunities all the time. When the market experiences the inevitable upswing that will come in the future, and those levels of spending return, you will be very confident in your position to take advantage of that.”

While the new sales representatives were getting their feet wet, Fortine was coaching the remaining employees on the new strategy to keep selling and to do more with less. It was critical for them to understand their new roles.

“We needed to explain that if we wanted to sustain our business long term, you don’t do that by laying off sales people,” he says. “You’ve got to always be selling.”

While this wasn’t a company culture makeover, Fortine felt it added a new dimension to the culture.

“I really believe it changed us culturally,” he says. “Your associates should really learn to think creatively about new approaches to managing the business. You have to continually ask yourselves and challenge each other, ‘What can we do to make this better?’ and ‘What can we do to make this easier, more economical, take less time?’”

How to reach: CSC Worldwide, (614) 850-1460 or www.cscww.com

Recreate success

Recreating positive sales and service experiences is an effective way to add to your bottom line ― once you know your strengths and weaknesses.

“You grow by continuously finding ways to do what you do more effectively,” says Nick Fortine, president of CSC Worldwide’s Retail Specialty Group. “You become more honed in doing what you do best.”

The best way for you to hone your business performance is to review the customer satisfaction level.

“Your clients will be very clear about how they believe you are doing,” Fortine says. “Continually ask them. If you are growing, if you’re profitable, and if your clients are happy, you know you are doing the right things.”

You should also believe also that your strength is your domain knowledge in the market.

“Knowing what it takes to pull off a world-class product rollout and translating that knowledge into exceptional service and program results ― that’s your differentiation in market,” Fortine says. “Believe that you do that as well as anyone in market.

“Spend all your time trying to recreate those success patterns by finding opportunities and serving more of them. Become really focused at what it is you do well and knowing what it is you don’t do well. Spend your time concentrating on just getting better and better at what you do really well.”

3M offers early retirement to 4,900 employees to control costs

MINNEAPOLIS, Minn. ―3M Co. is offering early retirement incentives to 4,900 employees and expects about 15 percent to participate in the program, a spokeswoman for the diversified U.S. manufacturer said on Wednesday.

“We are responding to the current economic situation by aggressively controlling costs and conserving cash,” said spokeswoman Jacqueline Berry.

3M began to curb spending in the third quarter through a hiring freeze and reduced travel, she added.

The company has about 80,000 employees worldwide, according to its website.