The mayhem in the media industry continues. The Wall Street Journal, a News Corp (NASDAQ: NWS) property, is closing its Boston bureau and sending nine employees into the wind. The newswire and MarketWatch operations are going to stay open in Boston, however, with no headcount impact.

The Journal doesn't have any plans to close other offices, according to a memo by managing editor Robert Thomson: "there are no plans, nascent or otherwise, to close any other U.S. or international bureau." The WSJ will still support an "investigative function" in Boston, but the New York-based Money and Investing team will cover Boston's mutual fund industry, which boasts such heavy hitters as Fidelity.

At the same time, magazine company Time Inc., owned by Time Warner (NYSE: TWX) is looking to cut $100 million in expenses, and layoffs will undoubtedly figure into the equation. The company that owns Time, Fortune, People and Sports Illustrated - and falls under the same umbrella as AOL, which owns BloggingStocks - is feeling the squeeze of a media recession that's even worse than the regular recession we've all been battling for what feels like decades.

Continue reading Time and WSJ to lay off more

Time and WSJ to lay off more originally appeared on BloggingStocks on Fri, 30 Oct 2009 14:20:00 EST. Please see our terms for use of feeds.

Struggling retail giant Liz Claiborne (NYSE: LIZ) has hired turnaround consultant Alvarez & Marsal to help it cut costs and stem losses at the insistence of its creditors.

"We told [the lenders] that we've been doing everything we can to manage receivables and control inventory," Liz CEO Bill McComb said in an interview with The New York Post. "In the spirit of that, we said we would hire a consultant."

Continue reading Liz Claiborne hires bankruptcy firm as turnaround consultant

Liz Claiborne hires bankruptcy firm as turnaround consultant originally appeared on BloggingStocks on Mon, 07 Sep 2009 09:00:00 EST. Please see our terms for use of feeds.

We've seen a large percentage of companies reporting better-than-expected earnings. However, the earnings reports were not always compared to last year.

There is yet another factor, actually the most important factor that generates profits, and that key factor is sales. Without sales, the bottom line (net profit) remains stagnant.

Companies have slashed payrolls and expenses and that increased the bottom line for a time. However after all of this is over, the bottom line doesn't improve until sales improve.

Continue reading Sales -- the key to the bottom line -- are still in the dumps

Sales -- the key to the bottom line -- are still in the dumps originally appeared on BloggingStocks on Fri, 14 Aug 2009 13:30:00 EST. Please see our terms for use of feeds.

Computer-networking icon Cisco Systems (NASDAQ: CSCO) is trying to cut costs wherever it can. In a sign of the times, Cisco will shut offices for four days during the Christmas/New-Year period in an effort to defend its profit margins (critical operations will remain open). Other tech companies that are trying to utilize time off for employees as a way of saving money include Apple (NASDAQ: AAPL), Hewlett-Packard (NYSE: HPQ) and Adobe (NASDAQ: ADBE).

When I read headlines like this, it makes me doubt the current rally we've seen in the markets. Indeed, bear-market rallies are common when things get way oversold. Then the euphoria gets put in perspective when we realize that it's going to be a long time until the economy truly finds its way back into a cycle of growth.

Businesses like Cisco will suffer from declining top-line sales as its customers become increasingly conservative with their investment capital. At that point, the only defensive move is to cut costs. And that's not a great position to be in. It limits management's ability to run operations, and it sends a bad message to Wall Street. Like some people have been saying, tools such as cost-cutting and layoffs aren't necessarily being perceived as positive elements in this cycle; they only serve to accentuate the dread of the slowing global economy.

Continue reading Cisco Systems in need of cost containment

Cisco Systems in need of cost containment originally appeared on BloggingStocks on Fri, 28 Nov 2008 10:10:00 EST. Please see our terms for use of feeds.

Michael Dell needs to get his story straight. He recently said that Dell's (NASDAQ: DELL) sales were doing well in China and the Middle East. Investors should look at that as a good sign.

Now, the CEO of the No.2 PC company says his firm needs to make really big cuts. According to The Wall Street Journal, "The company is imposing a hiring freeze, offering employees voluntary buyouts and asking workers to take one to five days off without pay." The "without pay" thing seems a bit bizarre for a company that is still profitable.

Based on information from last quarter, Dell had $8 billion in cash and made $784 million in net income.

Dell is asking a lot of the people who are still with the company after several rounds of restructuring. The company's founder and CEO is not doing anything to pitch in. Not only is he a billionaire, but according to the firm's last proxy, he made $2.3 billion.

Dell got his company into trouble by overbuilding manufacturing operations. He can afford to take $1 a year so that the people he is asking to do more feel that he is in the trouble with him.

But he did not cut his salary one penny.

Douglas A. McIntyre is an editor at 247wallst.com.

Dell looks for huge cuts, Michael Dell keeps his salary originally appeared on BloggingStocks on Wed, 05 Nov 2008 08:31:00 EST. Please see our terms for use of feeds.

General Electric (NYSE: GE) CEO Jeffrey Immelt is a hard man to pin down. He speaks in generalities, and what he says often does not turn out to be true. He has made sweeping comments about how well the company will do providing infrastructure services to countries like India and China. How often does he give a precise update on how that is going?

Now Immelt is talking about cutting costs and expenses at GE. According to The Wall Street Journal (subscription required), in an interview yesterday he said, "Costs will be lower in 2009 than in 2008. That will be true across the board." He offered the observation that the cuts would include employees. How many? No one knows, and he is not saying.

Usually when a chief executives says his company will cut people, he either says how many or what percentage of the workforce it will be. That is not the case here. Immelt is keeping that to himself.

What is more remarkable than the man's reticence is the fact that the company did not move sooner. GE's results have been more modest that people would like The third quarter numbers were down right troubling. GE must have seen that coming. Where were the layoffs of thousands of people back then?

Hard to say. Immelt is cagey.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Even General Electric will cut costs originally appeared on BloggingStocks on Sat, 25 Oct 2008 09:40:00 EST. Please see our terms for use of feeds.

News that FedEx (NYSE: FDX) is taking a huge charge of $891 million to drop the name Kinko's marks both the end of an era, as well as a huge waste of money that will impact shareholders.

According to the story in MarketWatch: "The company called it a "strategic decision" to strike Kinko's from the retail chain's name, and the charge is broken down into a $515 million charge for the use of the trade name, $367 million in goodwill and $9 million in other expenses."

A $515 million charge for use of the trade name? You've got to be kidding. The new name is going to be FedEx Office. That's pretty catchy, huh? I am going to run over there right now to make a photocopy, because it is such great branding. Not.

The company says that Kinko's was primarily a photocopying and faxing service while FedEx office is an entire back-office for small and mid-sized businesses. Unfortunately, with the halting of new store openings and layoffs, it appears that small and mid-sized businesses don't need to outsource their whole back-office to FedEx.

Bye bye Kinko's, it was fun while it lasted.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has has no position in any stock mentioned, as of 6/3/08

Kinko's: It was nice knowing you originally appeared on BloggingStocks on Tue, 03 Jun 2008 08:40:00 EST. Please see our terms for use of feeds.

With shares of leading book retailers Borders (NYSE: BGP) and Barnes & Noble (NYSE: BKS) having tanked in recent months, some prominent investors are starting to wonder if there's value to be unlocked.

Pershing Square Capital Management, a very good activist hedge fund run by William Ackman, secured a spot on the Borders board of directors last week, and may seek to make changes.

But with sites like Amazon.com (NASDAQ: AMZN) and discounters like Wal-Mart (NYSE: WMT) offering books at a much better value than Borders can, the activists' traditional bag of tricks -- cost-cutting, buybacks, dividends, putting the company up for sale, etc -- may not be enough. For Borders, cost-cutting is the opposite of the solution. In order to remain relevant, the brick and mortar stores will have to provide a value-added experience to the consumer, and make it worth paying 30% more than you would on Amazon. Creating an environment like that costs money.

Running a small independent bookstore is a labor of love characterized by poor margins and cutthroat competition. The Wall Street Journal recently looked at one of the ways struggling retailers are looking to stay open (subscription required) -- essentially getting book-lovers to "invest" in the stores to keep them open, with the understanding that the investment is risk and has very little upside. Now that my friends is angel investing.

In the end, I think Ackman may be barking up the wrong tree. As Oren Teicher, the chief operating officer of the American Booksellers Association, told the Journal, "The margins are small, the competition is fierce, and you're selling a product that is the same no matter where you buy it."

Borders is already bleeding red ink and won't be able to differentiate itself without spending tons of money, probably exacerbating the problem. But in its current form, the company just can't make any money.

Can brick-and-mortar bookstores be saved? originally appeared on BloggingStocks on Sun, 20 Jan 2008 18:10:00 EST. Please see our terms for use of feeds.

Toyota expects to save $2.7 billion through compatibility originally appeared on BloggingStocks on Tue, 11 Dec 2007 13:37:00 EST. Please see our terms for use of feeds.

In an interview in Barron's this week, Chris Ceraso of First Boston says that General Motors (NYSE: GM) stock will move to $40, if it gets a "reasonably good deal" from the UAW.

It appears that the "good deal" may be just around the corner. As GM and the UAW prepare for the next set of bargaining sessions. a large number of media outlets, including MarketWatch, say that the agreement to move GM's $55 billion liability for worker health care into a fund controlled by the union is nearly done. The new arrangement would also save GM about $5 billion in annual expenses.

The open issue in moving the fund is how much GM will have to pay into the new pool. The number could certainly be above $30 billion, which means GM might have to raise some of the money. Or, a portion of the dollars could go in as GM stock.

In many ways the deal is better for the UAW than it is for GM. Once the new health benefit pool is set up, the union needs to run it prudently to make sure that it can handle worker benefits for the years to come. But, no matter which GM's costs will have been cut, it still has to reverse the market share decline that it has suffered in the U.S. at the hands of Japanese car markers. Lower costs-per-vehicle may help, but can't make up entirely for ongoing drops in sales.

First Boston may be right, GM's shares my go to $40, but, If revenue keeps slipping, it won't be there for long.

Douglas A. McIntyre is a partner at 24/7 Wall St.

GM at $40, a deal with the UAW originally appeared on BloggingStocks on Sun, 23 Sep 2007 12:10:00 EST. Please see our terms for use of feeds.

For now, Trump won't sell originally appeared on BloggingStocks on Mon, 02 Jul 2007 16:10:00 EST. Please see our terms for use of feeds.

It is an odd company that says its turnaround is "on track" when market share in its home company and largest market is falling like a rock. But, so say Ford Motor Co. (NYSE: F) management.

"The closures and the employment reductions to size the capacity to the real demand -- we're a little bit ahead," Ford's CEO told reporters. "But generally (we're) on plan."

Ford has a couple of other cards in the hole. It will probably improve its balance sheet by several billion if it can sell its Jaguar and Land Rover units. And, upcoming UAW contract negotiations may give Ford the chance to beg off pension and benefits cost cuts. But, the point will come when Ford's recovery is measured by a need to spend more money to help improve production for rising sales.

But, a turnaround is not a turnaround without some stability in revenue, and Ford has been unable to show that. Its most profitable vehicles are its SUVs and pick-ups, and the sales of those are running down by double digits most months.

Measuring progress by cost cutting is generally a Faustian bargain. The Devil eventually comes for the whole company.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Ford's view of "on target" originally appeared on BloggingStocks on Sun, 24 Jun 2007 10:10:00 EST. Please see our terms for use of feeds.

Every once in a while Google Inc. (NASDAQ: GOOG) comes along with a new feature that grabs the attention of bloggers. Today's is Google Trends -- which ranks search terms based on their growth in popularity during the day.

In case you missed it, according to lostremote, General Electric Co. (NYSE: GE)'s NBC Universal launched an initiative last October: NBCU 2.0 -- a cost-cutting program designed to eliminate 700 jobs and $750 million in expenses by the end of 2008.

Two of the top Google Trends -- Stone Phillips (#1) and John Seigenthaler (#14) -- account for two of the highest profile 700 job cuts. Phillips is a co-host of Dateline and although I never watch the show, I remember his neck as being particularly frightening. Phillips will not be replaced. Meanwhile, Seigenthaler, who left last month, used to host the NBC Nightly News on weekends -- Lester Holt replaced him.

I hope these cost cuts improve NBCU's profitability, but there's a danger that they'll lead to revenue declines that exceed the cost cuts. Meanwhile Google's advertising revenues -- up 63% -- are growing while NBCU's shrank 22% (due, among other things, to the absence of 2007 programming to take up the slack from the 2006 Olympics and its weak ratings).

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He owns General Electric stock and has no financial interest in Google.

Google Trends: NBCU 2.0's casualties originally appeared on BloggingStocks on Tue, 22 May 2007 20:21:00 EST. Please see our terms for use of feeds.