Daily News from New York, New York on December 14, 2001 · 96
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Daily News from New York, New York · 96

New York, New York
Issue Date:
Friday, December 14, 2001
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TH30UJ ! J3TKI 'a, S DOW JOfES NASDAQ S&P 500 -128.36 - 64.87 -17.69 9,766.45 1,946.51 1,119.38 On "77 i fPfinKa 0)lllVJlW o o Mote, Retailers feeling the pinch By NANCY DILLON and JUDITH SCHOOLMAN DM3 NEWS BUSINESS WRITERS The ranks of the nation's unemployed swelled yesterday, as giant health insurer Aetna and telecom Qwest Communications each slashed thousands of workers. Aetna announced it's cutting 6.000 jobs, or 16 of its workforce, to help boost ailing profitability as its membership ranks fall. And Qwest said it will trim another 7,000 workers, adding to 4,000 in September. Meanwhile, the Labor Department said first-time jobless claims for the week ended Dec. 8 fell by 86,000, to 384,000, the lowest level since mid-September and the biggest plunge since August 1992. But the most recent four-week moving average, less volatile than the weekly figures, showed -a smaller decline in joblessness to 450,000 from the previous 462,000. About 1.2 million jobs have been cut since the country officially entered a recession in March, though 800,000 of these have come in the past two months. "The worst of the lay-offs may be behind us," said Melanie Jani of Salomon Smith Barney. Nevertheless, "firms are still not hiring" and likely won't start until consumer demand picks up as the economy improves. Aetna's cuts mark the second December in a row it has handed out thousands of pink slips. Last December it cut 5,000 jobs. Aetna CEO John Rowe said the cuts reflected the company's "stated goal of emphasizing profitability over size" as membership has declined from a peak of 21 million in 1999 to 17.5 million now. On Wednesday, American Express said it was cutting 5,500 to 6,500 jobs, following an earlier round of 7,700 job cuts for a total staff reduction of 15. Amid an ailing economy and . ongoing stream of lay-offs, the the holiday shopping season got off to a far from jolly start, the government said yesterday. Retail sales plunged a record 3.7 in November, reflecting not only dampened consumer -demand but a fall-off in car 3Sft sales from the feverish pace in October. Without cars, retail sales last month fell 0.5, which Donald Straszheim, president of Straszheim Global Advisors, called "ugly." Analysts predict a 2 retail sales increase this holiday season. Average annual sales growth in November and December has been 5 for the past 10 years. "With the economy in the doldrums and unemployment rising, consumers are being smart. They haven't stopped shopping, they've only stopped buying everything in sight," said Oscar Gonzalez, economist at John Hancock Financial Services. Consumers fuel two-thirds of the economy. On Wall Street, the sharp decline in retail sales and warnings from major tech companies combined to pull stocks lower yesterday. The Dow closed down 128.36 at 9,766.45. The Nasdaq dropped 64.87, or 3.2, to 1,946.51. Optical networking equipment maker Ciena fell $3.03 to $14.94 after posting a $1.79 billion quarterly loss and predicting more losses in the future. Prudential Financial gained $1.80 to $29.30 on the first day of trading after raising $3 billion in the third-largest initial stock sale this year. Hip hop kingpin picked to run . - "j. , A ? mm Lyor Cohen is replacing Sm Caparro, who resigned, as head of island Dej Jam. - iHZ' -"". '-r p 1 Z"- 4 . s-" t'"- I fc i t K, -J w V : i 1 ' : it !" ' I '.Z "i5 ; VT s Artist's image of new headquarters for The Times shows Eighth Avenue facade looking northeast. By PHYLLIS FURMAN DARY NEWS BUSINESS WRITER Hip hop empire builder Lyor Cohen is taking over music powerhouse Island Def Jam in a shake-up at the home of rap superstars Jay-Z, DMX, and Ja Rule. Cohen, the ambitious record exec and former partner of rap impresario Russell Simmons, replaces Island Def Jam chairman Jim Caparro, who has resigned from the company, Caparro told the Dairy News. The changes will be announced today. Caparro, who had two years left on his contract, asked to be released from Universal Music Group earlier this week. Designs on Times HQ By ERIC HERMAN DAILY NEWS BUSINESS WRITER The New York Times Co. unveiled the design of its new headquarters building yesterday giving shape to the future of the paper and Times Square with plans conceived in Italy. The design by architect Renzo Piano envisions a 52-story tower sheathed in transparent screens of horizontal ceramic tubes. Piano, of Genoa, created it with help from Fox & Fowle, a New York firm that designed the Conde Nast building in Times Square. "It's really pretty. That's the best way to describe it," said Bruce Ratner of Forest City Ratner, the building's developer. To make room for the building, the Empire State Development Corp. will condemn a series of lots occupying the block of Eighth Avenue between 40th and 41st streets. The Times and Forest City will pay the cost of compensating the landowners. If that cost exceeds $85 million, The Times stands to get tax breaks beyond $29 million in city incentives already committed. Last week, one of the landowners sued The Times and Empire State Development, challenging the financial terms of the deal. That didn't stop The Times and Forest City from finalizing the deal yesterday by giving Empire State Development a $110 million letter of credit to cover the costs. The project marks another step in the transformation of "I told Doug I wanted to resign," Caparro said, referring to Universal Music chief Doug Morris. Music insiders have long believed it was only a matter of time before Cohen would get the top job at Island Def Jam, the music company created three years ago by merging Island Records, Def Jam, and Mercury. Cohen, who began as a road manager for rap act Run-DMC, is considered one of the most astute hit makers in the business and is highly regarded by Morris. Sources said Caparro could end up working for EMI, the British music giant run by his former boss Alain Levy. Times Square from sin city to corporate mecca. Adult video stores now line the block of The Times' future home. But when complete, the sleek new Eighth Avenue headquarters will join a string of Times Square office towers started by the Durst Organization's Conde Nast building. The Times will occupy roughly half of the building's 1.5 million square feet, taking floors 2 through 28. The Times will own its portion of the building, while Forest City will lease the rest of the space to other tenants. i The Times' newsroom will occupy floors 2 through 7 in the building's base, overlooking a central garden. "It will be like a magic lantern," Piano said. Michael Golden, vice chairman of The Times company, said the building will allow for consolidating 2,500 employees who now work in seven locations. The Times' current home on W. 43rd St. is nearly 90 years old. The new headquarters "will extend our stay in Times Square for perhaps another century," Golden said. Groundbreaking is set for early 2003, and The Times expects to be in the building by 2006. Forest City has yet to find a tenant for the remainder of the building, which will lease for a pricey $75 to $85 per square foot. "We've had a couple of European tenants who've called us," said Forest City's broker, Mary Ann Tighe of Insig-niaESG. "In Europe, Renzo Piano is like a rock star." rap label Before taking the Island Def Jam post, Caparro served as head of distribution for Polygram Records, when it was run by Levy. Caparro might also end up at record giant BMG or Warner Music Group, sources said. Caparro leaves Island Def Jam on a high note. The label is said to be the most profitable at Universal, earning an estimated $100 million in profits this year. Long known for its strength in hip hop, under Caparro and Cohen, the label broke several rock acts this year including Sum 41, Saliva and American Hi Fi. "I'm done," Caparro said. "The company is built."

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