Apr 20, 2007

Discovery Employees Discover Pink Slips

Discovery Communications fired about 8% of its Silver Springs, DC staff on Monday. According to a Neil Adler article in the Washington Business Journal, it’s estimated that 200 were fired, and since Discovery has refused to give any information concerning the cuts, we can assume that there is no severance package or outplacement service.

The following is from the
career section of Discoveries website, it would seem that their current actions might hamper their ability to obtain additional awards:

• One of the 2005 "100 Best Companies to Work For," ranked by FORTUNE Magazine;
• 2004 #1 Best Programmer for Women in Cable, awarded by WICT (Women in Cable & Telecommunications);
• One of the "Top 100 Best Companies for Working Mothers," and Top 10 in 2005, according to Working Mother magazine
• One of the top 50 employers in the Washington, DC metro area, according to Washingtonian magazine; and,
• A proud recipient of the "Excellent Place to Work" seal, awarded by the Montgomery County, Maryland Work/Life Alliance.

“Discovery is committed to being an employer of choice, not just a good place to work, but a great and inclusive place to work. To that end, we strive to recruit and maintain a workforce that meaningfully represents the diverse and culturally rich communities that we serve.”

Do You Have A 403(b)

If so this article by Neil Weinberg on Forbes.com is a must read. From the article:

“Lies, kickbacks, union corruption and tens of millions of dollars in ill-gotten gains are among the accusations laid out in a lawsuit that's likely to strike fear in the hearts of labor leaders and financial executives across the country.”

“The union received as much as $3 million annually for its endorsement and told its members "we've done all the background work so you don't have to!" In total, 53,000 union members invested over $2 billion in the plan. Expenses ran several times those of lower-cost alternatives.”

Apr 19, 2007

The Mess Won’t Stop At Fannie Mae

In a Washington Business Journal article by Staff Reporter Jeff Clabaugh FannieMae will be attempting to trim $200 million from its annual operating budget. There has been no statement made on where those cuts are to come from but $200 million equates to a lot of jobs.

The article states that FannieMae employs 6,500 with 1,000 of these staffers being hired from 2004 to 2006. That hiring window opened when The Office of Federal Housing Enterprise Oversight released a report on September 17, 2004 alleging widespread accounting errors, including shifting of losses so senior executives could earn bonuses from making earnings targets. Fannie Mae was then ordered to “uncook” their books for the previous 3 ½ years.

From the article:

“In December, the company (NYSE: FNM) announced a restatement of financial results from 2001 through mid-2004 that erased $6.3 billion in previously reported profits.”
Since the blame for this fiasco was directed at booted Chairman and CEO Franklin Raines, some have directed at him:

NLPC Says Stop Franklin Raines’ Rape of Fannie Mae — and Taxpayers
As usual politics make things worse not better:

Carl F. Horowitz is director of the Organized Labor Accountability Project of the National Legal and Policy Center, a nonpartisan foundation promoting ethics in public life wrote in a 2005 article:

“Chairman Michael Oxley, R-Ohio, is the prime mover behind a requirement to force the GSEs to devote 5 percent of after-tax profits to a proposed affordable-housing fund…”

“…That makes them vulnerable to shakedowns, especially by nonprofits that operate on a nationwide scale.”

Did You Get A Tax Refund

There are several issues before Congress that could cost you thousands. The current hot button issue is the AMT. The Alternative Minimum Tax is estimated to add $2,000 to 23 million Americans tax bill this year (2007 tax year).

Alexandra Marks and Ron Scherer, staff writers for The Christian Science Monitor write an excellent article that should be read if this interests you. From the article:

“An estimated 4 million Americans will be subject to the higher AMT this year. The number would have been 11 million, but Congress approved a temporary patch last year. Unless lawmakers apply another patch or pass a comprehensive reform, that number will jump to as many as 23 million people for the 2007 tax year.”
Over on the Captain’s Quarters blog, Chris Muir, who does Day-By-Day Cartoon Inc. pokes fun at the situation in Congress.

On the Heritage Foundation website, Andrew Grossman is Senior Writer and Editor at The Heritage Foundation, penned an article back in November, 2005, When Would the President's Tax Cuts Expire? The following is a list, from that article, of the taxes cuts that have already or will run out:

• Bonus Depreciation: This provision, which changes depreciation schedules for businesses in a way that encourages investment, expired on January 1, 2005.

• Alternative Minimum Tax: Exemptions will decrease by $6,500 per filer on January 1, 2006.

• Small Business Expensing: On January 1, 2008, the maximum amount that a business may deduct will fall from $100,000 to $25,000, which will not be indexed to inflation. Also on that date, the cap for the value of qualifying property will shrink from $400,000 to $200,000, making it more difficult for small businesses to take advantage of this deduction.

• Capital Gains: Rates will rise to 10 or 20 percent, depending upon income, on January 1, 2009.

• Child Credit: This credit will shrink from $1,000 to $500 per child on January 1, 2011.

• The 10-Percent Bracket: This bracket will be eliminated on January 1, 2011, raising the income tax burden of many workers by 5 percentage points.

• The 15-Percent Bracket for Joint Filers: On January 1, 2011, the upper limit of this bracket will shrink from 200 to 167 percent of the upper limit for single filers, creating a marriage penalty.

• Standard Deduction for Joint Filers: On January 1, 2011, this will shrink from 200 to 167 percent of the standard deduction for single filers, creating a marriage penalty.

• The Estate Tax: The top rate for this tax will increase to 60 percent on January 1, 2011, and the value of an estate exempt from taxation will shrink to $1 million, which is less than it is today.

• The Income Tax: Rates will increase between 3 and 4.5 percentage points in each bracket on January 1, 2011.

• Dividends: Rates will rise to match standard income tax rates on January 1, 2009.

BankAtlantic Divests Itself Of 225 Staffers

As reported on in the South Florida Business Journal, BankAtlantic will be reducing it’s “operating platform” of 225 platforms. The cuts are coming from BankAtlantic Bancorp headquarters, branches and call centers. The pink slip writers seemed to have lost the address of the executive suite.

From the career section of the BankAtlantic Website:

"Join Florida’s fastest growing banking retailer.
7 great reasons to join BankAtlantic!

1. Fun corporate culture
2. Quarterly Stretch Profit Sharing Plan
3. Stability and excitement
4. Competitive compensation packages
5. Continued growth through BankAtlantic University
6. Flexible shifts"
7. Rewards program

Note: It's interesting that there are no press releases concerning these cuts.

Apr 18, 2007

Circuit City Is Now Hiring – Cheap

This is late but still needs to be put out. From a Circuit City press release:

“The company has completed a wage management initiative that will result in the separation of approximately 3,400 store Associates. The separations, which are occurring today, focused on Associates who were paid well above the market-based salary range for their role. New Associates will be hired for these positions and compensated at the current market range for the job.”

“The separations, which are occurring today.” They couldn’t have given a reasonable notice. I’m neither pro or anti unions, but this is a classic example of what takes place if there isn’t one.

From the Circuit City careers page:

"During our history spanning 50-plus years, we have continuously evolved to maintain our leadership in customer service and the consumer electronics industry."

This just demonstrates that Circuit City is no longer capable of managing a higher quality sales staff and wants to become a K-Mart style retailer.

In a previous life I was a Training Director for a company with about 2,000 employees. We purchased all of our AV equipment from Circuit City; they laid it all out, put it together and showed us some tricks that made life easy. What do you think you’ll get now that they are hiring their staff for as little as they can. Would you want to work for a company that has this attitude towards their staff.

Circuit City is officially off my shopping list.

Hanesbrands Closes Winston-Salem Plant Laying Off 610

The press release from the Hanesbrands website:

“WINSTON-SALEM, N.C. (March 29, 2007) – Hanesbrands Inc. (NYSE:HBI) announced today that it will close its Stratford Road textile manufacturing plant in Winston-Salem and move production to existing lower-cost plants in the Caribbean basin and Central America.”

“Production at the Stratford Road plant, which makes underwear and panty fabric, will substantially end by June 30, 2007. The plant’s print fabric operation, which employs fewer than 20, is expected to cease production by the end of the year. In total, the closure will eliminate positions for the plant’s current 610 employees.”

“The company will provide severance benefits and career transition assistance to employees and will apply to the federal government for U.S. Trade Adjustment Act assistance for affected employees. Also, affected employees will be allowed to seek open positions at the company’s other manufacturing and distribution operations in the Winston-Salem area.”

The Triad, once the heart of the textile industry, has seen textiles leave the area for years. The local, county and state governments have responded by coming together and presenting to businesses incentive packages that have attracted quality jobs to that area. Their development efforts is a model that other agencies, from across the country, have tried to emulate.

If anyone has some details of their severance package, please leave a comment.

Do You Work For Citigroup?

Well tomorrow is the day that Eileen Alt Powell, an AP business writer, wrote that Citigroup Inc. chairman and chief executive Charles Prince will announce, via a conference call, the companies proposed plan to satisfy disgruntled shareholders. Media reports that as many as 26,000 people could get their pink slips or be “reassigned”.

On March 26 an article in the Sacramento Business Journal said that media estimates were that Citigroup would cut 15,000 jobs. That estimate has grown and Prince is also quoted in the AP article as saying that “some operations would be moved "to lower-cost locations." And, he said, there would be continuing efforts aimed at "rationalizing our technology platforms to operate more efficiently and effectively."

These cuts are said to generate $2 billion a year in savings.

Other current activity, of interest by Citigroup, is their binge of takeovers:

Citigroup's overhaul came as the bank announced it will purchase the bank of The Overseas Chinese Bank, a mid-sized Taiwanese bank, for $425 million.

Last month, Citigroup announced it was launching takeover bid worth up to $13.3 billion for Japan's Nikko Cordial Corp., the country's third-largest brokerage.

In December, Citigroup acquired an 85.6 percent stake in the southern China-based Guangdong Development Bank for $3.1 billion.

Newer article on July 4, 07: Citigroup Mixed Signals & None Good

I have to wonder how many more jobs can be moved overseas. The Chinese are ready, willing and waiting for our jobs. Take a look at: One benefit you won’t find in the United States.