Wells Fargo, Ford, JPMorgan Chase, Verizon, Etc. To Lay-off 100,000+ Employees (#GotBitcoin)
More than a quarter of carrier’s (Verizon) workforce affected in effort to cut $10 billion in costs. Wells Fargo, Ford, JPMorgan Chase, Verizon, Etc. To Lay-off 100,000+ Employees (#GotBitcoin)
Verizon Communications Inc.’s offer of voluntary severance packages last month was made to roughly 44,000 employees, or more than a quarter of the carrier’s workforce.
A spokesman for the company confirmed the scope of the offer, which was previously reported by The Wall Street Journal.
Verizon’s efforts to trim its workforce come as the largest U.S. wireless carrier by subscribers seeks to cut $10 billion in costs and upgrade to a faster, 5G network.
The severance packages will give Verizon “an opportunity to find more efficiencies in the size and scope of our V Team and help expedite the building of an innovative operating model for our future,” Chief Executive Hans Vestberg wrote in a memo sent to employees last week and reviewed by the Journal.
Employees eligible for the severance packages were offered three weeks’ pay for each year of service up to 60 weeks.
The same day the offer was announced, Verizon notified many information technology employees that they were being transferred to Indian outsourcing giant Infosys Ltd. as part of a $700 million outsourcing agreement.
The pool of employees who either received the severance offer or are affected by the Infosys deal amounts to about 30% of the 153,100 employees that Verizon had globally at the end of June.
“Strategically we are going to invest more in transforming the business versus running the business,” materials detailing the outsourcing agreement said.
As part of that pact, Verizon is transferring about 2,500 employees in the U.S. and overseas to Infosys. Those employees aren’t eligible for severance payments and won’t receive their 2018 bonus if they are offered a job at Infosys and don’t accept it, according to materials given to the employees.
“There is a disappointment there” among long-serving employees who are being transferred to Infosys, rather than being offered severance packages some colleagues are eligible for, said Jerry Risi, who said he has worked at Verizon for more than 38 years and is a senior manager in IT.
Verizon to Shed More Than 10,000 Workers in Voluntary Separation Program
Company offered severance packages to about 44,000 employees to streamline the organization and cut costs.
Verizon Communications Inc. will shed about 10,400 workers who have accepted a severance package as the largest U.S. wireless carrier by subscribers works to cut $10 billion in costs and upgrade to a faster 5G network.
Chief Executive Hans Vestberg said in a memo to employees Monday that the number of employees who were granted the packages represented more than 90% of the staff who volunteered.
“While there were no specific targets in place, the objective was to accept as many eligible volunteers as possible,” he wrote in the memo seen by The Wall Street Journal.
The program offers as many as 60 weeks of salary, bonuses and benefits, based on an employee’s length of service, the company said.
The company had made offers to roughly 44,000 employees, The Wall Street Journal reported in October.
The pool of employees set to depart includes some information-technology workers as well as management employees, a spokesman for Verizon said.
A group of about 1,000 U.S. IT workers in September were initially told that they would be transferred to outsourcing giant Infosys Ltd. without the option of a separation package but were later offered the same deal as the initial pool of management employees.
Verizon said it notified employees on Monday whether they were accepted into the program. Employees’ final date on the payroll will be Dec. 28, March 22 or June 28, depending on the needs of the business.
The New York-based company had 152,300 employees as of Sept. 30.
Wells Fargo Layoffs: Company To Cut 26,000 Jobs
Wells Fargo announced on Monday that it was rolling out a new round of layoffs that will see at least 26,000 of its worldwide employees losing their jobs over the next three years.
The move marks a headcount reduction of at least 10% by the banking institution, marking a significant decrease in the workforce of the third-largest bank in the U.S. The announcement was made public this week but employees found out about it on Thursday as Wells Fargo CEO Tim Sloan unveiled the news.
The bank currently has about 265,000 workers in its payroll and it said that it plans on cutting jobs through both attrition and by laying off workers. It is unclear exactly where these jobs will be eliminated at Wells Fargo, as well as whether or not those who resign will be getting severance packages.
The last few years have been rough for the San Francisco-based bank as back in 2015, the company admitted that a large group of employees opened millions of fake bank accounts for customers so it could meet the insanely high and unrealistic sales goals issued out by its executives. Wells Fargo has admitted to other improprieties over the last few years, which include selling auto insurance to borrowers who did not need the insurance.
JPMorgan Chase Laying Off About 400 Mortgage Employees
Chase, one of the biggest home lenders, is cutting employees in Florida, Ohio, Arizona.
JPMorgan Chase & Co. is laying off about 400 employees in its consumer home-lending business as parts of the market slow down, people familiar with the matter said.
The bank, one of the largest mortgage lenders with about 20,000 consumer home-lending employees, is in the midst of laying off staff in cities including Jacksonville, Fla.; Columbus, Ohio; Phoenix and Cleveland particularly as mortgage servicing has fallen, the people said. The layoffs account for around 2% of that group.
Home sales have slowed as the rise in mortgage rates has been compounded by a lack of homes for sale, increasing prices and a tax bill that reduced some incentives for homeownership.
Rising interest rates have also discouraged homeowners from either refinancing their current mortgage or moving and having to get a new mortgage. The benchmark 10-year Treasury yield hit a seven-year high this past week.
JPMorgan has also found that customers’ delinquencies have fallen, dropping about 22% in August from the year prior, according to a spokeswoman. Mortgages that aren’t delinquent require fewer servicing resources.
“When fewer people are struggling with their mortgages, and more people are using self-service channels, we can adjust staffing,” spokesman Amy Bonitatibus said in a statement Friday. “Like all companies, we are making improvements to operate more efficiently and make slight adjustments to resources to best meet the needs of the market.”
Ms. Wexler added that JPMorgan’s consumer home purchase application volume rose year-over-year in August and September.
Wells Fargo & Co., the largest U.S. mortgage lender, said in August it is laying off about 650 mortgage employees who mainly work in retail fulfillment and mortgage servicing “to better align with current volumes.” In 2014, JPMorgan cut about 7,900 mortgage jobs.
Auto Makers Consider Shifting More Manufacturing to North America
U.S. trade pact is prompting foreign auto makers to rethink supply chains to meet potential restrictions.
Foreign car makers are considering moving more of their manufacturing to North America following the recent U.S. trade deal with Canada and Mexico.
Within days of the U.S. and Canada reaching a pact to replace the roughly 25-year-old North American Free Trade Agreement, executives at several foreign car makers said they are considering changes to their supply chains that would result in more auto-parts manufacturing in the U.S., Canada and Mexico.
“We will allocate more U.S. production for the U.S. market,” BMW AG CEO Harald Krüger told reporters at the Paris Motor Show this week. He said the German car maker already sources many parts in the region, but the new trade pact will accelerate a shift in investment.
Daimler AG CEO Dieter Zetsche said at the same event the new agreement could force the company to move more engine manufacturing to the U.S., where it builds cars and sport-utility vehicles at a factory in Tuscaloosa, Ala.
The impact on foreign auto makers’ North American operations from the newly named United States-Mexico-Canada Agreement, which still has to be approved by Congress, remains unclear. But many in the auto industry see the pact as evidence of President Trump’s tough approach to trade, at a time when he is threatening new tariffs on European and Japanese auto imports.
Industry consultants say auto makers are growing increasingly nervous that more restrictions could emerge as Mr. Trump turns to trade talks with Japan and the European Union.
“These companies are now seeing that there is an element of political risk to operating in the U.S.,” said Johan Gott, a principal with global management consulting firm A.T. Kearney.
Since Nafta was established in 1994, both U.S. and foreign auto makers have developed supply chains based on the expectation of low to no tariffs within North America. Mr. Trump made overhauling Nafta a campaign pledge, arguing that it eroded the U.S. manufacturing base and sent well-paying factory jobs to Mexico, where labor is cheaper.
The tentative deal, which replaces Nafta, requires auto makers to build at least 75% of a car’s value in North America to remain duty-free within the region, up from 62.5% currently. Car companies also have to ensure 40% to 45% of the vehicle is made by workers earning at least $16 an hour, a provision aimed at steering more work to the U.S. to generate manufacturing jobs.
The pact caps yearly auto imports from Canada and Mexico at a combined 5.2 million, well above the 4.1 million vehicles that were shipped into the U.S. last year from the two countries. Cars that don’t comply with the new rules will be subject to a 2.5% tariff. The deal exempts light trucks such as pickups from the caps.
Foreign-based car brands made up 56% of light-vehicle sales in the U.S. last year, according to Autodata Corp. Auto makers that source a significant number of parts overseas, including high-value engines and transmissions, will likely be at risk of noncompliance with the new rules for certain vehicles that they make in North America and sell in the U.S., industry analysts say.
The new rules will be phased in over the next two to five years, about the time it takes to develop a partially or fully revised car model. Car makers are likely to look at moving engine and transmission production first, because those parts make up roughly 30% of a car’s value and thus represent what would be a big step toward the stricter content thresholds, manufacturing consultants say.
The new standard is most significant for vehicles that are built in Mexico with lots of foreign parts and then shipped to the U.S., such as Nissan Motor Co.’s Sentra compact sedan, Volkswagen AG’s Golf compact and Honda Motor Co.’s Fit subcompact.
Carlos Ghosn, head of the Renault-Nissan-Mitsubishi alliance, said the new North American trade pact would spur the car-making group to invest more in both the U.S. and Mexico, but didn’t provide details. Honda and Volkswagen said in separate statements that they are still analyzing the potential impact of the deal on their local operations.
Mazda Motor Corp. , which relies on Japan for engines and transmissions, would also struggle to meet the higher content requirements on its Mexico-built Mazda3 compact car.
“Naturally, it will change since we haven’t reached 75%” local content,” said Mazda CEO Akira Marumoto. “Components that have to be made within the Nafta region will increase.”
By comparison, Detroit auto makers General Motors Co. , Ford Motor Co. and Fiat Chrysler Automobiles NV don’t expect to be impacted significantly because most of the vehicles they sell in the U.S. are likely to meet the local content and wage requirements, although some cars may face hurdles. That could include Fiat Chrysler’s Mexican-made Fiat 500 subcompact, which uses transmissions imported from Germany, Italy or Japan depending on the model, according to government data. FCA said it expects the trade deal to allow its North American production to “remain competitive at home and in export markets around the world.”
Some industry analysts say the new restrictions could over time hurt North American competitiveness by raising manufacturing costs and also lift retail prices for U.S.-sold cars. Many car makers now use North America—and particularly Mexico and the U.S.—to supply overseas markets, but that could change with the shifting trade policies.
Ford To Cut Jobs As It Reorganizes Salaried Workforce
Car maker says it plans a ‘headcount reduction’
Ford Motor Co. informed employees this week of a planned reorganization that will cut salaried jobs, part of Chief Executive Jim Hackett’s broader plan to slash costs as the auto maker seeks to improve profits and revive its stock price.
Ford said in a statement Friday that it is in the “early stages of reorganizing our global salaried work force,” though it declined to disclose how many people it may let go. The No. 2 U.S. auto maker by sales has about 70,000 salaried workers, and employees were told of the plan Thursday, a spokeswoman said.
The planned cuts should be decided by the second quarter of 2019, the spokeswoman said. It reflects Mr. Hackett’s “desire to have an organization that is moving faster, and part of that comes from having a flatter” management structure, she said.
“The reorganization will result in headcount reduction over time and this will vary based on team and location,” the company’s statement said.
The restructuring comes amid mounting questions from investors and analysts, who have been pressing Mr. Hackett for more details on his plans to revitalize the company. Ford’s share price is stuck at a multiyear low and its profits have been sliding at a time when General Motors Co. and other rivals have remained strong.
It is unclear if the reductions would be achieved by buyouts, layoffs or a combination of the both
Since he took the top job in May 2017, Mr. Hackett has emphasized improving Ford’s overall “fitness” by cutting costs and streamlining the way it engineers and builds cars. Ford is targeting $25.5 billion in cuts through 2022.
Separately, Ford has said it plans about $11 billion in restructuring costs over the next three to five years. Analysts expect many of those cuts to come in overseas businesses that have struggled in recent years, including Europe and South America.
The Ford spokeswoman said the company wanted to let workers know in advance about the plans because the reorganization is going to be fairly visible and is meant to be a participatory process. Each layer of management will be tasked with restructuring their own group, she added.
“It is important to be transparent with the workforce,” she said. “This is a whole new process. We’ve never done it like this before.”
David Whiston, an auto analyst with Morningstar Inc., said Ford could be trying to ease the shock of job losses down the road or hoping some people will leave early.
“Hackett is under a lot of scrutiny from Wall Street right now,” Mr. Whiston said. “Action needs to be taken to fulfill this restructuring plan.”
While Ford underwent a massive restructuring under former CEO Alan Mulally, costs have climbed in recent years as it has added headcount and stepped up spending on engineering and development. Ford’s global workforce, including factory workers, totaled 202,000 last year, up 18% from 2012.
In the critical area of engineering, research and development, Ford’s $8 billion budget last year outpaced GM’s by nearly 10%, even though GM sells far more cars globally and has more advanced electric cars.
Ford offered buyouts last year aiming to trim 1,400 jobs, but Mr. Hackett has pushed for deeper cuts since taking over as CEO.
Ford has said the restructuring will target areas of its business that aren’t generating a decent return so it can deploy more capital to its most profitable business lines, most notably trucks and sport-utility vehicles in North America. It has been losing money in Europe and South America, and swung to a loss in China during the second quarter.
During Ford’s second-quarter conference call with analysts, Morgan Stanley analyst Adam Jonas criticized Mr. Hackett for not spelling out to investors more specific moves he plans to make to boost Ford’s performance. Mr. Jonas even questioned whether Mr. Hackett expected to still have his job by the time the company was ready to disclose more about its plans.
“Hell yes,” the CEO responded. “I expect to be in front of everybody, declaring where we’re going and what we want to get done.”
Mattress Firm Files For Chapter 11 Bankruptcy
Up to 700 stores will be closed as chain pursues reorganization.
Mattress Firm Inc., the largest specialty mattress seller in the U.S., filed for bankruptcy protection Friday, the victim of increasing competition from discount retailers, too many of its own stores and the loss of a key supplier.
The Houston-based retailer, which had gobbled up dozens of rivals over the past decade, sought chapter 11 protection in U.S.
Bankruptcy Court in Wilmington, Del. The filing follows a deal struck in July with bondholders of its troubled parent, Steinhoff International Holdings NV, which took Mattress Firm private two years ago for $3.8 billion.
The bankruptcy marks a rapid fall for the once high-flying bedding retailer and Steinhoff, the South Africa-based retail conglomerate that has been called “Africa’s IKEA.” Steinhoff, whose purchase of Mattress Firm marked its entry into the U.S. market, has been caught up in an accounting scandal that erupted in December. Its creditors, who hold billions of dollars of the company’s bonds, agreed to suspend all payments on its debt for three years. Steinhoff is expected to launch a debt restructuring for its European business in the U.K. later this month.
Mattress Firm, the market leader in the U.S. with more than 3,200 stores and more than $3 billion in annual revenue, has its own problems. The retailer finds itself with too many stores as its sales have slumped and it struggles to integrate rival chains it bought.
“There are many examples of a Mattress Firm store being located literally across the street from another Mattress Firm store,” Hendré Ackermann, the company’s finance chief, said in an affidavit filed with the court. As part of its business restructuring, the company plans to close 700 stores before the holidays.
Its business was also rocked last year when Tempur Sealy International Inc., a top mattress maker, abandoned the retailer in a dispute over pricing. Mattress Firm’s revenue and earnings took a huge hit, according to a person familiar with the matter. Tempur- and Sealy-branded mattresses accounted for roughly one-third of the company’s annual revenue, said Seth Basham, an equity analyst at Wedbush Securities who follows Tempur Sealy.
The mattress market, like most other retail sectors, has also come under pressure in recent years from online upstarts, such as Casper Sleep Inc. and Leesa. The newcomers mostly sell bed-in-a-box mattresses they ship directly to homes, promising free returns.
Even as Mattress Firm retreats, some of the web-based sellers are starting to set up shop, opening pop-up stores in malls or partnering with furniture retailers like West Elm.
Casper recently announced plans to open 200 stores over three years to counter growing competition in online mattress sales.
The crowding of the bedding market and Tempur Sealy’s exit have hit Mattress Firm’s bottom line. In the year after the Steinhoff deal, the U.S. chain was already bleeding cash. Earnings before interest, taxes, depreciation and amortization of $251 million in fiscal 2016 were followed by an $81 million loss in fiscal 2017.
Faced with a cash crunch, the chain resorted to taking a $80 million loan from Steinhoff in March, but that wasn’t enough to last past October.
Mattress Firm couldn’t borrow more because of debt covenants tied its guarantees on $3 billion of debt owed by Steinhof, a person familiar with the matter said.
A group of Steinhoff bondholders, led by Baupost Group LLC, Davidson Kempner LP, Silver Point Capital LP and KKR Credit, are lending hundreds of millions of dollars to fund the retailer’s operations and efforts to close stores, according to people familiar with the matter.
The mattress retailer said it has lined up $250 million in bankruptcy financing to keep its remaining stores open during the bankruptcy case and another $525 million in financing to fund its exit from chapter 11. Mattress Firm said suppliers and contractors will be paid in full.
Under the reorganization plan Steinhoff reached with its creditors, the bondholders—who already control the South African conglomerate—will gain over 49% of the equity of Mattress Firm when it exits bankruptcy. Steinhoff will retain control of the rest of the shares.
On Friday, a bankruptcy judge convened an emergency hearing in Wilmington with lawyers for Mattress Firm to clear temporary financing arrangements to allow the company to spend its cash until a full court hearing Tuesday.
“I want to grant you cash collateral to do what you have to do to save the business,” Judge Christopher Sontchi said, referring to an order that grants Mattress Firm permission to use cash that is held as collateral for loans.
Without access to the cash, Mattress Firm would run out of money by the end of the month, Mr. Ackermann, the finance chief, said in a court filing.
U.S. Firms Shed More IT Jobs In September (Published: Oct 8, 2018)
Employers across the U.S. economy shed an estimated 90,000 core technology jobs in September, reversing IT employment gains from the previous month, while job postings for tech positions continued to decline, CompTIA reports.
Amid the broader declines, hiring within the tech sector picked up, following a downturn in August, with tech employers adding an estimated 5,900 new positions last month, the IT trade group said.
The results are based on an analysis of Labor Department jobs data released Friday, showing total U.S. nonfarm payrolls rose a seasonally adjusted 134,000 in September, the smallest gain in a year.
The overall downturn may partially reflect the impact of Hurricane Florence, which led to slower hiring in some sectors, The Wall Street Journal reported, adding that it may also signal growing challenges for some employers to fill jobs.
The upturn in tech-sector hiring last month was driven by strong demand for workers in IT services, custom software development and computer system design, Comptia said.
Other positive job categories included computer and electronic products manufacturing, and data processing, hosting and related services.
Despite declines in August, the IT industry overall has added an estimated 67,000 jobs since January.
Outside the tech sector, employers have cut IT positions in five of nine months through September, CompTIA said.
All told, the unemployment rate for IT occupations last month dropped to 2%, from 2.8% a year earlier, it said.
Tim Herbert, the group’s senior vice president for research and market intelligence, said the low unemployment rate, along with transitions underway at most enterprises to newer technologies and other external economic and policy factors, is causing “mixed signals in the employment data,” according to a statement.
Across the board, job posting for IT occupations fell by an estimated 2,700 from August, despite growing demand for software positions, IT support specialists and systems engineers.
Hiring around cybersecurity is also a bright spot, Comptia said, with U.S. employers posting more than 103,000 job openings so far this year, up 30% from the same period a year ago.
Bank CEOs Head To Washington Citing Efforts For Underbanked
JPMorgan Chase & Co., Bank of America Corp. and their largest rivals are preparing to tell lawmakers they’ve stepped up efforts to bank under-served communities, ahead of scrutiny into their lending to Americans facing hard times during the pandemic.
“We took steps to make sure those in need, including those without access to traditional banking services, received each round of stimulus payments quickly,” JPMorgan Chief Executive Officer Jamie Dimon said. The bank also delayed payments and extended forbearance options on mortgage and other accounts, and funded more than 400,000 loans to small businesses, according to remarks prepared for his appearance alongside other banking CEOs before Congress on Wednesday and Thursday.
The two days of testimony will mark the first time top bankers have faced a public cross-examination — albeit on video — since Democrats took control of the Senate and the White House early this year. The CEOs are expecting to meet with frustration from policy makers who are concerned about evictions and mortgage defaults after historic job losses, as well as the pace of lending to consumers and small businesses. Bankers have said sluggish loan growth has been a product of low demand.
That argument has been met with skepticism from lawmakers including Senator Elizabeth Warren, a Democrat from Massachusetts.
“The big banks and giant corporations made billions in profits during the pandemic and passed those gains on to their executives and shareholders,” Warren said in an emailed statement. “This is corporate greed plain and simple. Instead, we need financial institutions to make the big investments in communities and small businesses that our country needs for an equitable recovery, and it is our job to fight for that.”
Bank of America’s Brian Moynihan and Charlie Scharf of Wells Fargo & Co. highlighted in prepared remarks the loans and services they extended during the Covid-19 crisis, including to underserved communities. They pointed to their roles disbursing loans under the government’s Paycheck Protection Program, an initiative designed to help small businesses keep workers on payroll.
Bank of America didn’t prioritize client applications in its provision of PPP loans to almost 500,000 small businesses, it said. Wells Fargo’s lending supported 1.7 million jobs, according to Scharf.
Despite such efforts, the recovery from an economy nearly shuttered by the pandemic is uneven and the struggle continues for many, Citigroup Inc.’s Jane Fraser said in her prepared remarks.
“We are already seeing the shoots of a K-shaped recovery in which some will do better and others will struggle,” Fraser said. “Unfortunately, those who will struggle have been economically disadvantaged historically, and they will need special attention from our industry.”
Among its initiatives, Citigroup expanded access to check-cashing services for non-customers, scrapped surcharges for prepaid debit cards issued for stimulus payments and tweaked policies covering the garnishment of customer stimulus payments, Fraser said.
Lawmakers have also been pressing the banks for more disclosure on racial and gender equality within their own ranks. Fraser became the first woman to lead a big six U.S. bank, while others have begun to report more robust metrics about their workforces and elevated more women to senior roles.
JPMorgan’s Dimon highlighted the bank’s commitments toward advancing racial equity, noting that while his company’s investment commitment is significant, “we know there’s more work to do.”
Goldman Sachs Group Inc. CEO David Solomon cited goals to boost diversity across many levels of hiring.
“I believe a core part of my tenure as CEO will be defined by our progress on this front,” he said in prepared remarks. “I believe that we should have a company that looks like the regions and communities we serve.”
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