First Marblehead cuts 24% of workforce to pare costs

November 6, 2008

First Marblehead Corp. said it reduced its employee headcount 24 percent in an effort to reduce costs. A company spokesman wouldn't say exactly how many jobs it has eliminated or how many remain at the troubled Boston education finance firm, which had 368 full-time employees at the end of June. That was less than half its employment in May, before it slashed 500 jobs. The company has become a casualty of the credit crunch that began last year, which made investors reluctant to buy packages of securities including the student loans that First Marblehead bundled and arranged for sale. (Ross Kerber)

The Western Massachusetts healthcare network that runs Baystate Medical Center in Springfield says a $37 million budget gap is forcing it to cut 55 jobs and eliminate 120 vacant positions. Baystate Health said it will also enact a hiring freeze for nonclinical positions and wait until the economy improves before moving ahead with financing for a major expansion. Baystate says it's been hit hard by the economic downturn, reductions in Medicaid reimbursements, and falling numbers of patients. The projected shortfall represents about 2.3 percent of its budget for the current fiscal year. The company, which employs about 10,000, also operates hospitals in Ware and Greenfield and runs several regional health centers. (AP)

Covidien Ltd. is recalling 471,000 disposable insulin syringes because of mislabeling that could cause patients to receive an overdose, US regulators said. The Mansfield-based company's ReliOn hypodermic syringes could cause patients to get as much as 2.5 times the intended dose, according to the Food and Drug Administration. (Bloomberg)

Tweeter Opco LLC sought bankruptcy protection for the second time in 17 months after Schultze Asset Management LLC failed to revive the consumer-electronics chain. Canton-based Tweeter listed assets and debt of less than $100 million each in Chapter 11 documents filed in US Bankruptcy Court in Wilmington, Del. Affiliates Tweeter Newco, Tweeter Tivoli, and Tweeter Intellectual Property also sought protection from creditors. The company said it has begun store-closing sales at the 94 shops it operates in 17 states under the Tweeter, Sound Advice, HiFi Buys, and Showcase Home Entertainment names. Tweeter's 20 largest creditors without collateral backing their claims are owed a total of $5.95 million, court papers show. Sony Electronics Inc. is listed as the largest unsecured creditor, owed $1.7 million. (Bloomberg)

The Boeing aircraft that Hainan Airlines Co. plans to use to begin nonstop service between Boston and Beijing will not be ready for the manufacturer's test flight by year-end as had been planned. That could delay when Hainan will receive the planes, pushing back the company's hoped-for service in 2010. Boeing Co. said it is assessing how the recently ended 58-day machinists' strike will affect the timeline of the 787 Dreamliner aircraft. Hainan did not return a call for comment. (Nicole C. Wong)

Two senators have asked Johnson & Johnson to turn over information about its payments to physicians as part of a widening investigation into drug makers' influence over medical professionals. The healthcare conglomerate said Senators Charles Grassley, an Iowa Republican, and Herb Kohl, a Wisconsin Democrat, are investigating its relationship with psychiatrists. J&J markets Risperdal, a medication for schizophrenia and bipolar disorder. Grassley wants J&J to disclose any payments from the last year made to two dozen psychiatrists. Calls to J&J were not returned. (AP)

Crude oil fell more than $5 a barrel after an Energy Department report showed an unexpected increase in gasoline inventories. Supplies rose 1.12 million barrels to 196.1 million barrels last week, the report showed. A 650,000-barrel drop was forecast, according to the median of 14 analysts surveyed by Bloomberg News. Stockpiles of crude oil and distillate fuel, a category that includes heating oil and diesel, also climbed. Crude for December delivery fell $5.23, or 7.4 percent, to settle at $65.30 a barrel on the New York Mercantile Exchange. (Bloomberg)