Eleven American companies have laid off a total of nearly 600,000 people in the past two decades. Each also fired a large number of employees at one time to earn it a place among the largest corporate layoffs in modern American history.
According to information 24/7 Wall St. has reviewed, large layoffs are almost exclusively the result of two conditions. They happen in industries near the end of their most successful periods, or because of difficult economic conditions.
24/7 Wall St. took data from Challenger Gray & Christmas, which cover layoffs over the past several years. We examined the data by individual company. Some companies fired so many people in one instance that it was enough for them to make the list. In other cases, a company had two or three layoffs that made it qualify. We excluded companies that completely folded.
Two recessions accounted for many of the layoffs. The first was in the 2001 to 2002 period. The other was the deeper downturn of 2007 to 2009. Most of the layoffs not caused by recessions happened because companies in shrinking industries downsized their operations. The automotive sector is one such example. Ford, General Motors and Chrysler are all on this list. So are several banks, which were part of the consolidation as the financial industry shrunk after the 2007 credit crisis.
One case that stands out among those on the list is that of the U.S. Postal System. The USPS has cut 90,000 people in three layoffs over the past two decades. It has said it needs to cut another 28,000 people soon because the service loses billions of dollars each year. Unlike most of the other corporations on this list, technology and competition have destroyed the postal system’s future. It is easy to make the case that USPS layoffs will continue for several years.
This is the 24/7 Wall St. list of the “Largest U.S. Company Layoffs Ever.” It is a good snapshot of what happened in the American economy over the past 20 years as two recessions and a transformation of several industries changed the employment landscape significantly.
> Biggest layoff: 24,600
> Date of layoff: September 2008
One of the reasons former HP (NYSE: HPQ) CEO Mark Hurd was widely admired on Wall Street was the ease with which he cut costs — and headcount. Hurd’s largest cut came after he bought IT consulting firm EDS, which Ross Perot founded. Hurd spent $13.9 billion to diversity beyond HP’s core hardware operations. Once he closed the transaction, he fired 24,600 employees whom he felt would be redundant once the two companies were combined.
10. Daimler Chrysler
> Biggest layoff: 26,000
> Date of layoff: January 2001
Daimler Chrysler’s U.S. operations, known as Chrysler before the two car companies merged, is an example of a large corporation hurt by the 2001 recession. Chrysler said it would chop as many as 15,000 production workers and layoff several thousand management people as well. The company also said it would shutter six of its 41 plants. After nearly a decade, the merger eventually fell apart and Chrysler became independent again in 2007. But that was just in time for the next recession, which drove Chrysler into Chapter 11.
9. U.S. Postal Service
> Biggest layoff: 30,000
> Date of layoff: March 2010
The U.S. Postal Service recently announced it was on the brink of insolvency. The Postmaster General wants to save $2.1 billion a year, which means 28,000 jobs will be cut by 2012. This would not be the first time the USPS has downsized to offset the drop in mail as individuals and industry move to email and overnight carriers. It has been less than two years since the USPS shed 30,000 jobs for the third time for a total of 90,000. These reductions in workforce also aimed to save money and lower losses.
8. Bank of America/Merrill Lynch
> Biggest layoff: 30,000
> Date of layoff: September 2011
Under tremendous pressure from shareholders to cut large losses, particularly in its mortgage business, new Bank of America (NYSE: BAC) CEO Brian Moynihan laid off 30,000 people. He said it would help the bank, which had grown due to M&A activity, cut redundant jobs. Bank of America also said it would exit some of its unprofitable businesses. The financial firm’s headcount was 288,000 before that action. Management hinted there would be more firings in the future. Merril Lynch went on to lay off 25,000 positions in December 2008.
> Biggest layoff: 31,000
> Date of layoff: September 2001
Boeing (NYSE: BA) was another victim of the 2001 economic slowdown. The recession, and later the 9/11 attacks, hurt air travel. The commercial aircraft division of Boeing, therefore, suffered all the cuts, with the defense segment untouched. The head of the commercial division then was Ford’s current CEO Alan Mulally. When he announced the cuts he said, “We were on a very positive track and this is just a sad thing for all of us.” Boeing had previously had another one of the biggest layoffs. In December 1998 Boeing fired 28,000 workers.
> Biggest layoff: 35,000
> Date of layoff: January 2002
Ford (NYSE: F) began to lay off workers long before the 2007 – 2008 recession put a serious dent in its revenue. In January 2002, when the economy was still in the contraction that began in 2001, the large cuts at Ford were part of the seemingly endless parade of layoffs at other huge American companies, including United Airlines and Target (NYSE: TGT). Only last year, Ford has only begun to add workers again, after the U.S. car industry has had its first good season in the past five. Ford laid off another 23,200 people in January 2006.
> 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