Berkshire Eliminates 21,000 Jobs amid Slump
(Bloomberg) — Warren Buffett's Berkshire Hathaway Inc. (BRK/A) reported 21,000 fewer employees than it had at the end of 2008 amid a slump at the firm's manufacturing and retail units.
Berkshire and its subsidiaries have about 225,000 workers, the Omaha, Nebraska-based company said this week in regulatory filings. That's 8.6 percent lower than the 246,083 disclosed in the 2008 annual report. Berkshire provided the jobs information in a document tied to its planned $26 billion takeover of railroad Burlington Northern Santa Fe Corp. (BNI) Buffett didn't reply to a request, left with an assistant, for comment on the cuts.
Buffett, Berkshire's chief executive officer, oversees a collection of more than 70 subsidiaries that sell products including Geico car insurance, Fruit of the Loom T-shirts and Dairy Queen ice cream. Profit at the firm's manufacturing, service and retail businesses plunged by more than half in the first nine months of the year, and Buffett replaced the CEOs of two operating units whose sales suffered in the recession.
"There's a lot of businesses that have been struggling," said Paul Howard, an analyst with Janney Montgomery Scott LLC's Langen McAlenney division in Hartford, Connecticut. "I gotta believe all his managers are on their toes trying to figure out what to do."
David Sokol has announced about 800 job cuts at NetJets since taking the helm at the luxury air travel unit in August. Sokol, who also heads Berkshire's energy business, was installed by Buffett after NetJets founder Richard Santulli posted about $349 million in first-half losses and left the company. Buffett replaced Marvin Beasley in April as CEO of Berkshire's Helzberg Diamond Shops.
Good Times, Bad Times"When times are good, you're going to have more people employed than when times are bad," Buffett, 79, said this month in a video address to the 37,000 railroad employees that Berkshire will take on next year with the completion of the Burlington Northern takeover.
Fruit of the Loom announced in March it would lay off 3,000 textile workers in El Salvador because of excess inventory, La Prensa Grafica reported, citing Jose Antonio Escobar, president of Camara de la Industria Textil y de la Confeccion de El Salvador. The newspaper reported on Dec. 3 that the company planned to hire back 1,000 workers.
Fruit of the Loom had more than 34,000 workers at the end of 2008, according to Berkshire's most recent annual report, the largest total among its operating units. John Shivel, a spokesman for Bowling Green, Kentucky-based Fruit of the Loom, declined to comment.
Carpet, BricksBuffett told shareholders at the firm's annual meeting in May that he expected more cuts at Berkshire following reductions last year at Clayton Homes Inc., which builds manufactured housing, and brickmaker Acme Building Brands. Berkshire reported its first quarterly loss since 2001 in the first three months of this year. The firm returned to profit in the second and third quarters, helped by an advance in the stock market.
Shaw Industries, the carpet and flooring manufacturer, eliminated 600 jobs in March as it shuttered yarn facilities in Georgia, according to Employment Spectator. The company said in September it planned to cut another 430 jobs in the state, the Associated Press reported. Julius Shaw, head of investor relations for the Dalton, Georgia-based company, didn't return a call seeking comment. Shaw had about 29,000 workers at the end of 2008.
"We will be adding people at some point, but we won't do it until we see the demand come back," Buffett said in a September interview conducted by the CEO of Business Wire, the Berkshire unit that posts corporate press releases. "It'll be a little slow because we don't want to go through what we did before. Although, I will guarantee you that three years from now, our brick companies, our carpet company, and our insulation company will all be employing far more people than now."
Newspapers, FurnitureBerkshire's Buffalo News, which started the year with about 846 employees, cut approximately 100 jobs through voluntary attrition, said newspaper Vice President Daniel Farberman. Most of the cuts came on the production side of the business, he said in an interview.
"Advertising has been a challenge all through 2009, although we are starting to see some light at the end of the tunnel," he said.
Jordan's Furniture eliminated "dozens" of jobs this year in Massachusetts, the Boston Globe reported on April 25. Attempts to reach a representative of Jordan's yesterday were unsuccessful and the company's voice-messaging system said corporate offices in East Taunton, Massachusetts, would be closed through Christmas.