Jabil Circuit trims 900 more in global cutback
Wake up and good morning. True to its word of Jan. 28, St. Petersburg-based Jabil Circuit continues to make job cuts worldwide to reduce by 3,000 its 85,000-person workforce. The latest reductions hit Hungary where Jabil on Wednesday said it will slash 900 jobs at its Hungarian plant as a result of falling orders amid the global economic crisis, Jabil told local news agency MTI and Reuters reported.
More than 4,000 people work at the plant in the Hungarian city of Tiszaujvaros, about 100 miles east of Budapest. Nine years ago, Jabil announced its expansion plans there.
A month ago, Jabil said it would reduce its global workforce affecting 10 sites around the world and saving the company $55 million annually. About 10 percent of those cuts will be in the United States. And those appear to have occurred -- at a Jabil plant in Billerica, Mass., where 319 workers were notified six days ago. That plant is expected to close in about six months. As of December, Billerica's unemployment rate was 5.8 percent -- far lower than Jabil's headquarters town of St. Petersburg.
The bar chart shows Jabil's net income (in millions) over the past five years.
Amid the dismal news of local job cuts, Jabil is getting some positive attention. Local Massachusetts TV stations reported that Jabil put a half-page ad in the Boston Globe encouraging other businesses in the area to call the company if they are looking for skilled, experienced workers. "I think they went above and beyond a little bit… but I think it helped us out," one employee told WBZ-TV in Billerica. The Boston Globe ad typically costs $34,000, but the Globe says it gave Jabil a discount. Jabil had tried a similar tact with a local ad fve years ago when they closed an Idaho plant in Boise. Said Melanie Manne, Jabil's HR manager in Billerica:
"We've received calls about all sorts of positions -- anywhere from engineering-type roles to manufacturing opportunities."
Jabil's fighting stiff global competition and a worldwide recession. The latest blow was the recently announced weak results and outlook reported by Hewlett-Packard. That's putting some pressure on contract electronics manufacturers -- that's what Jabil does -- with close ties to the company. According to Barron's, Longbow Research analyst Shawn Harrison provided a list of some of companies with significant exposure to HP. Among them is Jabil, which makes servers and printers for HP, and ranks among its 10 largest customers.
Jabil shares now trade just under $5 after trading above $18 in the past year. Last week, Jabil Circuit asked Florida state officials for two more years to make good on its pledge to build a new headquarters in St. Petersburg. Last year, the state, city and Pinellas County promised $34 million in incentives to the company in exchange for investing $50 million in a new headquarters and creating hundreds of high-wage jobs.
-- Robert Trigaux, Times Business Columnist