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Berkshire Adds 3,000 Workers After Buffett Slashed Jobs in 2009

Friday, 10 Dec 2010 09:50 AM

Berkshire Hathaway Inc. added about 3,000 jobs this year as Chief Executive Officer Warren Buffett invested in the firm’s biggest employer, railroad Burlington Northern Santa Fe, after slashing the workforce in 2009.

Berkshire has 260,000 employees across more than 70 subsidiaries spanning insurance, energy, freight hauling and luxury travel, according to a regulatory filing yesterday from the Omaha, Nebraska-based company. That’s up from the 257,100 workers at Berkshire and Burlington Northern at the end of 2009, when the railroad was an independent company.

Buffett, 80, bought Burlington Northern in February in what he called a bet on a U.S. economy emerging from the biggest financial crisis since the Great Depression. Berkshire cut more than 20,000 jobs last year as results at its manufacturing and housing businesses suffered. The economy expanded 2.5 percent in the third quarter after growing 1.7 percent in the second. Unemployment remains near a 26-year high.

“With the weak economy I guess it’s relatively good that employment went up 1 percent,” said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business. “That would indicate stability in the Berkshire Hathaway companies.”

Berkshire’s Class A shares declined $25 to $120,750 in regular trading yesterday on the New York Stock Exchange. The shares have climbed about 22 percent this year, compared with the 11 percent gain for the Standard & Poor’s 500 Index.

Adding Workers

Buffett told shareholders in May that Berkshire subsidiaries were adding jobs and that businesses serving broad industries, like railroads, were leading the advance. Fort Worth, Texas-based Burlington Northern, the second-biggest U.S. railroad behind Union Pacific Corp., had 35,000 employees at the end of 2009, down from 40,000 a year earlier.

The U.S. unemployment rate rose to a seven-month high of 9.8 percent in November as payroll growth slowed, the Labor Department said last week. Hours worked and earnings stalled, while a record 6.4 million women in the labor force were without work last month. Joblessness stood at a 26-year high of 10.1 percent in October 2009.

“We’re inching forward, we’re not galloping forward,” Buffett said in remarks recorded for an October conference outside Tel Aviv. “The worst is behind us, but the pain will be felt for a long time from what happened.”

Burlington Northern, headed by CEO Matthew Rose, contributed $706 million to Berkshire’s earnings in the third quarter, compared with the $488 million of net income it posted a year earlier as an independent company. The railroad planned to invest more than $2.5 billion in capital and equipment this year, Buffett said in September at the Montana Economic Development Summit.

Berkshire’s apparel maker Fruit of the Loom had about 27,000 workers and carpet maker Shaw Industries employed 25,500, according to the 2009 annual report from Buffett’s firm.

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Berkshire Hathaway Inc. added about 3,000 jobs this year as Chief Executive Officer Warren Buffett invested in the firm s biggest employer, railroad Burlington Northern Santa Fe, after slashing the workforce in 2009.Berkshire has 260,000 employees across more than 70...
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