> Biggest layoff: 40,000
> Date of layoff: January 1996
When AT&T (NYSE: T) laid off 40,000 workers at the start of 1996, CEO Robert Allen said, at the time, the move would create more shareholder value. The job cuts were part of a plan to spin out AT&T’s NCR and Lucent divisions. Allen then said, “I am convinced that some downsizing was necessary to protect the jobs of the 270,000 people who will make up the three new companies.” AT&T’s share price did rise 10% after the decision. AT&T continues to make job cuts today, as its landline business loses ground to cellular and VoIP products.
4. General Motors
> Biggest layoff: 47,000
> Date of layoff: February 2009
GM’s (NYSE: GM) layoffs in early 2009 were part of an effort to cut costs enough to match the drop in revenue. At the time, car sales were dragged down by the 2007 io 2008 recession and stiff competition from Japanese manufacturers. GM made the reductions as it was about to enter Chapter 11 with federal government aid. The number one U.S. car company also dumped its money-losing Hummer division. GM’s employee base before the cuts was 250,000. GM made a number of smaller layoffs throughout 2009, including the elimination of several thousand management jobs. The company also laid off 25,000 workers in June 2005, a number that ranks separately in the largest layoffs ever.
> Biggest layoff: 50,000
> Date of layoff: November 2008
Citgroup’s (NYSE: C) layoffs were part of a companywide effort by management to save the financial firm after the collapse of the credit markets in 2008. Citi had taken $20 billion in TARP funds to tide it through the worst of the period. But the company that Sandy Weill built, which combined insurance, corporate banking, investment banking, consumer banking and a brokerage arm, was too unwieldy and expensive to manage. New CEO Vikram Pandit and the board decided the only way to quickly stem billion of dollars in losses was to trim a large portion of the company’s 352,000 workers.
> Biggest layoff: 50,000
> Date of layoff: January 1993
Sears and Kmart went through a series of job cuts each before they merged in 2005, and long before the retail company’s current severe trouble. At the time of the merger, the expected savings from the marriage were $500 million a year. The largest of the pre-merger layoffs came in early 1993 and hit 50,000 workers at Sears. Back then, Sears faltered because of competition from Walmart (NYSE: WMT). Kmart fired 35,000 people in 2003 as it was about to enter bankruptcy. That followed another massive firing of 22,000 people in 2002 as Kmart management tried to salvage the company.
> Biggest layoff: 60,000
> Date of layoff: July 1993
When Louis V. Gerstner Jr., viewed by many as one of the great CEOs of the second half of the 20th Century, joined IBM (NYSE: IBM) in 1993, the company was in deep trouble. The technology firm took an $8.9 million charge to slash 60,000 workers. IBM’s revenue was dropping at the time. Revenue for the second quarter of 1993 was $15.5 billion, down from $16.2 billion in the same quarter the year before. IBM already had cut workers in the late 1980s. The company had 405,000 workers in 1985. After the Gerstner cuts that figure was 225,000. The CEO’s workforce reduction and cost cuts saved IBM $4 billion a year.
Douglas A. McIntyre