Even Warren Buffett is cutting jobs
Filed under: Company News, Economy
Even Warren Buffett can't escape the ravages of the economy. Last year, his Berkshire Hathaway Inc. (BRK-A) conglomerate posted its worst-ever financial results. He rocked the financial markets yesterday with comments that the economy this year would be a "shambles." So it should come as no surprise that his companies will be laying people off.According to Bloomberg News, Berkshire cut 16 percent of the workforce of manufactured housing builder Clayton Homes Inc., while Shaw Industries, the largest U.S. carpet-maker, slashed 6.2 percent of its staff. All told, about 80 Berkshire units have cut jobs, including the maker of Benjamin Moore paint and recreational vehicle maker Forest River Inc. The company does not expect the economy to show improvement until 2010. Berkshire's holdings employ more than 246,000.
A Berkshire SEC filing mentions that its companies "will continue to take cost reduction actions in response to the current economic situation, including curtailing production, reducing capital expenditures, closing facilities and reducing employment."
None of this comes as a surprise to long-time Buffett watcher Thomas Russo, a money manager who has owned Berkshire stock since the early 1980s. Berkshire will "be as careful as any in their approach to downsizing but the {businesses) will have to be downsized," he said in an interview. "There is a need to reset their cost structures."
Buffett, who is famous for leaving the day-to-day affairs of his businesses to his management teams, is still beloved by many on Wall Street. Though he seems like everyone's rich uncle, Buffett has never claimed to be anything more than a businessman. For him, it's all about the bottom line.
But investors these days are not the patient lot Buffett says they should be. Shares of the Omaha-based company are down about 46 percent this year. The shares are trading a "close to book value," which Russo said is unusual.
"I am confident of the long-term value of his holding, as reasonably priced as it has been," he said. "Rarely has it ever been close to book value."
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Reader Comments (Page 1 of 2)
3-03-2009 @ 1:57PM
LARRY said...
BUFFETT VOTED FOR OBAMA NOW HE IS PAYING THE PRICE----WHEN OBAMA TALKS THE STOCK MARKET DROPS (OBAMA'S TOO STUPID TO REALIZE THAT THE MARKET IS THE MAIN STREET WORKERS)
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3-03-2009 @ 3:31PM
Ed B said...
Wow - what a market guru! I suppose you consider hedge funds, investment banks and other institutions "main street workers?" They will be glad to know about that!
3-03-2009 @ 5:14PM
Chris said...
Boy your head is so far up your ass...I am not sure how to help you.
3-03-2009 @ 2:33PM
Dennis said...
How quickly we forget. This problem was years in the making, not Obama's, and will not be resolved till the stimulus packages, confidence and time work their magic.
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3-03-2009 @ 3:47PM
David said...
I would like to share your enthusiasm, but with the additional debt coming soon, I find it difficult. This is pretty much what Mr. Buffett said as well.
3-03-2009 @ 3:19PM
Patrick said...
Stimulus programs failed in Japan in the 90s. The New Deal by FDR was a failure. Socialism is a failure.
Instead of waiting around for the government to give you a handout, or the market to rebound, take your future into your own hands and start your own business venture.
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3-03-2009 @ 9:43PM
Robert Johnson said...
How could a man like Buffett ever think Obama ( Who never had any Business Dealings) Could take over the USA's problems. Now he pays' Along with the other BHO voters.
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3-03-2009 @ 5:06PM
Al Hill said...
How many votes did you get?
3-05-2009 @ 10:26AM
mobdev said...
The function of government is to create environment condisive to economic prosperity. Government sets rules and makes sure that everybody plays by the rules. Neither republicans nor democrats want to do it - republicans want pplay without rule which leads to economic chaos, democrats want government actually play the game, which leads to stagnation. We need a third party - "Party for responsible governance". Ha, we doomed.
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3-03-2009 @ 3:41PM
wes said...
So your saying Warren Buffet, the richest man in the world is stupid? We should all be that stupid.
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3-03-2009 @ 3:46PM
Robert Johnson said...
Stupid or Senile? Let's ask Nancy P. Nothing is forever.
3-03-2009 @ 5:18PM
Chris said...
Well it took 8 years for repubs to get us here. What makes them think that democrats can undo their bad deed in just a month. Repulicanism = Loserism
3-03-2009 @ 3:49PM
Walter said...
The only magic you are going to see is Free cheese and Bread Stale bread at that.
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3-03-2009 @ 4:05PM
Mauricio Lopez said...
Of course the Market drops when he makes statements: "We will emerge Stronger"; We will recover". Everybody knows that those statements are just wishful thinking to fool the dumb shits voting for him; this guy never even ran a 7/11 store; how could they even begin to think that he could run this country; he is stumbling from one thing to the other. His economic plan is NO plan; his exit strategy from Irak is the same as McCain's; except McCain called it for what it was a LONG TERM deployment of a substantial military contingent to watch the area closely; while He calls it: WIthdrawal; you can hardly call a "withdrawal" when you are leaving 50 70K soldiers station in a "Base" and you are sending an additional 17K troops into Afganistan, that is a tactical move of troops, the war rages on!!!
God help us!!!
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3-03-2009 @ 4:10PM
Wes said...
Thankfully W wasn't forever, but some of effects of his legacies, preemptive war, trillion dollar debt and crashing economy, might be. Senile? oh yes I remember Reagan-the architect of the trickle down theory, which the RNC used as it's economic stimulus plan for the past 8 years. Do you think it worked?
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3-03-2009 @ 4:30PM
Robert Johnson said...
W was doing fine until 2 years ago when the Donkeys took over. Hope to see you in the Bread line. We can talk more then.
3-03-2009 @ 4:11PM
Sandy said...
The stimulus package won't work. No stimulus packages have worked in the past. Mr. Obama is not for change but for taxing small business people. Eighty-five percent of this country is run on small business and 70% of them make over $250,000 in a year. Most of that money goes back into the company. These are not rich people. These are entreprenurials. Taxing them is not going to solve the problem. You are not distributing the wealth!! You are taxing those who hire everyone else and but their money back into the employees. I know because I work for a small business. My huband and I are a small business. What my husband makes in trucking only pays for trucking because his customers want to cut costs but our expenses don't decrease. It costs twice as much to repair a truck or buy tires or get equipment each state requires you to add to your truck, things like this. You young people think the Messiah has got all the answers and the only answers he has got are you and your children are going to be paying for bailouts and taxes for the rest of your lives. In the meantime, the Dems will spend every dime we, THE PEOPLE, don't have.
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3-03-2009 @ 4:14PM
Roland C. Woodaka said...
IT'S NOT A NEW IDEA.....
.....but the instituting of a four day work week will solve the
unemployment problem ! ! !...
The rest is up to the "Yankee" ingenuity of Americans ! ! !
Unemployment solved! Next problem ?
Roland C. Woodaka
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3-03-2009 @ 4:30PM
Robert Johnson said...
With unemployment being extended for a year. What's the insentive to get a job? 3 of my neighbors are laid off and won't even look for a job. Yet in our small town of 2500, 3 stores are looking for help. What's the insentive when you draw unemployment and quialify for food stamps. Your making close to what you were working and get to watch TV all day
3-03-2009 @ 4:23PM
wisdom said...
Thank God for Warren .He helped me turn $34,231 dollars in to $983,000 dollars.You have to take a chance in life,go for your dreams. I have purchased over 12,000 shares of GE.Why be poor when you can be rich.
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