Delphi announces plans to cut 8,500 jobs

Updated: 9:20 a.m. ET Dec. 10, 2004

DETROIT - Delphi Corp., the world’s largest automotive supplier, said Friday it would cut 8,500 jobs around the world, or about 1 percent of its total work force, next year.

The Troy-based company had set the same goal for 2004 and exceeded it through attrition. In the first three quarters of 2004, Delphi has cut between 9,100 and 9,200 jobs, spokeswoman Claudia Baucus said.

Of the total announced Friday, Delphi said 3,000 jobs were expected to be U.S. hourly employees and 5,500 would be from outside the country.

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Delphi also revised its earnings forecast for the fourth quarter and next year to take the layoffs as well as slower sales into account.

It said that revenue in the October-December period would be between $6.9 billion and $7 billion, about $200 million lower than its previous guidance.

The company blamed the decline on “lower production volumes.”

Delphi said that it expected to report a loss of $123 million to $143 million in the fourth quarter. Excluding restructuring and other charges, the fourth-quarter loss will be between $70 million and $90 million, it said.

For the year, Delphi forecast a loss of $57 million to $77 million. Excluding charges, earnings would be $118 million to $138 million, it said.

For 2005, the company expects revenues of $28.5 billion to $29 billion.

It said the full-year loss would be $350 million. Excluding special charges, the loss would narrow to $200 million.

The announcement came two days after Delphi revealed in a filing with the Securities and Exchange Commission that it had improperly recorded a $20 million payment from Electronic Data Systems Corp. in 2001.

The company said it also booked $26 million in credits from EDS in 2000 and 2001 for future information technology services when the amount should have been recognized over a longer period of time.

Delphi, which said its audit committee’s review was not complete, disclosed in late September that the SEC was investigating certain transactions with EDS, its longtime IT services provider.

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