Layoffs and Downsizing in Today's Job Market
...addition to these new cuts, due to the corporation evolving from being primarily a local and long distance provider to a company that is earning more than half of its income from its wireless products. Sprint is still determining where the cuts will come within the division, but half will be cut by the end of 2004 with the remaining coming in the first half of 2005. (Twiddy) Bank of America succeeded in integration with FleetBoston Financial Corp., but declining business in new mortgages has led them to announce the cut of an additional 4,500 jobs in October. This will be a 2.5% decrease in the corporation’s work force, coming on top of 12,500 layoffs from the merger earlier this year. The job cuts announced will be concentrated in support areas such as finance, marketing and operations and are expected to have little impact among workers that deal directly with customers, such as tellers. Alex Trower, a spokesman for Bank of America, stated that “reorganization of the bank, unanticipated cost savings identified during the merger and the fluctuations of the business cycle – particularly the rise in interest rates that is reducing the mortgage activity – are all behind the additional layoffs.” However, the workers that lose their jobs are going to receive career support resources, job posting services, extended benefits and severance pay from Bank of America, resulting in a cost of about $150 million to the bank. (Whitmire) Eli Lilly and Co., an Indianapolis-based drug manufacturer, plans to eliminate 575 jobs, mostly sales and support jobs, in order to streamline operations to become more competitive. The workers will be given the option to take other jobs within the company by the end of the year or accept a severance package. The changes include closing 43 leased district and regional sales offices by mid-November, with some of the management and support staff from those offices beginning to work from home, while about 100 of those support staff jobs will be eliminated. Among the changes, nearly 300 sales representatives will be moved to other sales territories, with 80 jobs to be eliminated by restructuring the business-to-business unit and U.S. medical division. These job cuts follow a companywide hiring freeze and other measures to try to cut costs back in August. The problems within the company are coming primarily from new drugs being introduced into the market by competition and health plans and governments importing lower-cost drugs from Canada to keep from paying full price. (Reuters, Indianapolis) On the transportation end of the scale, both American and Bombardier Aerospace have announced plans to cut jobs. American has announced plans to lay off as many as 1,100 pilots, mechanics and other ground staff in the coming months, with more expected in the future. The job cuts include 450 pilots by mid-2005, 300-400 mechanics and other maintenance workers in mid-November (2004), and unknown numbers of customer service, management and support staff. The only group of employees left untouched was flight attendants, but their numbers will start decreasing through voluntary lay offs in January 2005. (Reuters, Fort Worth) While American struggles with its own revenue issues, Bombardier Aerospace is suffering because of the problems that Delta Airlines is facing. With the low demand for their production of jets, they have to start cutting jobs, as well. Due to the low demand, they have already announced plans to cut 2,000 jobs, which is 7% of its workforce. The layoffs are to take place over nine months, starting in November 2004. If Delta Airlines continues to face its financial difficulties, they will be unable to take delivery of jets that they have already placed orders for, which would cut production for Bombardier even further, requiring an additional 1,200 jobs to be cut. (Reuters, Montreal) General Motors has also announced job cuts in three different areas. They are going to have to eliminate roughly half o...