In fact, there have been some very large corporate layoffs recently. In October alone, six companies fired a combined 17,700 workers. Using figures provided by Challenger, Gray & Christmas, 24/7 Wall St. reviewed the six firms with the largest layoffs last month.
One of these companies, pharmaceutical firm Ben Venue, is not just laying off workers, it is closing down entirely. The drug maker folded last month after being cited by the U.S. Food and Drug Administration (FDA) for violating safe practices.
The remaining five of these six companies described the cuts as “restructuring,” “cost cutting” or “demand downturn.” Each rationale means about the same thing: the business prospects of the firms have softened. Each company needs to cut expenses as a means to improve profits, if there are any profits to be had at all.
All layoffs listed are based on company layoff announcements made in October, compiled by Challenger, Gray & Christmas. These layoffs have not necessarily taken place yet, and have not been confirmed with the company.
These are the six companies that cut the most jobs in October.
6. Ben Venue Laboratories
> October layoffs: 1,100
> Employees: n/a
> Industry: Pharmaceutical
Boehringer Ingelheim, Ben Venue’s parent, closed the pharmaceutical company early last month. The FDA had cited Ben Venue for quality control problems. However, Boehringer Ingelheim said that even with “significant investments in facility upgrades, the company cannot return to sustainable production.” The Ohio facility used to produce Doxil, a cancer drug, for Johnson & Johnson and a variety of other drugs. According to Reuters, closing the production site in Bedford, Ohio, will affect 1,100 employees.
5. Broadcom
> October layoffs: 1,500
> Employees: 11,300
> Industry: Electronics
The Irvine, California-based chip maker had two reasons to make cuts this October. The first was the acquisition of Renesas Electronics. The other was flat corporate revenue. Broadcom Corp. (NASDAQ: BRCM) married the two when it released quarterly earnings with revenue up only 2% from the same quarter the year before. According to the company, “During the quarter Broadcom initiated a global restructuring plan to reduce expenses and better align its resources to areas of strategic focus. The plan includes a workforce reduction of up to 1,150 employees (some of whom originated from the Renesas acquisition).”
4. Boston Scientific
> October layoffs: 1,500
> Employees: 24,000
> Industry: Health care/products
Boston Scientific Corp. (NYSE: BSX) has struggled for years to get its mix of often unsuccessful medical devices right to improve revenue growth. The company had revenue of $8 billion in 2008. Last year, that number was down to just $7.2 billion. The company has lost money four of the past five years. The new restructuring was the third since 2011, according to The Boston Globe. Discussing the cost of the layoffs, Boston Scientific reported “Program implementation is expected to result in total pre-tax charges of approximately $175 million to $225 million…”
3. Alcatel-Lucent
> October layoffs: 2,100
> Employees: 72,344
> Industry: t Telecommunications
Alcatel-Lucent S.A. (NYSE: ALU), based in Paris, is one of the largest telecom equipment companies in the world. It has struggled to keep that place for years. The firm recently announced that it would raise $2 billion to support its turnaround. Alcatel-Lucent will need the money. It lost 200 million euros in its most recently reported quarter. The new cuts are part of what Alcatel-Lucent calls its “Shift Plan,” which is a series of programs meant to make the company profitable again.
2. Thomson Reuters
> October layoffs: 3,000
> Employees: 60,000
> Industry: Media
To compete, and make up for lost revenue, which is down 2.4% to $3.09 billion, Reuters plans to cut 3,000 jobs, or 5% of the total workforce. According to the International Business Times, the cuts will be levied on the Reuters Financial Risk Division, which also received the burden of cuts back in February, when the company laid off 2,500 employees. CEO Jim Smith explained the cuts are part of a company plan to improve efficiency: “We will pick up the pace of efforts to simplify and streamline our organization, to shift resources behind the most promising growth opportunities.”
1. Merck
> October layoffs: 8,500
> Employees: 81,000
> Industry: Pharmaceutical
Merck & Co. (NYSE: MRK), a drug company, will cut 8,500 jobs in addition to the 7,500 layoffs it announced earlier this year. The restructuring comes in the wake of a 35% drop in profits reported at the end of October. Merck’s poor performance, which is not unusual among Big Pharma companies lately, could be due to low research and development (R&D) productivity and the loss of patent protection on top-sellers, such as the allergy drug Singulair. According to Forbes, the company may benefit from these layoffs. The extra cash may allow them to “agilely pour into experimental programs that show sudden promise,” as well as more effectively license outside medicines.
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