Cisco announces 1,100 more layoffs as business continues to dwindle

Photo Credit: Prayitno Flickr

Cisco has seen better days. According to this ABC report the company will cut 1,100 more jobs.

Cisco Systems Inc. said Wednesday that it is laying off 1,100 more workers, deepening job losses at the internet gear maker battling declining revenue.

The new round of layoffs comes on top of the 5,500 jobs Cisco announced it was cutting in August. That amounted to about 7 percent of its workforce at the time.

Cisco sells routers, switches, software and services business and has seen its business hurt as more of its corporate customers rely on remote data centers for their computing needs instead of online networks maintained on their own premises.

The company based in San Jose, California, on Wednesday reported revenue of $11.94 billion for its fiscal third quarter that ended in April. That was down from $12 billion a year earlier. It said it expects its revenue to decline 4 to 6 percent in the quarter ending in July compared to the same 2016 period.

BLOODBATH: India’s IT market crashes, 500,000-600,000 LAYOFFS over the next THREE YEARS

Very bad news coming out of India. According to this ZD report, approximately 500,000 IT professionals will be losing their job over the next three years. To make matters worse there are now reports that IBM India will also be dumping 5,000 employees over the next few quarters.

Over the last week, the one thing that Indian IT professionals were most dreading began to be talked about in earnest.

First, Mint newspaper disclosed that after conducting interviews with 22 current and former employees across seven Indian IT companies, it was clear to them that at least 56,000 engineers would be given pink slips this year. That figure is double the number let go last year.

Apparently, one immediate sign of the axe about to fall is if you are given a “low rating” by your company that then impacts subsequent opportunities at the firm — in other words, a pre-cursor towards being fired.

This year, for example, Mint said that 15,000 of Cognizant’s employees have found themselves placed in the bottom-most tier, or bucket IV, while Infosys has deemed 3,000 of its senior managers needing improvement. Mint said that in a normal year, around 1 to 1.5 percent of an Indian IT company’s employees would be shown the door, but this year that figure is going to be between 2 and 6 percent. None of the Indian companies confirmed the report.

Then, a few days ago, the managing director of executive search firm Head Hunters, K Lakshmikanth, dropped a bombshell. “Contrary to media reports of 56,000 IT professionals to lose jobs this year, the actual job cuts will be between 1.75 lakh (or 175,000) and 2 lakh (200,000) per year in the next three years, due to under-preparedness in adapting to newer technologies.”

IT Giant IBM to layoff 5000 Employees

The ongoing layoffs by the leading IT companies in India is continuing, in fact on an increasing note with IBM joining the league newly. In a major development, sources close to IBM disclosed that the company may release at least 5,000 employees over the next few quarters.

“The process has already started. Managers have been asked to identify under performers,” says a person close to the development.

Though the IT major didn’t confirm the exact number of employees to be impacted, it further said that, “Re-Skilling and rebalancing are two ongoing processes as we accelerate the benefits of cognitive and cloud technologies for clients around the world.”

Currently, 1,50,000 persons are employed in IBM India. With this decision, close to 30,000 IT jobs are in danger this year.

Ford To Layoff 20,000 Workers after profits DROP 35% in 2017

According to this Washington Examiner report Ford is planning to layoff 20,000 workers worldwide after reporting a 35% drop in Q1 profits.

Ford Motor Company is expected to announce later this week plans to gut 10 percent of its 200,000-person salaried workforce in North American and Asia, according to multiple reports late Monday.

The layoffs will go into effect by Oct. 1 and employees will receive early retirement incentives.

Hourly workers and those on the production line will not be effected.

Ford recently announced plans to cut $3 billion in costs after its profits in the first quarter of 2017 dropped 35 percent to $1.6 billion, according to a statement the company released April 27. It’s the first time in seven years since the recession that the company saw a decline in profits.

“Reducing costs and becoming as lean and efficient as possible also remain part of that work,” the company said in a statement. “We have not announced any new people efficiency actions, nor do we comment on speculation.”

JC Penney’s stock hits all-time low at $4.48, net loss widened to $180 million

More bad news for retail. According to this CNBC report JC Penney’s stock has fallen to  $4.48, the lowest level since 1972.

J.C. Penney’s stock plunged Friday after the embattled retailer reported weak comparable sales and a massive net loss in the first quarter.

Shares of the stock fell as low as $4.48 intraday, the lowest level since 1972, according to FactSet. The stock closed down nearly 14 percent on Friday at $4.55 per share.

The stock drop came after the company reported revenue that also fell short of estimates in the quarter. Earnings, however, topped analysts’ expectations.

Here’s what the company reported vs. what the Street was expecting:

  • Earnings per share: 6 cents, excluding items, vs. a forecast loss of 21 cents, according to Thomson Reuters analysts’ estimates.
  • Revenue: $2.71 billion vs. an estimate of $2.77 billion, Thomson Reuters analysts said.
  • Same-store sales: 3.5 percent drop vs. a forecast 0.6 percent drop, according to FactSet estimates.

The department store operator’s net loss widened to $180 million, or 58 cents per share, in the first quarter, from $68 million, or 22 cents per share, a year ago.

This was largely due to weaker sales at brick-and-mortar locations during February and higher costs related to store closures and employee severance packages, the company said.

“While February was a very challenging month for JCPenney and broader retail, we are pleased with our comp store sales for the combined March and April period, which improved significantly versus February,” CEO Marvin Ellison said in a statement.

Earlier this year, Penney’s firmed up plans to downsize its brick-and-mortar fleet, telling investors it will close 138 stores starting on April 17 and running through the second quarter.

The 138 stores being closed represent 13 to 14 percent of J.C. Penney’s store portfolio but generate less than 5 percent of annual sales, the company said.

Wells Fargo closing 450 branches by 2019

More bad news for the bankers.  According to this Dispatch report Wells Fargo will be closing 450 branches by 2019.

Wells Fargo & Co. on Thursday laid out plans to close additional branches and offer more digital tools — all part of a push to trim $2 billion in costs while trying to keep customers and attract new ones.

Speaking to investment analysts at the bank’s investor day conference in San Francisco, executives said they plan to close 450 branches by the end of 2018 — 50 more than the bank had announced earlier this year — with the potential for more in 2019.

Wells Fargo has 14 area facilities in Rock Island, Moline, Davenport, Bettendorf, Geneseo, Atkinson and Woodhull.

We continue to evaluate our branch network, and base our physical distribution strategy on customer behavior, market factors, economic trends and competitor actions,” said Staci Schiller, a spokesperson for Wells Fargo. “While branches continue to be important in serving our customers’ needs, our investment in digital capabilities has enabled us to seamlessly serve our customers across channels and provide choice in how they bank with us.

“Through April of this year, we’ve closed 48 branches and are on pace to close 200 by year-end,” she said. “Next year, we expect the pace of branch closures to increase to around 250.

“At this time, we cannot provide details on specific locations; however, many of the closures this year will be in close proximity to another branch,” Ms. Schiller said. “Therefore, we don’t expect a significant revenue or team member impact.”

Delusional: Sears CEO claims “We have all the customers we could possibly want”

More delusional rumbling from the company we once knew as Sears. According to this Retail Dive report CEO Edward Lampert claims Sears has all the customers it could possibly want.

Sears Holdings Corp CEO Edward Lampert reassured shareholders that despite unfavorable media coverage the retailer is on its way to recovery. “We don’t need more customers. We have all the customers we could possibly want,” he said at the company’s annual shareholders meeting Wednesday. Fortune confirmed the comments with a Sears spokesman.

Lampert, who compared Sears’ and Kmart’s years-long profit drought to Amazon’s sales-building days, also blasted coverage of the retailer as “deliberately unfair” and “meant to scare our vendors,” which he said then costs retailers because vendors thereby accrue leverage in negotiations, the Chicago Tribune reports.

Sears, in March, expressed diminished hopes in its ability to continue operating, according to its annual report filing with the Securities and Exchange Commission.

Lampert apparently demonstrated frustration with what he characterized as untrue news reports about the company’s fortunes. Sears Holdings executives, including Lampert, have often taken to the company’s blog to refute rumors about store closings, vendor tussles and even the utter collapse of its Kmart division.

But by and large, the media is reporting facts and figures from analysts and the company’s own financial disclosures and press releases. In December, Sears reported its 20th consecutive quarterly sales and revenue miss, and announced then it will accelerate the closing of unprofitable stores to combat declines.

Winn-Dixie parent to close 20 stores and consider layoffs as grocery industry the next sector to get CRUSHED

A massive consolidation is underway in the grocery industry. Look for grocery stores to be the next industry to get crushed. According to this Food Dive report Winn-Dixie parent, Southeastern Grocers will be shutting down 20 stores. Unfortunately, this sector has failed to do anything that one would consider “innovating” in the last 50 years thus leaving it in prime position to get destroyed by an Uber like app.

Southeastern Grocers will close 20 stores in its Winn-Dixie and Harvey’s footprint, according to Supermarket News. The Jacksonville, Fla.-company also is considering laying off a number of store-level department heads. The publication reported that Southeastern is in talks to refinance its debt.

The Jacksonville, Fla.-based retailer said the closures were part of a customary portfolio review and in some cases accompany lease expirations or the effects of renovations of neighboring stores. Southeastern Grocers, whose operations also include Bi-Lo, said two Winn-Dixie stores shuttered following flooding in Louisiana will not reopen.

“From time to time, the successful execution of our strategy will require us to make the difficult decision to close stores,” Southeastern Grocers spokesman Joe Caldwell told Supermarket News in an email.

Chase is offering 100,000 credit-card rewards points for new mortgage customers

Leave it to the bankers to get you locked into massive debt. According to this Market Watch report, Chase is ready to reward you with 100,000 credit card points for taking on a 30-year mortgage.

This has to be one of the most expensive ways to pick up some credit-card points.

Chase JPM, +0.52%   announced Monday it is offering 100,000 Chase Ultimate Rewards points to its customers who have Sapphire, Sapphire Preferred or Sapphire Reserve credit cards — if they open a mortgage with Chase. The offer will be available through August 6 to customers who had any Chase Sapphire card as of May 7.

Chase’s credit cards have been popular in recent months, particularly the Sapphire Reserve card, which debuted in 2016 and initially offered a 100,000-point sign-up bonus, which was later reduced to 50,000 points. Credit card experts estimate some 900,000 people signed up for that card between September 2016 and November 2016. (Chase has declined to confirm that number.)

As a result, J.P. Morgan chief executive Jamie Dimon said in December the Chase Sapphire Reserve credit card reduced the bank’s profit by $200 million in the fourth quarter, to $300 million. Now, Chase is attempting to capitalize on the young consumers it captured with that card.

Half of Chase Sapphire customers are millennials, who may be looking to buy their first home soon, said Pam Codispoti, the president of Chase Branded Cards, in a statement. And customers under age 35 made up 36% of Chase’s mortgage originations in 2016, up from 20% in 2015, a spokeswoman for the bank said.

Iconic Joe’s Crab Shack to file for BANKRUPTCY

The restaurant economy is slowly collapsing. According to this Bloomberg report Joe’s Crab shack is preparing to file for BANKRUPTCY.

The operator of the Joe’s Crab Shack and Brick House Tavern restaurant chains is preparing to file for bankruptcy, according to people familiar with the matter.

Ignite Restaurant Group Inc. could file as soon as next week, said the people, who asked not to be identified because the process isn’t public. In early April, the company announced it was pursuing options including a possible sale with financial adviser Piper Jaffray Cos. Both strategic and private equity buyers are considering purchasing the company out of bankruptcy, according to one of the people.

The dining sector has been facing drops in customer traffic, and Ignite reported declining sales in the most recent quarter, with comparable-restaurant revenue falling by 6.8 percent. The company’s debt totals about $121 million, including $112 million on a term loan set to mature in 2019, according to data compiled by Bloomberg. Chief Executive Officer Robert S. Merritt resigned last month.

As of January, Houston-based Ignite operated 112 Crab Shacks and 25 Brick House Taverns.

Kit and Ace Is Closing All Its US Stores

More bad news for retail. According to this Racked report, Kit and Ace will be closing all their US, UK and Australian stores.

Kit and Ace, the technical apparel company started by Lululemon founder (and ex-CEO) Chip Wilson and his family, is closing all of its US stores. It plans to focus its efforts on its online and Canadian business, the company confirmed.

Wilson’s altheisure company launched in 2014, pushing technical cashmere and luxury athleisure clothing meant to be worn both at and outside of the gym. The company rapidly expanded in the short amount of time it’s been around, growing to 61 stores in five countries and 700 employees by early 2016 — probably not a great idea, considering the currently dismal retail landscape.

“We recognize the traditional world of bricks and mortar retailing is changing, which is why we’re shifting strategies,” Wilson said in a circulated statement. “We believe in the business model for Kit and Ace. Going forward, we will be a stronger company. Fewer stores require fewer people. We remain deeply grateful for the creativity and commitment of those leaving the company and thank them for their valuable contribution.”

While Kit and Ace was in expansion mode (which some dubbed as “unicorn delusions”), Wilson told the Star Tribune in 2015 that the company “had money” and that he didn’t “think we would go into such an aggressive expansion if we didn’t see such excitement in the first few months.” Now, the company is closing 32 stores, leaving just nine open in Canada (though it’s also laid off an undisclosed number of employees in its Vancouver headquarters).

Yesterday, the company put up a message on its Facebook page alerting shoppers that all stores in the US, the UK, and Australia would be closing.

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