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Business today

Compiled from Times wires

© St. Petersburg Times, published June 7, 2001

TECH DISTRIBUTOR CUTS STAFF: Ingram Micro will slash as many as 1,000 U.S. jobs because of softer demand within the tech industry. Ingram, the world's largest distributor of computer products, said the cuts amount to 6 percent of its work force. Ingram also will close a distribution hub in Newark, Calif., and two return processing facilities in Rancho Cucamonga and Santa Ana, Calif. Ingram Micro hopes to save $30-million to $40-million a year after the cuts. Its second-ranked competitor is Clearwater-based Tech Data Corp.

MORE CUTS AT Z-TEL: Tampa alternative phone company Z-Tel Technologies confirms it has cut 65 jobs as it slashes costs in search of a profit. The cuts were distributed between Z-Tel's Tampa headquarters, an engineering and research facility in Atlanta and a customer service center in Atmore, Ala. Affected workers were notified Tuesday. Z-Tel spokeswoman Sarah Bialk said an earlier unconfirmed report that it may cut up to half its 1,800 jobs this week was "inaccurate." But Bialk did not rule out additional cutbacks as the company continues to evaluate its headcount. Z-Tel, which offers high-tech telephone service through bundled packages, eliminated about 400 jobs earlier this year, including 125 in Tampa.

IRS TACKLES WITHHOLDING RULES: The IRS has sent formal notice to tax lawyers and other professionals that if they refuse to withhold taxes from workers' paychecks, they may be prosecuted. The claim that only income from foreign sources, or employers based abroad, is subject to U.S. income taxes "is refuted by the express and umambiguous terms" of the tax code, the notice states. The Justice Department this year filed a civil lawsuit in U.S. District Court in Tampa to recover funds from Bosset Marketing Partners of Clearwater.

CIRCUIT CITY EXPECTS LOWER EARNINGS: Circuit City Group said it will report lower earnings for the fiscal first quarter ended May 31. The Richmond, Va., electronics retailer said it expects earnings will fall to 4 cents a share from 28 cents a year earlier. Still, that would exceed the 3 cents a share loss predicted by analysts. Circuit City will report final results June 15. The company also said it plans to reduce its stake in CarMax Group by about 10 percent to help pay for the remodeling of its electronics stores. Circuit City will offer 7.5-million of CarMax's tracking shares, which may generate about $123-million in proceeds, said analyst Alan Rifkin of Lehman Brothers.

PA. APPROVES VERIZON REQUEST: Verizon Communications Inc. has won conditional backing from Pennsylvania regulators to sell long-distance phone service in the state. The state's Public Utility Commission agreed to support the carrier's long-distance application with the Federal Communications Commission if Verizon accepts monitoring of how it treats rivals using the company's local-phone network. Verizon also must agree to higher fines if service falls below established standards. Verizon said it has agreed.

HOUGH OPENS MIAMI OFFICE: William R. Hough & Co. of St. Petersburg is opening an office in Miami with the addition of six former employees of First Equity Corp. of Florida, which recently closed its doors. The office will handle corporate and public finance, individual investor services and mortgage loan trading. Hough already is active in public finance in the Miami area but has not had an office there for several years.

RUSSELL FORECASTS LOWER EARNINGS: Russell Corp., maker of Russell Athletic and Jerzees clothing, said profit this quarter will unexpectedly fall and it will close two plants and shut down some other operations in Alabama, affecting about 775 workers. The company said it has seen significant reductions in retailers' inventories and soft demand across all retail channels. Russell said it is hopeful second-half profit and sales will increase as the athletic-clothing company gains new customers and reduces costs.

HEINZ TO BUY BORDEN UNITS: H.J. Heinz Co. agreed to buy Borden Foods pasta sauce and dry bullion businesses. Terms of the transaction weren't disclosed. The deal would add the Classico and Aunt Millie's brands of pasta sauce to Heinz's stable of products.

PC FORECAST LOWERED: With an economic turnaround yet to emerge, the U.S. personal computer industry will see its first annual decline in 2001, according to market research projections. Based on new data, International Data Corp. projected PC shipments will decline this year by 6.3 percent from 2000. IDC had expected 2.2 percent growth. IDC also lowered its worldwide PC shipment forecast from 10.3 percent to 5.8 percent growth, citing the slumping U.S. market and economy.

FISHER-PRICE TO PAY FINE: Fisher-Price has agreed to pay a $1.1-million fine to the federal government, one of the highest to be packaged with settlement of charges that a child-products company failed to report a dangerous defect. The settlement follows the U.S. Consumer Product Safety Commission investigation into a massive recall of the company's ride-on Power Wheels. The commission learned of fires and injuries associated with the recalled battery-powered toys through consumer complaints and fire investigators' reports.

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