Business memo 06/10/02

WorldCom Inc. may cut up to 16,000 jobs

WorldCom Inc. plans another round of job cuts -- possibly as many as 16,000, or about 20 percent of its global work force, a company official familiar with the situation said Wednesday.

Later in the day, after the stock markets closed, the company said it was exiting the wireless resale business, which generates some $1 billion in annual revenue and employs 2,200 people.

WorldCom said that slowing market growth prompted the decision to sell the business. Several major wireless carriers have expressed interest in the unit, the company said, but did not say how much it might fetch.

The layoffs would be the second round this year for WorldCom, which is facing $30 billion in debt.

Toys 'R' Us cutting prices to compete

Toys "R" Us will cut prices on about 200 popular items to better compete with Wal-Mart and Target, which sell those toys at cost or less to attract customers, the company's top executive told shareholders at their annual meeting last week.

The retailer of toys, children's clothes and accessories also plans to resume featuring its talking-giraffe mascot, Geoffrey, in advertising targeting parents who grew up with the character.

It also will begin testing new business strategies as part of an effort to increase its toy market share, now about 17 percent, to 20 percent, as it nears the end of a costly restructuring and store remodeling plan that was partially responsible for losses in two of the last three quarters.

Albertsons posts $81 million loss

Albertsons Inc., the nation's second-largest food and drug retailer, posted a first-quarter loss of $81 million, dragged down by restructuring costs of getting out of unprofitable markets.

Excluding one-time items, the results announced last week beat Wall Street expectations that were raised two weeks ago after the grocery retailer said that its turnaround was gaining momentum faster than anticipated. Albertsons also raised its full-year earnings estimate.

Albertsons closed a store in Cape Girardeau earlier this year as part of its restructuring plans.

Gettelfinger elected auto union president

Ron Gettelfinger was elected Wednesday to succeed Stephen Yokich as president of the United Auto Workers at the union's constitutional convention.

Gettelfinger, 57, had been a union vice president since 1998 and headed the UAW's Ford Motor Co. department where he made his mark in leading negotiations during the 1998 contract talks.

Elizabeth Bunn was elected as secretary-treasurer and becomes the highest ranking woman in the union's history. As a member of the National Writers union prior to its affiliation with the UAW, Bunn also is the highest ranking officer to come from a non-automotive arm of the union.

Tobacco company lawsuit reinstated

The Oregon Court of Appeals last week reinstated a $79.5 million punitive damage award against Philip Morris in a lawsuit brought by relatives of a man who died after smoking Marlboros for four decades.

The award had been reduced to $32 million by a trial judge on grounds it was excessive. The appeals court decision could be appealed to the state Supreme Court.

Last week's ruling by a three-judge appeals court panel reversed Circuit Judge Anna J. Brown, who said she based her decision to cut the award on limitations imposed by the U.S. Supreme Court.

Foreign investments in United States plunge

Foreign investment in the United States, after hitting record highs for three straight years, plunged by 60 percent in 2001, reflecting the U.S. recession and a sharp slowdown in mergers and acquisitions.

The Commerce Department said that spending by foreigners to buy existing U.S. companies or set up new operations fell to $132.9 billion in 2001, down from an all-time high of $335.6 billion in 2000.

The department attributed the big decline to the recession in the United States and economic weakness in many other major countries last year, as well as the sharp slowdown in mergers and acquisitions, especially in telecommunications and other high-tech industries which have seen their stock values plummet since the spring of 2000.

-- From staff, wire reports