Nordstrom cuts down to the bone

  • Wednesday, October 3, 2001 9:00pm
  • Business

Seattle-based Nordstrom Inc. laid off 1,600 employees nationwide in the past 30 days, including about 250 at the retail clothing chain’s downtown headquarters. The layoffs, 3.6 percent of the company’s 45,000-person workforce and 7.9 percent of the corporate headquarters staff, are the result of slumping sales since the terrorist attacks Sept. 11, spokeswoman Brooke White said. “This has been a difficult process for us,” White said.

Generic competition ate into Eli Lilly and Co.’s sales of blockbuster anti-depressant Prozac faster and deeper than expected. Meanwhile, the drug maker said it is increasing spending to prepare for the launch of five new drugs over the next 14 months. The double whammy pushed the company on Wednesday to lower its earnings estimates for this year and warn of a possible earnings decline next year – a rarity in an industry where 14 percent earnings growth is the average. Lilly’s blockbuster anti-depressant drug Prozac lost its patent in August, and the switch to the generic version has been dramatic.

General Electric’s aircraft engine division said Wednesday it will cut up to 4,000 jobs, or 13 percent of its workforce, by early next year. The company, which provides engines for some Boeing aircraft, said it expects the demand for engines to drop after the Sept. 11 terrorist attacks. Up to 800 jobs will be trimmed at the company’s Cincinnati offices and about 250 jobs at Lynn, Mass. Since the attacks, the nation’s major airlines have announced plans to cut about 93,000 jobs and reduced flight schedules by about 20 percent. Kennedy said Aircraft Engines expects a 15 percent to 20 percent decrease in demand for engines and a 10 percent to 15 percent decrease in spare part sales and requests for maintenance and overhaul services.

Verizon Communications, still struggling to restore full telephone service to lower Manhattan after the Sept. 11 devastation, said Wednesday the effort may hurt earnings in the second half of the year. Analysts surveyed by Thomson Financial/First Call expected the company to earn $3.08 a share for 2001, with earnings of 78 cents a share and 81 cents a share in the third and fourth quarters, respectively. The Sept. 11 terrorist attack disconnected 200,000 of Verizon’s voice access lines, 100,000 business lines, 3.6 million data circuits and 10 cellular towers. Verizon president Ivan Seidenberg said Verizon “virtually rebuilt the entire communications network in lower Manhattan.” Verizon, which provides local service to Snohomish County and maintains its Northwest headquarters in Everett, is the largest U.S. local carrier, reaping most of its profit from 65 million customers.

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