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© St. Petersburg Times, published October 18, 2001
JACOBSON CUTS WORK FORCE: Jacobson Stores Inc., which operates two upscale apparel stores in the Tampa Bay area, is terminating 5.5 percent of its 4,100 person work force in hopes of returning to profitability. About half the 225 jobs eliminated are at the company's headquarters in Jackson, Mich. None will be on the sales floor. Jacobson in August reported a second-quarter loss of $14.3-million, or $2.47 a share, compared with a loss of $4.4-million, or 75 cents a share, in the comparable year ago quarter.
PARADYNE SHARES JUMP: Shares in Paradyne Networks surged as much as 85 percent on heavy trading as investors reacted to the company's turnaround. The Largo maker of high-speed and other broadband products reported better-then-expected third-quarter results after the close of market Tuesday. Paradyne made $1.5-million, or 5 cents a share, for the period ended Sept. 30; analysts were expecting a loss of 13 cents a share. Shares in Paradyne closed at $3.42, up $1.30, or 61.3 percent.
VERIZON DSL OFFER: Verizon Communications said it would offer a three-month introductory rate of $29.95 a month for its high-speed digital subscriber line Internet access. That's $20 a month less than the normal fee for the company's most popular consumer plan. It doesn't require a contract or activation fee and has no termination penalty. The company also said it has reached 1-million DSL lines in service and continues to aim for 1.2-million subscribers by year's end.
MCDONALD'S REORGANIZES: McDonald's Corp. said it will eliminate 500 to 700 jobs, including positions at its headquarters, to revive sales and profit in the United States. The company will organize its U.S. business into 21 regions, down from 37. McDonald's said the moves will reduce selling, general and administrative expenses, though it didn't say how much. McDonald's profit has fallen the last three quarters as the chain struggles to improve the quality of its food, customer service and the cleanliness of its restaurants, analysts said. McDonald's shares fell 30 cents to $29.40.
SPRINT RESTRUCTURES: Sprint Corp. said it will lay off about 6,000 employees, or 7 percent of its work force, and eliminate 1,500 contract workers' jobs. The company also said it would discontinue its money losing voice and high-speed Internet unit, ION. The announcements came as Sprint, the nation's third-largest long-distance provider, reported lower third quarter earnings and a loss for its PCS wireless division. The company also said it is combining its consumer and small business long-distance operations into one group called "mass markets" with a focus on acquiring customers through bundled offerings. Sprint blamed the weak economy and "a rapidly changing industry landscape" for the moves.
CUTBACKS AT AUTO PARTSMAKER: Dana Corp. plans to eliminate 11,250 jobs, or 15 percent of its work force, and sell its leasing unit as the automotive parts manufacturer struggles with lower car and truck production. Dana also slashed its dividend to 1 cent a share from 31 cents, the first reduction since 1936. Dana's third-quarter net income fell 55 percent as a glut of used trucks led to lower heavy-truck output. Dana shares tumbled 22 percent, or $3.26, to $11.30 on the New York Stock Exchange.
HOUSING STARTS RISE: U.S. housing starts unexpectedly rose in September, the Commerce Department said. Construction of new homes and apartments rose by 1.7 percent in September to an annual rate of 1.57-million units. Housing starts had been expected to drop in September as builders held back on new projects out of fear that consumers would become more hesitant about big-ticket purchases after the terrorist attacks. Even with the unexpected gain, analysts cautioned that the full impact of the attacks probably will not be seen until the October data is released.
VOLUNTARY FURLOUGH: More than 3,000 United Airlines flight attendants are taking a voluntary three-month furlough from the company, according to union representatives. The airline said it needed to cut its roster of 25,000 flight attendants by 5,374 positions for the November through January period, said Victoria Pierce, spokeswoman for the Association of Flight Attendants council at United. Separately, labor unions angrily dismissed United's warning that it is in danger of going out of business as a "Chicken Little letter" intended to force a reopening of its costly labor contracts. Investors sent the stock of United parent company UAL Corp. -- which peaked at over $100 in 1997 -- as low as $16, before it recovered to close at $16.85, down $1.79.