Economic Recovery? To Gin Up Profits, Companies Firing Tens of Thousands

By David Zielenziger | October 27 2012 12:44 PM

The U.S. economy is expanding, unemployment is falling and more than 70 percent of companies in the S&P 500 have reported earnings ahead of estimates -- but companies are still announcing layoffs, albeit smaller ones than those that occurred in the worst years of the recession.

Newell Rubbermaid

Newell Rubbermaid reported good 3Q results, boosted its dividend and announced it would fire at least 10 percent of its people.

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On Friday alone, nearly 5,000 more were announced, not including as many as 10,000 more, not all in the U.S., from Swiss banking giant UBS AG (NYSE: UBS), that may be announced on Tuesday.

The announcements came after earlier confirmation in the week that semiconductor maker Advanced Micro Devices (NYSE: AMD), the No. 2 microprocessor developer, would fire 1,800 employees this quarter and No. 1 chemical maker E.I. DuPont (NYSE: DD) would ax 1,500, while rival Dow Chemical (NYSE: DOW) will fire 2,400 people.

On Friday alone:

Newell Rubbermaid (NYSE: NWL), the diversified maker of products from Aprica strollers to Parker Pens, said it would fire 2,000 people soon, as it announced that the Atlanta-based company set a 50 percent hike in the quarterly dividend;

Truck maker Oshkosh Corp., of Oshkosh, Wis., said it would lay off off as many as 450 workers as it tries to shave costs to defeat a hostile takeover by financier Carl Icahn;

Diebold (NYSE: DBD), the maker of ATM and voting machines, said it will fire 500 workers, including some in Brazil as well as some near its main office in North Canton, Ohio;

Telllabs Inc. (Nasdaq: TLAB), the communications equipment maker in Naperville, Ill., is set for a 200-worker layoff after reporting a net loss of only $4 million, or a penny a share in the third quarter, far below the prior year’s loss of $130 million or 36 cents; and

Rockwell Collins (NYSE: COL), the communications equipment maker for the aviation sector, set a 1,250-layoff target, but said they would be for the next 12 months. The Cedar Rapids, Iowa-based company is afraid of defense cuts, said CEO Clay Jones, who added that he hopes as many as 300 will find new jobs in the civilian aerospace sector, where companies such as Boeing Co. (NYSE: BA) have won new orders.

To be sure, others besides Boeing have won new business.

Amazon.com Inc. (Nasdaq: AMZN), the No. 1 e-retailer, announced as many as 50,000 hires for the holiday season, and technology giants including Facebook (Nasdaq: FB), the No. 1 social networking site, and Google (Nasdaq: GOOG), the No. 1 search engine, have said they continue to add technical professionals, even as Google’s Motorola division continues to fire excess workers.

There could me more announcements, too, of both hirings as well as firings.

Still shares of Newell Rubbermaid set a new 52-week high on Friday before easing back to $20.59, up 50 cents, boosting their gain this year to 27 percent, more than twice that of the S&P 500 Index.