Waste Management Inc. has begun sending 60-day notices to employees at its Oak Brook headquarters whose jobs will be eliminated when the nation’s largest waste hauler is merged into Houston-based USA Waste Services Inc.
USA Waste Services, which hopes to complete the $21.52 billion deal by this fall, plans to cut 1,500 of the 1,700 Waste Management headquarters jobs to lower costs as it consolidates its headquarters in Houston, company treasurer Ronald Jones, told a Minneapolis investment conference.
William Plunkett, a Waste Management spokesman, said there are 1,250 employees at Oak Brook and another 450 support staff scattered around the country. He said they have been notified that most jobs will be cut and that severance and job placement services will be offered.
The impact of the firings may be eased by the tight labor market in and around Oak Brook. In April, the latest time for which data are available from the Illinois Department of Employment Security, the jobless rate in DuPage County was 2.5 percent, compared with a national rate of 4.3 percent.
Waste Management’s headquarters also could be easily absorbed.
The office vacancy rate is 8.7 percent in the overall East-West Corridor market and 9.3 percent in Oak Brook, said Dan Stone, a broker in the area with CB/Richard Ellis. Though bringing such a large amount of space to the market at once could bump up the vacancy rate, there is enough demand to absorb it before long, he said.
“They’re in a very desirable location and Oak Brook is a hot market,” Stone said. “They could very well go quickly.”
The combined company, to be called Waste Management and have its headquarters in Houston, would have annual sales of about $12.5 billion and 319 landfills, about 225 more landfills than its closest rival, Browning-Ferris Industries Inc. of Houston.
“Our goal is to enable the new Waste Management to hit the ground running,” Plunkett said. “Regrettably, that includes job reductions in Oak Brook and other offices as company headquarters moves to Houston.”
Of the Oak Brook employees, about 130 would move to the combined company’s Houston headquarters, about 70 others would be assigned to regional offices throughout North America and the rest would be fired, Jones said.
Waste Management has a total of 58,800 employees worldwide, including 37,000 in the U.S. Plunkett said most operating employees would be retained.
Waste Management owns a valuable chunk of west suburban property, with four buildings plus a parking structure in a campus straddling Butterfield Road in Oak Brook and Lombard.
The buildings, built in the 1980s and ’90s, comprise 550,000 square feet of office space, and could appeal to major corporate tenants seeking large blocks of space, which are scarce in the East-West Corridor.
Exactly how the company might dispose of the property is unclear, however. That decision will be made once the merger is complete and the space begins to be vacated, Plunkett said.
USA Waste, with 17,700 total employees, hasn’t said how many landfill and trash-collection jobs would be cut as a result of the acquisition.
USA Waste also has several potential buyers for Waste Management’s struggling hazardous waste-disposal unit and any assets the companies would divest to meet antitrust requirements, USA Waste spokesman Lewis Nevins said.
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Antitrust regulators are expected to ask USA Waste and Waste Management to divest some assets in markets where the companies significantly overlap.
USA Waste didn’t name potential suitors and doesn’t know which markets or how many landfills would be affected by the antitrust ruling, expected to be handed down by the U.S. Department of Justice within three months.