Monday, December 28, 2009

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Berkshire cuts 21k jobs in '09

Warren Buffett's Berkshire Hathaway reported 21,000 fewer employees than it had at the end of 2008 amid a slump at the firm's manufacturing and retail units.

Berkshire and its subsidiaries have about 225,000 workers, the company said this week in regulatory filings. That is 8.6 per cent lower than the 246,083 disclosed in the 2008 annual report. Berkshire provided the jobs information in a document tied to its planned $26 billion takeover of railroad Burlington Northern Santa Fe Buffett did not reply to a request, left with an assistant, for comment on the cuts.

Buffett, Berkshire’s CEO, oversees a collection of more than 70 subsidiaries that sell products including Geico car insurance, Fruit of the Loom T-shirts and Dairy Queen ice cream. Profit at the firm's manufacturing, service and retail businesses plunged by more than half in the first nine months of the year, and Buffett replaced the CEOs of two operating units whose sales suffered in the recession.

"When times are good, you are going to have more people employed than when times are bad," Buffett, 79, said this month in a video address to the 37,000 railroad employees that Berkshire will take on next year with the completion of the Burlington Northern takeover.

Fruit of the Loom announced in March it would lay off 3,000 textile workers in El Salvador because of excess inventory, La Prensa Grafica reported, citing Jose Antonio Escobar, president of Camara de la Industria Textil y de la Confeccion de El Salvador.The newspaper reported on December 3 that the company plans to hire back 1,000 workers.

Fruit of the Loom had more than 34,000 workers at the end of 2008, according to Berkshires most recent annual report, the largest total among its operating units. John Shivel, a spokesman for Bowling Green, Kentuckybased Fruit of the Loom, declined to comment.

Buffett told shareholders at the firm's annual meeting in May that he expected more cuts at Berkshire following reductions last year at Clayton Homes Inc, which builds manufactured housing, and brickmaker Acme Building Brands. Berkshire reported its first quarterly loss since 2001 in the first three months of this year. The firm returned to profit in the second and third quarters, helped by an advance in the stock market.

"We will be adding people at some point, but we will not do it until we see the demand come back," Buffett said in a September interview conducted by the CEO of Business Wire. "It will be a little slow because we do not want to go through what we did before. Although, I will guarantee you that three years from now, our brick companies, our carpet company, and our insulation company will all be employing far more people than now."

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