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Whitney Information Network, Inc. announced termination of 15% of its workforce

On October 21, 2004, WIN filed an 8-K with the Securities and Exchange Commission. It announces that they terminated 15% of their employees. You can read it at http://phx.corporate-ir.net/phoenix.zhtml?c=135427&p=irol-SECText&TEXT=aHR0cDovL2NjYm4uMTBrd2l6YXJkLmNvbS94bWwvZmlsaW5nLnhtbD9yZXBvPXRlbmsmaXBhZ2U9MzA0MzEyMCZhdHRhY2g9T04=
Publicly-traded companies like WIN are required to file 8-Ks whenever something “material” happens.
I am not sure how many people 15% is. Emails I have received cite figures in the 55 to 100 range. Both the emails and the company news release say the terminations were mostly in the Cape Coral, FL area where their headquarters is.
The WARN Act
A writer tells me that there is a federal law called the WARN Act (Worker Adjustment and Retraining Notification Act 29 USC §§2101) that relates to layoffs. It requires employers to give 60 days notice in advance of plant closings or mass layoffs. It applies to employers with 100 or more people, which Whitney is. It is triggered if 50 or more are laid off at a single location for six months or more. Different geographic locations may be aggregated for the purpose of determining whether 50 have been laid off. Also, they look at a 90-day period to see if the threshold of 50 has been reached. Part-time employees do not count towards the 50.
If Whitney laid off a number just below 50 and did not comply with the Act, I would be worried if I were an employee about what might happen when the 90 days is up and another 49 can be fired witohut complying with the Act.
‘Streamlining’
WIN spins the action as “streamlining.” They also say that, “…the company was underperforming in certain new marketing initiatives, causing reductions in its cash position and creating an operating loss.” I think the plain English translation of that is they tried some new stuff that lost a lot of money. WIN has never made a cumulative net profit in its history according to their SEC filings and they have a negative net worth.
The people laid off are characterized in the news release variously as:
• “non-essential”
• “overlap”
• “waste”
Don’t ya love how public corporations and governments frequently brag about eliminating “waste,” but never seem to acknowledge having any before they eliminate it?
They also blame Hurricane Charley damaging their headquarters building. I would have thought that a competent business person, especially a purported real estate investment expert like Whitney, would have casualty insurance that would cover such losses. Nothing Down author Robert Allen likes to blame an avalanche that destroyed a personal residence he was having built for his financial difficulties. In a tape-recorded phone interview, I asked if he was saying that he, the big real estate expert, had no insurance on his under-construction home. He said he did have insurance. I asked if the insurance company paid the claim. He said they did. “So, what’s the problem?” In fact, insured losses are usually not much of a problem—but most people fail to ask about insurance coverage and claims payment and accept the explanation.
A stock market expert pointed out to me that public corporations’ news releases typically quote the CEO when they contain good news and quote “the Company” when they contain bad news. Notwithstanding all its positive spin, WIN’s news release on the layoffs quotes “the Company.”
Copyright 2004 by John T. Reed
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CONSUMER WARNING NOTICE: I recently saw Russ Whitney on a late night TV infomercial and then attended one of his "free" seminars. Unfortunately I believed all of their LIES and FRAUDULENT CLAIMS and I paid thousands of dollars to go to his "training camps". Needless to say I was clearly ripped off, cheated and lied to by Russ Whitney and his employees (band of thieves). My mistake was not searching the Internet to find out more about Russ Whitney and his company's HORRIBLE reputation for fraud, deception and illegal activities. Had I searched online I would have found out about THOUSANDS of customers being cheated, HUNDREDS of investigations by the Attorney General into the fraud of Russ Whitney and his company's, and that Russ Whitney himself is a CONVICTED VIOLENT FELON and spent years in PRISON. I saved the cached pages from the major search engines of the John Reed lawsuit with Russell Whitney and the TRUTH and FACTS that Reed discovered during his investigation of Whitney. I am posting this information on real estate discussion boards so other people do NOT get cheated and ripped off like I did.