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Dec 7, 2011

AstraZeneca slashes 1,150 U.S. sales jobs

AstraZeneca is cutting nearly a quarter of its U.S. sales force in a second wave of redundancies in as many months as it seeks to reduce costs.

Britain's second biggest drugmaker said on Wednesday it would cut about 1,150 sales representative and management jobs at a cost of between $50 million and $100 million, charged in the fourth quarter.

Rich Fante, president of AstraZeneca U.S., said it was a difficult decision to make the reductions, which represent 24 percent of the U.S. sales organization and come on top of 400 job U.S. losses announced in October.

"The changes we are making, however, will help us deliver better results for our business and, most importantly, continue delivering on our mission of patient health," he said.

Since restructuring costs are not included in the company's core earnings measure, the cost of the cuts will not have any impact on its guidance for core earnings per share for 2011.

Generic competition and pricing pressures are already weighing on AstraZeneca's sales in the world's biggest market and things are about to get tougher.

Over the next few years, analysts forecast a steady decline in sales at the London-based group because patents expire on big sellers like Nexium for heartburn and schizophrenia drug Seroquel.

What is more, it faces a major challenge to its biggest-selling medicine Crestor, following the arrival of cheap generic copies of Pfizer's market-leading cholesterol pill Lipitor, which hit the market at the end of November.

AstraZeneca has relatively few new drugs to replace such blockbusters, leaving its sales line exposed and its management under pressure to cut costs wherever possible.

The latest round of job cuts, which are expected to be finalized by early February 2012, are in addition to the wide-ranging program of 8,000 job cuts, designed to be implemented over several years, that AstraZeneca announced in January 2010.

The likes of Pfizer, Merck and Novartis have also announced major job cuts but the scale of the retrenchment has been particularly severe at AstraZeneca.

The impact of the latest U.S. changes will vary by geography and selling teams and a company spokeswoman said AstraZeneca was looking to make greater use of alternative methods for promoting its medicines, such as online tools.

Source : Reuters
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Nov 29, 2011

American Airlines files for bankruptcy

A worker walks underneath an American Airlines airplane at Miami International airport in Miami, Florida November 29, 2011. American Airlines and its parent company AMR Corp filed for bankruptcy on Tuesday after failing to win a labor deal with pilots and suffering from mounting fuel costs.   REUTERS/Lucas Jackson
American Airlines filed for bankruptcy protection on Tuesday to cut labor costs in the face of high fuel prices and dampened travel demand, capping a prolonged descent for what was once the largest U.S. carrier.AMR Corp, the parent of American Airlines, also filed for bankruptcy and replaced its chief executive.
The company, which employs about 88,000, has been mired for years in fruitless union negotiations, complaining that it shoulders higher labor costs than rival domestic and foreign carriers that have already restructured in bankruptcy.
United Continental Holdings Inc's United Airlines and Delta Air Lines Inc, both of which used Chapter 11 to cut costs and later found merger partners, are now the largest U.S. carriers. American ranks third.
"The world changed around us," incoming Chief Executive Tom Horton told reporters on a conference call. "It became increasingly clear that the cost gap between us and our competitors was untenable."
AMR named Horton as chairman and chief executive, replacing Gerard Arpey, who retired.
American plans to operate normally while in bankruptcy, but the Chapter 11 filing could punch a hole in the pensions of roughly 130,000 workers and retirees.
AMR pension plans are $10 billion short of what the carrier owes, and any default could be the largest in U.S. history, government pension insurers estimated.
Ray Neidl, aerospace analyst at Maxim Group, said a lack of progress in contract talks with pilots tipped the carrier into Chapter 11, though it has enough cash to operate. The carrier's passenger planes average 3,000 daily U.S. departures.
"They were proactive," Neidl said. "They should have adequate cash reserves to get through this."
Bankruptcy gives AMR a chance to pare less profitable operations, and could result in the sale of flight routes. The process also gives AMR more flexibility, according to Jack Williams, a professor of law at Georgia State University.
"There are considerable tax benefits that they will be able to use in a bankruptcy case, and they will be able to more aggressively manage their liabilities," Williams said.
But analysts question whether the bankruptcy will address operational shortcomings that have eroded revenue.
"Bankruptcy is not necessarily the be-all, end-all," said Helane Becker, an analyst with Dahlman Rose & Co. "They've got more problems to address in addition to the cost problem."
Shares of AMR closed Tuesday down $1.36, or 84 percent, at 26 cents, down from a 52-week high of $8.89 on January 7. Stock typically is wiped out in bankruptcy.
Shares of rival airlines rallied on expectations that reduced competition could boost fares. AMR had kept a lid on industrywide fares in its effort to keep its airplanes full.
United Continental shares closed up 6.3 percent at $17.63, Delta rose 5 percent to $7.80 and US Airways Group Inc climbed 4.4 percent to $4.46.
AMR shares were halted 28 times on the NYSE on Tuesday for triggering a circuit breaker rule, activated when a stock moves up or down at least 10 percent within five minutes.
In its bankruptcy petition filed in Manhattan, AMR reported assets of $24.72 billion and liabilities of $29.55 billion. The company has $4.1 billion in cash.
One bankruptcy rule is "don't wait too long," Harvey Miller, a partner at Weil, Gotshal & Manges representing AMR, said at a court hearing. "Don't wait until the course is irreversible. That is what American Airlines is doing today."
AMR's bankruptcy filing showed few details about how the company would proceed, said Stephen Selbst, a bankruptcy attorney with Herrick Feinstein in New York.
"It's possible they are still in negotiations and don't want to put something on paper that might prejudice those negotiations," he said.
Experts believe AMR stands to save billions by restructuring its obligations in bankruptcy.
"AMR will no longer have its defined benefit pension plan, helping absorb nearly $7 billion in debt," Morningstar equity analyst Basili Alukos said.
"I imagine the company can save between $1.2 billion to $1.5 billion in labor costs, in addition to savings on repair and maintenance and better fuel burn," he said.
AMR said the bankruptcy has no direct legal impact on non-U.S. operations. It also said it was not considering debtor-in-possession financing.
But it could susceptible to unsolicited takeover bids from rival carriers. AMR has long said it could thrive on its own.
Robert Herbst, an analyst with and a former American pilot, said there was a "95 percent" chance American would join up with another carrier within two years.
"US Airways is probably toward the top of the list but it wouldn't be the only (potential merger partner)," he said.
A US Airways representative did not immediately return a phone call seeking comment.
Most large U.S. carriers are the products of mergers.
United Continental combined the former United Airlines and Continental Airlines, while Delta bought the former Northwest Airlines. US Airways was formed from a 2005 merger with America West Airlines.
US Airways and United Airlines filed for bankruptcy protection in 2002, and Delta and Northwest in 2005. US Airways had tried to buy Delta out of bankruptcy.
Japan Airlines Co, one of American Airlines' alliance partners, filed for bankruptcy last year.
American Airlines said it would remain an active member of the oneworld global airline alliance.
American struggled with labor costs despite massive concessions from unionized workers in 2003, which enabled it to avoid Chapter 11 at the time.
"That deal wasn't good enough," former American chief Robert Crandall told Reuters. "The other airlines that went bankrupt cut their costs much deeper than American.
"If you look at all of the elements of the problem, they all stem back to costs," he said. "It hasn't cut capacity effectively given the constraints" that labor placed.
Contract talks with pilots hit a wall in recent weeks over wages, benefits and work rules. Talks with unionized flight attendants have also flagged.
"While today's news was not entirely unexpected, it is nevertheless disappointing that we find ourselves working for an airline that has lost its way," David Bates, president of the Allied Pilots Association, said in a statement.
A wave of pilot retirements this year prompted speculation of a Chapter 11 filing, given that the retirements could preserve pensions that might be at risk of being terminated.
"The 18-month timeline allotted for restructuring will almost certainly involve significant changes to the airline's business plan and to our contract," Bates said.
The case is In re: AMR Corp, U.S. Bankruptcy Court, Southern District Of New York, No. 11-15463.

Source : Reuters
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Nov 14, 2011

Mizuho net falls 25 percent, plans 3,000 job cuts

Mizuho Financial Group maintained its full-year net profit forecast on Monday after reporting that first-half profit fell 25.4 percent, weighed down by the absence of hefty bond trading gains that lifted its profits the previous year.
Japan's top three banks are announcing their first-half results on Monday, and Mizuho, the second-largest by assets, had been expected to lag rivals.

Results of the other two, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group, are expected to show they are on track to beat their full-year forecasts.

Unlike their Western rivals, Japanese banks largely escaped the brunt of Europe's debt crisis due to limited exposure to the region, while bad-loan costs remained low at home as the number of bankruptcies in Japan continued to decline.

Mizuho said net profit was 254.67 billion yen ($3.3 billion) for April-September, down from 341.76 billion yen in the same period last year. Second-quarter profit fell to 158.31 billion yen from 191.91 billion yen in the year-ago period, according to Reuters calculations from first-half and first-quarter figures.

For the full year to next March, the bank kept its net profit forecast at 460 billion yen, above an estimate of a 433.9 billion yen by Thomson Reuters Starmine's SmartEstimate.

The bank also said on Monday that it plans to cut 3,000 jobs, or about 5 percent of its work force, by March 2016 through the merger of its corporate and retail banking units.

Shares of Mizuho have fallen 33 percent so far this year, compared with a 16 percent drop in the benchmark Nikkei average.

Source : Reuters
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Oct 7, 2011

Sony to close Japan plant, lay off 100 contract workers

Sony Corp will merge two of its wholly owned manufacturing subsidiaries, resulting in the closure of an equipment plant north of Tokyo and the eventual layoff of about 100 contract workers, the company said on Friday.

The move, which takes effect on April 1 next year, comes as analysts and investors urge the company to pull off a drastic restructuring of its loss-making television division.

Sony Manufacturing Systems, which makes factory equipment, will be absorbed by Sony EMCS, the electronics giant's main domestic manufacturing subsidiary, which makes items such as televisions and computers at various sites around Japan.

The 411 regular workers at Sony Manufacturing Systems will be kept on at a different site, but 100 non-regular workers will not have their contracts renewed.

The company is considering selling off the buildings and land at the Saitama site, about 60 km (36 miles) north of Tokyo, a Sony spokesman said.

Source : reuters  [tags : ]

Sep 28, 2011

BAE Systems to cut nearly 3,000 UK jobs

Europe's biggest defense contractor BAE Systems said it will cut nearly 3,000 jobs in Britain as smaller global defense budgets hit orders for its fighter jets.

BAE said the four partner nations in the Eurofighter Typhoon program -- the UK, Germany, Italy and Spain -- were slowing production rates to help ease their budget pressures, affecting the workload at a number of sites.

The company, one of the largest prime contractors in the U.S, said production was also slowing on the F-35 Joint Strike Fighter jet, a U.S. program led by Lockheed Martin for which BAE produces the tailplane.
"Pressure on the U.S. defense budget and top level program changes mean the anticipated increase in F-35 production rates will be slower than originally planned, again impacting on our expected workload," said BAE in a statement on Tuesday.

The 2,942 job cuts from Britain's biggest manufacturer are a blow to the Conservative-led coalition government, which is seeking to rebalance the economy away from an over-reliance on financial services jobs in the overheated south-east of England.

Latest figures show unemployment rose at its fastest pace in two years, totaling 7.9 percent of the workforce.
Trades Union Congress chief Brendan Barber, speaking at the opposition Labour party conference in Liverpool in north-west England, said the job cuts were "yet another devastating body blow to our manufacturing base."

Many of the job losses will come from the north-west, traditionally a center of British manufacturing. Two - in Warton and Samlesbury and involved in Typhoon and F-35 production - are based in Lancashire.
A third site in north-east England, Brough, makes the Hawk training aircraft. BAE said it had begun consultation on ending manufacturing capability at Brough, which also runs a structural testing facility. Around 400 posts will remain there from a current workforce of 1,300.

Critics of the government say its austerity program is choking off growth and risks plunging the country back into another recession.

Unite, the biggest trade union representing BAE workers, vowed to fight the lay-offs.
"The government cannot sit on its hands and allow these highly skilled jobs to disappear," it said.
"It's a dark day for thousands of skilled men and women across the country and it is a dark day for British manufacturing. BAE Systems have dealt a hammer blow to the UK defense industry and Unite is determined to fight the cuts."

Weapons makers globally are bracing for more cuts in defense spending sparked partly by this summer's debt-ceiling deal in the United States -- the world's biggest arms market.
British industry body ADS said it feared that the job losses would be "only the tip of the iceberg," citing a fall in government defense spending from 10 percent 20 years ago to 5 percent currently.

"With such cutbacks under governments that have included all three major parties this is not a party political issue but a matter of the national interest that has a profound impact on the capabilities of both our Armed Forces and our industrial base," ADS chairman Ian Godden said in a statement.
Howard Wheeldon, Senior Strategist at BGC Partners, said he had believed for some time that such a course was inevitable.

"While the loss...will be a serious blow to hopes of rebuilding the manufacturing skills base as a public company BAE must in terms of employment cut its coat according to the cloth available."
The U.S. defense department is cutting at least $350 billion from previously projected spending, and additional cuts could kick in if Congress fails to find more deficit reductions by year-end.
Britain, meanwhile, slashed its defense budget by 8 percent last year to help reduce its deficit, hitting BAE, which makes around a fifth of its revenue in the UK.

BAE, which has already laid off around 15,000 employees worldwide over the last two years, reported a decline in first half pretax profit in July.

The company, which has a 33 percent stake in the Eurofighter joint venture company alongside EADS and Finmeccanica, is continuing to pursue Typhoon sales in India, Japan, Oman and Malaysia and has said exporting the fighter aircraft remains a priority.

British and U.S. arms suppliers have been battling to win new business in emerging defense markets as they look to offset the belt-tightening at home.

Source : Reuters  [tags : ]

Aug 1, 2011

HSBC sheds 30,000 jobs, posts surprise profit rise

HSBC will shed 30,000 jobs as it retreats from countries where it is struggling to compete, Europe's biggest bank said on Monday after it reported a surprise rise in first-half profit.

Shares in HSBC rose over 4 percent after it unveiled first-half pretax profits of $11.5 billion, up from $11.1 billion a year ago and better than the $10.8 billion average in a Reuters poll of analysts.

The bank also said it had cut 5,000 jobs following restructuring of operations in Latin America, the United States, Britain, France and the Middle East and that it would cut another 25,000 between now and 2013.
"There will be further job cuts," Chief Executive Stuart Gulliver told reporters on a conference call. "There will be something like 25,000 roles eliminated between now and the end of 2013."

The cuts equate to roughly 10 percent of HSBC's total workforce. They come on top of planned reductions in overall headcount in a program of disposals that also forms part of a plan to focus on HSBC's Asian operations.

The bank is reversing a strategy that had been criticized for "planting flags" around the world.

Gulliver's far-reaching plan unveiled three months ago aims to slash costs and he intends to sell, shut or slim down retail banking in 39 countries.

HSBC said on Sunday it would sell 195 U.S. branches to First Niagara Financial for about $1 billion in cash, and close another 13 of the 470 sites it had.

The bank also intends to sell HSBC's U.S. credit card portfolio, which has more than $30 billion in assets, a move which would free up capital. Capital One Financial Corp and Wells Fargo are among the bidders, sources have said.

Another suitor could be Barclays.

HSBC is the first of Britain's big banks to report for the quarter. Rivals are also cutting jobs and shaking up their business model as the euro zone debt crisis has hit fixed income trading revenues hard and tougher regulations are hurting returns for investors.

The bank on Monday highlighted risks to global economic recovery from increased regulation, particularly as governments grapple with sovereign debt crises and try to plug holes in their budgets.

"The pace and quantum of regulatory reform continues to increase at the same time as the global economy appears to be losing momentum in its recovery," HSBC said.

Source : Reuters
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Jul 26, 2011

Blackberry RIM Cuts 2,000 Jobs

Research in Motion said it will cut 2,000 jobs (approximately 11% of the company’s workforce) and reorganize upper management.
The company’s COO Don Morrison will retire, and Thorsten Heins will take over the expanded role of COO, product and sales.
The move comes after weak financial results in Q1 and an even worse outlook for the future. As a result of the bleak Q1 report, RIM’s sharestook a beating, dropping 20% overnight.
Once a dominant force in the smartphone market, RIM recently fell to third place behind Apple’s iOS and Google’s Android. The imminent layoffs are necessary to keep the company financially sound, but RIM will have to rethink its entire smartphone and tablet strategy to catch up with its rivals.

Source : Mashable
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May 11, 2011

Cisco warns of sales miss, eyes $1 billion savings

Cisco Systems Inc warned that it will fare worse this quarter than Wall Street had feared, and laid out plans for global job cuts as it struggles to revive growth.
Shares of Cisco fell 3 percent after the world's largest networking equipment maker projected nearly flat sales growth this quarter.
CEO John Chambers, who admitted last month that the Silicon Valley bellwether had lost its way, cautioned that Cisco's fiscal year starting August would also not live up to the company's previous growth expectations.
The company is preparing a round of layoffs around the world, aiming to cut annual expenses by $1 billion, Chambers told analysts on a Wednesday conference call.
Most of the cutbacks would be done by the end of the company's fiscal first quarter, though Chambers would not be drawn on their scale. Employees hurt by the layoffs would know by the end of the summer.
"Cisco is a very strong company in a healthy market with a few problematic areas," he said.
But his optimism failed to impress shareholders, who sent Cisco shares down in late trade after the weak guidance. Cisco's sales warning obliterated an initial 4-percent lift after the company posted quarterly earnings that exceeded low expectations.
"Cisco is in a period of transition. There's a very negative camp that believes that Cisco is in a long decline ... which is why the stock is so inexpensive," said Evercore Partners analyst Alkesh Shah.
The results come as Chambers works to turn around the Silicon Valley bellwether.
Since the rare admission, he has trimmed the company's bloated management structure, offered early retirement to some employees, killed the Flip camcorder and laid off 550 workers. Chambers said he would decide on the next round of layoffs very quickly.
"Each time we've done this in the past, we've done it crisply and emerged out of it stronger. ... We want to do it surgically instead of with a blunt instrument," he said.
"We were all here for the last couple of weeks, 9:30 at night, although the pizza wasn't too good."
Cisco warned that overall fourth-quarter revenue would be flat to just 2 percent higher than a year earlier, implying a range of $10.84 billion to $11.05 billion, below expectations for $11.59 billion according to Thomson Reuters I/B/E/S.
Cisco shares slid 1 percent to $17.72 after rising as much as 4.2 percent to $18.53 from a Nasdaq close of $17.78.
During the conference call, analysts grilled Chambers about his plans for reviving his bread-and-butter business of selling the plumbing of the Internet and corporate networks. They zeroed in on its switching business, where sales fell 9 percent in the third quarter after sliding 7 percent in the second quarter.
Chief Financial Officer Frank Calderoni told Reuters he could not say when Cisco's switching business would grow again.
Before the company gave out weaker-than-expected guidance investors had been hoping the results would beat forecasts.
The company reported profit, excluding items, of 42 cents per share, for the fiscal third quarter ended April 30, beating the average analyst forecast of 37 cents according to Thomson Reuters I/B/E/S.
"This relieves a bit of investor concern in the near term," said Gleacher & Co analyst Brian Marshall. "While April results look decent relative to expectations, we've longer-term issues the company needs to address."
It delivered a non-GAAP gross margin of 63.9 percent, ahead of its forecast of 62 to 63 percent.
Net income fell to $1.8 billion, or 33 cents per share, from $2.2 billion, or 37 cents per share, a year earlier.

Source : Reuters
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Feb 16, 2011

Borders files for bankruptcy, to close 200 stores

Borders Group Inc filed for bankruptcy protection and said it would close about one-third of its bookstores, after years of shriveling sales that made it impossible to manage its crushing debt load.

The long-expected Chapter 11 filing will give the second-largest U.S. bookstore chain a chance to try to fix its finances and overhaul its business in an attempt to survive the growing popularity of online bookbuying and digital formats.

But the chain still faces questions about its longer-term survival in the face of competition from larger rival Barnes & Noble Inc and discounters such as Wal-Mart Stores Inc and Costco Wholesale Corp, as well as from Web retailer Inc and from Apple Inc in electronic books.

Borders President Mike Edward said his chain "does not have the capital resources it needs to be a viable competitor." He said the bankruptcy was essential for Borders to restructure its debt and still operate.
Borders, which was founded in 1971 and bought by Kmart in 1992, had liabilities of $1.29 billion and assets of $1.28 billion as of December 25, according to documents filed on Wednesday with the U.S. Bankruptcy Court in Manhattan. Borders has had net losses totaling $680.6 million since the beginning of its 2007 fiscal year.

The pioneer of book superstores plans to abandon some of its highest profile locations, closing a store in its hometown of Ann Arbor, Michigan, as well as one on Manhattan's Park Avenue.

All 200 closings will be superstores, and about 6,000 jobs will be affected, the company said. It has the option of closing up to 275 in all, according to court documents. It said the stores it wants to close lose a combined $2 million a week. The closings will start by Saturday. The company said it will honor gift cards.
Borders operates 642 stores, including about 500 superstores as well as more than 100 smaller Waldenbooks locations. Almost all of the stores closed by the company in recent years were Waldenbooks locations.

"Waldenbooks really is a specialty retailer," said Mark Freiman, a retail consultant with Focus Management Group. "Borders is category killer and essentially a category killer in book is going to go away. There is no question about it."

The largest U.S. bookstore chain, Barnes & Noble, has had success with its Nook e-reader and online store, allowing it to stay in contention with online book pioneer Borders has lagged well behind.

Borders made a major strategic error in 2001 when it handed off its online business to Amazon. It relaunched in 2008, but in the first three quarters of 2010, online sales made up only 2.3 percent of revenues.

The chain's difficulties have been worsened by the revolving door in its executive suite in recent years. The company has had four chief executive officers in the past three years and two chief financial officers in 2010.
Sales declined by double-digit percentage rates in 2008, 2009 and in the first three fiscal quarters of 2010. During those nine months, sales came to $1.54 billion.

The bankruptcy could help sales of traditional books at Barnes & Noble, at least temporarily, analysts said. Credit Suisse estimates that 70 percent of Borders stores are near a Barnes & Noble store. Barnes & Noble operates 717 superstores.

Source : Reuters
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