Electronic Arts seeing the floor of sales fall out will undergo cost reductions by eliminating 500-600 jobs. This company makes some pretty cool video games, but I guess the 50-60$ expense for video games is another element that gets cut from the entertainment budget in hard times.
More hard times from a California employer. New job cuts out of the state are rolling in almost daily in line with the financial earnings release season.
Electronic Arts is headquartered in Redwood City, CA.
Sunday, November 2, 2008
Timber! Ponderosa falls
Ponderosa has filed for Chapter 11 bankruptcy. Restaurants are not a necessity and is part of a cost of living reduction many people take when the times get tough or have been affected by loss of income or reduced income due to layoffs, job change after layoff, or even reduced working hours. As with reduced shopping, reduced services are to be expected. Suddenly, less ironed shirts are needed or more time is freed up to do the ironing oneself. Less restaurant meals and more cook at home, brown bagged lunches, or fast food. Less car washes. Less spa treatments. More in-home fingernail care. I see the future and it is that trend continuing for some time.
Redfin encountered Jaws: 20 people eaten
Redfin, another small fish, has cut 20 heads to reduce staffing to 75 people. This was a little while ago. but with the quantity of layoffs these days it makes sense to group similar type of layoffs. Note the prior post was also in the neighborhood of 20 losses.
Goes to show, companies big and small are affected by the force of the economic cycle and their early investors are making it known that they must reduce their capital expenditures in order to make it out to the other side of this market cycle. Money will not be easy to come by in the midst of the economic slump, so keeping a hold of the money already raised is vital to the startups. You can bet the repurcussions after the CEO sent out a message forecasting a big dip that the company may still not make it to the end will be wide for the remaining employees. One other notable thing to bring up that I haven't explored on this site yet that fits the theme of cost cutting. Hiring freezes and layoffs are a couple of the main newsworthy events in times of economic turmoil. The other less visible item is company cutbacks in budgets and expenses. This means fewer airplane trips around the country or world, fewer expensive customer dinners, and lower raises and performance bonuses. This all points to weak spending in the retail and restaurant sectors.
Redfin is based on Seattle, WA.
Pandora's Bawx
Pandora, an interesting company doing radio a new way over the Internet, has cut 20 employees. While this number is not significant compared to some of the other entries, it does show a trend in the start-ups of scaling back their headcount. This amounts to 14% of staff from 140 down to 120.
Not only does this reduce the number of heads who will be collecting paychecks into the holiday season it also points to lowered hiring demand. AKA, once a job is lost in this climate it is difficult to pick up a comparable job on the market since many of these companies are either in hiring freeze mode, planning layoffs, or already having done the deed.
Reduced paychecks, reduced IPO thoughts, reduced profit shares, reduced employement all add up to reduced spending, reduced advertising, reduced commercial occupancy, and reduced credit. This reduced spending will be a huge theme through this holiday shopping season. Not many will be spared, except possibly Apple and any others?
Pandora is based on Oakland, CA.
Not only does this reduce the number of heads who will be collecting paychecks into the holiday season it also points to lowered hiring demand. AKA, once a job is lost in this climate it is difficult to pick up a comparable job on the market since many of these companies are either in hiring freeze mode, planning layoffs, or already having done the deed.
Reduced paychecks, reduced IPO thoughts, reduced profit shares, reduced employement all add up to reduced spending, reduced advertising, reduced commercial occupancy, and reduced credit. This reduced spending will be a huge theme through this holiday shopping season. Not many will be spared, except possibly Apple and any others?
Pandora is based on Oakland, CA.
Lost Golden Boys: Goldman Sachs to cut 10%
While the number is not too staggering, the amount of money should probably be. While paying out billions in bonuses with money robbed by pen from you and me, the American Tax Payer... Goldman Sachs is removing excess headcounts by 10% or about 3,000 employees. Since investment banking is quite lucrative in the salary game and centered in New York City, this will have some high end impacts. Fine dining, luxury goods, and other similar entities will see decreased demand. First decreased demand from those affected, second decreased demand from those worried they may be next, third is the bonuses will likely be a lot lighter this year than the past few, and finally decreased demand from others in the same industry who are worrying about their jobs.
I remember when Bill Gates said GS was a strong competitor since he was in the IQ business. Maybe with this cutting back and L-shaped recession where the recovery is far from swift, some of the large minds will head out to Redmond instead and fix Vista or do other actual productive work that doesn't include being the leech of the economy.
Shoe Pavilion: Al Bundy on hard times
As I was driving around today I noticed some sign holders with the familiar liquidation signs. This time it was at an unexpected corner where there is no Linens N' Things. As I approached I saw that the store in duress is Shoe Pavilion, which made me check this news when I got home. Shoe Pavilion previously pared down their number of non-performing shops and now it looks like all of them are non-performing as they are closing all 64 remaining shops.
This will further hurt commercial real estate. I have already seen several leasing signs where there hadn't been any while the consumers acted like drunks. Well now they have a hangover, to borrow Bush's off the cuff remarks on the economy. The particular Shoe Pavilion that is going down also occupies an area where there is a Halloween shop where a CompUSA used to be. These vacancies are going to begin to severely impact the property owners cash flow. Any commercial real estate owners who used leverage are going to be in a world of hurt. From the Weingarten Realty Investors (NYSE: WRI) recent quarterly report they called out that they have about 800,000$ at risk anually due to Shoe Pavilion leasing arrangements on 3 stores at 46k square feet (Note: They also have 8 Circuit City representing 4 million).
About 500 more frugal folks will be venturing into the holiday shopping season as they wind down their stores and expect a harsh job market when retail dies in January.
Shoe Pavilion was based on Sherman-Oaks, CA.
This will further hurt commercial real estate. I have already seen several leasing signs where there hadn't been any while the consumers acted like drunks. Well now they have a hangover, to borrow Bush's off the cuff remarks on the economy. The particular Shoe Pavilion that is going down also occupies an area where there is a Halloween shop where a CompUSA used to be. These vacancies are going to begin to severely impact the property owners cash flow. Any commercial real estate owners who used leverage are going to be in a world of hurt. From the Weingarten Realty Investors (NYSE: WRI) recent quarterly report they called out that they have about 800,000$ at risk anually due to Shoe Pavilion leasing arrangements on 3 stores at 46k square feet (Note: They also have 8 Circuit City representing 4 million).
About 500 more frugal folks will be venturing into the holiday shopping season as they wind down their stores and expect a harsh job market when retail dies in January.
Shoe Pavilion was based on Sherman-Oaks, CA.
Rumor: Circuit City to close 150 stores within 60 days
This is a rumor that is making its way around the net right now. Earlier the Wall St. Journal reported that about 150 stores would be closed by the end of the year. This looks to be true and be announced tomorrow. But why wait? There's more! You can have a sneak preview on a store-by-store basis by checking their store locator to see if your favorite shopping store or employer is listed there.
Obviously 150 store closing would have a dampening effect on the employees there and their capability to take on new credit and/or spend with loose pockets. In the short term CC's liquidation may hold back customers from Best Buy this holiday season. In the long term, Best Buy will now have less competition as their chief competitor shutters many shops.
Further, it is some people's opinion that Circuit City store closures will not be enough to get them back on track in the terrible consumer spending environment. This opinion means that eventual bankruptcy is in their future. I would hold that opinion along with the other people.
Obviously 150 store closing would have a dampening effect on the employees there and their capability to take on new credit and/or spend with loose pockets. In the short term CC's liquidation may hold back customers from Best Buy this holiday season. In the long term, Best Buy will now have less competition as their chief competitor shutters many shops.
Further, it is some people's opinion that Circuit City store closures will not be enough to get them back on track in the terrible consumer spending environment. This opinion means that eventual bankruptcy is in their future. I would hold that opinion along with the other people.
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