Last year was an incredibly strong one for the stock market and the U.S. economy. Stock indexes ended the year with gains that quadrupled their historic annual averages, while the U.S. unemployment rate hit a nearly 50-year low of 3.5% in October. We have to go all the way back to December 1969 to find a time where the U.S. job market looked this strong, as a whole.
Yet even this impressive of a performance hasn't been able to save workers at select companies from losing their jobs in the U.S. and around the world.
As we turn the page toward a new decade, let's look back at 25 companies that laid off workers in 2019.
The only pedal put to the metal in the auto industry in 2019 was in the pink-slip department, with Detroit's Ford Motor (NYSE:F) leading the way. In May, Ford shifted gears by announcing 7,000 job cuts, or about 10% of its salaried worldwide staff at the time. The move, designed to save $600 million annually, is part of the company's longer-term plan to restructure its business to modernize its fleet and boost its overseas sales.
Then, just five weeks after declaring its intention to shed 7,000 salaried workers, Ford wielded its ax once more by announcing the expected departure of 12,000 workers in Europe by the end of 2020. This'll include the sale or closing of six of Ford's 24 European plants and reduced production/work shifts at plants in Germany and Spain.
With Adam Jones of Morgan Stanley on record as suggesting that Ford will need to shed 30,000 total jobs to meet its profit goals, this unfortunately may not be the last round of pink slips the company hands out.
Though Walt Disney (NYSE:DIS) has a history of bringing delight to children and families with their iconic movies and unforgettable theme parks, the House of Mouse has been cleaning house of late, especially in the company's film and distribution operations.
The reason for the job cuts is Disney's now-completed $71.3 billion acquisition of 21st Century Fox this past March. Disney has been busy severing overlapping operations, most of which have been found in the combined company's film and television segments. It's worth noting that it's not just previous Fox employees getting the ax, but rather a combination of Disney and Fox workers. As of early August, about 250 workers had been let go.
However, according to TheWrap.com, up to 4,000 employees from the combined company are eventually expected to get walking papers in an effort to save $2 billion on an annual basis. While there's no denying that 21st Century Fox's assets are worth the price, Disney has become the proverbial Death Star for a growing number of workers.
3. Canadian National Railway
Jobs were also derailed at Canadian National Railway (NYSE:CNI), which has plans to lay off up to 1,600 workers, according to online publication Globe and Mail.
Canadian National Railway spokesperson Alexandre Boule confirmed that the company was indeed "adjusting its resources to demand," albeit wouldn't pinpoint a specific number of job cuts. What is known is that management and union jobs are at stake as Canadian National looks to pare its expenses.
In particular, Canadian National Railway has seen a substantive drop-off in business from British Columbia, with high log prices and low timber supply shutting down over two dozen mills in the province. When coupled with weaker manufacturing growth, and a cut to the company's full-year outlook, Canadian National has been left with no choice but to issue pink slips and potentially furlough additional workers to meet a more challenging environment.
4. Deutsche Bank
In July, Deutsche Bank unveiled an $8.3 billion restructuring plan designed to reduce costs and better align the bank to compete globally. This means reducing the company's struggling investment banking business, closing its equity sales and trading business, and creating a bad bank for about $83 billion in troubled assets. It also meant the disposition of 18,000 jobs by 2022. That's roughly a fifth of Deutsche Bank's 92,000-employee workforce.
Reportedly, around half of the company's layoffs will come from its home market of Germany, with slightly more than 4,000 jobs having already been cut through the third quarter of 2019, according to company data. About three-quarters of the layoffs in 2019 have centered on its capital release unit (i.e., all the businesses being wound down), with another 730 jobs lost at its investment banking unit.
Do-it-yourself home improvement giant Lowe's (NYSE:LOW) is another brand-name company that announced it would lay off "thousands of workers" in 2019, albeit the company declined to offer a specific number of job cuts. Lowe's did, however, note that the cuts would come from eliminating maintenance and assembly worker positions, with these existing positions being outsourced to a third party. The company described the reasoning for the layoffs as an effort to move associates onto the floor to help customers, rather than having them assembling products like patio furniture behind the scenes.
For anyone closely following Lowe's, these cuts probably come as no surprise. Since becoming CEO of the home improvement company in July 2018, Marvin Ellison has unleashed an ambitious plan to close the gap between it and Home Depot. Among the many changes, Ellison has emphasized tightening the company's belt and improving operating margins. Lowe's closed around 20 stores in the U.S. through July, as well as shuttered its 99 Orchard Supply Hardware stores in the United States. To continue closing the gap with its key rival, further cuts may be on tap.
Healthcare companies may be relatively recession-resistant given that people don't get to choose when they get sick or what ailment they develop, but even that doesn't save them from dishing out the occasional pink slip from time to time.
In November, biotech giant Amgen (NASDAQ:AMGN) declared two rounds of job cuts. First, the company announced the elimination of 149 jobs in Massachusetts by the end of the year that are tied to its neuroscience research and development operations. These cuts follow an unsuccessful clinical trial involving CNP520, an experimental BACE inhibitor developed in partnership with Novartis that was being tested as a treatment for Alzheimer's disease.
The company also announced 172 additional job cuts that'll affect employees at its California headquarters and in the field. With brand-name therapies Neupogen and Neulasta already facing biosimilar competition, and it only being a matter of time until anemia drug Enbrel is dealing with the same, Amgen is looking to trim costs to counter its modestly shrinking sales.
Similar to Amgen, enterprise cloud and infrastructure technologies provider Oracle (NYSE:ORCL) laid off workers in two separate instances in 2019.
In May, Oracle wound up showing 352 of its California employees the door. These job cuts, which were announced in March, are part of a constant rebalancing by the company to remove jobs in lower-margin legacy operations and focus on higher-margin cloud services. Oracle referred to its May cuts as "permanent."
Then, in August, the company issued a second round of cuts totaling around 300 workers in the company's flash storage division. Similar to the May cuts, this is all about repositioning its workforce to drive higher margins, rather than the trying to cling to legacy operations. Not to mention, a number of Oracle's flash storage peers have dealt with a recent drop-off in sales, so these cuts may well be warranted. Just keep in mind that this is a relatively small percentage of job losses for a company that employs around 140,000 people worldwide.
8. Bed Bath & Beyond
As consumers move their purchases from brick-and-mortar stores to the internet, traditional retailers have felt the pinch. That's why home furnishing retailer Bed Bath & Beyond (NASDAQ:BBBY) has used its proverbial scissors to make cuts in 2019.
In March, the company shed around 150 of its 65,000 employees, with two-thirds of these cuts coming from its wholly owned decor chain, Christmas Tree Shops. These cuts were made just a few days after a number of activist investment funds took stakes in Bed Bath & Beyond and demanded a complete shakeup of the company's board of directors.
The bigger round of pink slips was announced in July. In an effort to save nearly $19 million for the remainder of fiscal 2019, Bed Bath & Beyond reduced its corporate headcount by 7%. Among the layoffs was Eugene Castagna, who'd been the company's chief operating officer. The company decided as part of its corporate review to eliminate the COO position altogether. As consumers continue to shift their purchasing online, it wouldn't be surprising if the job cuts continued at Bed Bath & Beyond.
9. Tesla Motors
Tesla (NASDAQ:TSLA) and its lineup of all-electric vehicles might be the hottest thing to hit the road in decades, but that doesn't make its employees immune from job cuts.
In January, CEO Elon Musk made the tough decision to let 7% of the company's full-time workforce go -- roughly 3,000 people -- in an effort to conserve cash. Despite continuing to field strong orders for the flagship Model S, Musk believes it imperative that Tesla transition away from its reliance on luxury vehicles and toward more affordable, mass-produced EVs like the Model 3. But to do so, capital needs to be conserved, which is why 3,000 workers lost their jobs to begin the year.
And this wouldn't be Tesla's only round of cuts, either. Although the company refused to cite a specific number, dozens of sales team members responsible for reaching out to customers to set up test drives were let go at the beginning of the second quarter. It's unclear how Tesla will be able to compete with the big boys in the auto industry if it continues to cut out seemingly essential parts of its staff.
10. Activision Blizzard
Not even the gaming industry was free from layoffs in 2019. Activision Blizzard (NASDAQ:ATVI), the company behind the Call of Duty and Guitar Hero franchises, announced in mid-February that it'd be shedding 8% of its workforce, or roughly 800 of its 9,600 workers at the time.
According to the company, these cuts were made entirely from the non-developmental side of the business. The idea here is that Activision wants to save costs to develop additional games. In fact, CEO Robert Kotick believes his company has yet to realize its full potential. The company plans to achieve this potential, as well as release more games, by increasing the number of developers working on its Call of Duty, Candy Crush, Overwatch, Warcraft, Hearthstone, and Diablo franchises by 20%.
What makes these job eliminations unique is that even though Activision hasn't reached its potential, the company generated a record $2.38 billion in 2018 fourth-quarter sales. Thus even with record revenue, Activision employees weren't spared from layoffs.
As mentioned earlier, big banks were showing people to the door with regularity in 2019, and European banks were no exception.
U.K.-based HSBC (NYSE:HSBC) kicked off its round of layoffs in August, when it announced that it would be eliminating over 4,000 jobs. Most of the job cuts were expected to be high-paying, executive-level positions, with the purpose being to drive down costs for the international bank. As with most banks, a low interest rate environment is crushing net interest income potential, and cost-cutting has become their best option to fight this low-yield environment.
But this proved to be just the beginning for HSBC. In October, the company upped its job-cutting outlook to 10,000 employees, which would ultimately translate into about a seventh of its workforce being eliminated. HSBC expects most of its layoffs to come from its European division. By the same token, Asia is off-limits, as HSBC has been generating double-digit growth from the region.
Whereas Activision shocked folks by announcing job cuts after a record quarter of sales, computing and printing equipment giant HP (NYSE:HPQ) announcing layoffs is about as far from a surprise as you can get. As consumers and enterprises move into a digital world, legacy hardware has been commoditized and brutalized, and HP has paid the price.
Just five weeks after HP made the announcement that Enrique Lores would become its new CEO with Dion Weisler stepping down, Lores announced a massive restructuring plan in early October that'll reduce the company's workforce by 13% to 16% and involve 7,000 to 9,000 job cuts. The goal of said cuts is to save $1 billion in operating costs on an annual basis by 2022. Lores, who headed HP's printing operations, also plans to institute a bifurcated pricing system allowing printers that are compatible with third-party ink cartridges to have higher prices than printers that only work with HP's ink products.
Interestingly, though, HP will be increasing its dividend to shareholders by 10%, despite its money-saving efforts. It's unclear how this move will go over with income seekers over the long run given that HP's growth machine appears to have completely stalled.
13. General Motors
With auto sales stuck in reverse in 2019, General Motors (NYSE:GM) joined Ford in handing out pink slips.
The company behind the popular GM, Chevy, Cadillac, and Buick vehicle lines actually announced plans to lay off more than 14,000 workers throughout North America in November 2018. These layoffs were deemed necessary for the company to stay competitive with its peers, as well as help to counteract growing competition from the likes of Uber and Lyft, which have made it no longer a necessity for consumers to own a car.
The reason General Motors is included on this list is that its massive layoff campaign really ramped up in February with approximately 4,000 layoffs. According to reports, roughly 8,000 of the total cuts will be salaried workers, with another 2,800 hourly employees and 3,200 Canadian hourly workers getting the axe. By 2020, General Motors expects these cuts to save the company $6 billion, with half of these savings being realized in 2019.
Brand-name overseas businesses weren't spared from job cuts, either. European telecom giant Vodafone (NASDAQ:VOD) has reduced its workforce in a number of markets in 2019. In no particular order, the company has:
- Cut its Italian workforce by 16%, or 1,130 jobs.
- Shed 130 jobs in its Australian Hobart contact center.
- Eliminated nearly 400 jobs in New Zealand as part of a restructuring in the country.
Although we're only talking about an aggregate of less than 2% of Vodafone's employees being shown the door globally, this isn't an insignificant number. Vodafone is contending with tougher wireless competition in a number of its core markets, and now has higher expenses to deal with as it upgrades its networks to 5G. And as we well know, telecom companies tend to reduce headcount to offset an increase in infrastructure spending.
In June, it seemed that employees were receiving something of a reprieve after the large miner announced that job cuts at the West Rand gold mines wouldn't be as steep as initially feared. With labor unrest occasionally disrupting production, lower ore grades yielding less gold, and higher mining costs more than offsetting higher gold prices, Sibanye-Stillwater announced that approximately 3,450 people would lose their jobs, as opposed to initial figures of nearly 6,700 workers. Mind you, these cuts are occurring as gold hit its highest point in more than six years in 2019.
But after moving only one step backward in June, as opposed to two, things would get much worse three months later. In September, Sibanye offered up plans to eliminate 5,270 jobs at its Marikana mine, which has been struggling with higher costs amid South Africa's incredibly high 29% unemployment rate. The company believes these cost-cutting measures are necessary to ensure the long-term viability of its South African mines.
In July, Uber wound up cutting roughly 400 people from its marketing team shortly after its New York Stock Exchange IPO. Then, in September, 435 more jobs were eliminated, only this time it was from the company's product and engineering team. The trifecta came in October, when it was announced that roughly 350 employees would be let go from its self-driving and Uber Eats units.
According to CEO Dara Khosrowshahi, all three rounds of layoffs were part of a plan put in motion months ago to "eliminate duplicate work," as well as remove some of the "bureaucracy that tends to creep as companies grow." It's no secret that Uber has been losing money at an extraordinary clip, with the company's third-quarter operating results featuring a $1.2 billion loss, including $401 million in stock-based compensation expensing. Make no mistake about it, far more belt-tightening may be needed to improve the ridesharing company's outlook.
Clean up, aisle four!
National grocery behemoth Kroger (NYSE:KR), which operates brands such as Kroger, Ralphs, Fry's, Pay Less, Fred Meyer, and Smith's supermarkets, to name a few, indicated in October that it would be laying off "hundreds" of workers, although the company chose not to specify an exact number. These cuts were cited as coming from mid-level management positions within the company's various operating divisions. Keep in mind that "hundreds" of workers losing their jobs represents only a small fraction of the company's nearly 500,000 employees.
These layoffs were announced just weeks after Kroger modestly lowered its 2019 profit outlook. The grocer has been contending with tough competition from the likes of Amazon.com and Walmart, and has been spending aggressively on its omnichannel retail model that emphasizes consumer convenience. While these investments are expected to yield higher long-term growth rates, they're pinching margins in the meantime.
18. Wells Fargo
Perhaps it comes as no surprise that Wells Fargo (NYSE:WFC) has been following in the footsteps of other money center banks in cutting expenses... and jobs. In September 2018, the banking giant announced plans to cut between 5% and 10% of its workforce of approximately 265,000 over a three-year period, so pink slips were pretty much a given in 2019.
Interestingly, no jaw-dropping layoff figures hit the newswires during the year. Rather, Wells Fargo wound up cutting a few hundred workers from different regions or divisions within the company throughout 2019. Most notably, it shed a little over 200 employees in its commercial banking division, which represents a little over 3% of its commercial banking employees in the United States. Wells Fargo has been targeting cuts in agricultural lending and energy in recent years, with the bank still reeling from bankruptcies tied to crude oil's price collapse back in early 2016.
As reported by American Banker, Wells Fargo has plans to reduce its branch count to around 5,000 by the end of 2020. This means layoffs are a near-certainty for Wells Fargo in 2020.
19. MGM Resorts International
Sometimes what happens in Vegas winds up plastered on the internet. That was the case for MGM Resorts International (NYSE:MGM), which wound up letting a little over 1,000 employees go in April and May, most of them in Las Vegas. Overall, this represents less than 2% of the company's workforce of roughly 77,000 people.
These layoffs are part of MGM Resorts' announced initiative to generate an extra $300 million in adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) by 2021. These job cuts wound up eliminating 12% of the company's salaried staff, many of them managers, which should translate into reduced costs and, according to management, a more efficient company.
It could also be argued that MGM Resorts made this move on a proactive basis. It's no secret that casinos and hospitality companies tend to get hit pretty hard during economic downturns, and we're currently in the longest economic expansion in U.S. history, dating back more than 160 years. The odds would suggest we're due sooner than later for a recession, and these layoffs should help prepare MGM for that pullback when it occurs.
Unlike a number of the companies mentioned on this list, heavy-duty equipment manufacturer Caterpillar (NYSE:CAT) didn't make a lot of noise when it announced layoffs in November. That's because only 120 workers were let go at a plant in Texas, which pales in comparison with the size of the layoffs discussed from other companies in 2019. In fact, 120 job losses represent only about a tenth of 1% of the company's global workforce.
However, these job cuts are still noteworthy, given that they're directly tied to the ongoing trade war between the U.S. and China. Caterpillar is one of many companies that's been adversely affected by the trade spat between the world's two largest economies by GDP. With some of Caterpillar's clients skittish about making large capital expenditures because of the trade war, the company felt compelled to pare back employee headcount at one of its plants.
When asked about the cuts, Caterpillar spokeswoman Kate Kenny told Reuters that the company was taking, "a variety of actions at its global facilities to align production with demand." Presumably, this leaves the door open to additional cuts if the trade war worsens.
Telecom giant Verizon (NYSE:VZ) may be a leader in communications, but it apparently bit off more than it could chew when it decided to acquire AOL for $4.4 billion in 2015 and Yahoo! for $4.5 billion in 2017. We know this because Verizon Media Group, which houses the combination of AOL and Yahoo! (previously known as Oath), TechCrunch, and Huffington Post, announced two separate rounds of layoffs in 2019.
The first round came in January, when approximately 800 employees of Verizon Media Group were axed, representing about 7% of the division's workforce at the time. These job cuts came just three months after management admitted that ambitions of hitting $10 billion in annual sales from its media assets by 2020 would not be possible. Shortly thereafter, Verizon announced an asset impairment charge on Oath (now Verizon Media) of $4.6 billion, and in Jan. 2019 let 7% of its staff go.
The latest round of layoffs hit just weeks ago, with 150 employees being eliminated across multiple media platforms. Although digital media only makes up a little over 5% of Verizon's total sales, the underperformance of these assets (digital media sales fell 2% in the most recent quarter) may lead to further cost-cutting and layoffs.
As noted throughout this list, automakers were pumping the brakes in 2019, and Japan-based Nissan (OTC:NSANY) was no different. In July, following miserable fiscal first-quarter operating results that saw the company's net income decline 94.5% from the prior-year period, Nissan unveiled a plan to eliminate 12,500 jobs by the end of fiscal year 2022.
According to the company, a little more than half of the job losses (6,400) are expected to occur over the next year in seven countries, with the remaining jobs (6,100) being reduced between fiscal years 2021 and 2022. More than 1,400 of the company's job cuts will come from the U.S., equating to a U.S.-based workforce reduction of 9%.
And it's not just jobs that are being cut. Nissan plans to reduce the company's global capacity and product lineup by 10% by fiscal year 2022. Management believe this reduction is necessary to be more competitive on a global scale, as well as focus on higher-margin models. Since this is multiyear transition, expect Nissan to be a regular visitor to the layoff list in the years to come.
Deutsche Bank wasn't the only German financial institution cutting jobs in 2019. Commerzbank (OTC:CRZBY), Germany's second-largest money center bank, announced in September that it'd be shedding about 4,300 jobs and closing 200 of its 1,000 branches in a restructuring effort designed to cut costs. Commerzbank will, however, be adding 2,000 jobs in operations, regulatory affairs, and IT, which will somewhat mitigate the layoffs.
Commerzbank expects the company's latest cost-reduction effort will save the company about $667 million (600 million euros) by 2023, and allow the bank to pay its shareholders a 4% dividend. Of course, with shares of the company down nearly 99% since May 2007, it's not as if shareholders have been doing a lot of rejoicing.
Quebec-based HEXO (NYSE:HEXO) isn't exactly a household name like the other company's on this list, but the 200 jobs across various departments that it's cutting is notable given that HEXO is a marijuana stock!
The North American cannabis industry has been among the most robust job creators in recent years, especially with Canada legalizing recreational cannabis and commencing sales in October 2018. However, HEXO and its peers have been clobbered by Health Canada's inability to approve cultivation and sales licensing applications in a timely manner, and Ontario slow-stepping the licensing of physical dispensaries. In simple terms, pot growers can't get their product in front of consumers, and many are having to realign production and costs because of this.
Not only is HEXO planning to eliminate 200 jobs, but it'll also be halting cultivation at the Niagara facility, which was acquired when it purchased Newstrike Brands earlier this year, and idling 200,000 square feet of growing space at its flagship Gatineau facility. Suffice it to say, the green rush has suddenly fizzled out in Canada.
Last, but not least, health insurance provider Humana (NYSE:HUM) advised Wall Street in October that it would be letting 800 employees go, equal to about 2% of its workforce.
The motivation behind these pink slips just might have to do with the expected reinstatement of the Health Insurance Providers Fee under the Affordable Care Act (ACA), which was exempted in 2017 and 2019, but looked to cost Humana $1 billion in 2020. Humana also faced this fee in 2018 and, as it's doing now, the company laid off a small percentage of its workforce prior to that year, too. However, the newly signed federal budget repealed this tax, so it's unclear if Humana will look to rehire workers.
In addition to the cost uncertainties created by the ACA, Humana is continuing to encourage providers to focus their efforts on value-based care. In other words, if physicians can reduce recurring hospitals stays and improve the well-being and monitoring of their patients, it'll lead to more revenue for Humana.
Make sure to dig into the details behind layoff announcements
As you can see, layoffs could be found in all walks of industry in 2019. But it's important to dig into the details behind a layoff announcement. While some job cuts are clearly in response to changing business dynamics (e.g., Bed Bath and Beyond and Commerzbank), other job cuts are genuinely designed to funnel additional resources into higher growth areas, such as with Activision Blizzard and Oracle. It's important to make this distinction as it can provide a lot of context as to where a company is headed next.