Russell Announces Staff Cuts
Just in case you haven’t heard, Tacoma based Russell Investments has announced that it is cutting 20% of its staff. From what we hear, the memo short and to the point. No other details were available.
Link to The News Tribune
Filed under: Tacoma Business, Russell
31 comments
R RR Anderson January 27, 2009
C crenshaw sepulveda January 27, 2009
Not too many months ago Russell was telling us they are growing so much that they may have to leave town to find another building to house all of its people. Now we are hearing they will lay off 20 percent of their staff. The city and state grew so concerned they put together a package of huge incentives to keep Russell in town. Now it is clear that Russell is going nowhere maybe we can use that money for something more sensible. It is time for Tacoma to stop bending over for the likes of Russell.
R Relssek January 27, 2009
Just because they’re laying people off, doesn’t mean they’re out of money and won’t leave. There are a lot of companies using this “terrible economic environment” as an excuse to get rid of some dead-weight. (Although 20% seems a little high. Most go for about 10%).
It’s a lot easier to fire people right now than any time in the past twenty years without the typical PR issues.
Look at Microsoft. They don’t NEED to lay people off. Spend 10 minutes looking at their annual report and you’ll see that they have enough cash on hand to keep their current workforce for decades.
Back to Frank R…. Please stay. Tacoma needs you.
M Mofo from the Hood January 27, 2009
If you work at Russell and your salary is $100,000. a year, and you are laid off, what is the approximate dollar amount of the hardship?
$100,000. divided by 12 months = $8333. a month.
$8333. divided by 30 days = $278. a day.
T Thorax O'Tool January 28, 2009
Nah, those cats @ Russell are among the fabled “white collar workers”, a species seldom seen outside of the denser areas of King County. They don’t work 30 days a month. They work 2080 hours a year, seldom working things like weekends and overtime.
So $100,000/2080 = $48.08/hr = $384.64/day for M-F, $0/day for Sat/Sun.
J John Sherman January 28, 2009
A better question, just to think about; for example, how much money Russell must invest and the return on investment money for its buildings, wages, tenant leases, operating expenses, and utilities; so we should all know this same just how-to-do-it also about where you place our money for these types of money returns from investments; as a result, just from just investing our few dollars. Russell could start a Tacoma Citizens instruction class: “How to invest and you can make a lot of money also, just like us.”
Or, like a house-of-cards, when the money movers-and-shakers quit moving money around and like-the-banks determine their net worth; possibly nobodies is quite sure what their worth is anyway. So, “Taxpayers’ TARP money is the seat filler for the empty chairs, chairs now sitting with money gone, that once the empty chair is removed and gone the cards will collapse because of all the money absent from the investment system.
But, I am sure somebody here could explain how any and all investment companies everywhere can make enough money to support their existence and ongoing capital- and operating-costs for today and all tomorrows by just investing money that gives-back profit from the money invested and manipulated?
R Relssek January 28, 2009
I have a handful of friends that work at Russell, Microsoft, Weyerhauser, etc. and they’re all on the edge of their seats hoping not to lose their job.
I also have friends that work for the City of Tacoma, Pierce County, Sound Transit and King County. They don’t have any job worries at all.
Once you have a government job, you’ve hit the jackpot. Does that make sense to anyone?
S Siberia January 28, 2009
Government jobs aren’t the jackpot. The counties happen to be doing well right now but likely that will change when tax revenues falls even further next year. State colleges and universities are also facing at least a %10 cut if not a %20-%30 cut. That means layoffs at UWT,TCC,Bates,Pierce college etc..
C crenshaw sepulveda January 28, 2009
I suspect some of the California public employees are pretty nervous these days. Some of the State of Washington employees I know are also getting nervous. I’m not sure things will be business as usual for some time to come, government employee or otherwise.
J jamie from thriceallamerican January 28, 2009
Ditto to what others have said on the government jobs. Thanks to Tim Eyman’s limiting of property tax increases combined with recent leveling and/or reduction in property value assessments, the county is starting to feel the hurt. Meaning not only job cutbacks, but also reduction in services such as road maintenance… I’m assuming there’s similar hand-wringing going on for many cities right now as well.
(On a level more based on personal-taste, I’d say that many would find government jobs to be much less than a “jackpot”… Sure you’re most likely only expected to be there for your 8 hours, but it’s at the expense of having to live in an environment rife with hierarchy/bureaucracy where many of your coworkers are lifers who don’t actually care about doing their jobs well. Though I’m sure there are many exceptions…)
R Relssek January 28, 2009
Jamie,
The last time I checked, the 1% property tax increase was struck down by the Washington State Supreme Court and re-instituted by Gov. Gregoire. As you know, she and Tim Eyman are very good friends.
We pay more than enough in taxes.
Also… even though assessments are going down, they still collect 1% more in taxes (county-wide) than the previous year. It’s a common misconception that when your assessment goes down, so do your taxes.
D drizell January 28, 2009
I wonder which employees FR will be laying off. As you may recall, there was lots of earlier discussion about Russell’s efforts to recruit new and younger workers to come work in Tacoma. The desire to attract a young, talented workforce was cited as a main reason for considering a move to Seattle.
Typically, layoffs tend to affect younger, less experienced employees rather than seasoned veterans. If this is the case, then the Russell executives who are being laid off are going to be younger, and less likely to have roots in Tacoma. Focusing on saving the jobs of the older employees who have stronger roots in the area means it’s unlikely Russell will be moving anytime soon.
However, it is possible the Russell will buck the trend and lay off many of it senior employees to allow the younger executives opportunities for advancement. If this is the case, and Russell is focusing on attracting new talent in the next hiring cycle, I think it is more likely that they will choose to move.
J jamie from thriceallamerican January 28, 2009
@Relssek (Kessler?)
Ah, but inflation and cost of goods highly outpace 1% increases in the property tax take of the county. So even if employment stays flat, cost-of-living adjustments outpace the income. Need some road projects done? Too bad, your fucked, concrete is too expensive.
(And p.s., let me get this right… It sounds like you’re pro-tax limitations, yet you’re going after the governor for keeping them in place? I think it’s well understood that she doesn’t like the 1% limit and is merely doing so to preserve the intent of the people in approving the measure. But I suppose she can do no right in your eyes?)
T Thorax O'Tool January 28, 2009
Just like it also was a common misconception among municipalities that planning and spending like property values were going to skyrocket forever was a good idea.
T tct2326 January 28, 2009
There was a rumor that Russel’s parent company was moving to tacoma from Wisc. Maybe this layoff is setting up for that move.? Just a thought.
D Doodlebug January 28, 2009
@tct2326
The chances of Northwestern Mutual moving here is zilch. A few employees maybe. The whole she-bang, never.
That rumor came from a blog called Rumors and was completely unexplained or backed up. I wouldn’t exactly trust it.
S Squid January 28, 2009
I agree with Doodlebug, the source/accuracy of that rumor is highly suspect.
Also remember, from Milwaukie, Tacoma looks like Seattle the way St. Paul looks like Minneapolis.
T Thorax O'Tool January 28, 2009
It’s simple math.
Eliminate the jobs that can be duplicated in the home office back in Milwaukee… plus a few extra for good measure.
Then ship a few employees from Milwaukee here, maybe a few from here out there.
C CA January 28, 2009
I think it’s become rather unlikely that Russell will leave Tacoma. No need for a larger fancier building in Seattle, and no need for the exposure to risk. But I wonder if in the future, certainly not any time soon, they will expand here in Tacoma? If we are to believe that America’s economy will return eventually, then Russell’s health should return also. Has the recession firmly planted Russell’s roots in Tacoma, or simply postponed their eventual relocation?
T Thorax O'Tool January 28, 2009
It’s delayed it certainly for at least a decade.
But the problem is, when the economy finally recovers, said recovery could leave financial institutions behind.
Remember, banks and investments depend on trust, which is nonexistent now.
I’d expect for tangible goods and related services to recover more, and quicker than the financial sector will.
A altered chords January 29, 2009
I’d expect money management services and money management valuation services to recover. That is actually germane to what Russell does. Don’t lump them into “financial services” and assume that because insurance companies and brokerages failed because of the housing market correction and related credit default swap meltdown that all “financial services” firms do the same thing and have the same level of culpability and the same degree of survivability. (sorry for the Faulkneresque sentance).
They mentioned leaving beacuase of the need for clear visibility of their trading staff. That did not mean the were leaving Tacoma. That was one of their options. I suspect that despite a 20% layoff, they will soon feel the need for traders to visually see each other. They may even still have that need despite the layoffs.
Thorax – delayed by at least a decade??? Where’d you pull that timeframe from?
S Squid January 29, 2009
AC@21 is right – the ergonomic need for their traders to be in visual contact is still an issue for Russell. If they can pick up a building where they can do that at a bargain basement price I could still see them doing that. The smart companies are going to start using the current situation to their benefit.
C CA January 29, 2009
“the ergonomic need for their traders to be in visual contact is still an issue for Russell.”
With a smaller staff and less trading, perhaps this is not as big a problem as before. The Russell company, like most financial institutions in the country, are going to be making less money in the coming years than they had during the bubble years of the last decade. I’m guessing their expansion plans have been completely rewritten. Or scaled back.
M MARC January 29, 2009
DID YOU FORGET HOW MUCH TAXES ONE PAYS FOR A SALARY AS SUCH? FORGOT THAT OBAMA STATED THAT COMPANIES WHO REHIRE WILL GET $1K TAX CREDIT PER EMPLOYEE, THEN YOU WONDER WHY THE BIG LAYOFFS. HMMM LAYOFF THEN GET TAX CREDIT??? THESE JOBS ARE NOT COMING BACK BELIEVE ME….
If you work at Russell and your salary is $100,000. a year, and you are laid off, what is the approximate dollar amount of the hardship?
$100,000. divided by 12 months = $8333. a month.
$8333. divided by 30 days = $278. a day.
4 | Posted by Mofo from the Hood | Jan 27, 09:57 PM
K Kelley January 29, 2009
Jobs at Frank Russell, Microsoft, Boeing are high paid positions. Might as well count on another 50K jobs leaving before this hits bottom. For every job at B you get 2-3 subcontracting jobs. So all you realtors, small business owners and salespersons can kiss your job goodbye in 10 months. Wonder if the government will be so generous to all those people who put in 25+years of high taxes and fees to pay for low grade schools, government employees working 7 hours days and all those cops driving home on your tax dime!
T Thorax O'Tool January 29, 2009
“Thorax – delayed by at least a decade??? Where’d you pull that timeframe from?“
If you really want to know, I can elaborate. But be forewarned that it may result in a very lengthy post.
A altered chords January 30, 2009
No. I’m good for 3 to 4 sentances max. Then ADD kicks in.
T Thorax O'Tool January 31, 2009
One word, AC:
Deflation.
——————————————————————
Explanation for the non-ADD among us:
The M3 money supply is in serious decline.
Jobs are disappearing faster than they can be created.
Prices of commodities, consumer goods, real estate and assets are plummeting.
Yield on Gov’t T-Bills is effectively near zero.
Other nations (China, Japan, Saudi Arabia, Europe) that typically buy US debt now have their own financial tsunamis at home… they’re getting out of Dollars, not buying more of them.
The few who are credit-worthy aren’t borrowing.
The US economy has been on a debt orgy since Reganomics… a debt bubble to a scale never seen before by mankind.
We’re in a long deflationary cycle that will wipe out the real estate gains since 1995, will wipe out the bank profits since 1992 and will result an economy probably 5-10% smaller.
The huge profits of the past are gone, massive over-leveraging is gone, deregulation is gone, trust is gone.
It will likely take a decade to just sort this mess out, much less move forward.
T Thorax O'Tool January 31, 2009
Oh, and I almost forgot…
Air cargo in December 2008 was down by 22.6% over 2007, currently 5.5% of the worlds container ships are sitting idle in harbors, with new ships being delivered into service will represent an extra 12% of the world’s capacity.
Let’s not forget the protests in Sofia, Reykjavik and the enormous million-man protest in Paris on Thursday as well as the whole UK government teetering on insolvency.
Given the utter mess the reckless spending by governments and individual citizens over the last decade, I’m starting to think 10 years may be optimistic.
C CA February 1, 2009
“Given the utter mess the reckless spending by governments and individual citizens over the last decade, I’m starting to think 10 years may be optimistic.”
Isn’t Keynesianism fun!?
T Thorax O'Tool February 1, 2009
If you’re on the profit end it sure is!