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Bay area job cuts echo U.S. employment losses
By DAVE GUSSOW © St. Petersburg Times, published February 6, 2001 An old economy printing plant is shutting down and a new economy Internet provider is cutting back. The number of jobs lost is relatively small, but the decisions provided fresh reminders that the Tampa Bay area's economy isn't exempt from the nation's economic slowdown. R.R. Donnelley & Sons confirmed it will close its St. Petersburg printing plant next week, eliminating 120 jobs, and Internet service provider High Speed Access has cut 23 positions from its payroll in St. Petersburg. Chicago-based Donnelley, which printed telephone directories at the plant, is offering employees severance packages and help with job searches. The company Monday described the closing as an efficiency move. "We determined the facility, which is the smallest in our operation, lacks the scale necessary to support the current and future needs of our customers," Ronald E. Daly, Donnelley's president of telecommunications, said in a prepared statement. Donnelley bought the 230,000-square-foot facility at 118 18th St. S near Tropicana Field from GTE Directories in 1998 and said at the time that it would spend $5-million retooling the plant. The job losses come as more companies react to the slowing U.S. economy by trimming or closing operations. In December, 133,713 jobs nationally were eliminated, according to outplacement firm Challenger, Gray & Christmas Inc. in Chicago. That's the highest monthly total the firm has reported since it started tracking firings eight years ago. And some economists think January numbers may be worse, though they have not yet been tallied. The bay area has not been hit as hard as regions that are heavily dependent on dot-com start-ups on the one hand or traditional manufacturing on the other. But neither has it been immune from what has been occurring nationally: Fingerhut, the catalog operator, said last week it would close two call centers in Tampa that employed 950 people. Vitality Beverages Inc. closed its Dade City refrigerated trucking business Dec. 31, with 155 employees losing jobs. 2nd Century Communications, a telecommunications company, trimmed 60 jobs at its Tampa operation in December. The roll call of job losses picked up in 2000, from Jacksonville-based Winn-Dixie cutting 11,000 jobs throughout the supermarket chain last spring to 375 positions lost at Walter Industries in Tampa last summer. "While it seems the layoff announcements come in waves, they all come after the economy has slowed and companies adjust their budgets to account for slower growth," said Mark Vitner, an economist with First Union Bank in Charlotte, N.C. Typically, companies do such assessments around the end of a year or early into a new year. Though slowdowns affect virtually everyone, Vitner says, most vulnerable now are companies with large payrolls and whose market prospects have diminished. The weakest sectors are manufacturing, parts of retail and Internet-related businesses. The latest example from the local tech sector is Internet service provider High Speed Access, which confirmed that it cut 23 more jobs at its NetPerformance unit at 300 First Ave. S in downtown St. Petersburg. Last week's firings are the second since Denver-based High Speed Access closed on its acquisition of NetPerformance in December. NetPerformance now has about 40 employees, down from a high of about 80 last fall. "That number will ebb and flow based on the work we have. We expect, if anything, it's going to increase," High Speed Access spokesman Andy Holdgate said. NetPerformance was created last year by the merger of Digital Chainsaw, a Web hosting company in St. Petersburg, and U.S. Technologies, a Tampa company focused on Web development, sales, marketing and integration. Most of the cuts are focused on the U.S. Technologies side as the company pulls back from offering systems-integration services such as customer service support, shipping, inventory and warehousing. Instead, NetPerformance will focus mainly on Web hosting, Holdgate said. "In terms of our initial market opportunity, there's not much demand for those (back-office) types of services as there is for getting a Web site started," he added. "Regrettably, we had to forgo investing in some of the longer-term opportunities." Publicly traded High Speed Access envisioned NetPerformance as an ideal marriage of its high-speed connectivity to the Internet with Web site hosting. But like other Internet-related stocks, the company has struggled to gain investor confidence and to make a profit. It is due to report year-end results Feb. 27. - Times staff writer Jeff Harrington and news researcher Caryn Baird contributed to this report, which includes information from Bloomberg News. Contact Dave Gussow at gussow@sptimes.com or (727) 445-4228.
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From the Times Business report
From the AP
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