Magazine article Information Today

Mead Data Central Downsizes; Company Eliminates 400 Employees

Magazine article Information Today

Mead Data Central Downsizes; Company Eliminates 400 Employees

Article excerpt

Last month Mead Corporation announced that Mead Data Central, its electronic publishing subsidiary, would eliminate approximately 400 headquarters employees. According to the parent company this measure was part of their previously announced performance improvement program.

The provider of the Lexis/Nexis services will see approximately $50 million in annualized long-term savings in personnel, facilities, travel, equipment, supplies, and various internal services, according to Rodney L. Everhart, president of Mead Data Central (MDC). MDC expects these savings to result in a modest benefit to earnings in 1993, and a more significant benefit in 1994 and beyond. The savings will also be used by MDC to make strategic investments in its business over the long term.

"We're undergoing a fundamental change in the way we do business," Everhart said. "MDC is becoming more customer-focused. Earlier this year, for example, we added more than 100 people to our sales and customer support areas. The logical next step is to make better use of our resources by eliminating those headquarters activities not essential to serving our customers.

"MDC will emerge from this performance improvement program strengthened and prepared for accelerated growth for the long term," he said. "This action will in no way slow the plans we have for the introduction of several exciting new products in the coming months."

Information Today asked MDC spokesperson Anthony Sprauve what specific headquarters activities,were being eliminated and we were told it would be an "across the board" move, "a variety of activities would be eliminated but the sales and customer service departments would not be affected." Sprauve also said that although the company is offering a severance package there would be no voluntary terminations or early retirements,

In May, shortly after Rodney Everhart's status changed from interim president to president he announced an employee empowerment program. We asked Sprauve how this elimination of employees fit in with the employee empowerment program. He commented that it ties right in with the program. According to Sprauve, teams of employees were formed and given the task of evaluating different areas within the company. It was a company-wide effort and after this process was finalized the teams presented their findings to the board for their approval. The end result - the elimination of 400 employees.

So, what does it all mean? Is MDC in trouble? The answer to that question is, probably not. On the surface it would appear that this is just another corporate downsizing.

Downsizing has become the corporate trend of the early nineties, the theory being eliminate jobs - your stock goes up. …

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