NO LOVE AT CA TECHNOLOGIES

According to documents filed with the SEC (Securities and Exchange Commission), New York-based CA Technologies (formerly known as Computer Associates) has announced a restructuring plan that will result in approximately 800 layoffs and some office closures.

FISCAL 2019 RESTRUCTURING CHARGE

On May 2, 2018, the Company's Board of Directors approved a restructuring plan ("Fiscal 2019 Plan") to better align its business priorities. 

The Fiscal 2019 Plan comprises the termination of approximately 800 employees and facility exits and consolidations. These actions are intended to better align the Company's cost structure with the skills and resources required to more effectively pursue opportunities in the marketplace and execute the Company's long-term growth strategy, which includes a particular focus on shifting more of the Company's business to a subscription-based model. 

Actions under the Fiscal 2019 Plan are expected to be substantially completed by the end of fiscal 2019. Under the Fiscal 2019 Plan, the Company expects to incur a pre-tax charge between approximately $140 million and $160 million (including severance costs between approximately $90 million and $100 million and facility exit and consolidation costs between approximately $50 million and $60 million). 

Are you asking yourself, Am I Next?

NO LOVE AT DEVON ENERGY (01/26/2021)

JANUARY 26, 2021 — MERGER WITH WPX ENERGY, 50-PLUS EMPLOYEES TARGETED IN TULSA, OKLAHOMA

Oklahoma City, Oklahoma-based Devon Energy, an energy exploration and development company, has announced the inevitable restructuring and workforce consolidation of operations after its merger with Tulsa, Oklahoma-based WFX Energy, a similar energy exploration company.

The combined company will operate under the name Devon Energy and be headquartered in Oklahoma City.

Fifty or more of the 409 WFX employees are targeted for immediate layoff as WFX offices start closing on March 12, 2021, with permanent closure expected by December 31, 2021.

Speaking about the layoffs, a company spokesperson noted, “It’s a difficult but expected part of the merger process. Eliminating staffing redundancies is one of the keys to capturing the value of combining the companies. Most people understand the reality of the situation and are grateful for the severance benefits we have. WPX has been a great employer with an outstanding value proposition.”

APRIL 13, 2018 — Original post…

Oklahoma City, Oklahoma-based Devon Energy Corporation has announced that it will be laying off approximately 300 employees company-wide in response to an industry-wide slowdown and relatively low oil and gas prices.

The Corporate Speak …

Dave Hager, Devon CEO: “Our changing industry requires us to make some difficult decisions, and this one is the most difficult. The main feedback we heard from those affected in the 2016 workforce reduction was that they appreciated being treated with respect, transparency and dignity. I assure you that this will be no different. Through the good times and the difficult times, we will live the Devon values.” 

Tony Vaughn, Devon COO: “Simply put, we have had too many people working on too many things — projects and otherwise — that are ancillary to our core business. In isolation, each of those projects adds value, but when taken as a whole, they are dilutive to our focus on the key value-creation activities of the company.”

John Porretto, Devon Spokesperson: “The oil and gas industry is in a lower-for-longer commodity price environment, which requires Devon to transform the way it operates The company must continue to sharpen its focus on core operations, increase its operating and financial efficiencies and align its workforce with this heightened focus to be as competitive and successful as possible in this environment."

These layoffs should come as no surprise to employees. Devon, in 2016, Devon publicly announced plans to reduce its workforce, cut-projects, and to lower operating costs in response to a low commodity price environment.  Additionally, previous announcements of Devon’s continued restructuring under their “Vision 2020” plan were announced in February 2018. Basically, the company will be concentrating on its core competencies and eliminating superfluous personnel, projects, and assets. According to published reports, there will be severe cutbacks in spending for IT infrastructure, travel, sponsorships and charitable donations, and independent contractors and consultants. 

And, in an effort to increase stock prices, the effort includes a billion-dollar stock repurchase and the pay-down of a billion dollars of accumulated debt.

According to Hager, “With our disciplined multi-year plan, Devon will accelerate value creation through the pursuit of capital-efficient cash-flow growth and portfolio simplification, not top-line production growth. Looking beyond our initial priority of reducing up to $1.5 billion of debt from our upstream business, we plan to return excess cash flow from operations or divestitures to shareholders through both opportunistic share buybacks and dividend growth.”

Are you asking yourself, Am I Next?

BATTLE OF THE BITS: BROADCOM VERSUS QUALCOMM (UPDATED)

HOW DO THE PIECES FIT TOGETHER?

Is a merger/acquisition eminent?

How do the pieces fit together?

Who will survive the battle?

UPDATE: July 26, 2018 -- QUALCOMM KILLS NXP SEMICONDUCTOR DEAL

Qualcomm apparently has killed the NXP Semiconductors deal for $44 billion due to Chinese regulators missing Qualcomm's self-imposed deadline. While Qualcomm will have to pay NXP a break-up fee of $2 billion, it appears that Qualcomm is planning to spend approximately $30 billion in a stock buy-back that will deliver additional value to Qualcomm shareholders.

UPDATE: March 15, 2018 -- FORMER CHAIRMAN IS ATTEMPTING TO PURCHASE QUALCOMM

According to the Financial Times, "Paul Jacobs, the recently demoted chairman of Qualcomm, has approached several global investors in an effort to acquire the $89bn chipmaker founded by his father, in what would be one of the largest buyout deals in history."  Former Qualcomm chairman seeks funding for buyout ($$ Paywall)  

UPDATE: March 12, 2018 -- TRUMP KILLS DEAL

It is a moot point as any possible acquisition of Qualcomm by Broadcom was scuttled by President Trump who announced from the White House that there will be no deal.

"There is credible evidence that leads me to believe that Broadcom Limited, a limited company organized under the laws of Singapore (Broadcom)...through exercising control of Qualcomm Incorporated (Qualcomm), a Delaware corporation, might take action that threatens to impair the national security of the United States."

Both companies were ordered to immediately abandon the proposed deal. The order also prohibits all 15 of Broadcom's proposed candidates for Qualcomm's board from standing for election.

Presidential Order Regarding the Proposed Takeover of Qualcomm Incorporated by Broadcom Limited

UPDATE: March 11, 2018

How to fit another piece in the puzzle?

It appears that computer chipmaker Intel Corporation is worried about the birth of a strong competitor should Broadcom acquire Qualcomm and NXP. Rumors are floating that should Qualcomm fail to hold Broadcom at bay, Intel may consider a hostile takeover of Broadcom to further strengthen its own operations. 

Let us not forget that Intel, primarily a CPU maker whose power-hungry, hot-running chips could not be easily used in mobile devices, was late to the mobile game and fiercely competes with Qualcomm. Acquiring Broadcom would be a logical next move for Intel.

In a deal valued over $117 Billion, Singapore-based Broadcom is attempting a hostile takeover of bitter rival San Diego, California-based Qualcomm at a shareholders meeting that would have been held today, March 6, 2017, to ask Qualcomm shareholders to ratify the deal by firing six of the company’s eleven board members and replacing them with Broadcom nominees. 

POLITICS TO THE RESCUE ...

The United States Department of the Treasury has responded affirmatively to Qualcomm's secret January 29, 2018, request for an investigation by CFIUS (Committee on Foreign Investment in the U.S.) to determine if the Singapore-based Broadcom represents a national security threat -- and ordered the annual meeting delayed by at least 30 days. The request was not made public and neither the shareholders nor Broadcom was notified of the proceedings.

CIFUS is the same highly-politicized committee that allowed the Russians to purchase 20% of America's uranium production capacity. 

On the other side, Broadcom has claimed that this is a last-minute ploy by managers desperate to keep their jobs and denies Qualcomm shareholders the opportunity to unlock additional value in their shares. Broadcom, originally headquartered in the United States, further argues that it should be exempt from CIFUS oversight because it is reincorporating in the United States and that effort should be completed in May 2018 at the end of their second fiscal quarter. 

WHEN POISON FAILED

Since Qualcomm attempted to poison any offer by Broadcom by purchasing Netherlands-based chipmaker, NXP Semiconductors, and increasing the debt on the Qualcomm balance sheet by approximately $44 billion, unfortunately the deal became even more attractive to Broadcom who could offer less for Qualcomm to compensate for the overpayment for NXP and to acquire two major competitors at the same time. 

APPLE IS LURKING BEHIND THE SCENE

But the picture is murky because of the background machinations of Apple who uses Qualcomm chips and patented technology worth about $2 Billion in annual royalty payments to Qualcomm. The loss of Apple’s business could further devalue Qualcomm and increase its vulnerability. 

THE EMPLOYEES ARE AT RISK

However, the real price may be paid by Qualcomm AND NXP employees as Qualcomm has promised shareholders that they will restructure to reduce costs by $1 billion and that means laying off workers to reduce expenses and to compensate for any loss of revenue. And, of course, to resolve any redundancies between Qualcomm and NXP. 

If Broadcom should prevail, the same redundant employee headcount reductions are a sure thing.

The problem with mega-mergers is that the Titans crush employees as the executive’s maneuver to keep their jobs. 

Are you asking yourself, Am I Next?