Wednesday, October 24, 2012
DuPont and United Technologies plan massive job cuts
Faced with weakening revenue, two big companies warned on Tuesday that they would cut jobs as a way of protecting their profits. DuPont Co said it planned to lay off about 1,500 workers - roughly 2% of its global headcount - as the chemical company grapples with weakening demand from the construction and renewable energy sectors.
United Technologies Corp did not specify the magnitude of the cuts it was considering but said it would raise its full-year restructuring budget by 20% to $600 million as demand for its military equipment declines. Both companies reported weaker-than-expected sales for the third quarter, following an overall trend.
Of the companies in the broad Standard & Poor's 500 index that had reported results for the quarter as of Monday, 62% came in below analysts' revenue forecasts - well above the 38% sales-miss rate in a typical earnings season, according to Thomson Reuters I/B/E/S.
"Obviously we're looking carefully at the macro environment," United Tech Chief Executive Louis Chenevert told Reuters. "In Europe, the economy continues to be very sluggish, and in North America, it's a slow recovery.
DuPont and United Tech are by no means the only big U.S. companies to begin cutting jobs. Most dramatically, chipmaker Advanced Micro Devices said last week that it would reduce its 12,000-person workforce by 15% as it copes with weak demand and a consumer shift towards tablet computers.
Engine maker Cummins Inc , the PayPal arm of eBay Inc and for-profit college operator Apollo Group Inc announced smaller rounds of cuts earlier this month. Read more >>