GE Plastics' rapid-fire shift to the Internet has resulted in an expected casualty: the layoff of clerical workers.
The resin supplier will reduce the work force at its Pittsfield, Mass., headquarters by 15 percent by the end of the year, said spokesman James Pomeroy.
That will result in the termination of about 100 of the company's roughly 600 workers in Pittsfield, some through layoff and some through attrition.
The company also plans to pare employment at its plants this year by an undisclosed number, Pomeroy said. The company expects some of those terminations to come through retirement or attrition.
GE's executive-mandated move to Web-based business tools, both in Pittsfield and at resin distributor GE Polymerland of Huntersville, N.C., hastened the reductions, Pomeroy said.
A slowing economy, resulting in flat sales and profit for GE Plastics in the first quarter of 2001, also contributed, he said. Still, the almost-overnight Internet adoption was the fuel for those cutbacks.
"We didn't say, `Oh, my god, the sky is falling, we need to cut costs to make our quarter,'" Pomeroy said in an April 27 telephone interview. "While [the reductions] happen to perhaps have been accelerated by the economy, it was a natural process that we would have to do as our business digitized its operations."
Many of those affected in Pittsfield are administrative, secretarial and clerical employees who perform such tasks as keying information into a database or reviewing and checking information before shipments are sent or orders delivered.
The company has swiftly moved many of those functions to its private Intranet network, created since a companywide mandate was issued in January 1999 by GE Chairman Jack Welch. Welch raised the ante by asking business managers to "get their businesses to the Internet in a hurry," Pomeroy said.
The computer network in Pittsfield links to Web-based material sourcing and purchasing functions available both at GE Plastics and through Polymerland. Welch's mandate was to "digitize" all buy, make and sell functions throughout GE.
"How many pieces of paper, how many faxes, how many phone calls and return phone calls, how many potential errors can be avoided by this?" Pomeroy asked rhetorically.
Pomeroy made clear the worker reductions will not affect GE's sales staff. Instead, they will have more time to visit customers instead of keying in orders at Pittsfield, he said.
GE's Polymerland distribution site has become the poster child for plastics-industry electronic business. The site has grown from less than $100,000 million in sales in 1999 to about $1.5 billion in 2000.
This year, GE Plastics expects the site to conduct about $4 billion in sales and handle about 250,000 orders, Pomeroy said. The $4 billion mark represents about half of GE Plastics' expected sales, he added.
Design, engineering and shipment tracking also are available either through GE Plastics or Polymerland's Web sites.