Merger-related job cuts skyrocket (77,000 in first quarter)

[UpInArms]

http://money.cnn.com/2005/04/20/news/economy/challenger_job_cuts/

Acquirers slashed nearly 77,000 jobs in the first quarter, six times the number the prior quarter.

NEW YORK (CNN/Money) - Job cuts from mergers and acquisitions soared in the first quarter, job search firm Challenger, Gray & Christmas said Wednesday.

Merger-related job cuts jumped to 76,784 in the quarter, nearly six times above the previous quarter and about three times the rate of a year earlier.

And mergers accounted for about 27 percent of all the 287,134 job cuts in the quarter, according to the firm.

The biggest cutting came in the telecom industry, which saw increased M&A activity in the last half of 2004 and the beginning of 2005. Forty-two percent, or 32,380, of the merger-related cuts occurred in telecom, Challenger said.

"Several telecom deals have yet to be finalized, but once they are we can expect to see more fallout, especially since many of these deals were made with the sole purpose of cutting costs," John Challenger, CEO of the firm, said in a statement.

...more...

[legally blonde]

1. oh, yes sirree

our economy is doing just fine. :sarcasm:

[plasticsundance]

2. Yep ...

Now the BLS will really have to tweak that birth/death model. :eyes:

[54anickel]

3. Ain't that Jobs Creation Act gonna turn out to be the greatest thing since

sliced bread?

http://www.kpmginsiders.com/display_analysis.asp?cs_id=126854

snip>

American corporations are expected to repatriate as much as $320 billion in profits generated abroad. The leading beneficiaries of the act are expected to be technology and manufacturing firms. The pharmaceutical industry alone is expected to repatriate over $80 billion.

Drug companies can use the money to make strategic acquisitions to replenish its drug pipelines, expand research and development efforts, or to pay down existing debt, which are likely to create jobs. But many industry observers think the main effect will be to accelerate M&A activity.

snip>

Corporations have wide latitude in how to spend the cash repatriated from undistributed foreign earnings. There are notable restrictions: the profits cannot be used to boost executive compensation, pay for stock redemptions, or go toward dividends.

snip>

However, the Jobs Creation Act has its critics on Capitol Hill, including California senator Diane Feinstein and Rep. Fortney "Pete" Stark. They contend that profit repatriation may actually lead to job losses -- especially in the pharmaceuticals industry.

In a statement, Feinstein warned that the Senate may yet wind up with "egg on its face," especially if mergers and acquisitions "result in employees being fired for so-called efficiency reasons."

[DainBramaged]

4. This is the sentence that scares me to death

And mergers accounted for about 27 percent of all the 287,134 job cuts in the quarter


What a wonderful outlook for the future. Dollar in the toilet, energy prices through the roof, and nearly 300,000 people out of work thanks to the * merger mania.

How many more Wal-Marts will they build to support them all? :sarcasm:

[Zorra]

5. Bush is deliberately destroying America. This is the truth.

His agenda is the impoverishment and enslavement of the "lower middle" and "lower classes", economically speaking, the destruction of American democracy, and the complete privatization of our government.

He is a genuine fascist.

The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it comes strong than their democratic state itself. That, in its essence, is fascism - ownership of government by an individual, by a group, or any controlling private power.

Franklin D. Roosevelt

[Roland99]

6. That's what we need folks! Bigger and fewer corporations!

We don't need competition. It's all about economies of scale.

But, I do feel for the poor executives missing out on the tremendous executive salaries available right now.

How will they ever survive?