Hospira to cut 1,450 jobs, 10% of work force/IBM set to lay off 5,000 in North America

Hospira to cut 1,450 jobs, 10% of work force
By James P. Miller
Copyright © 2009, Chicago Tribune
8:21 AM CDT, March 24, 2009
http://www.chicagotribune.com/business/chi-biz-hospira-job-cuts-hsp-march24,0,4608558.story


Hospira Inc. outlined a reorganization plan that will eliminate one out of every 10 jobs at the Lake Forest specialty pharmaceutical and medication-delivery concern.

Based on the 14,500-person workforce Hospira listed in a recent regulatory filing, the makeover initiative Hospira refers to as "Project Fuel" promises to cut 1,450 positions during the next two years, most within the first 12 months. A spokesperson said only about 150 of the jobs being eliminted are in the Chicago region.

Hospira said it expects the initiative to yield annual savings of $110 million to as much as $140 million once it is fully implemented. But it will also generate a total of $140 million to $160 million in one-time pretax charges, the company noted.

Chairman and Chief Executive Officer Christopher Begley said the company is taking "a number of important steps to simplify our business, strengthen our financial position and establish a strong foundation for our future."

Reducing costs and improving efficiencies through the new initiative, he said, will "free up more dollars to invest for profitable growth and shareholder returns."

Among other actions, the new project calls for Hospira to streamline its product line, focusing what the company describes as an overly complex line of offerings that sometimes duplicates the same drug compound choices in a confusing fashion.

Hospira also said it is looking for ways to shed non-core assets that show less growth than the company's flagship specialty injectable pharmaceuticals and medication management systems product lines. Without providing details, Hospira said that beyond those two key segments, it will be "rationalizing non-strategic assets that detract from the company's overall growth trajectory and margin expansion opportunities."

It will also "streamline" its organizational structure to boost efficiency, with key targets including its procurement, finance and information-technology operations.

jpmiller@tribune.com




IBM set to lay off 5,000 in North America
By Joseph Menn in San Francisco
Copyright The Financial Times Limited 2009
Published: March 26 2009 00:21 | Last updated: March 26 2009 00:21
http://www.ft.com/cms/s/0/e70a378a-1999-11de-9d34-0000779fd2ac.html


IBM, which has the largest workforce in the US technology sector, is set to lay off about 5,000 staff in its North America operations. Employees are expected to be told of the cuts on Tuesday.

IBM declined to comment on the job losses, which were confirmed by a person familiar with the company’s plans.

The group has more than 100,000 staff on its payroll. IBM executives indicated recently that it would eliminate more jobs in the first half of 2009 than in the second half.

IBM, which which has been hit by slower technology spending in the US as the downturn bites, now earns around two-thirds of its revenue overseas and has been expanding its workforce in emerging markets including China and India.

Many of the cuts are likely to come in the global services division, which has been a consistent source of profits at Big Blue as the fortunes have fluctuated at other divisions.

IBM has been pushing to provide support contracts to clients from bases in India and other lower-cost countries.

Elsewhere, IBM is seeking new business. It is in talks to acquire Silicon Valley server and software company Sun Microsystems for about $6.5bn in cash, in what would be IBM’s largest takeover.

IBM recently announced that fourth-quarter profits rose 12 per cent to $4.43bn.

In the most recent quarter, global business services revenue was flat, at $4.7bn after currency adjustments.

The technology services business fared better, rising 3 per cent to $9.6bn. But the combined services business saw new short-term contract signings dip 1 per cent.

Once known mainly for its largest computers, IBM has steadily diversified, building up first software and then services and expanding beyond core technology expertise. It is the second largest software supplier in the world and the largest IT services firm.

That strategy has helped the company, and outsourcing to contract employees has risen by 20 per cent. Higher-priced consulting can be axed quickly by customers looking to save.

Total revenue in the fourth quarter declined 1 per cent to $27bn, again adjusting for currency shifts.

IBM shares fell 0.42 per cent to close at $97.95 on the New York Stock Exchange.