Erickson Retirement idles 260 workers

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Most layoffs are at corporate headquarters after decision to cut back on growth, development
By Lorraine Mirabella and Andrea Walker
8:08 PM EST, January 8, 2009

Erickson Retirement Communities, which develops and operates retirement communities in 11 states, laid off 260 employees Wednesday, a 2 percent staff reduction that the Catonsville-based company blamed on the deepening recession.

Most of the cuts came at corporate headquarters, Erickson said in an announcement Thursday. The company, which operates 20 communities and has 13,000 employees, said a decision to slow its aggressive growth and development plans led to cuts in full- and part-time staff in construction, development and corporate support functions. Only a small portion of cuts came in the retirement communities.

"Erickson Retirement Communities has recognized the need to adjust its growth plans to address the new economic environment," Rick Grindrod, Erickson’s chief executive, said in a statement. "We have witnessed and successfully managed the ups and downs in the real estate development industry over the years. However, what has occurred in the past 4 months is admittedly unprecedented."

Erickson was one of three local companies that announced job cuts Thursday, the same day a U.S. Labor Department report presented a bleak picture for job seekers. The government reported that the number of laid-off workers who are continuing to draw unemployment checks jumped more than expected to 4.6 million at the end of December.

A separate government report on December employment, due out Friday, is expected to show an increase in the unemployment rate from 6.7 percent in November. Economists said persistent economic woes – housing, credit and financial crises — along with a flurry of layoff announcements in the opening days of 2009 all point to another terrible year for job seekers.

Besides Erickson, layoff announcements came Thursday from steelmaker Severstal North America Inc. and Towson power toolmaker Black & Decker.

Severstal said it would continue temporary voluntary and involuntary layoffs at several plants, including Sparrows Point in Baltimore County. The layoffs, which come as the demand for steel has declined, include both salaried and hourly workers.

Employees at three other Severstal plants in other states will also be affected. The company declined to say how many workers would be affected because cutbacks vary from week to week based on the demand for steel.

"We are trying to balance our production volumes with our order book," said Melvin Baggett, Severstal North America vice president of human resources. "We will be readjusting that every week."

But union officials said the past temporary layoffs have affected an average 275 employees a week.

"I think they’re just following suit of all the other domestic steel companies because of what is going on with the economy," said John Cirri, president of United Steel Workers Local 9477, which represents Sparrows Point workers. "They’re all laying off people."

Sparrows Point employed about 2,100 people at the end of last year, Baggett said. The temporary layoffs began there last month. Severstal North America is a division of Russian-based Severstal International, which bought Sparrows Point last year.

Black & Decker, one of only two Fortune 500 companies headquartered in the Baltimore area, eliminated about 125 positions in the United States this week, but said most of them were not in the Baltimore area. The company has faced a slowdown in sales because of the weak housing market and general economy.

It laid off about 10 percent of its work force in the first half of last year. It employed about 22,500 before this week’s layoffs, down from 25,000 early last year.

"Our markets have taken a tremendous downturn," company spokesman Roger Young said. "We sell products related to construction and home improvement, and those markets have fallen off quite a bit."

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