Amex said it will slash 10% of workforce or 7,000 job in order to save $1.8B. The survivors of such a layoff work will see no raises and other cut backs including travel expenses. CEO Ken Chenault, who earned $26M in compensation from American Express did not specify if he or management would be taking a paycut to save a few jobs.
Facebook’s CFO was recently seen in Dubai trying to raise capital. Why you ask? It seems that Face is growing to fast and all that new hardware costs serious bucks. Techcrunch has a great analysis of the issues facing Facebook.
The highlights are that Facebook has grown 118% in the last year! To support these visitors, the company is spending $100M on 50,000 servers and another $120M annually additional staff. Throw in another $100M for desks, computers etc.
Company revenues are $265M…but most of the international visitors don’t generate revenue. But at the rate company is spending cash, they are going to run out money soon! Compounding the problem is that ad-spending with dive in the recession next year, so now we are looking at reduced revenues.
In the Q3 earnings conference call, CEO John Thompson announced an earning shortfall and as is the case most of in these cases, announced a layoff of 800 employees (4.5%) in order to meet Wall St. earnings estimates for the next quarter – it’s always easier to cut your way to profitability than it is to grow sales. The good news is that CEO Thompson will get his bonus….($1.68M on top of his $800K salary). Mr. Thompson has made a $71.84M in the last 6 years as CEO of Symantec. Has anybody thought of reducing the executive salaries to save a few jobs?
In another cost cutting move, the company will also be transferring it’s IT operation and finance operations and employee to HP’s Electronic Data Systems. It will be comforting for Symantec employees to hear that last month HP laid off a massive 24,600 employees when it acquired EDS. Symantec employees better start practicing “Do you want fries with that?”
Update: Symantec competitor McAfee in their Q3 conference call announced record sales (and no layoffs).
Mega lawfirm Clifford Chance laid off 20 attorneys’s today…but not to worry, they have another 3,800 attack dogs that you can hire for in case you declare bankruptcy in this sucking economy. Clifford Chance is based in London, but all the layoffs occurred in New York and Washington, DC – How about a little respect and spread the layoffs around your 30 offices around the world?
Not to be out done, Katten Muchin Rosenman laid off 21 attorneys and Sonneschein Nath & Rosenthal laid off 15 attorneys.
Motorola, which hasn’t had a hit product since the Razr, and got royally screwed by Apple on the Rockr, is going for a last gasp strategy by embracing unproven Google’s Android OS. The company is short on options and desperately needs to catch up in the Smartphone market. New CEO Sanjay Jha has decided to eliminate 3 phone platforms and the thousands of engineers working on them, replacing them with a new staff of approx. 350 focused on the Android and a new ‘social networking phone’. WTF? Sounds like a failed strategy and a f-cked company to me.
This is a no-lose proposition for CEO Jha – even if he fails, the company agrees to pay him $30M! Hey Motorola, I can drive your company to the ground for 1/3 of the price!
The company has not been profitable since 2006 - they have lost an average of $12 per phone for each of 28 millions phone sold last quarter.
Online writing community Helium laid off 1/3 of it’s staff as advertising rates collapse. Writers can place content into 24 different “channels”, which in turn get distributed via the Helium network to third party sites. Helium shares ad revenue with the writers, less a transaction fee. The company previously raised $17m.
According to insiders, the layoff was much closer to 50% with 18 of 35 employees kicked to the curb.
Online video production company Revision3 has laid off 1/3 of the company and cancelled some shows including: Pixel Perfect, PopSiren and Internet SuperStar. Rumors are that Jay Speiden (writer/producer/host), Glenn McElhose and Heather Frank (Sr. Producer) have all been let go.
In a cascading effect, SmashFace, producers of Revisions3’s EPIC FU and Wine Library made a layoff as Revision3 will no longer distribute these programs.
Source: NYT, Kevin Rose Blog
According to the TechCrunch layoff tracker, 49 companies have laid odd 20,400 employees so far.
It all started with the steep market dive caused by the credit crunch and the Lehman Brothers non-bailout. The dive accelerated with startups when Sequoia called a all hands CEO meetings for their portfolio companies. Sequoia is not a second rate VC firm-when they talk the entire valley listens. Overnight the mindset for startups have changed and other VC pulling back on investments, cutting valuations and having their portfolio companies cut 25% or more of their employees. Unprofitable firms are being told to get to cash flow break even or even sold. Advertising based business models are being told to come up with alternative models as advertising rates are expect to crash.
It’s a domino effect my friends, what is the next shoe to drop drop? Stay tuned with F-ckedCompany.com. Please bookmark us, subscribe to our RSS feed and help us spread the word.
De nobis fabula narratur
First the good news – Xerox announces a $285M profit…the bad news you lose your job along with 3,000 coworkers. What did Anne Mulcahy, CEO, have to say? “To better align our operations with these changes, we are accelerating actions to reduce our cost base and drive operational improvements across the board, giving us more flexibility in our business in this unpredictable economy. “ WTF? Does she get paid by the word? Is she taking lessons from Sarah Palin?