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.

PM's plea has no credit; Amex cuts jobs

Credit card company American Express has asked some of its senior managerial employees to quit as part of its strategy to save costs.

The layoffs are primarily in Delhi and Bangalore and all the employees who have been asked to quit have been with Amex India for the past 15 to 20 years. Amex India has hired a consultancy to help sacked employees find a new job. The company currently has around 6,000 employees in India.

PTI reports the company is believed to have handed over pink slips to about 200 employees and senior executives.

The report on layoffs comes on a day when Prime Minister Manmohan Singh asked Indian companies to "refrain from large-scale lay-offs". Singh on Monday warned industry leaders that layoffs may lead to a “negative spiral”.

"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 said on Monday.

American Express confirmed that it would cut jobs in India but said it cannot give a specific number. “Approximately 7,000 jobs are being eliminated company-wide which translates into about 10 percent of the company's worldwide workforce,” the company said in a press statement.

"While we cannot give you specific numbers for India, we can tell you that we (Indian operation) are not the main focus for restructuring," it said. "Reduction will occur throughout the company and across business units, markets and staff groups, primarily focusing on management and other positions that do not interact directly with customers."

American Express, last week, announced it would lay off 7,000 employees—about 10 per cent of its worldwide workforce—to save $1.8 billion in costs in 2009.

PTI reports the company would also suspend management-level salary hikes for the next year and curtail hiring.

Jet Airways was last month was forced to withdrew its decision to sack 1,900 employees.