Wednesday, February 17, 2010

Did CEO Clark "Up" The Layoff Figure -- In The "Employees Only" Briefing, Yesterday?

At least one commenter, in the "employees only" briefing -- held shortly after the external Q4 2009 earnings conference call, says so. The employee claims that CEO Dick Clark has actually put the number of layoffs at over 20,000. That's up from the external 17,500 he mentioned to Wall Street, on the earnings call. And that 17,500 figure, is itself, up from the earlier 16,000 announced at bust-up closing time (Novemeber 3, 2009).

And that total would not include any spinoff, or other transactional layoffs, or already discussed plant and facility closings. So, 28,000 might be closer to the right number, inclusive of those items. Here is a link to that comment [edited for context and clarity] -- and a snippet:

. . . .In the employee business briefing, [CEO Dick Clark] said the following:

15,000 cuts due to merger

And 3,000 positions not to be filled

And another 2,500 cuts -- due to current initiatives (that's 20,500 jobs cut so far).

He also stated that [the 20,500] doesn't include future cuts from known plant closings and consolidations of duplicate functions (not included in the original 15,000) but the majority of Merck and SGP persons will be kept.

In [the commenter's] sarcastic view of [Merck], that means that they only need to keep 50.1% of each company's employees. . . .

Interesting. It would be a sub-optimal practice -- from a securities disclosure and compliance perspective -- to make inconsistent statements (or at least differing ones) about a material matter like layoff totals, internally, as compared to less dire ones, externally -- for Wall Street consumption.


Anonymous said...

well, not to say 'I told you so' but, we did have this discussion way back when the announcement of a merger and cost savings were first mentioned.

I believe you pegged it at around 23K.

Very sad. All so Freddie and his Crooks get their millions.

Condor said...

I hear ya', Anonymous. Though actually -- a small matter here -- I think I've repeatedly put the figure at around 30,000 -- if one includes the Merial JV decoupling, the possible Intervet transfer (back to New Merial), and the likely associated regulator-required divestitures in AH.

If Merck spins off the legacy Schering-Plough Consumer Health businesses, in 2011 or 2012, then the total will be closer to 45,000.

Thanks for the insights!


Anonymous said...

Agreed. Let's hope that the spin off people will at least get to hold their jobs.