Economic Landscape Marred by Layoffs

N E W   Y O R K, Jan. 5, 2001 -- News Corp., the media empire controlled by Rupert Murdoch, is shutting down its online division and eliminating more than 200 jobs in an effort to conserve badly needed cash.

The announcement was one of several in recent days by companies that the New Year would involve mass layoffs, and cutbacks in an effort to reduce costs.

Sears Roebuck,

eToys

and

Bausch & Lombhave all released statements announcing there would be changes. In some cases, thousands of employees will be affected.

And on Dec. 28, retailer Montgomery Ward, a sturdy American institution announced it was closing its doors after 128 years of business.

News Corp. said in a statement released released late Thursday that itwould transfer the production of three major Web sites back to thenetworks they are associated with —

Fox Broadcasting Company,FoxSports Television Group, and Fox News Channel.

In so doing, about half of the 450 jobs in the digital division,News Digital Media, will be lost through attrition and layoffs overthe next six months, according to company spokesman Andrew Butcher.The remaining jobs will be moved back to the networks.

Butcher said the move would save the company “tens ofmillions” of dollars, but he declined to be more specific.

News Digital Media was formed in 1997 with the ambitious goal ofproviding fresh editorial content for the online components of NewsCorp.’s broadcast outlets, FoxNews.com, FoxSports.com and Fox.com.

Disappointing Earnings Spur Changes

Bausch & Lomb Inc. also said it would be cutting back its workforce.

The world’s largest eye-care company, which employs about 12,000people, said demand for laser eye surgery has dipped recently “intandem with the deceleration in the overall U.S. economy.”

It said it would be cutting 350 jobs,or 2.9 percent of its work force, on top of 450 cuts disclosed justthree months ago, citing a slowdown in sales of laservision-correction machines.

It also forecast lower earnings today for the fourth quarterand for all of 2001 than Wall Street expected.

The 800 job cuts will save Bausch & Lomb about $20 million thisyear and $40 million in annual costs starting in 2002. The companysaid it will record a pretax charge of $41 million in the fourthquarter and $9 million in this year’s first quarter.

Bausch & Lomb lowered its fourth-quarter earnings projection to69 to 71 cents a share when one-time items are excluded, down from88 cents in last year’s fourth quarter. Analysts surveyed by FirstCall/Thomson Financial had anticipated a profit of 73 cents ashare.

Chief executive William Carpenter said there was a “noticeableslowdown” in purchases of vision-correction machines and in thenumber of laser eye surgeries in the United States at the end oflast year.

Bausch & Lomb said the across-the-board layoffs would hitvirtually all of its U.S. plants, from Rochester and St. Louis toClaremont, Calif., Greenville, S.C., and Tampa, Sarasota andClearwater in Florida. Since July 1995, the company has cut more than 4,000 jobsworldwide.

Is Trouble Brewing?

The slowing economy is also affecting the airline and auto industries. Delta Air Lines Inc. theNo. 3 U.S. airline, said today its fourth-quarter revenue andearnings would be lower than expected due to thousands offlight cancellations it blamed on bad weather and pilotsrefusing overtime.

Atlanta-based Delta said it expects fourth-quarteroperating revenue to be $65 million to $75 million lower thanit had previously anticipated. Earnings per share will bebetween 55 and 65 cents, excluding noncash adjustments for thedrop in value of its shares in Priceline.com Inc. and a changein the way it accounts for fuel hedging activities.

Analysts had been expecting Delta to earn 81 cents a sharein the quarter, according to First Call/Thomson Financial.

Delta canceled about 7,500 flights in December. In additionto harsh winter weather, Delta said many pilots put in farfewer requests for overtime flying, on which the airlinedepends for part of its schedule, as a pressure tactic duringcontract talks.

Concerns are also growing among union leaders at DaimlerChrysler AG that a decision to end production of the Jeep Cherokee could cost an estimated 800jobs.

The automaker announced Thursday it will end Cherokee productionlater this year as it begins production of the new Jeep Libertysport utility vehicle at a new $1.2 billion plant in Toledo.

DaimlerChrysler AG officials, though, say it is too early tospeculate about potential job losses.

About 800 jobs could be lost when full production of the highlyautomated new plant opens, said Bruce Baumhower, president ofUnited Auto Workers Local 12.

Production of the Liberty at the new plant and the Jeep Wranglerat the current plant would require about 3,900 employees andseveral hundred temporary employees, Baumhower said.