"Businesses could see their inventories suddenly fall in December, but the Fed waited until January [to cut interest rates], causing real damage" -- Cisco CEO John Chambers, speaking at the World Economic ForumEdited by Sheridan PrassoReturn to top
A Sign of the Times--Is Blank
Such a thing hasn't been seen for ages, at least as measured in Internet time. But one of the many billboards along a prime stretch of Highway 101, Silicon Valley's main artery, has been blank for at least two weeks.
It's another sign--literally--of the slowdown in high tech. And not just the vacancy: In the past few months, ads for outsiders such as Walt Disney and DeBeers have popped up on billboards that were once locked up by software makers and Internet hopefuls. Eller Media, one of the largest outdoor ad companies, reports that its dot-com ads so far this year are 20% below the level of fourth quarter, 2000. Dot-bombs such as Garden.com, whose unusual sign on Highway 101 once featured live plants, are to blame.
Billboard prices on Highway 101 have come down slightly, outdoor advertisers report. But still, the road boasts "the most highly sought-after real estate in Northern California," says Eller's president for the region, Jeff Joaquin, so traditional companies are moving in to take up the slack.
And if Valley entrepreneurs feel DeBeers is a little beyond their price range these days, a recent addition to the 101 scene makes a more modest appeal: Best Western.By Amy Cortese; Edited by Sheridan PrassoReturn to top
Jack the Job-Killer Strikes Again
Neutron Jack is back. BusinessWeek has learned that General Electric is planning massive job cuts--on a scale not seen since CEO Welch's early days in the 1980s. Wall Street sources and those close to the company say GE will likely eliminate at least 75,000 jobs--more than 15% of its workforce--during the next two years. And that total doesn't include 28,000 jobs lost in the closing of Montgomery Ward, a subsidiary of GE Capital.
The carnage is largely due to GE's acquisition of 120,000 workers in its merger with Honeywell International in the coming weeks. GE is likely to cut up to 50,000 Honeywell jobs--or 42% of its workforce, according to analysts who have spoken to GE execs. But that's not all. GE may pare as many as 10,000 jobs from its appliances, lighting, broadcasting, and plastics divisions, areas sensitive to the slowing economy.
GE is also signaling it will make deep structural changes by moving reams of administrative work to the Web and cutting entire layers of support jobs. By doing this "digitization," GE expects to save $1.6 billion this year and eliminate 11,000 jobs.
GE won't confirm the layoffs, but Welch has spoken recently of "significant" cuts. His last big round in 1981 involved 100,000 jobs over four years. That led to many years of profit growth and Welch's nickname. Is there a name to top Neutron now?By Pamela L. Moore; Edited by Sheridan PrassoReturn to top
Don't Give Us Any Crap
Swiss police clamped a cordon around the Jan. 25-30 World Economic Forum at Davos this year, blocking the usual gnarl of demonstrators from getting anywhere near the event. The confab was a hand-wringing affair. CEOs, politicians, and other world leaders debated and pondered the very repercussions of global capitalism that protesters at previous meetings such as Seattle had brought to world attention.
In erecting their fortress of barbed wire, steel fences, and roadblocks to keep the demonstrators at bay--if not the issues they raised--Switzerland's security forces had one forceful weapon in reserve: liquid manure. Seems the police had loaded their water cannons with cow dung, which is normally sprayed on fields as fertilizer.
Squirting the demonstrators with manure would be a last resort, the police had said. So while the protests grew violent in nearby Swiss cities, the Davos police never put their secret weapon to use. Asked about it, one heavily armed policewoman in Davos smiled brightly and remarked: "At least it's organic."By Bruce Nussbaum; Edited by Sheridan PrassoReturn to top