Tyson Foods to close two plants, cut 880 jobs

(Reuters) - Tyson Foods Inc (TSN), the biggest U.S. meat processor, said it would stop operations at two of its plants in the United States, affecting about 880 employees.

The company said it expects to cease operations at a pepperoni plant in Jefferson, Wisconsin and a prepared foods facility in Chicago, Illinois during the second half of the year ending Oct. 1.

The closures would affect about 880 employees, including about 480 at Chicago and about 400 at Jefferson, Tyson said on Thursday.

Arkansas: Walmart to cut 450 jobs at its headquarters

Wal-Mart Stores Inc. CEO Doug McMillon said 450 people will be laid off at the company’s headquarters in Bentonville, Ark., according to a memo sent to all Wal-Mart staff today.

“After months of evaluation, we’ve concluded there is an opportunity to better position our Home Office teams to move with speed and purpose,” McMillon wrote in the memo. The company is at “an important time in our history,” he said. “This in part means pulling back in some areas and investing in others.”

Laid-off employees will receive 60 days of pay, plus two weeks of pay for every year of employment with the company, said a Wal-Mart (WMT) spokesman. Job search assistance will be available for those who want it, he said.

Groupon Is Laying Off 1,100 At A Cost Of $35M, Shutters Operations In 7 Countries

Groupon will eliminate 1,100 jobs outside the U.S. over the next year, as the deals company struggles to improve its bottom line. 

The company said the cuts, about 10 percent of its workforce, will primarily impact its international operations but not its Chicago headquarters, where it employs about 2,500. The board decided on the restructuring Sept. 18, according to a securities filing this morning.

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Groupon’s overseas business accounts for about 35 percent of its revenue but has been a drag on profitability. With the company’s stock down by 50 percent since late February to $4.17, Groupon is under pressure to improve its financial results. It has focused on its core business in the U.S., increasing the amount of deals available and getting customers to shop for deals in an online marketplace rather than rely on a few deals e-mailed to them.

Chicago: Motorola Mobility to cut 500 jobs

Motorola Mobility is cutting 500 positions, or 25 percent of its workforce in Chicago, as part of a major restructuring by its parent, China's Lenovo Group.

That's more than twice the 10 percent reduction Lenovo said it was undertaking in its non-manufacturing workforce.

The company employs a little under 2,000 people at the Merchandise Mart, where it moved last year from its longtime headquarters in Libertyville.

"We will maintain a substantial employee base there, as well as our labs and design facilities," spokesman Will Moss said.

Employees were being told of their fate today.

The dismissals are part of a major restructuring at Lenovo, which reported a sharp slowdown in sales in the most recent quarter. Motorola also saw a steep dropoff, with its phone shipments dropping 31 percent from a year ago.


“It's across all functions, affecting all departments,” Moss said.

Chicago is Motorola Mobility's largest facility by headcount. Motorola had about 3,500 people worldwide when Lenovo bought it from Google last year for $2.9 billion.

"Chicago is not as badly impacted as some of our other sites," Moss said, though he declined to detail headcount reductions at other sites.

In announcing a restructuring after disappointing quarterly results last night, Lenovo said it would be relying more heavily on Motorola “to design, develop and manufacture smartphone products.”

With Motorola cutting its headcount by 25 percent, it begs the question whether it will need all of the 600,000 square feet of space it has on four floors of the Merchandise Mart, which has become one of the most desirable office locations in the city. Food giant ConAgra is looking to take 200,000 square feet in the building.

"There's nothing specific we can announce," Moss said. "The Merchandise Mart continues to be our headquarters and will still be the hub for global R&D and home for our labs. We'll continue to be there."

There are specialized labs on three of the four floors, but if Motorola did decide to vacate some of its space, it wouldn't be hard to fill. “As long as any space that Moto would potentially consider subleasing isn't too specialized, I would expect the market to snap it up,” said Jack Keenan, a managing director at JLL.

Food giant ConAgra is looking to take 200,000 square feet in the building.

Motorola's move, announced in 2012, helped cement the Mart as the city's most visible address for high tech and to spur activity in River North. Since then, it's added tenants such as Braintree and Yelp.

“The Mart continues to thrive as a tech hub,” said Howard Tullman, CEO of 1871, a tech incubator at the Mart. “I don't think it's going to impact things a whole lot.”

Much of Motorola's staff are engineers and technical workers, who likely will be snatched up quickly in a very tight labor market for tech talent. Experienced sales and marketing workers who understand tech also are in high demand.

But the cutbacks further diminish Motorola's presence in Chicago.

When Motorola Mobility spun off from the rest of the company, four years ago, it produced cell phones and set-top boxes and had $11.5 billion in sales and 19,000 employees worldwide. Google bought it a year later for $12.5 billion. About 7,000 employees worked in the set-top box unit, which was sold to Arris in 2012 for $2.4 billion.

Motorola had about 3,500 people worldwide when Lenovo bought it from Google last year for $2.9 billion. The company did not say what Motorola Mobility's total headcount will be when the layoffs are complete.

The firings at Motorola follow the elimination of 700 jobs at Kraft Foods' headquarters in Northfield yesterday, and recent layoffs at such other big Chicago employers as CME Group, McDonald's, Walgreens Boots Alliance and Allstate.

Illinois: Kraft Heinz cuts 700 jobs in Northfield, Illinois

Kraft Heinz says it is cutting about 2,500 jobs, including more than a third of its workers at Kraft's headquarters in Northfield, as part of its plan to slash $1.5 billion in costs after the food companies combined.

Employees were notified of the staff reductions in an internal email sent this morning. Spokesman Michael Mullen said the cuts include 700 jobs in the north suburb, where Kraft Foods has been based. Mullen said the company has no plans to shut a research and development center in neighboring Glenview, which will "remain open and continue to be an important R&D facility," he said in an email.

Affected workers are in the U.S. and Canada and were to be notified in person. The company would not specify where other cuts were taking place.

The mass firing is among the biggest in metro Chicago since the recession and comes amid layoffs at the headquarters of CME Group, McDonald's , Walgreens Boots Alliance and Allstate.

Kraft Heinz said it has a total of around 46,600 employees, including about 1,900 in Northfield, prior to the dismissals. That's already down from about 2,100 from before Kraft's early July merger with Pittsburgh-based H.J. Heinz.

Significant layoffs had been expected since the company announced plans last month to move one of its two corporate headquarters to 170,000 square feet at the Aon Center in downtown Chicago from its sprawling 700,000-square-foot complex in Northfield.

In the email sent this morning to employees signed by the heads of people and performance for the U.S., Gil de Las Alas, and Canada, Michael Ferranti, employees were told the "thorough and detailed process of integrating our businesses and designing our new organization is well underway."

"The leadership team has examined every aspect of our business to ensure we are operating as efficiently and effectively as possible," the memo read. The cuts, de Las Alas and Ferranti wrote, "will better position the company to deliver on the needs of our consumers and our customers."

A GRIM DAY IN NORTHFIELD

Most employees will be notified by the end of the day tomorrow. They'll be offered benefits for a minimum of six months and outplacement assistance, according to the letter.

A source with knowledge of the cuts described a harrowing morning in Northfield. All employees with senior manager positions or lower were to be given 10 minutes with human resources and security and told whether they would keep their jobs or get a severance package. None had meetings on their calendars this morning, but all had been told to be in the building, said the source, who requested anonymity to discuss sensitive information.

The company's IT department, the source said, was told to "prepare for 800 computers to be turned in."

Kraft Heinz also will cut a number of temporary office workers and limit their use. They also will be let go by the end of tomorrow.

CUTS AND MORE CUTS

From the moment the merger was completed, the company has been in belt-tightening mode.

In a memo to employees dated July 13, Kraft Heinz CEO Bernardo Hees outlined a variety of "provisional measures" the company was taking to avoid unnecessary spending. That included instructing workers to print on both sides of paper, reuse office supplies like binders and file folders, and turn off computers before leaving the office.

Corporate donations to charities had to be approved, as did memberships in industry associations, the memo said.

At its office in Northfield, the company stopped providing free Kraft snacks like Jell-O.

The company also has instituted a series of new requirements that govern hiring. Kraft Heinz will not rehire former employees of either Kraft or Heinz, spouses of current employees or employees of other consumer packaged-goods competitors unless approved by the executive leadership team, according to a July 8 memo.

A TIGHTFISTED REPUTATION

The combination of Heinz and Kraft earlier this year was engineered by Warren Buffett's Omaha, Neb.-based Berkshire Hathaway and Brazilian investment firm 3G Capital, which has become known for its tight cost controls.

Hees—a 3G partner—had overseen cost-cutting at Heinz since the ketchup maker was taken over in 2013 through a previous partnership between 3G and Berkshire. That means the cuts announced today mostly will hit the Kraft side of the business.

Together, the two U.S. food giants own brands including Jell-O, Heinz baked beans and Velveeta that are facing sales challenges amid changing tastes. Their combination was nevertheless seen as attractive because of the opportunity to save hundreds of millions of dollars a year by combining functions like manufacturing and distribution.

Executives say they expect to save $1.5 billion in annual costs by 2017.

In a statement, Mullen said today that the job cuts were part of the process of integrating the two businesses and "designing our new organization." "This new structure eliminates duplication to enable faster decision-making, increased accountability and accelerated growth," he said.

Chicago: CME Group cuts 3% of staff, with half coming from technology

(Bloomberg) -- CME Group Inc. eliminated about 3 percent of its employees, with about half the cuts coming from technology staff.

The world's largest futures exchange dismissed about 80 workers on Aug. 6, Laurie Bischel, a spokeswoman, said in an e- mailed response to questions. Brian McElligott, a managing director and global head of information products, is among those who have left the Chicago-based company, Bischel said.

“This was part of the restructuring announced last fall designed to eliminate bureaucracy and improve our ability to serve our global client base more efficiently,” Bischel said.

Kraft employees brace for big layoffs as Heinz merger nears

While no one at the Northfield, Illinois-based company will say how many of Kraft's 22,000 employees are likely to be out of a job after it merges with H.J. Heinz as soon as July 2, judging by what the new owners did when they took the ketchup-maker private, the layoffs will be swift, proceed in waves and cut deeply.

When Brazilian private-equity firm 3G Capital and Warren Buffett's Berkshire Hathaway bought Pittsburgh-based Heinz two years ago, they cut about 400 headquarters employees, or about a third of the company's corporate staff in Pittsburgh, within the first six months. If they follow the same playbook in Northfield—which seems likely, insiders say—as many as 700 of Kraft's 2,300 local employees could be out of a job by the end of the year.

That would be the largest mass dismissal locally since 5,600 Dominick's employees lost their jobs in December 2013 when the supermarket chain closed all of its stores. Before that, American Airlines cut 987 jobs in 2012 as part of a bankruptcy reorganization, according to state data.

Kraft Heinz, whose products will include a basket of grocery staples from Oscar Mayer meats and Kraft Macaroni & Cheese to Heinz ketchup and Ore-Ida Tater Tots, will be run from Pittsburgh and the Chicago area, the companies have said, though they have not said which functions will be retained here. Kraft has been struggling to boost sales and profit since it split from Deerfield-based Mondelez International in late 2012.

This year's cuts likely would be only the start.

Kraft and Heinz project annual cost savings from the combination to reach $1.5 billion by the end of 2017, which executives said would be achieved through increased scale, operational efficiencies and cost reductions. While neither company publicly has acknowledged layoffs as part of the mix, Kraft CEO John Cahill told employees in a video shortly after the merger was announced that “cost-cutting will be a focus. I do want to be candid.” And the combined company's prospective CEO, Bernard Hees, told Kraft employees in April that “change is never easy.”

LOOK TO PITTSBURGH

That certainly has been true in Pittsburgh.

Since 3G and Omaha, Neb.-based Berkshire Hathaway closed the Heinz deal in June 2013, the company has slashed more than 7,000 jobs, a component of ruthless cost-cutting measures that helped boost its 2014 profit to $657.1 million, according to the company's annual report filed in March. In its first full year under new ownership, Heinz's managers cut expenses by 19 percent through restructuring, layoffs, plant closures in the U.S., Canada and Europe, and other initiatives aimed at generating $250 million in annual savings.

“When 3G and Berkshire take an ownership stake, they reduce costs, and that almost always includes significant layoffs,” says Wade Pierson, founder of staffing firm Impact Talent Ventures in Medford, N.J. “It's pretty widely known among the circles of folks in my business and others who cover the (industry) that they're coming, but what we don't know yet is how many and what positions.”

At Heinz, the layoffs came in several waves and included workers at every level. The first cuts came about six weeks after the deal closed and took out some 600 workers in Heinz's North American operations, including about 350 office workers in Pittsburgh. Five months in, the new company had cut a total of 2,000 corporate and field positions through the closure and consolidation of manufacturing facilities and corporate offices. Weeks after those cuts had concluded, Heinz announced it would close three plants in North America and dispatch about 1,350 more employees.

Buyouts and layoffs continued in 2014. By the end of last year, Heinz had 24,500 employees worldwide, down from 31,900 when the company announced its takeover by 3G and Berkshire Hathaway in April 2013.

Because Heinz already has been through the efficiency wringer, it's likely that the preponderance of cost-cutting and layoffs will target the Kraft side of the business, analysts and company insiders say.

MAKING THAT LIST

Those cuts are likely to target positions in corporate functions like human resources, accounting, finance and marketing. They could include members of sales teams who call upon the same accounts as their new colleagues at Heinz. There also could be efforts to streamline distribution and possibly production, raising the specter of plant closures, or “manufacturing rationalization” as it's known in industry parlance.

“Across the board, obviously, 3G has shown a penchant of taking a more heavy hand with regards to operating costs, and we think they will employ that stringent focus when looking at the combined operating cost structure of Kraft and Heinz together,” says Erin Lash, an analyst at Morningstar in Chicago. “Like other (consumer packaged goods) companies, Kraft has been working to streamline costs even prior to this announcement, but we expect those efforts will occur at an even more pronounced level when the businesses are combined.”

Senior teams from Kraft and Heinz have been meeting regularly since the merger was announced in March to identify areas of overlap between the two food giants, but they have not disclosed plans to anyone outside senior and executive level teams, sources say. No job cuts are expected before late August, insiders say, but some midlevel workers have begun independent job searches ahead of potential layoffs, staffing firms, current and former employees say.

Pierson, the staffing firm executive, says that in combinations involving companies as large as Kraft and Heinz, executives from both companies “are literally mapping out each department, each position and trying to figure out where there's overlap and where do certain (workers) fit within the (merged) company.”

In addition to layoffs, Pierson says, a significant number of workers likely will be asked to take on new roles, potentially in different locations. “There will certainly be disruption, but these are both well-managed companies.”

COMMITTED TO CHICAGO

Michael Mullen, a Heinz spokesman, cautions that many details about the new organization have not yet been determined. “This includes finalizing and announcing the new leadership team who will lead the company and integration of Kraft and Heinz,” Mullen says in an email. “Our priority will be to communicate with all employees openly, honestly and often throughout this process.

"Many things will stay the same, and we remain committed to our hometowns with our co-headquarters in Pittsburgh and Chicago.”

While Heinz CEO Hees will lead the new company, the remainder of the Kraft Heinz executive team has not been identified. The new team “will lead the new company including the ongoing integration efforts,” says Basil Maglaris, a Kraft spokesman. In a regulatory filing yesterday, Kraft says Heinz executives have spoken with some members of Kraft's senior management team about remaining with the combined company following the merger. (Cahill, for instance, will stay on in a diminished role as vice chairman.) Kraft says no other final decisions have been made.

Kraft's shareholders are expected to approve the combination in a meeting scheduled for July 1. The companies expect the transaction will close as soon as the next day.

“It's important to note that, until the transaction is closed, we remain two independent companies,” Maglaris says. “The work being done now is led by an integration team comprised of both Kraft and Heinz executives, including Kraft senior leaders representing every function and discipline in the company. They're gathering information to ensure a seamless transition, including critical details to inform the longer-term structure of the company and value-creation opportunities.”

John Deere laying off 910 workers in Iowa, Illinois

A continuing decline in farm equipment sales will idle more than 900 employees of Deere & Co. in Iowa and Illinois over the next two months, including 565 in Waterloo.

Moline, Ill.-based Deere on Friday termed the actions “workforce adjustments,” including indefinite layoffs at five locations that build agricultural equipment. In addition to the Waterloo employees at three locations, Deere said 300 will be idled at the Des Moines Works in Ankeny and 45 at Harvester Works in East Moline, Ill.

The layoffs will begin in early February and most will be effective in late March.

The latest Deere furloughs come after the Waterloo plant laid off 460 employees in October, primarily in two areas — tractor cab assembly operations (about 240) and drivetrain operations (about 195).

Deere manufactures medium and large row crop tractors, cab assemblies, marine and industrial diesel engines, drivetrain components, wheel assemblies, gray and ductile iron castings, and tractor parts and components in Waterloo.

United Auto Workers Local 838 represents bargaining unit employees of Deere's Waterloo plants. While declining to comment on the latest layoffs, a spokesman who declined to be identified said it plans to reach out to affected members to offer assistance.

The union spokesman also said it was impossible to provide a pay range for those affected by the layoff, citing the different employment classifications and tenure that influence how much a union member is paid.

The UAW master contract with Deere covering all the company's plants in Illinois, Iowa and Kansas will expire on Oct. 1, 2015.

A total of 93,500 people were employed in the Waterloo-Cedar Falls metropolitan statistical area in November, according to Iowa Workforce Development. Of that number, about 12,700 worked in durable goods manufacturing.

The latest layoff at Deere's Waterloo facilities would affect 0.59 percent of those employed in the Waterloo-Cedar Falls area and 4.3 percent of residents working in durable goods manufacturing. Waterloo-Cedar Falls had a 4.5 percent unemployment rate at the end of November.

Lower corn and soybean prices have affected farmer purchases of two- and four-wheel-drive farm tractors and combined industrywide. Corn prices have fallen from an average $6.89 a bushel in 2012 to $3.65 a bushel. Soybean prices have dropped from $14.40 a bushel in 2012 to $9.50 a bushel.

Gov. Terry Branstad said corn prices are depressed because the U.S. Environmental Protection Agency has not maintained a robust federal Renewable Fuels Standard.

“When the price of corn gets below the cost of production, farmers are reluctant to purchase (equipment),” Branstad said Friday, reacting to the Deere layoff announcement.

A total of 425 four-wheel-drive farm tractors were sold in December, down 49 percent from 834 in the same month of 2013, according to the Association of Equipment Manufacturers, which tracks farm equipment sales on a monthly and annual basis.

Sales of self-propelled combines dropped 40.4 percent to 760 in December 2014 from 1,275 in December 2013.

For all of 2014, four-wheel-drive farm tractor sales were down 26 percent and combines sales were off 25.7 percent from 2013.

Deere said about 500 employees at Deere's Seeding and Cylinder facility in Moline will go on an extended inventory adjustment shutdown. The plant typically has a seasonal inventory adjustment this time of year.

The seeding and cylinder shutdown is expected to end in late summer.

Deere has added 220 jobs at construction and forestry factories in Davenport and Dubuque. The company said nearly all of the positions have been filled by individuals who had been working for Deere at other locations, but were laid off in October.

The latest layoffs at Deere's Waterloo plants have revived memories of the 1980s farm crisis that slashed employment at Deere and other farm implement makers.

On Nov. 1, 1982, 1,300 Deere employees were laid off indefinitely at three Waterloo plants. An additional 400 workers were placed on indefinite layoff on Nov. 22, 1982.

Another 3,800 employees were affected by a March 14 to March 27, 1983, shutdown, as Waterloo needed time to rework the lines and reduce dealer inventories. On Aug. 27, 1984, 642 of 6,300 wage employees at three Waterloo factories, were laid off due to high interest rates, the 1983 drought, and poor overseas trade.

McDonald's, Coca-Cola announce lay-offs

Coca-Cola on Thursday announced plans to lay off 1,600 to 1,800 of its corporate, U.S. and international employees in the coming months. The move came hours after McDonald's, on Wednesday, confirmed that it was laying off 63 employees at its corporate headquarters and that some other open corporate positions had been eliminated.

While both moves had been widely anticipated, they only begin to reflect the sizable cutbacks and changes expected to hit both iconic brands in 2015.

The job cuts are part of Coke's $3 billion cost-cutting program that was announced in October — about three times the $1 billion in cuts that had previously been announced. The job reductions at McDonald's are part of a wider corporate review to redirect nearly $100 million in savings toward business priorities, says McDonald's spokeswoman Heidi Barker Sa Shekhem.

For Coca-Cola and McDonald's, 2015 will be a year of cutbacks, change and evolution as an increasingly Internet-savvy and health-conscious public continues to move away from sugary drinks and fried and processed foods.

"These two brands cannot continue to decline," says Gary Stibel, CEO and founder of the New England Consulting Group. "They must have growth. Even when they're in neutral, they're actually slipping back."

In October, when both companies posted wretched third-quarter results, CEOs for both brands announced plans for big cutbacks and changes. At the time, Coca-Cola posted a 14% drop in third-quarter profit, and McDonald's fell a worse-than-expected 30%.

J.C. Penney to shutter 39 stores, lay off up to 2,250

Despite a better-than-expected holiday shopping season, it wasn't enough to keep J.C. Penney JCP from shuttering 39 underperforming stores and laying off 2,250 workers.

Penney said the mall-based stores in 19 states will close by early April. Word of the store closures - which represent about 4% of the middle-market chain's stores - came days after Penney said holiday sales rose 3.7%.

"We continually evaluate our store portfolio to determine whether there's a need to close or relocate underperforming stores,'' said company media relations manager Sarah Holland. "Reviews such as these are essential in meeting our long-term goals for future company growth. While it's never an easy decision to close stores, especially due to the impact on our valued associates and customers, we feel this is a necessary business decision."

Penney shares closed up 0.8% to $7.95 Thursday after jumping 20% Wednesday on its holiday sales report.

With a glut of retail outlets, on-line sales rising and consumer tastes changing, many big chains are curtailing operations. Sears, Staples, Macy's and Coach announced store closures in 2014. But Penney is the biggest retailer to announce post-holiday store closures so far this year. Wednesday, struggling teen-centric retailer Wet Seal said 338 stores - two thirds of its total - would close and 3,700 employees let go in an effort to avoid bankruptcy.

Consumer psychologist Kit Yarrow, author of Decoding the New Consumer Mind, says, "Retail is in a massive transformation period. Consumers have lost their enthusiasm for trolling through massive stores hunting for a bargain. They can do that online.

"The only big department stores that will remain relevant to consumers are those that are incorporate tricks and treats into the shopping mix — like product offerings you can't find online, special demonstration or sampling, cushy or fun relaxation areas."

She says J.C. Penney "is bloated with deteriorating real estate at a time when people want smaller, easier to navigate, technology-enhanced shopping experiences.

"Poor Penney. I bet I'm not the only Boomer that really, really wants to shop there for the sake of their heritage, but can't," Yarrow says.

Contributing: Nanci Hellmich

Penney stores facing closure:

Georgia

Dalton: Walnut Square Mall
Duluth: Gwinnett Place Mall
Lagrange: Lagrange Mall

Iowa

Mason City: Southbridge Mall
West Burlington: Westland Mall
Waterloo: Crossroads Shopping Center

Illinois

DeKalb: Northland Plaza
Quincy: Quincy Mall

Indiana

Michigan City: Marquette Mall

Massachusetts

Hanover: Hanover Mall
Taunton: Silver City Galleria

Michigan

Adrian: Adrian South Mall

North Carolina

Asheboro: Randolph Mall
Elizabeth City: Southgate Mall
Statesville: Signal Hill Mall
Wilson: Parkwood Mall

New Jersey

Vineland: Cumberland Mall

New York

Kingston: Hudson Valley Mall

Ohio

Columbus: Eastland Mall
Greenville: North Towne Plaza
Springfield: Upper Valley Mall

Oregon

North Bend: Pony Village Mall

Pennsylvania

Chambersburg: Chambersburg Mall
Hummels Wharf: Susquehanna Valley Mall
Media: Granite Run Mall
State College: Nittany Mall
York: York Galleria

Rhode Island

Providence: Providence Place Mall

South Carolina

Aiken: Aiken Mall
Murrells Inlet: Inlet Square Mall

South Dakota

Aberdeen: Lakewood Mall

Texas

Brenham: Market Square Mall

Virginia

Manassas: Manassas Mall
Williamsburg: The Marquis

Vermont

Rutland: Diamond Run Mall
St.Albans: St.Albans Shopping Center

Wisconsin

Oshkosh: Aviation Plaza
Racine: Regency Mall

Shawano, Shawano Plaza