IT job losses in India can top 50K in '09

Over 50,000 IT professionals in the country may lose their jobs over the next six months as the situation in the sector is expected to worsen due to the impact of global economic meltdown on the export-driven industry, a forecast by a union of IT Enabled Services warned.

"There would be 50,000 job losses (IT and BPO put together) over the next six months," Karthik Shekhar, general secretary of UNITES India, a politically neutral union of ITES professionals said.

The job loss in the IT and BPO sector in the country topped 10,000 in the September-December period, Shekar said.

While employees of medium-sized companies bore the brunt of job losses in the September-December period, it's going to be their counterparts in the big and small firms who would increasingly face the axe in the coming six months, he said.

UNITES India, affiliated to the global union United Network International, suggested that the companies in trouble could resort to salary and incentive cuts without trying to "squeeze" the staff, rather than adopting the "layoff path".

Employees are willing to take such cuts for 12-16 months till the demand picks up again, when such benefits should be restored to them.

Shekhar said senior officials of the industry had concurred with the figure of 10,000 job loses in September-December, stating that it accounted for "bottom five per cent of the performers".

Consultations with the union's counterparts in the US and UK suggested that slowdown would continue to hit the offshore sourcing space, he said.

He said factors like continued slowdown, likely "tax application" to companies outsourcing jobs under the new US regime and tightening in regard to H1B visas were among the key reasons cited for the acceleration in issue of pink slips.

Ambanis Preparing Layoffs

Recession may have just become a worry for Mukesh Ambani and Anil Ambani, brothers who own some of India’s most valued companies, too.

Sources tell Network 18 layoffs and cost cutting have been ordered in Reliance Industries Ltd. (RIL), owned by Mukesh, and the Anil Dhirubhai Ambani Group, which is owned by his younger brother Anil.

Sources say several senior and mid-management executives across the RIL group companies have been asked to leave. The company has scrapped plans for its semi-conductor business for now and the team for the project has been asked to leave, sources say.

CNBC TV 18's Executive Editor Shereen Bhan reports RIL’s official position is that three of its key projects—all related to its petroleum and gas business—are in the final leg of implementation. But the company makes no mention its retail business, which was seen as a growth industry but now may be scaled down because of recession.

Network 18 asked for a statement from RIL on whether it was downsizing and was told: "As a good corporate practice, we constantly examine our cost competitiveness and take appropriate measures regularly."

On layoffs in its management team, the company said: “Apart from normal attrition, we are not aware of several senior and management executives across the group (who have) been asked to leave."

Cost cutting “is a practice which is undertaken constantly at Reliance”. Asked whether it planned to put its semi-conductor business on hold for now, RIL said: “As a part of our business expansion, we continue to evaluate various long term potential business opportunities. As a matter of policy we do not comment on any business which is still in the evaluation stage.”

CNBC-TV 18’s Economic Policy Editor Vivian Fernandes reports that ADAG has laid off 6,000 people. The lay-offs cut across ADAG companies in life insurance, general insurance, mutual funds, commercial and consumer finance, and entertainment.

The job cuts have been implemented in all hierarchies: from marketing heads to middle management and lower management officials and customer executives.

Sources say ADAG has drastically pared its marketing team for life insurance in Mumbai and in Delhi it has been disbanded. Marketing budgets have been cut too.

The number might seem big, but not in relative terms as the life insurance business of ADAG employs about 30,000 people.

ADAG denied any lay offs or retrenchments. The company predicts that the next few months would be a high-investment season for tax saving products and it would employ up to 90,000 agents and sales representatives.

Auto parts: 200,000 may lose job; 4,000 units face closure

India's auto component makers are facing one of the biggest crises ever. With the domestic market in the doldrums and the exports to the American market badly hit, many companies are on the verge of shutting down.

The entire supply chain of auto companies is bearing the brunt of the economic meltdown. From Tier-1 companies to small-scale units, all are facing a huge fall in demand, delayed payments and a stiff liquidity crunch.

"About 4,000 ancillary units are on the verge of closure and about 200,000 people will be affected by this crisis. Most companies have cut down the number of shifts, working days and are cutting down production. The US crisis has aggravated the problem," says Anil Bhardwaj, secretary general, Federation of Indian Micro, Small and Medium Enterprises (FISME).

The commercial vehicle segment is the worst hit by the crisis. Such crises are cyclical, and tend to recur every 5-6 years, but a calamity of this magnitude has put all companies in trouble. "Auto component makers are hit very badly. The original equipment manufacturers (OEMs) have not been able to sell stocks. Cash flow is getting hugely affected. Payments are getting delayed, affecting a lot of projects. The overall sentiment is negative," says Jayant Davar, vice president, Automotive Component Manufacturers Association (ACMA).

Domestic woes

It all started with the crisis in the auto industry. Car sales, which were booming, have now plunged. In the wake of the marked economic slowdown, there is a severe credit crunch. This has, in turn, slowed down demand for vehicles.

"Payments to vendors are getting delayed, loans for capacity expansion are not being sanctioned, and banks are refusing loans to auto companies that are supplying to companies like General Motors, Ford, etc. The removal of insurance cover for exporters too has severely hit the industry," Davar explains.

The Chennai-based Sundram Fasteners [Get Quote], which supplies radiators caps and fasteners to General Motors, says it is more worried about India than the United States. "Most of the auto companies have done very badly in 2008. The business in the second half of the year has been 50 per cent less than in the first half," says V G Jaganathan, president (finance), Sundram Fasteners.

The US impact

The auto crisis in the US has only worsened the situation. Auto component makers' exports to the Ford, GM and Chrysler were growing at 50-70 per cent. Out of this 35-40 per cent of the exports were to GM in North America. GM accounts for about $500 million of India's auto component exports.

Exports from Indian companies accounted for over $3 billion last year. "We were expecting a 20 per cent year-on-year growth. But this year, this has drastically fallen to about 6 per cent. November and December were the worst months for auto component makers," says Davar.

The auto sector is amongst the worst-hit industry sectors. Adding to their woes is the cancellation of credit insurance which protects manufacturers against payment defaults from buyers.

The Export Credit Guarantee Corporation has frozen issue of fresh credit risk insurance (CRI) cover to Indian component vendors of US auto giants. "Auto component makers are coping with the double whammy of the domestic market and the export market," says Bhardwaj.

Meanwhile, GM India is playing down the impact of the parent company going under. "GM North America is in crisis while GM Europe has flat growth. GM Latin America and Middle East, and GM Asia Pacific are doing well. GM has already sourced components woth $500 million from India and it will meet the target of $1 billion by 2010, as other markets still need components," says P Balendran, vice president (corporate affairs), GM India.

For companies like Sundram Fasteners, the crisis will have short-term impact. "GM accounts for about 2-3 per cent of the total business. We will continue to outsource products. In case, GM files for bankruptcy, payments will be delayed. Bankruptcy does not mean closure, it is restructuring," says V G Jaganathan.

Big trouble

Sandhar Technologies, a diversified auto parts maker that has plants in the Europe, has seen a fall in business by about 50 per cent.

"The topline growth for Sandhar Tech has grown to Rs 800 crore (Rs 8 billion) compared to Rs 640 crore (Rs 6.4 billion) last year. But the bottomline growth has been severely hit. Steps taken by the government -- like Cenvat cut -- are just nominal. There is no liquidity in the market. With high auto loan rates and a scary job market, the last thing on anyone's mind would be to buy a car," Davar, who is also the CEO and founder of Sandhar Technologies, laments.

Auto component companies employ about 400,000 people. The small and medium enterprises in India employ about 3.3 crore (33 million) people. Many of these SMEs are in the auto sector. A good majority of them have already lost their jobs and the sector is likely to see more job cuts.

"Though the jobs cuts are not apparent, a large number of people have already been asked to leave. "Many ancillary units which supply to these companies are also likely to be wiped out if the crisis continues," Davar says.

Commercial and passenger vehicle sales have fallen drastically. Unless sales go up, the market will continue to be sluggish, says carmakers. Most of the companies were half way through expanding their operations and building new capacities. It is now a huge burden on these companies as they have to bear the huge interest costs and the defaults in payments.

Help us!

Many banks have refused to offer credit to companies who are supplying to GM. They fear that in the event of a bankruptcy, their payments will also get stuck. Many companies established auto plants in India to enjoy the benefits of the excise cut exemption. They have already invested huge amounts into these plants.

ACMA has asked the government to intervene and help the industry. There should be more liquidity in the system. Many banks have pulled back credit to auto companies. The interest rates have to come down to push sales. Auto companies badly need the ECGC cover. The government should look into these issues.

Auto crisis & GM India

The crisis will not have any impact on GM's India operations. The company's plans are going on as per schedule. "We will go ahead with our plans with internal approval so the crisis in the US will not affect us in India. GM is the only auto company which has seen consistent growth despite a fall in sales in November," says Balendran.

Optimistic even during the crisis, he says that GM India performed better in 2008 than it did in 2007. "In 2006, we sold about 35,000 units; in 2007, we sold about 60,032 units, while in 2008, we have already sold 72,000 units. It has been a steady growth," he says.

GM has inaugurated the engine plant at Talegaon, with a capacity of 160,000 units. This plant is expected to be commissioned in the year 2010. GM India is likely to hire 500 employees at the plant. GM has also started the engine power train facility with a capacity of 140,000 units.

"We have already hired 1,000 people and we will be hiring 500 more. We have no plan to cut production or cut costs. The reason for GM's success in India is the product line up. Starting from Rs 2.99 lakh (Rs 299,000), we have cars for every segment. We will be launching the new Captiva in January, a sedan called Cruze mid next year, and a mini car in 2009. The upgrades programme will also continue as planned," Balendran adds.

Bleak future

How long will the crisis last? There are no definite answers to this.

"We are hoping the situation will improve slightly in the Jan-Mar quarter. But if the recession worsens, it will only be tougher for companies to get going," says Davar.

GM India believes the situation will take many months to improve. "The slowdown has gathered pace in the last 3 months. The market is very sluggish. Liquidity is certainly a problem and it will take months to recover," P Balendran says.

"About 25 per cent of all companies in the small and medium enterprises, have already become 'non-performing assests (NPAs).' As the crisis worsens, 50 per cent of SMEs in the auto sector will end up as NPAs," says Anil Bhardwaj.

The FISME has said that these trying times should be converted into an opportunity to create a lean and powerful economy with sustainable growth.

In its memorandum to the Prime Minister Manmohan Singh, the association has sought several relief measures, including a moratorium on repayment and the allowing of corporate debt restructuring for all unit.

The association has also demanded that wrking capital limits of enterprises must be enhanced liberally and specific steps be taken to ensure timely payment to Micro, Small and Medium Enterprises (MSMEs) against supplies made to corporates.

A big push is needed for exposing SMEs to exports. Currently, 0.5 per cent of SMEs are engaged in exports and yet contribute to about 50 per cent of the exports.

There is a critical need to look beyond Export Promotion Councils and leverage resources of private organisations and associations focusing SMEs, the FISME has said.

Indian exporters lay off 65,500 employees - minister

Indian export companies, facing a slump in demand in the overseas markets, have laid off around 65,500 employees, a minister said on Monday.

A sample study of 121 firms for Aug-Oct 2008, conducted by the Department of Commerce revealed "loss in export orders to the tune of Rs 1,792 crores (17.92 billion rupees) and loss of jobs of around 65,500," Oscar Fernandes, labour minister told Parliament.

The minister was answering a question on how employment was affected by slow industrial development, closure of industrial units and global economic recession.

In a statement, Fernandes said the government has initiated several fiscal measures to instill confidence in the economy and spur growth.

"These measures will prevent large scale job losses," he said.

The survey included export firms from textiles, leather, engineering, gems and jewellery, handcraft, food and food processing, minerals and marine products sectors, he said.

Deutsche Bank to lay off its staff in India

Foreign lender, Deutsche Bank has started following the industry trend and is dismissing employees from its operations in India. However the bank did not unveiled any such news but a senior official connected with the bank revealed that many employees have been asked to quit jobs.

The bank is laying off the staff as a measure of its cost-cutting program. In fact a senior official from the bank informed that this decision was taken to "make minor adjustments in its human resources front".

The lender however remained mum on all the issues concerning the matter. He did not even disclose its current employee strength. According to the RBI data, the bank had 3,500 employees on March 2008. This figure had been increased from 2,250 in March 2007 and 678 in March 2006. Deutsche Bank has 11 offices in India and it supposed to turn off employees across all the branches. Besides there are also news that it is laying off staff at its Singapore operations.

This move by the German bank looks strange because it has recently injected a fresh dose of capital worth Rs 325 crore into its operations in India.

Earlier HSBC India had also unwaged employees from its broking house, Investsmart. It had also followed this as a practice of cost-cutting.

Global decline spells trouble for India's tech sector

The deadly terrorist attacks in Mumbai, India dominated the global headlines last week. What didn't get a lot of attention, though, was the reason behind the attacks.

The terrorists attacked the commercial heart of India — Mumbai's financial district. And I believe their purpose was to destabilize India's democracy and capitalist economy.

Yet ...

India's Economy was Struggling
Before Those Attacks!

The Indian economy expanded by 7.6% in the third quarter. And while that may sound impressive, it's the slowest pace in four years and well below the 9% growth it had averaged for the last three years.

The terrorists attacked Mumbai's financial district, the commercial heart of India.

India's exports contributed to that decline: down in October for the first time in seven years.

The International Monetary Fund (IMF) expects the Indian economy to continually slow down. And it recently reduced its growth forecast to 8% for 2008 and 6% next year.

In response, the Reserve Bank of India has been aggressively cutting interest rates in hopes of keeping its economy on track. In fact, it has cut interest rates three times since October for a total reduction of one full percentage point.

And much like our politicians, India's government is embarking on a stimulus-seeking spending spree. The dollar amount — $4 billion — is a far cry from the $7 TRILLION we're throwing into the U.S. economy. But it nonetheless shows that India shares our same slowdown worries.

Indian IT Companies Are Going
Through a Downturn of Their Own

Mumbai may be India's financial center, but the lucrative high technology center is in Bangalore.

Bangalore, the Silicon Valley of India, has become the world's back office.

Bangalore has become the Silicon Valley of India. It is the back office of the world, handling customer service calls, process payments, and writing the code that runs much of corporate America's software. And its high-technology companies and outsourcing firms are going through a downturn of their own.

The global slowdown is forcing them to reduce hiring, freeze salaries, postpone new investments and lay off thousands of software programmers and call center operators.

Three examples of Indian companies in trouble ...

Infosys: India's second-largest software services exporter gets two-thirds of its business from the United States. One-half of that is from financial companies, like Citigroup and Bank of America.

This could explain why Infosys recently scaled back its earnings projections for the year, telling investors that it expects revenue to expand 13% to 15% instead of the 19% to 21% it had previously forecast. That's way below the 30% growth of recent years.

Satyam Computer: India's fourth largest exporter, cut its 2009 recruitment plans from 15,000 to 10,000 and has suspended travel for all but the most critical needs.

Wipro: Fifty percent of this giant Indian technology outsourcer's customers are from the U.S. And many are postponing or downsizing contracts. Consequently, Wipro recently laid off 2.5% of its work force.

The Trends for Arranged Marriages
Are Extremely Telling ...

You may be surprised that most marriages in India are still arranged by parents. And parents of daughters are very interested in making sure their future son-in-laws have good jobs and can support their families.

So young men working in the technology sector have been among the most desirable marriage partners.

But that is drastically changing ...

Jagadeesh Angadi, a matchmaker in Bangalore, said, "'Because there are no job guarantees for IT people, for the last six months brides' families have not been accepting grooms from this background."'

What Does This Mean For Investors?

First of all, I'd steer very clear of Indian stocks for right now.

I love the Indian people and admire the heck out of their intelligence and work ethic. But the combination of their slowing economy and horribly deficient infrastructure — highways, power plants, airports, water plants, shipping ports — makes it very unlikely that the Indian economy will rebound right away.

Don't forget, however, that stock markets usually bottom 6-12 months before the underlying economies do. And the bottom of the bear market for Indian stocks may be closer than you think.

Second, make the most of market rallies to raise cash. Put that money into short-term Treasuries or Treasury-only money market funds.

After all, a bargain isn't a bargain unless you have money to take advantage of it. And when the time is right, you'll be able to buy India's best companies for dimes on the dollar.

Deutsche Bank starts layoffs in India

Even after receiving a fresh dose of capital for business expansion, Deutsche Bank India is learnt to have started laying off employees following the general industry trend. Though Deutsche Bank remains mum about job cuts, a senior official close to the development indicated the bank had asked several officials to quit as a cost-cutting measure.

When contacted, Deutsche Bank India spokesman told ET the bank would not wish to comment. An e-mail sent last Friday (December 5) to the official seeking details of the job cuts and the reasons behind it did not elicit a response.

However, a senior bank official said on the condition of anonymity the decision to lay off some of its employees was in order to “make minor adjustments in its human resources front”. Incidentally, there have been talks of Deutsche Bank laying off staff at its Singapore operations too.

The German bank also remained silent on its current employee strength. As on March 2008, it had 3,500 employees for its 11 offices here. The tally significantly rose from 2,250 a year ago and 678 in March 2006, according to Reserve Bank of India’s latest fact sheet on banks. A banking industry executive claimed the number was growing this financial year too despite this retrenchment. Overall, the group has over 6,000 employees in India.

What has surprised banking circles is the fact that Deutsche started laying off employees even as it infused Rs 325 crore of fresh capital into its India operations. A significant chunk of the money is expected to be used for its corporate banking expansion.

Himachal industries lay off workers following recession

The hilly state of Himachal could not escape the heat of the global financial meltdown.The industries in the state have started laying off the employees as a part of cost-cutting measures

The units located in Baddi-Barotiwala and Nalagarh area that account for more than 70 per cent of industries in Himachal are shedding their workforce to resort to cost cutting.

According to the Centre of Trade Union(CITU) leaders in Himachal, the impact of the economic slowdown has definitely affected industries in Himachal, where employers have started giving pink slips to the employees.

N T Ranaut, general secretary, CITU said units like auto ancillaries and other manufacturing units have laid off more than 500 employees in wake of the recession.

Recently, auto parts manufacturer Gabriel India Ltd (GIL), which opened its plant in Parwanoo few months back, has sought permission of the labour department to lay off 140-150 workers.

Similarly, Su Kam Power System, manufacturers of power inverters, had suspended production in Baddi last month, citing no demand. There were rumours that company had applied for closure of their units in Baddi, but the labour department in Himachal maintains that things have now been sorted out and there is no issue of the company closing its operations.

Another company Hunter Telecom India Pvt Ltd had closed down their operations in Baddi last month, thus laying off around 50 workers.

B R Verma, Himachal labour commissioner, said the state has somewhat managed to withstand the impact of the recession .He said that the department had received two proposal where companies have requested for permission to close down the units.

While Purewal industries have applied for closure of their unit, Gabriel India Ltd has sought permission for retrenchment.

Purewal industries have applied for closure of one unit at Jubbar, as the company is unable to meet the struggle posed by industries from China that has rendered their units uncompetitive. Around 491 employees are working in the unit.

Even as the state government has refused the company to close its unit at Jubbar, the company has moved the labour tribunal. Similarly, the order for Gabriel India Ltd permission is awaited.

No plans to cut jobs in India: Sony

Japanese electronics major Sony, which has announced a massive layoff of 16,000 employees across the world has said that it has no plans to cut jobs in India given the strong business growth in the country.
“The Tokyo-headquartered firm is reviewing its business in each country for the announced cost-cutting programme, but the Indian business is unlikely to see any job cuts given a ‘healthy business growth’,” Sony India Managing Director Masaru Tamagawa said in an email statement.
Tamagawa was responding to a query on whether India would be impacted from Sony’s planned cost-cutting measure to eliminate 8,000 full-time staff and another 8,000 temporary employees from its global workforce.
“Based on expectations of the future economic environment and the electronics business, Sony Corporation is enacting various measures, such as lowering fixed costs and reducing headcount at a macro level,” he said.
“Our Headquarters is now starting to review each country’s, business, and sales operation. However in India given our healthy business growth, we do not foresee any manpower reduction,” he added.
Yesterday, the Japanese firm announced the job cuts as part of a billion-dollar cost saving exercise in a bid to improve profitability and enhance operational efficiency in its electronics businesses.
Besides, under the corporate restructuring measures, Sony is planning to reduce investment in the electronics business by about 30% by fiscal 2010, compared to its mid-term plan.
The electronics giant also plans to reduce the total number of manufacturing sites by 10% from the current total of 57 by 31 March, 2010.

Yahoo to lay off 3% of India workforce

Global Internet major Yahoo is understood to have issued lay-off notices to three per cent of its India workforce due to the ongoing slowdown.

Sources close to the company said, "As part of Yahoo's strategy to perform competitively in the current economic downturn in India, less than 3 per cent of the total Indian workforce has been impacted and they were notified on Wednesday."

Yahoo has about 2,000-strong workforce in India and it is likely that a maximum of 40 people would be impacted by the decision, the sources said, and added that "a significant number of employees were affected due to poor performance and only a few of them due to the slowdown".

The Yahoo notification, according to sources, read: "Yahoo is grateful for the important contributions made by the employees affected by this reduction and that is why, consistent with our past practices, we are making every effort to support impacted employees with severance packages and outbound placement services."

Yahoo has a R&D centre in Bangalore where a large number of its India employees are located.

About 1,500 Yahoo employees -- about 10 per cent of its workforce  - are likely to be laid off globally, to enable the company survive the deteriorating financial turmoil.

Chief Executive of Yahoo! Jerry Yang had said in November that he would leave the company, after facing strong criticism for his leadership.

Hiring prospects lowest since 2005

Global slowdown has dampened hiring prospects of India Inc, causing its outlook to hit the lowest ebb, with only 19 per cent employers having positive recruitment plans in the next three months, according to global staffing services firm Manpower.

This is the weakest outlook observed in India since the survey began in Q3 2005. This outlook represents considerable decrease of 24 percentage points quarter-on-quarter and 27 percentage points year-on-year, the Manpower employment outlook survey for the first quarter of 2009 said.

With this drastic fall, India has lost its top position after two consecutive quarters. Employers in India now report the second strongest hiring intentions globally, next to Peru, which has reported a net employment outlook of 24 per cent.

"Though hiring intentions remain positive, Indian employers are reporting a much slower hiring pace as compared to the last quarter and year. Employers in all the seven industry sectors and four regions have reported considerable decline in anticipated hiring activity for the first quarter of the New Year," Manpower India Managing Director Naresh Malhan said.

Responding to a query as to when will there be a sign of recovery, Malhan said, "The amount of damage done to the world economy is still uncertain. It will be another 4-6 months, by the time we get to know when the recovery start will start. It will get worse before it gets better. Considering the present situation, it is unlikely to improve in the next few quarters."

India is getting into a doom loop, but the country can get out of it with sufficient support from the government as well as private firms, Malhan added.

It is not an outright blanket ban on hiring plans. There is just slowdown. Companies with robust plans are willing to go ahead, so opportunities are still there. At present, it is a question of re-prioritisation, he said.

"The times may seem challenging but the employment scenario in the country is not as gloomy as the rest of the world and according to the survey, India will be one of the most actively hiring nations for Q1 '09," Malhan added.

However, recruiting confidence among employers in India is the strongest of all the eight countries and territories surveyed across the Asia-Pacific region for Q1 2009.

Of the 3,557 employers surveyed, 22 per cent expect an increase in staffing levels in the first quarter of 2009, four per cent anticipate a decrease, and 63 per cent are expecting no change.

Sectoral analysis shows employers in the services sector as well as the mining and construction sector are expecting the most active hiring environment in the coming quarter with a net employment outlook of 23 per cent. While, wholesale and retail trade employers reported the least optimistic hiring intentions with a net employment outlook of 11 per cent.

A regional analysis shows that employers in all four regions in India anticipate positive hiring activity over the next three months though all indicate a sharp decline in hiring intentions compared with last quarter and year.

Hiring plans are strongest in East India, with a net employment outlook of 20 per cent. For South India it is 19 per cent. The weakest hiring intentions are reported by employers in West and North India, each reporting the net employment outlook of 18 per cent.

As per the global results, employers in 25 of 33 surveyed countries and territories still expect positive hiring activity in the coming quarter. However, those in 30 say they would slow the pace of hiring from three months ago.

Asia's biggest job cut, Sony to chop 8,000 jobs

Japan's Sony Corp said it will slash about 4 per cent of its workforce, scale back investments and pull out of businesses as it aims to cut $1.1 billion in costs out of its ailing electronics operations.

The 8,000 job cuts -- the biggest announced by an Asian firm so far in the financial crisis -- and other restructuring steps underscore challenges facing Sony, which has fallen well behind Apple Inc's iPod in portable music and is struggling to make money on flat panel TVs.

Analysts questioned if it would be enough for Sony, which employs about 186,000 people worldwide in businesses ranging from movie making to video games. ''The number sounds big, but this staff reduction won't be enough. Sony doesn't have any core businesses that generate stable profits,'' said Katsuhiko Mori, a fund manager at Daiwa SB Investments.

''After the workforce reduction, the next thing we want to see is what is going to be the business that will drive the company.'' Shares in Sony, which have fallen nearly 70 percent this year, closed up 3.9 percent at 1,896 yen ahead of the announcement.

The restructuring marks a major setback for Chief Executive Howard Stringer, who had seemed to have the electronics and entertainment conglomerate back on track after implementing a wide-ranging restructuring after taking the helm in 2005.

Like rivals Samsung, Panasonic and just about every other big consumer goods firm, Sony faces a bleak Christmas shopping season as the financial crisis grows into a broad recession that has already engulfed the United States, parts of Europe and its home market in Japan.

Sony, along with other Japanese manufacturers, has also been hit hard by a surging yen, with the currency's rise to 13 year highs this year cutting into the value of its earnings and making its products less competitive in overseas markets.

The maker of Bravia flat TVs and PlayStation 3 video game consoles, said in October when it more than halved its annual operating profit forecast that it would need to close some plants, reduce capital spending and lay off workers.

Hiroaki Osakabe, fund manager at Chibagin Asset Management, said the restructuring was unlikely to trigger a share rally. ''The scheme doesn't contain anything new, like a new earnings pillar or a growth strategy. It was something that people had expected, and I think the market had already discounted the announcement,'' he said.

Sony said it would delay plans to boost output for liquid crystal display TVs in Slovakia, outsource production of image sensor semiconductors, and reduce the number of manufacturing sites by about 10 percent from the current 57. It aims to cut investment in its electronics business by 30 percent in the next business year to March 2010 compared with a previous business plan.

Recession hits BPOs, sector seeks bailout package

The tremors of American recession will soon be felt in India. The $11 billion BPO sector - which gets most of its business from the United States - will bear the brunt. Industry is projecting a cut over 2.5 lakh jobs starting from the first half of 2009.

According to Nasscom, the BPO sector employs 7,00,000 people

President BPO Industry Association, Samir Chopra says, "'Severe job loss is expected because of recession. We are going to request for a fiscal package from the Government but if that doesn't happen, then there be huge amount of losses in terms of manpower. I think a quarter of a million jobs will go.''

The job cuts follow a decline in growth. IT major Infosys predicts a drop of 15 per cent in growth from 30 per cent last year.

Infosys CEO & MD, S Gopalakrishnan says, "'There is a slowdown, no question about it. I think you know what is happening around the world has had an impact."

Coupled with the slowdown, the devastating attack on Mumbai too has lead to fears that new investments might not come. The companies now want a fiscal package from the Government to tide over. Their top demand would be to extend tax relief to the industry for another 5-10 years.

US: 30,000 jobs gone in last week and still counting

News of the US officially slipping into recession seems to have spurred another round of massive retrenchment, as the first week of December alone saw a stunning 30,000 layoffs, with more than half happening in the world's largest economy.

The whopping numbers are just a continuation of a strained labor market as employers in America slashed 5,33,000 jobs in the month of November, the maximum downsizing in 34 years.

Right from telecom giant AT&T to battered banking major Credit Suisse to steel maker ArcelorMittal, the layoffs are spread across the sectors, amid the worst financial turmoil since the Great Depression of 1930s.

Moreover, since the start of recession in December last year, as concluded by the National Bureau of Economic Research, 1.9 million people lost their jobs and two-thirds of the losses happened in the last three months.

Leaving a gloomy November, this month's layoffs are led by AT&T which would slash 12,000 jobs or about four per cent of its total workforce.

The telecom entity cited economic pressures and a changing business mix, among the reasons for the latest move.

Further, Swiss banking giant Credit Suisse would be axing 5,300 jobs, accounting for 11 per cent of its global workforce, by the first half of the next year.

Battered by the financial turmoil, the company had incurred a whopping loss of about USD 2.5 billion by November-end in the fourth quarter. Credit Suisse already slashed 1,800 jobs this year.
In yet another job cutting act, software maker Adobe has announced it would cut 600 full-time positions worldwide.

In yet another job cutting act, software maker Adobe has announced it would cut 600 full-time positions worldwide.

Other major job cuts have been announced by ArcelorMittal (over 9,000 jobs), American car rental firm Avis Budget Group (2,200 jobs), Japanese financial services major Nomura (about 1,000 jobs), General Motors (2,000 jobs) and chemical company Dupont (2,500 jobs).

Moreover, JPMorgan is reportedly planning to reduce its workforce by 21 per cent. The move is expected to result in 4,000 employees being given the pink slip by January at Washington Mutual, the failed American entity which was snapped up by the former in September.

The unemployment rate jumped to a 15-year high of 6.7 per cent last month, reflecting the strained labour market which has seen massive layoffs by many corporate giants.

"Non-farm payroll employment fell sharply (-533,000) in November, and the unemployment rate rose from 6.5 to 6.7 per cent," the Bureau of Labor Statistics, which is a part of the US Labor Department, said on Friday.

The job losses, widespread across major sectors, are reportedly the worst since December 1974.

Further, the ADP National Employment Report showed that private American companies had cut 2,50,000 jobs last month.

In addition, US-based 3M Co would axe 1,800 jobs, media conglomerate Viacom would reduce workforce by 850 in number and banking firm Jefferies Group would cut over 250 people.

Reliance group, support firms ask 5,000 to resign

The global financial crisis has hit India's largest private sector conglomerate. The Reliance group and its associate companies have asked about 5,000 employees to resign, according to inside sources. A significant portion of the staff reduction has come from the retail operations.

Some of the companies involved in the exercise are Reliance Retail, Reliance Logistics, Reliance Info Systems and Reliance Corporate Park. The resignations, as against a straight lay-off, leave employees in a better position to find new jobs.

A Reliance Industries spokesman did not comment on a detailed questionnaire sent by Network18, asking for more time to respond.

The associate companies have been supporting Reliance Industries' core operations for several years. But now, divisions within these companies are being shut, sources from within the companies said. Most of the affected employees are permanent, middle-level managers.

Some employees said as many as 3,000 people in the retail business could be sent home, as the proposed expansion had been scaled back after an abrupt change in economic prospects in the last six months.

The group entered the retail business in 2006 with a planned investment of Rs. 25,000 crore.

It was a strategic move designed to take the group beyond its core commodity business and was supported by a slew of subsidiary and associate companies like Reliance Gems and Jewels, Reliance Supply chain, Reliance Dairy Production and Reliance Agri Products.

But soon protests by small retailers and then the economic slowdown hampered aggressive expansion plans. Now, employees in nearly all departments related to the retail business are being fired, said a former employee, who recently left.

In some states, the protests and slowdown have meant the company has decided not to open stores there. Real estate teams are down to one person in such places and other places. While electronics store chain `Reliance Digital’ was supposed to have 20- 25 stores in the first year but actually opened only 3- 4, the hypermarket format was supposed to open over a hundred stores but has opened only two.

In the footwear store chain and health and wellness store chain, Reliance had hired aggressively to keep up with the expansion, but plans didn't materialize.

Reliance Logistics, a Mumbai-based company managed by the RIL chairman’s cousin Niraj Ambani, is one such case. The privately held company that was started in 2001, employs about 2,600 people, of which about 1,000 have been asked to leave in the last two weeks.

Marketing, process quality and business planning departments in the company are being shut down. Employees were given oral orders to resign and have been given the option of staying home and collecting their salaries for the next three months, sources who did not want to be named said.

Since the beginning of the year, this company had been doing third-party work for other companies in the retail business like ITC and Hindustan Unilever. But this has dried up.

Sources in Reliance Retail Limited, a direct RIL subsidiary, said many employees in support functions including information technology have been put on notice. The retail rollout has slowed down considerably specially in Uttar Pradesh, Kerala and West Bengal.

Reliance East West Pipelines has completed construction of the pipeline that will transport gas from the east coast to markets in western India. In better times, RIL would have deployed the white collar workforce to other projects. This time around, 400 employees are anxious as no orders have been received.

US crisis continues, November leaves 5,33,000 jobless

The economy shed 5,33,000 jobs in November, according to a government report Friday — bringing the year's total job losses to 1.9 million.

November had the largest monthly job loss total since December 1974.

"No one expected such a drastic number," said Tig Gilliam, chief executive of placement agency Adecco. "This is a real wake-up number."

According to the Labour Department's monthly jobs report, the unemployment rate rose to 6.7% from 6.5% in October. Though lower than economists' forecast of 6.8%, it was the highest unemployment rate since October 1993.

Economists surveyed by Briefing.com had forecast a loss of 325,000 jobs in the month. November's monthly job loss total was greater than October's revised loss of 320,000. Payroll cuts in September were revised up to 403,000.

The revisions brought the 3-month job loss total to 1.3 million. That's equal to two-thirds of this year's total job losses and the third highest three-month job loss total since World War II.

November's report provided the first glimpse at how employers reacted after the peak of the credit crisis, reached in mid-October. With credit largely unavailable and expensive, consumers scaled back their spending, dragging down manufacturing and construction businesses.

Travel has also been trimmed, with would-be vacationers opting to stay close to home.

Accordingly, job losses were spread across a wide variety of industries. Manufacturing lost 85,000 jobs, the leisure and hospitality industries cut 76,000 jobs, and construction employment shrank further by 82,000 jobs.

In a bad sign for the ongoing holiday shopping season, retailers slashed payrolls by 91,300 workers last month.

Professional and business services, a category seen by some economists as a proxy for overall economic activity, had a 136,000-job drop in employment. And financial services jobs fell by 32,000.

The just-under 1.9 million jobs lost in the current recession, which began in December 2007, surpasses the 1.6 million jobs lost in the 2001 recession. That's noteworthy, because jobs were cut in droves in 2001 during the dot.com bust, which followed a white-hot employment market during the tech boom of the late 1990s. The job market expansion leading out of the previous recession was much more drawn-out and tepid.

With the economy in a recession and most economic indicators signaling even more difficult times ahead, economists say job losses will likely deepen and continue through at least the first half of 2009.

Citing weak economic conditions, a slew of large-scale job-cut announcements came this week. On Thursday alone, AT&T (T, Fortune 500), DuPont (DD, Fortune 500), Viacom (VIA), Credit Suisse (CS) and Avis (CAR, Fortune 500) issued statements that totaled nearly 23,000 jobs lost, most of which will take place over the next several months.

According to a report by outsourcing agency Challenger, Gray & Christmas, planned job cut announcements by US employers soared to 181,671 last month, the second-highest total on record.

Temporary employment, including workers employed by temp agencies, fell by 100,700 jobs last month, the highest on records that go back to 1985. That could mean even more full-time payroll reductions to come, as employers often cut temporary workers before they begin cutting permanent staff.

Adecco's Gilliam said employers are trying to position their companies to weather the ever-intensifying economic storm.

"CEOs are trying to get their businesses better positioned for the start of the year so they're not constantly chasing the slowdown" he said. "December will be another very tough month."

In another sign of weakness, a growing number of workers were unable to find jobs with the amount of hours they want to work. Those working part-time jobs - because they couldn't find full-time work, or their hours had been cut back due to slack conditions - jumped by 621,000 people to 7.3 million, the highest ever on records that date back to 1955.

The so-called under-employment rate, which counts those part-time workers, as well as those without jobs who have become discouraged and stopped looking for work, soared to 12.5% from from 11.8%, setting the all-time high for that measure since calculations for it began in January 1994.

But some industries were hiring last month. Government hiring has stayed strong throughout the downturn, adding another 7,000 jobs in November. Education and health services also grew payrolls, which grew by 52,000 employees.

The average hourly work week fell to 33.5 hours last month. Economists expected the workweek to hold at October's level of 33.6 hours. But with a modest 7-cent gain in the average hourly salary, the average weekly paycheck rose by 52 cents to $613.05.

With 2008 already the worst year for jobs since 1982 and on pace to become the worst since 1945 - and second worst on record - support for a second stimulus package to boost the job market has grown among economists and lawmakers.

The prior stimulus package in the spring sent tax rebate checks to millions of tax filers. It helped the economy grow in the second quarter, but it did little to stem the tide of job loss in the country.

But the proposed stimulus package, supported by President-elect Barack Obama, would focus on aid states and municipalities as well as consumers, adding millions of infrastructure jobs for Americans.

"Our economy has already lost nearly 2 million jobs during this recession, which is why we need an Economic Recovery Plan that will save or create at least 2.5 million more jobs over two years," said Obama in a statement. "There are no quick or easy fixes to this crisis, which has been many years in the making, and it's likely to get worse before it gets better."

Experts say a two-part stimulus package is the right way to stem the tide of mounting job losses.

"First, you have to get consumers to spend, since 70% of the GDP is tied to consumer spending, and then you need job stimulus like highway projects to maintain economic job growth," said Gilliam. "This number is so bad that Obama will have to do something drastic soon."

Wipro puts 9,800 freshers on hold

Reeling under the impact of global meltdown, Wipro Technologies Ltd has kept about 9,800 graduate engineers, hired from campuses last year, waiting to join the IT bellwether, a company official said.

"Of the total 13,500 campus offerings made across the country last year, we have taken 3,700 of them so far, while the remaining (9,800) have been told to wait for their turn to join," Wipro vice-president for talent acquisition Pradeep Bahirwani told reporters at a hurriedly called press conference.

Due to slowdown in the IT industry and tough business environment, Bahirwani said, the company had discontinued campus offerings this fiscal for the time being.

"We have made 8,000 campus offers across the country in about 200 engineering colleges, including IITs and NITs (National Institutes of Technologies) this year as against 13,500 last year," Bahirwani said.

To make better use of the engineering freshers hired but not absorbed, the company has began to offer them the option of joining its BPO (business processes outsourcing) division at its software development centres in Kolkata, Bhubaneswar and Hyderabad for the same compensation fixed for IT services.

"To meet our BPO division's requirements in technical support, we have offered them the choice of coming onboard or wait as long for the joining date at the salary stack made in the offer letter. We hope to see a turn-around in business after 12-18 months to move them to IT services," Bahirwani said.

The company's novel initiative to ask freshers hired for IT services to join BPO division by paying upfront Rs 75,000 for bond backfired in Kolkata, with the hired engineers protesting against such the move and taking up the matter with West Bengal IT Minister Debash Das on Monday.

"The option has been given in commensurate with our current requirements, which are

more in BPO than in IT services, as technical support
role requires engineering grads
and not those from science or general stream. There is no compulsion or change in compensation," Bahirwani clarified.

Defending the offer to join the BPO division, the HR official said the decision was taken to give an opportunity to engineering graduates to get on work without further delay.

Wipro's global IT services business had 97,552 employees, including 16,500 in the BPO division till the second quarter (July-September) of this fiscal.

Banking giant JP Morgan to cut 3,000 job

As the economic slowdown haunts governments both at home and outside, job cuts remain the biggest worry.
New York-based banking giant JP Morgan is planning to cut 3,000 jobs that is 10 per cent of its banking staff.
According to reports, the cuts, which would be across all levels and regions, will be completed by as early as the end of this year.
There are also reports that JP Morgan will freeze salaries next year for most employees who earn more than 60,000 to 70,000 dollars.
These job cuts at JP Morgan are in line with other investment banking giants such as Goldman Sachs Group etc.

World in recession, worldwide job cuts

Japan became the latest major economy to fall into recession and Citigroup said on Monday it would cut 52,000 jobs, one of history's largest layoffs, stoking fears the global economic slump is worsening.

After a weekend meeting of the Group of 20 advanced and emerging economies failed to come up with specific new measures to ease the world's financial strains, the IMF said it needed at least $100 billion in extra funding to fight the crisis.

Citigroup, the US bank with the farthest global reach, announced the biggest round of job cuts since the financial crisis erupted last year, slashing 15 per cent of its workforce in a bid to return to profitability.

The cuts come on top of 23,000 reductions Citigroup had already announced and lag only the 60,000 layoffs by IBM in July 1993 as the largest ever, according to outplacement firm Challenger, Gray & Christmas Inc. After stock markets closed, the US Treasury said it had completed equity purchases in 21 more banks totaling $33.56 billion, including $6.6 billion in US Bancorp .

Life insurers also joined the long list of companies seeking funds under Washington's $700 billion financial bailout program. Seeking to contain the economic fallout for the US auto industry, Democratic lawmakers proposed a politically potent plan to bail out big American car firms.

But its passage is uncertain even with millions of jobs at stake. Automakers have taken the brunt of the impact from a dramatic decline in US consumer spending, triggered by the housing crash and worsened by rising unemployment. Germany said it was ready to guarantee funds for General Motors' Opel unit. Even Japan's Toyota came under ratings scrutiny as signs of recession spread across the globe.

The United States fell into a recession in April and the downturn is expected to last 14 months, with unemployment reaching 7.7 per cent this year, according to a survey of private forecasters by the Federal Reserve Bank of Philadelphia.

That would be the longest contraction since the 16-month recession that ended in 1982, according to the National Bureau of Economic Research. The organization has not declared a recession this year, in part because output expanded in the second quarter, fueled by economic stimulus plan payments.

A top Senate aide said another stimulus plan was not likely to be approved during Congress' post-election session this week, the last time lawmakers are to meet in 2008. In Britain, the main employers group forecast that joblessness could rise to almost 9 per cent by 2010, and France's central bank said the French economy should contract 0.5 per cent in the fourth quarter.

The euro zone is already in recession, usually defined as an economy shrinking for two consecutive quarters. Japan surprised markets with data showing the world's second-biggest economy was in its first recession in seven years as the worst global financial crisis since the Great Depression curbed demand for exports.

The 0.1 per cent contraction in July-September was worse than forecast. China's central bank said the risk of a downturn in its economy was rising, and it also warned that the global slowdown could hurt its exports. International Monetary Fund Managing Director Dominique Strauss-Kahn told the BBC his organization would likely need at least $100 billion in extra funding over the next six months to help countries survive the downturn.

Car Trouble and Market Woes

US Senate Democrats proposed a plan to provide $25 billion of the $700 billion financial fund as loans for the nation's "Big Three" automakers, General Motors Corp, Ford Motor Co and Chrysler LLC. But they face a difficult fight in obtaining enough votes to pass the scheme, especially as lawmakers will be in session for just a few days this week.

The outgoing Bush administration and some congressional Republicans want Congress to adopt an existing $25 billion loan program that specifically targeted the industry, rather than tap the financial bailout funds for carmakers.

The German government said it was ready to guarantee funds for ailing carmaker Opel, the first European carmaker to turn to a government for help. But any money it provides to the GM unit must stay in Germany.

Fitch Ratings put Japanese car giant Toyota Motor Co on a negative ratings watch because of the global downturn, stronger yen and challenges in the auto industry. Toyota is one of the rare companies to have a top-notch "AAA" rating.

Markets were unimpressed with the weekend meeting of the G20 in Washington, which agreed on some steps to tackle the world economic crisis but left it to individual governments to tailor their responses to their own circumstances. Major US stock indexes all closed down more than 2 per cent on Monday, after stocks in Europe and Asia also ended lower.

Commodities also slumped on weak economic news. Oil lost more than 3 per cent as concerns about demand offset evidence of OPEC output cuts and the hijacking of a Saudi Arabian supertanker. Economic concerns supported safe-haven demand for government bonds on both sides of the Atlantic.

"The economic outlook is worrying and no solution has been found short term," said Simon Wardell, analyst at economic consultants Global Insight.

Hard times: Minister says accept layoffs

The country’s economy is under pressure and there will be layoffs, Union Labour Minister Oscar Fernandes has said.

“I would not like any layoffs but reality is reality. If there is no demand for things one produces and there is no market, he has to lay-off,” he told Pallavi Ghosh, CNN-IBN’s Chief Political Correspondent.

“Our growth is on the plus side, (but) because of the recession definitely impact will be felt by way of cut in exports and things like that,” he told CNN-IBN’s Pallavi Ghosh.

Fernandes appealed banks to give loans to the “small man” and not just concentrate on big businesses. “The small man should again get an entry into the banks, so that whatever they save also gets into the banks. Otherwise the small man doesn’t know where to invest.”

The minister’s statement may indicate a change in the Government’s stand on layoffs. Early November, Prime Minister Manmohan Singh had asked the Indian industry not to resort to layoffs.

“While every effort needs to be made to cut cost and raise productivity, I hope there will be no knee-jerk reaction such as large-scale layoffs, which may lead to a negative spiral,” Singh had said.

Finance Minister P Chidambaram, too, on Monday urged companies not to take extreme measures like cutting production and instead wanted them to slash prices of their products. "Hotels must cut tariffs; airlines must cut prices; real estate must cut rates of apartments and homes they sell; car makers and two-wheeler makers must cut prices," said Chidambaram.

Fernandes’ statement comes after international banking giants announced they are cutting hundreds of jobs. It is not clear yet whether the banks’ decision would affect India.

Citigroup’s layoff of 52,000 makes history

Citigroup Inc.’s reduction of 52,000 employees announced on Monday is the second-largest job cut ever undertaken by any company on record, according to consulting firm Challenger Gray & Christmas.

Only the 1993 bloodbath at Big Blue, when IBM let go 60,000 people, was larger. Put another way, the number of jobs being eliminated at Citi is equal to the total amount lost throughout the entire U.S. financial services industry in 2006, according to Challenger Gray.

The cuts figure to have a severe impact on the New York economy, considering that Citi is the city’s second-largest private employer behind only the New York-Presbyterian Healthcare System, according to Crain’s research. Citi had 27,000 staffers in the city in 2005, according to the most recent available data. That number has likely shrunk since then because Citi had already laid off 23,000 employees, or 6% of its worldwide workforce, heading into Monday’s news that it would sack another 20% in what it called “the near-term”—a phrase that seems designed to leave room for additional job cuts later.

In a presentation to employees Monday morning, Citi said it will wind up with about 300,000 staffers, or 75,000 fewer than it had at the end of last year. In doing so, it will shrink operating costs to about $50 billion a year. Citi had $63 billion of non-interest expenses last year.

Half of the job cuts will be achieved through divestitures, such as the previously announced sale of Citi's German banking business, and the rest are new cuts across the board.

New York state Attorney General Andrew Cuomo called the job losses "sad and disturbing" and urged Citi executives to follow the lead of Goldman Sachs Group Inc. and announce that they will not be receiving bonuses this year.

"It would send exactly the wrong message for Citigroup's top brass to collect bonuses while investors, taxpayers, and now Citigroup's own employees suffer," Mr. Cuomo said in a statement.

Investors weren't impressed with the scale of layoffs at Citi, driving the stock down another 7% Monday. The stock is down 70% this year and trades at levels unseen since 1996 due to billions in mortgage-related losses over the past 12 months.

Bill Smith, chief executive of Smith Asset Management and a Citi shareholder who accurately forecast that the bank would need to sack 50,000 people, said investors may not be reacting more positively to the news because they believe Citi needs to go even further and lay off an additional 10,000 to 15,000 staffers to get costs in line with declining revenues.

“Citi is at a tipping point like a cow in a field at midnight,” wrote Douglas McIntyre on the blog 24/7WallSt.com, alluding to the company’s uncertain future.

Stay off layoffs, PMO tells private airlines

The Prime Minister's Office (PMO) has sent a communication to all the six private airlines in the country, asking them to avoid laying off any employee.
Four projects to save jobs, cut emissions

The communication to the chairmen of these airlines comes at a time when India's airline companies are expected to make a combined loss of Rs 10,000 crore in fiscal 2009 - second only to the American aviation industry.

Confirming the receipt of the communication, a top official of a private airline said the PMO has said the bailout package offered by the government-owned oil marketing companies was meant to protect the interests of the employees and the airlines should therefore avoid layoffs. Another CEO of a leading airline said he has heard about the communication but has not seen the letter personally as he was travelling.

The letter was sent 10 days ago by the principal secretary to the prime minister TKA Nair. The communication followed a bailout package announced by the Indian government to help the private airlines tide over the current financial crisis. On October 22, the government had allowed airlines to clear fuel dues owed to the oil marketing companies, amounting to Rs 3,000 crore, in six equated monthly instalments (EMIs). The government has also extended the credit period for paying bills to 90 days against the current limit of 60 days.

Of the Rs 3,000 crore, Jet Airways owes Rs 1,057 crore to oil marketing companies, while Kingfisher Airlines has an outstanding of Rs 983 crore. The first instalment of the dues is expected by the oil companies on this weekend.

Thanks to a combination of high taxes, overcapacity and soaring oil prices, India's aviation sector finds itself facing a crisis. An analyst said these companies need to cut at least 8,000 jobs to remain afloat. Though Jet tried to lay off 2,000 employees in October, it had to hire them back after a nation-wide hue and cry.

The airlines are expecting the coming peak season in December to help them get passengers into empty aircraft. Passenger traffic in October was down by 13% to 3.1 million passenders as compared 3.6 million passengers flying in October 2007.

With Sun's job cuts, tech sector layoff toll in '08 hits 140,000

The economic downturn that has resulted in tens of thousands of layoffs in the housing and financial services sectors is now bearing down on the tech industry. The job cuts announced by Sun Microsystems Inc. on Friday are only the latest in the growing toll.

Sun plans to cut as many 6,000 jobs, or about 18% of its workforce, a move that raises the total number of technology-related job cuts announced so far this year to more than 140,000, according to Challenger, Gray & Christmas Inc., a Chicago-based outplacement consulting firm that tracks layoff announcements by sector.

Most of the job cuts have taken place in the past few months, with nearly two-third of them, or 89,500, occurring since July.

At the current rate, Challenger is forecasting tech-sector job cuts totaling 180,000 by the end of the year.

The rapid increase in job losses follows an increasingly pessimistic spending forecast. Research firm IDC said this week that IT spending growth in the U.S. will be less than 1% in 2009, a sharp drop from an August forecast that projected a 4.2% increase next year.

In 2007, the number of job-cut announcements in the tech sector totaled 107,300; in 2006, it was 131,200; and in 2005, it hit 174,744.

The worst year was 2001, the year the dot-com bubble burst, when nearly 700,000 tech jobs took place, according to Challenger.

Companies that announced layoffs this month include Santa Clara, Calif.-based Applied Materials Inc., which this week unveiled plans to reduce its global workforce by about 12%, or 1,800 workers. National Semiconductor Corp., said it is cutting 330 jobs.

John Challenger, CEO of Challenger, Gray & Christmas, said in a statement that by the end of 2008, "we may also see cuts from Cisco Systems, Qualcomm and Nokia, all of whom are reporting falling sales amid the weakening economy."

One of the largest cuts announced so far this year came in September after the merger of Hewlett-Packard Co. and Electronic Data Systems Corp. HP said in September that it planned to cut as many as 25,000 employees as a result of the merger.

Stay off layoffs, PMO tells private airlines

Mumbai: The Prime Minister's Office (PMO) has sent a communication to all the six private airlines in the country, asking them to avoid laying off any employee.
The communication to the chairmen of these airlines comes at a time when India's airline companies are expected to make a combined loss of Rs 10,000 crore in fiscal 2009 - second only to the American aviation industry.
Confirming the receipt of the communication, a top official of a private airline said the PMO has said the bailout package offered by the government-owned oil marketing companies was meant to protect the interests of the employees and the airlines should therefore avoid layoffs. Another CEO of a leading airline said he has heard about the communication but has not seen the letter personally as he was travelling.
The letter was sent 10 days ago by the principal secretary to the prime minister TKA Nair. The communication followed a bailout package announced by the Indian government to help the private airlines tide over the current financial crisis. On October 22, the government had allowed airlines to clear fuel dues owed to the oil marketing companies, amounting to Rs 3,000 crore, in six equated monthly instalments (EMIs). The government has also extended the credit period for paying bills to 90 days against the current limit of 60 days.
Of the Rs 3,000 crore, Jet Airways owes Rs 1,057 crore to oil marketing companies, while Kingfisher Airlines has an outstanding of Rs 983 crore. The first instalment of the dues is expected by the oil companies on this weekend.

India Inc. speaks on jobs squeeze

ome 7,00,000 people have lost their jobs so far this year, and 5,00,000 more are likely to go in the next 2-3 months if the situation continues like this. Retail markets are declining, exports are down and there are payment problems.
—Sunil Jain, Proprietor/Exporter IC Textiles

The textile sector has been facing downturn since last year. I had a mill manufacturing cotton yarn. It was a 100 per cent export oriented unit with a turnover of Rs 120 crore. Last November I had to shut down the mill and sack 1100 workers. I have nowhere to turn to. Banks will not fund me so I can't think of restarting my business. Now things are worse. I had a staff of 150, now I just have five. I had an office of 3000 sq feet but now it is less than 1000 sq ft.
—DK Nair, Secretary General, Confederation of Indian Textile Industry (CITI)

As discussed with you, there are no layoffs at Satyam. Every year, as part of our appraisal process we identify around 5-10% of our associates in the "Performance Improvement" category and then put them through a structured Performance Improvement Program. Of these, only .5-1% of our associates are asked to leave.

Our performance appraisal process was completed recently and around 400-500 associates left Satyam on account of poor performance.

Manpower Hiring plans in wake of slow down:

Our Q2 gross addition was at 3323 which was healthier than our Q1 additions of 1918. We have revised our manpower guidance downward for FY '09 in the range of 8000 to 10000 posts considering the changes in business and volume growth prospects. Reduction in manpower guidance is also a reflection of the ease in supply environment of both campus and lateral recruits. However we had earlier provided offers for campus recruits which shall be fully honoured in the course of time. Emphasis over the next 6 to 12 months time frame towards man power recruitment shall be in nature of just in time approach.
—Srinivas Vadlamani - CFO, Satyam

The pharma sector per se has not resorted to sacking. What we at Wockhardt are doing is freezing recruitment. We are keeping hiring on hold. There were plans to create some new positions but that is on hold now since the last three months. We take 200 people every year. We are going to wait and watch for the next six months before hiring fresh.
—Habil Khorakiwala, Wockhardt

Whirlpool India's business has been progressing on a high growth path which is reflected in our improving profitability. We have been proactively prudent on our cost control and are well prepared for a slow down. Our future recruitment plans will be linked closely to our growth trajectory.

Whirlpool Corporation has announced a reduction of workforce by approximately 5000 positions by the end of 2009.
—Sanjay Singh, vice president, HR, Whirlpool of India (There were reports of 5000 being sacked)

During the last few weeks, Medium & Heavy Duty Commercial Vehicles market has been facing problems of inadequate funding and high interest costs. Consequently, market demand has come down.  Taking into account the inventory in pipeline and the suppressed market demand, Ashok Leyland has decided to moderate the production plan for the next two months. This decision has also been partially influenced by the problems encountered by the suppliers as a result of power shortage in some parts of the country. Ashok Leyland's manufacturing plants, will work 3 days a week, until December 08.

The Employee Union has agreed for an arrangement by which for the non-working days, the employees will receive their full salaries so that their income is not affected. Half the number of non-working days will be treated as special leave. The remaining number of days will be 'banked' and when the market revives, employees will make up for the equivalent production loss.
—Ashok Leyland's plans to meet fall in demand (Company officials)

The auto sector is certainly not in the pink of health, given the lack of financing and high interest rates. But Tata Motors has not laid off people. Like all other auto companies in the sector, we have temporary workers who come and go.
—Tata Motors, Debashish Ray

Executives around the world overwhelmingly favor developing economies over the more established global powers such as the United States, Europe and Japan for job opportunities in today's economy.

According to our latest executive study, 64 per cent feel that Brazil, Russia, India and China (the BRIC nations) offer the best career options, compared with 22 per cent who selected the US and just nine percent who selected other developed economies such as Western Europe and Japan.

Today's leaders have to be globally aware and understand a variety of international markets, economies and cultures to support their career growth. The allure of the emerging markets presents significant career opportunities in a time of great change.

Sacked from job, employee guns down bosses

An Indian-American CEO of a semiconductor company was shot dead along with two other persons by a laid-off employee of the firm in northern California, police said.

Sid Agrawal, the chief executive officer of SiPort Inc, the company's vice president of operations Brian Pugh and an unidentified woman was killed when several rounds were fired on the premises of the firm in Santa Clara yesterday.

Police said investigators are searching for Jing Hua Wu, 47, in connection with the shooting.

Jing worked as a lead product test engineer for the four-year-old firm, media reports here said. Police said he had recently been laid off from the company and investigators are exploring that as a possible motive in the shooting.

It is believed that a handgun was used in the shooting, a police official told reporters.

Police released a description of the vehicle in which Jiang is believed to have fled and launched a manhunt for him.

According to his biography in the company's website, Agrawal had more than 25 years of experience at startup and established high-technology companies, including at Adobe, Intel and Bell Labs.

He held a degree in Electrical Engineering from IIT-Kanpur, an MS degree from Southern Illinois University and an MBA from the University of Chicago.

IT salary survey: optimism in declining IT job market

The effects of the economic downturn are clearly visible in the IT industry as job vacancies decline, but some skills are still in demand.

The most recent survey on the IT jobs market by ComputerWeekly/Salary Services Limited (SSL) shows IT job vacancies in finance are down by 14.9% in Q3 compared with Q2, in the public sector by 20.5%, in media by 14% and in manufacturing by 9%.

But the sector is better placed than most to meet the oncoming recession, and some IT staff are still experiencing high demand for their skills. Experts say IT professionals have their work cut out over the coming months, but that many will be able to weather the storm.

The skills shortage of the past few years means demand has been higher than supply, and in some areas the downturn is bringing the two back into balance. IT can be essential in a recession - it can improve efficiency, cut costs and bring competitive advantage. The challenge for IT professionals is to make the benefits of IT clear to the rest of the business.
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The SSL survey contains strands of optimism. Demand for some jobs might be falling, but there are some which persist in staying strong.

Management level jobs, such as communications and network managers, technical support managers and systems development managers, saw increases in demand for the year from Q3 2007 to Q3 2008. And project leaders, systems analysts and IT directors all saw increases in salaries for the same period.

"There are still some areas of demand," said Richard Steel, CIO at Newham Council. "Many are within the areas of programme management."

John Meakin, group head of information security of Standard Chartered Bank, says management skills are valuable, even in a downturn.

And Bruno Laquet, CIO at Corus Group, says he would be willing to pay the asking salary of someone who can make a difference to project delivery.

"I think there will continue to be strong demand for some senior roles, such as strong network managers and strong web architects and web operational managers," says Mike Cope, IT director at Virgin Airlines.

And it is not just senior staff who are witnessing steady demand. Companies continue to take advantage of cheap labour in countries such as India, and off-shoring is still a threat, but there has been a surprise growth in demand for UK-based junior skills. Both PC support analysts and PC support workers have seen increases in demand, from 3,989 jobs advertised in Q3 2007 to 4,528 in Q3 2008, and 1,932 to 1,972 respectively.

Michael Bennett, director at Rethink Recruitment, says, "Many companies are deciding they would like some of those skills closer to home, which has led to an unexpected increase in demand."

Web skills are likely to stay in high demand. Advertised vacancies for web designers rose from 1,165 in Q3 2007 to 1,565 in Q3 2008. Advertised salaries increased by 1.6% over the year, while salaries for web authors jumped by 7.6%.

Richard Steel says it is worthwhile for IT professionals to invest in developing web skills. Demand for these skills will increase over the coming years, he says, as organisations start to make the most of what Web 2.0 can offer. Understanding the technology behind it will stand IT staff in good stead.

Marilyn Davidson, director of the Association of Technology Staffing Companies, says, "An increasing number of businesses are going online to cut costs by automating more and more processes, so web skills will be continually in demand."

No-one can deny that the next couple of years will be difficult, however, and many of the problems are likely to bite harder in the next few months.

Cope says, "As the down turn begins to bite deeper we will begin to see a greater slackening of the IT market," while Davidson predicts that the next quarter will be "interesting. Only then is the full impact likely to come through."

Sun Microsystems to lay off 6,000 staff

In the latest staggering batch of redundancies in the technology sector, Sun Microsystems has announced that it is to cut between 5,000 and 6,000 jobs – around 18% of its workforce – over the next year.

The cuts will save an estimated $750 million a year, the company said, but will cost it between $500 million and $600 in the coming 12 months.

The company also announced some radical restructuring. Sun’s software division will be split into three units; one for programming languages and databases, one for its Solaris operating system and the third for ‘cloud computing’ systems. The head of its current oftware division Rich Green has resigned.

The announcement comes shortly after Sun revealed a $1.7 billion loss made in its most recent financial quarter. The company’s share price currently places to the total market capitalisation under the amount it holds in cash.

BT to Cut 10,000 Jobs; Second-Quarter Profit Falls

BT Group Plc, the U.K.'s largest phone company, aims to cut about 6 percent of its workforce in the year through March to improve profitability after reporting a slide in second-quarter earnings.

Most of the 10,000 cuts, out of a workforce of 160,000, will be ``indirect labor'' such as agency workers, contractors, subcontractors and offshore employees, the company said in a statement today. Earnings before interest, taxes, depreciation, amortization and costs to cut jobs fell 1.3 percent to 1.43 billion pounds ($2.1 billion) in the fiscal second quarter.

BT posted the biggest intraday surge in six years in London trading. The economic downturn makes it more difficult to win new clients and complete contracts, Chief Financial Officer Hanif Lalani said in a Bloomberg Television interview. About 4,000 of the planned redundancies have already been completed, BT said.

``It's definitely the right thing to do,'' said Andy Lynch, a fund manager at Schroder Investment Management Ltd., which oversees $2.9 billion. ``It's currently difficult to win new business, so cost cuts are necessary to defend profitability.''

BT gained 10 pence, or 8.9 percent, to 122.5 pence in London, after jumping as much as 13 percent earlier. Before today, the stock had lost 59 percent this year.

Union Talks

Chief Executive Officer Ian Livingston said BT doesn't plan compulsory job cuts. Job cuts among people working directly for BT will be largely achieved through natural turnover, BT said.

The Communication Workers Union will discuss the cuts with management, the union said in a separate statement. It will oppose compulsory redundancies by ``whatever means necessary.''

The company aims to cut costs by 700 million pounds to 800 million pounds this fiscal year, Livingston told reporters in a conference call. The current economic slump ``will get worse before it gets better,'' the CEO said.

Analysts predicted second-quarter Ebitda excluding costs for job reductions of 1.37 billion pounds and sales of 5.24 billion pounds, the average estimates in a Bloomberg News survey.

BT said Oct. 31 that second-quarter Ebitda was ``slightly below expectations'' in the three months through September. The company cited lower cost savings than forecast, a disappointing performance in the global services division and a slump in the U.K. The company reiterated Ebitda in the 12 months through March is predicted to show a ``small'' decline, while sales will rise.

`Not Good Enough'

``Three out of our four business units, BT Retail, BT Wholesale and Openreach are delivering on or ahead of target,'' Livingston said today. ``But profits in BT Global Services are simply not good enough and we are taking decisive action to put matters right.

The head of the global services unit, Francois Barrault, resigned on Oct. 30. He was replaced by Lalani.

The company has sufficient funds for the next two years and ``there is no need for us to require any more liquidity until the end of 2010,'' Lalani said in the interview.

The finance chief said BT will consider the issue of its full-year dividend at the end of the year. BT plans to pay an interim dividend of 5.4 pence per share, the same as last year.

BT also said planned changes to its pension program will help to cut costs by about 100 million pounds a year. The company proposed this week to raise the retirement age to 65 from 60, base payouts on career average pay instead of final salary and build up pension entitlement at a slower rate.

The Communication Workers Union and the Connect Union both said they will put the proposed agreement to their BT members in a ballot with a recommendation to accept it.

10,000 banking jobs at threat

UNIONS urged the Federal Government to save banking jobs, amid fears the big five banks could soon shed up to 10,000 positions. The Age reported yesterday that ANZ was set to cut 3000-3500 jobs — 10% of its workers — in weeks, responding to the economic slowdown.

A well-placed source said the cuts were long-planned.

An ANZ spokeswoman confirmed job losses. She would not say how many but denied it would be 10% of its workforce.

"We announced in September that we would have a new structure with fewer middle-management roles — although it will leave customer-serving roles largely unaffected," she said. "These plans are beginning to crystallise and it is inevitable that some jobs will be lost."

Releasing the KPMG banking report last month, its head of banking, Andrew Dickinson, said Australia's big banks would likely cut about 10,000 staff from a pool of more than 150,000.

Finance Sector Union national secretary Leon Carter said ANZ was acting heartlessly.

"We have seen Westpac and St George get together yesterday and we conservatively estimate that at least 5000 jobs will disappear out of those two banks," Mr Carter said. "If you add the speculation about ANZ, then in the next 12 to 18 months, up to 10,000 jobs will disappear out of the banking sector."

He urged the ANZ to "come clean" on the jobs under threat because it created uncertainty for workers and customers. He said the Government guarantee on bank savings meant it should demand that no jobs go.

Deputy Prime Minister Julia Gillard said although she would not advise businesses on their circumstances "we've been very clear that the global financial crisis is going to touch this country. We are not immune.

"We've been very frank, we expect unemployment to rise." She said the Government was investing in jobs through its economic programs.

RBS to cut 3,000 jobs globally

Royal Bank of Scotland will cut around 3,000 jobs worldwide over the next several weeks, according to British media reports.

RBS, which is raising as much as 20 billion pounds ($29.6 billion) from the British government to survive the financial crisis, will cut positions in its global banking and markets work force, the BBC said, without identifying its sources.

RBS spokeswoman Linda Harper said the bank was not confirming the cuts. "We constantly review our operating model to make sure that it is appropriate to the market conditions and take action accordingly," she said in a statement.

The BBC and the Scotsman newspaper reported the news Friday.

Earlier this month, RBS had said it could suffer its first ever annual loss this year, after almost 300 years of consecutive annual profits in the company's history.

The report comes after announcements earlier this week that other British companies, including BT Group PLC, Virgin Media and Yell Group PLC, will also slash thousands of jobs.

BT said Thursday that it will be cutting 6,000 more jobs — mostly in Britain — by March of next year to improve profitability. The cuts come on top of 4,000 more the company has already made since April.

On Wednesday, official statistics showed Britain's unemployment rate rose sharply to 5.8 percent in the three months to September, up from 5.4 percent in the previous quarter. The total number of unemployed people in Britain is now 1.82 million — the highest it has been in a decade, Britain's Office for National Statistics said.

The banking sector is among the hardest hit with job losses because of the financial crisis. Recruitment agency Morgan McKinley reported on Thursday that there were just 5,418 new job openings in London's financial services sector this October — 48 percent less than there were in the same month last year.

Citigroup mulls 10,000 pink slips

Vikram Pandit-led Citigroup, the world's largest bank, will hand out pink slips to at least 10,000 employees beginning this week and is also planning to raise its credit card interest rates as part of plans to return to profitability, a report said on Friday.

According to a report in the Wall Street Journal, Citigroup is embarking on "another huge round of layoffs and is raising interest rates on millions of credit card customers" as part of its push to become profitable again.

The fresh measures follow net losses of more than $20 billion over the past year and the subsequent efforts by Pandit, who became Citigroup's CEO late last year, to stabilise the financial giant, the report added.

"Starting this week, Citigroup is handing out pink slips toat least 10,000 employees..." the Journal reported.

In October, Citigroup reported a net loss of 2.8 billion dollars for the third quarter and said that its headcount was cut down by about 11,000 employees during the period.

In the first three quarters of this year, Citigroup cut down its workforce by about 23,000 persons.

Another report in the New York Times said that worst may be yet to come for Citi despite a year of losses, months of share price plunge and a 25 billion dollar government help.

The company's share price have lost nearly two-third of its value so far this year and figures among the top losers on the Dow Jones Industrial Average index.

The New York Times report quoted unnamed Citi executives as saying that the bank has announced plans to cut 40,100 jobs as of the third quarter and "still needs to hand out pink slips to 9,100 workers to meet its goals and bankers are bracing for much of the bad news to arrive early next week."

Motorola confirms layoffs in India

The company’s India operations will face job cuts as part of a plan to shed 3,000 jobs, or about 5% of its global workforce

US mobile phone maker Motorola Inc. has said its India operations will face job cuts as part of a plan to shed 3,000 jobs, or about 5% of its global workforce. The company did not specify the number of employees to be given pink slip in the country.
Trimming costs: Motorola Inc.’s headquarters in Schaumburg, Illinois. Tim Boyle / Bloomberg
“The decision (to lay off) is an in-principle worldwide one, to be implemented while evaluating a variety of factors for each market. At this time, there are no specifics,” said Amit Chaudhery, communications and corporate affairs head of Motorola India Pvt. Ltd
This comes a day after reports that American Express India, the local unit of New York-based card issuer American Express Co., is likely to cut 120-150 jobs from its finance and accounting back-office operation in India.
Several software engineers in Motorola India are being redeployed after Sanjay Jha, the company’s co-chief executive, in August decided to focus on Google Inc.’s Android operating system and just two other software platforms to develop new phones, jettisoning at least four platforms.
“The company is trying to redeploy internally as many people as possible, but some will have to be laid off,” said an official at Motorola India, who did not wish to be identified because of the sensitivity of the issue. He added that the company will have to let go of a maximum of 15 people.
Unlike market leader and rival Nokia Oyj, which uses just two operating systems for most of its handset designs, Motorola has relied on more than half a dozen operating systems.
Motorola India, with its headquarters in Gurgaon, employs about 4,000 people and has offices in New Delhi, Mumbai and Bangalore.
“There are several software engineers, vice-presidents and directors in the market looking for jobs. About 400-500 people have become redundant in Motorola, but many of them are being redeployed internally,” said a human resources manager in an IT services company, who claimed to have interviewed many of these candidates. He requested anonymity for fear of jeopardizing his relations with Motorola.
The Schaumburg, Illinois-based Motorola had announced plans to slash 3,000 jobs on 31 October while declaring a third quarter net loss of $397 million (Rs1,929 crore today). The company had made a profit of $60 million in the year-ago period.
The layoff is expected to reap annual savings of $800 million. The company’s co-chief executive, Greg Brown, has said two-thirds of the layoffs would be in the sagging handset division. In the quarter ended October, Motorola slipped to the No. 4 position in the handset market behind Nokia, Samsung Electronics Co. Ltd and Sony Ericsson Mobile Communications AB. The US cellphone maker has also delayed the planned spin-off of its mobile handset business amid the current economic crisis.
Meanwhile, the process of rehiring, which Motorola India had initiated a few months back, is still continuing. It aims to rehire 220 middle and senior managers, who had left the firm over the past one year.

Unemployment looms large over Kerala IT horizon

In August 2007, a leading engineering college in Thiruvananthapuram, Kerala had invited applications from engineering graduates to a couple of vacancies of lecturers, offering a handsome package. But there were hardly any takers for the posts.

A year later, in 2008 October, the same college invited applications to two posts of guest lecturers in Computer Science. And, the response was unbelievable. Nearly 100 engineering graduates turned up for the selection.

This simple instance reflects the grim scenario in the IT sector in the state. The shake up in the US economy and the global recession that followed have its repercussions in God's on Country too.

Though the industry leaders kept on denying the reports of cost-cut measures by the IT companies in the state, they became mum as IBS Software Services based at the Thiruvananthapuram Technopark had given the pink slips to about two dozen IT professionals.

While IBS's version is that it was only a 'performance based termination', the expelled employees contradicts it claiming that those who had even won the company chairman's best performer awards had also found a place in the chop-off board.

"About forty per cent of the software export from Kerala is to the US and hence it's obvious that any minute fluctuations in the US market will have its direct impact on the state," says Thomas Mathew, an IT professional in the city.

"Termination is nothing new in the IT sector. About a year back, another leading firm in Technopark terminated a good number of software professionals. Since the IT sector was at its peak at that time, those professionals did not take much time to get a better placement," Mathews adds.

But in the present scenario, it's quite difficult to get a fresh placement as almost all companies had put a sealing on the recruitments, he says.

Besides causing serious social problems owing to overnight terminations, the slow down in the IT industry is also having its impact on the state's economy as the fund flow from abroad would come down.

The skyrocketing growth of the IT sector had in fact contributed to the over all development of the state. Real estate, construction and automobile industries had witnessed a massive growth in Kerala over the last few years, which could definitely be attributed to the hefty packages offered in the IT sector.

"With reports of IT slow down coming in, there is definitely an uncertainly in the construction sector also. The response to some of our new projects is not as impressive as what we received till a few months back," says a leading builder in Kochi.

Meanwhile, a haste intervention of the state government into the termination of IT professionals by IBS had irked the IT entrepreneurs.

Following reporters of over-night termination from IBS, the state Labour Minister deputed a team of officials of his department to look into the issue. This action had invited widespread criticism from the industry.

G.Vijayaraghavan, founder CEO of the Technopark had even termed the move as a suicidal one that would scare off the investors from the state.

This is not the sunset of the IT sector. Every steep will be followed by a slope. With a state-of-the-art manpower, the IT companies in Kerala could maintain its growth by shifting the focus to other parts of the world, say experts in the filed.

Corus to lay off 400 to cut expenditure

Corus, part of the Tata Steel Group, will cut 400 jobs in its distribution business, in the wake of the global economic downturn.

Since the acquisition by Tata Steel in January 2007, which catapulted the domestic steel major to the world’s sixth, this is the first layoff announced by the Corus.

A company release said that Corus Distribution had introduced a series of measures to reduce expenditure on transport, consumables, energy and other discretionary spending. “However, these actions alone will not be sufficient to offset the decline in the market and the business unit is therefore today announcing proposals to reduce approximately 400 positions,” said the statement.

The restructuring will be done in the UK and Ireland, where the company employs around 2,400 people across 36 sites. Following the production-cut announcement, Moody's Investors Service revised the outlook on Tata Steel's Ba1 corporate family rating to negative, reflecting the change in slowing demand in Europe and the UK.

Since the start of 2008, Corus Distribution UK & Ireland has been operating in a volatile and fluctuating market. “The impact and continuation of the global economic downturn is having a major effect on steel customers in the automotive, construction, plant and machinery segments. Since September, the business has seen a significant decline in demand,” said the release.

The consultation process with employees would start as soon as possible with focus on voluntary redundancy. Corus Distribution would put in a range of support services to help the affected employees.

Corus today announced that it would cut 30 per cent production in the fourth quarter. Last month, it had decided to reduce its crude steel production in the third quarter by up to 20 per cent, which translates to around one million tonnes. The decision is aimed at aligning steel production with demand.

Steel prices have crashed in the last 2-3 months. Hot rolled coil prices, which were hovering at $1,200-1,250 a tonne, are now ruling around $600-700.

Fidelity to lay off 1,300 employees

Fidelity Investments, the mutual fund company that’s pushing into the Triangle in a big way, will lay off around 1,300 people worldwide in the face of the economic downturn.

The company said Thursday that the cuts represent 3 percent of its 44,400-person work force. It was no immediately clear how the layoffs would affect the more than 2,500 Fidelity employees in the Triangle.

A second round of layoffs will come in the first quarter of next year, the company says, but it’s yet to work out the details.

“Global economic conditions and the unsettled nature of the world's stock markets all year long have required businesses around the globe and across all industries to examine their operations and make adjustments,” the company said in a statement. “Fidelity executives have been carefully reviewing their work units and prioritizing their business initiatives in order to ensure the company is well-positioned for the future.”

Fidelity said in August 2006 that it would add 2,000 employees to its Triangle operations in return for state and local incentives. The company has since boosted its work force to more than 2,500, from 1,000 and it expects to have 3,000 employees in Research Triangle Park by 2010.

The company is currently in the midst of building a 260-acre campus in RTP that’s expected to be complete by 2009.