Intel Lays Off 12,000 People After They Lobbied FOR MORE FOREIGN H1-B WORKERS –
“12,000 people are now out of work after their employer, tech giant Intel, lobbied for more foreign workers to come into the U.S.
What are these newly unemployed people supposed to do now?
The Daily Caller reports:
Intel Lays Off 12,000 People After Lobbying For More Foreign Workers
One of the top users of foreign workers imported via the H-1B visa program announced Tuesday it’s laying off about ten percent of its global workforce.
Tech giant Intel is laying off some 12,000 workers, although it’s one of the country’s 15 largest users of H-1Bs, which are temporary visas that allow companies to hire foreign workers for American tech jobs. The big-time layoffs come even as the company has called for hikes in the number of foreign workers it is able to hire using H-1B visas.
The chip-making giant said the mass firings are part of a “restructuring initiative” that will further its shift away from the PC business toward smart devices and cloud-based computing.
But the firings stand out in light of Intel’s lobbying to expand the H-1B visa program. In 2013, the company’s government affairs managers complained that Intel simply can’t find enough homegrown workers in technical fields to meet its needs. And in 2014, the company called for allowing the spouses and children of H-1B recipients to automatically qualify for work in the U.S. as well.
Our leaders just keep giving it all away.
And yet some people continue to wonder why Trump is so popular.”
…Continue reading @ www.progressivestoday.com
Silicon Valley in Meltdown as Intel Slashes 12,000 Jobs
“The meltdown of Silicon Valley tech jobs accelerated Tuesday, as Intel announced 12,000 job cuts worldwide and a plan to dump product lines, despite reporting higher profits.
Intel Corporation (INTC: NASDAQ) reported that first quarter net income rose 2.7 percent to $2.05 billion, and sales climbed 7.2 percent to $13.7 billion. The earnings were 14 percent higher than expected, and the sales were in line with expectations.
But during what was anticipated to be an upbeat earnings call, new President Murthy Renduchintala, brought in from Qualcomm in late November, announced he was presenting a plan to CEO Brian Krzanich to slash employment by 11 percent and give CFO Stacy Smith direct control of manufacturing, sales, and operations.
Krzanich immediately followed up with an email to employees stating, “These are not changes I take lightly. We are saying goodbye to colleagues who have played an important role in Intel’s success.”
Although Intel expects to take about a $1.2 billion restructuring write-off for the layoffs this quarter, the move will save $750 million in expenses this year and generate estimated annual savings of $1.4 billion by the middle of 2017, according to SiliconValley.com.
Breitbart News predicts Intel is restructuring its Client Computing Group to exit stand-alone central processing units (CPUs) for personal computers (PCs) and fully embrace its disruptive 3D XPoint memory technology, which combines huge storage-class memory and a processor into a single device. The compact high-bandwidth package will eliminate the need for standalone dynamic random access memory (DRAM) chips.
Intel believes that PCs will all but disappear because 3D XPoint smartphones will pack more than enough computing power and energy efficiency for 90 percent of users’ tasks.
Microsoft has developed cloud-based “Continuum” so display and input can seamlessly flow across a variety of devices. The coming Windows-based “Phone Computer” may be an existential threat to Apple’s iPhone business and student user loyalty.
Breitbart News has been reporting a string of mass layoffs hitting Silicon Valley technology companies since the first of the year. With growth slowing, big private equity player Morgan Stanley marked down the value of its private equity stakes in tech by 32 percent on Feb. 26.
According to Wall Street analyst Chris Martenson, Silicon Valley is about to suffer a wave of mass layoffs that could be “worse today than back in 2008/9.”
…Continue reading the noteworthy article by Chriss W. Street @Breitbart
– Investor’s Business Daily
“Labor Markets: Hundreds of employees at the University of California at Berkeley are getting schooled in basic economics, as the $15 minimum wage just cost them their jobs. Too bad liberal elites “fighting for $15” don’t get it.
A week after California Gov. Jerry Brown signed the state’s $15 minimum wage boost into law, UC Berkeley Chancellor Nicholas Dirks sent a memo to employees announcing that 500 jobs were getting cut.
Coincidence? Not really.
Last year, University of California President Janet Napolitano announced plans to boost its minimum wage to $15 at the start of next school year, independent of the state law. Since UC Berkeley was already in financial trouble — it ran a $109 million deficit last year and is projecting a deficit of $150 million this year — number crunchers there had to have factored in the higher mandated wage when making their layoff decisions.
Those workers might want to have a chat with the folks at UC Berkeley’s Center for Labor Research, who just days before Brown signed the wage-hike bill released a study touting the minimum wage as a boon to low-income household breadwinners.
After that report came out, Ken Jacobs, chairman of the UC Berkeley center, told the Los Angeles Times, “This is a very big deal for low-wage workers in California, for their families and for their children.”
It is a big deal, as well, to those soon to be out of work UC Berkeley workers.
But why is anyone surprised about jobs cuts following a wage hike? It’s one of the most basic laws of economics. Any high school kid taking Econ 101 can explain it: If you raise the price of something, demand goes down.”
….Continue reading @ Investor’s Business Daily
Pink Slips at Disney. But First, Training Foreign Replacements
– New York Times
ORLANDO, Fla. — The employees who kept the data systems humming in the vast Walt Disney fantasy fief did not suspect trouble when they were suddenly summoned to meetings with their boss.
While families rode the Seven Dwarfs Mine Train and searched for Nemo on clamobiles in the theme parks, these workers monitored computers in industrial buildings nearby, making sure millions of Walt Disney World ticket sales, store purchases and hotel reservations went through without a hitch. Some were performing so well that they thought they had been called in for bonuses.
Instead, about 250 Disney employees were told in late October that they would be laid off. Many of their jobs were transferred to immigrants on temporary visas for highly skilled technical workers, who were brought in by an outsourcing firm based in India. Over the next three months, some Disney employees were required to train their replacements to do the jobs they had lost.”
…Continue reading @ NY Times
Retailer Bankruptcies Are Hailing Down on the US Economy
“Another retailer is heading for bankruptcy. This time Aeropostale, with 800 teen-clothing stores, after three years in a row of losses. It’s “preparing to reorganize under a Chapter 11 bankruptcy, and could file as soon as this month, according to people familiar with the matter,” Bloomberg reported today.
Upon Bloomberg’s propitious report, Aeropostale shares plunged 28% to 15 cents. It has been a penny stock since last September. The New York Stock Exchange, which had threatened the company with delisting, removed the stock before 2 p.m. today, and trading of the shares has been suspended.
Aeropostale is trying to work out a loan to finance its operations during the bankruptcy process, according to the people. A deal to avert a filing or find a buyer also could still emerge, they said.
Which is what just about all collapsing retailers are valiantly trying to do. And often to no avail.
In March, Aeropostale had already announced that it would “evaluate strategic alternatives.” It hired Stifel Financial Corp. to work on a sale or restructuring. According to Bloomberg, it’s also working with law firm Weil Gotshal & Manges LLP and FTI Consulting, “people familiar with the matter said last week.”
As in so many cases, there is a private equity angle. PE firm Sycamore Partners owns a large state in Aeropostale and is its main lender. But they have been embroiled in a feud. Sycamore also owns Aeropostale’s key clothing supplier, MGF.
In 2013, when Sycamore acquired its stake in Aeropostale and lent if $150 million, it obtained two seats on the board and set up the supply deal with MGF. Bloomberg:
At the time, Sycamore was seen as possible savior for the troubled chain. Some investors expected the investment firm to eventually acquire the rest of Aeropostale, helping redeem a stock that has been declining since 2010.
But that didn’t work out. These hopeful investors lost their shirts. Sycamore’s two directors left Aeropostale’s board. In March, Aeropostale said that MGF has stopped delivering merchandise in violation of the terms of its agreement, leaving the retailer short on merchandise. MGF, as Bloomberg put it, said “it was merely seeking protection from Aeropostale.”
There are numerous other 1990s and 2000s brands that didn’t quite make the transition in the relentlessly tough US retail environment of squeezed consumers, fickle and picky teens, smart women, shoppo-phobic men, inscrutable millennials, and a brutal shift to online sales.
And now their bankruptcies are hailing down on the US economy with increasing intensity. Here are a few standouts in 2016 and 2015. Note the PE firms behind many of them:
April 16, 2016: Vestis Retail Group, the operator of sporting goods retailersEastern Mountain Sports (camping, hiking, skiing, adventure sports),Bob’s Stores (family clothing and shoes), and Sport Chalet (general sporting goods), filed for Chapter 11 bankruptcy. It will close all 56 stores and stop online sales.
In the filing, it blamed the going-out-of-business sales at “certain Sports Authority locations,” plus the weather, which had been too warm, and trouble with switching to a new software platform. It’s owned by private equity firm Versa Capital Management LLC.
April 7, 2016: Pacific Sunwear of California, clothing retailer with nearly 600 stores and derailed ambitions of skate-and-surf cool, filed for Chapter 11 bankruptcy. PE firm Golden Gate Capital, a lender to the company, agreed to convert over 65% of its loan into equity of the reorganized company and add another $20 million in financing. Wells Fargo agreed to provide $100 million of debtor-in-possession financing.
March 2, 2016: Sports Authority filed for Chapter 11 bankruptcy. It said it would close 140 of its 450 stores, including all stores in Texas. In 2006, it had been taken over in a leveraged buyout by a group of PE firms led by Leonard Green & Partners [Another Private-Equity LBO Queen Bites the Dust].
February 2, 2016: Hancock Fabrics filed for Chapter 11 bankruptcy, for the second time. It closed 70 of its retail sewing and crafting stores. Its inventories are being liquidated with going-out-of-business sales at the remaining 185 stores.
January 16, 2015: Wet Seal, teen fashion retailer, filed for Chapter 11 bankruptcy.
October 2015: American Apparel filed for Chapter 11 bankruptcy, after years of all sorts of sordid turmoil – and losses since 2009.”
…Continue reading @ MarketExpress
U.S. Jobless Claims Fall To Lowest Level Since 1973
“An important measure of layoffs hit its lowest mark since the Nixon administration, a sign of increasing momentum in the labor market and a possible hint at the extent of job growth for the full month of July.”
…Read more on the rosy outlook @ Wall Street Journal