IBM To Axe 5000 Employees In US

International Business Machines (IBM) plans to lay off about 5,000 US employees, with many of the jobs being transferred to India, a media report said today. The technology giant has been steadily building its work force in India and other locations, while reducing the number of employees based in the US. Foreign workers accounted for 71 per cent of Big Blue’s nearly 4.00,000 employees at the start of the year, up from about 65 per cent in 2006, the Wall Street Journal said.

The latest round of cuts target the company’s global business-services unit, which does everything from running corporate data centers to managing HR for clients. Some jobs are being eliminated as customers have ended contracts or the company has automated tasks. But employees were quoted as saying that they have been training IBM workers from India to do work that will now be moved overseas.

Google pays for 'over-investments', to cut 200 jobs

Google Inc is cutting its sales and marketing team by roughly 200 employees, saying it had over-invested in certain parts of the company.

The move is the Web search leader's latest effort to cut costs in a tough economy and a broad slowdown in advertising spending. In January, Google laid off about 100 recruiters and it said up to 40 people would be laid off in February, when Google pulled the plug on its radio advertising effort.

"When companies grow that quickly it's almost impossible to get everything right and we certainly didn't," said Omid Kordestani, Google’s Senior Vice President of Global Sales and Business Development in an announcement posted on Google's blog on Thursday.

"In addition, we over-invested in some areas in preparation for the growth trends we were experiencing at the time," he added. Google has nearly 21,000 employees. The Mountain View, California-based company does not disclose how many staff work in sales and marketing.

Sameet Sinha, an analyst with JMP Securities, said the cuts were in keeping with the agenda of Chief Financial Officer Patrick Pichette, who took the job last year and has made cost-cutting a priority. "His first line of attack was going after non-core expenses. Now he's looking at some of the major organizations there where you can cut costs," said Sinha, who rate Google's stock "market outperform."

His company makes a market in the stock. In the wake of U.S. sales head Tim Armstrong's recent departure from Google to take the top job at Time Warner Inc's AOL, Sinha said the sales team was more vulnerable to cuts.

Google is the No. 1 search engine in the United States, with a roughly 63 percent market share, according to comScore. In 2008, 97 percent of Google's $21.8 billion in revenue came from advertising.

Google's strength in text-based search advertising has shielded it from the difficult conditions plaguing the online display ads that companies like Yahoo Inc and AOL depend on. Even so, Google's business has not been completely immune.

Total sales grew 18 percent in the fourth quarter of 2008 versus 51 percent in the fourth quarter of 2007. A Google spokesperson said the company will seek new positions for affected employees, but it will not be able to place all of them.

It did not disclose the number of open positions it has. Google shares finished regular trade up 2.68 percent, or $9.22, at $353.29 on Nasdaq on Thursday.

United Technologies to fire 11,600 employees news

United Technologies Corp., which owns Pratt & Whitney jet engines and Sikorsky Aircraft, expects to cut 11,600 jobs and is lowering its 2009 forecast because of a deteriorating commercial aerospace market.

As of December 2008, it employed about 220,000 people. Additional hourly work force adjustments may occur during 2009 based on market driven production volume changes, the company said in a statement.

The world's largest maker of elevators and air conditioners said on Tuesday it expects to earn $4 to $4.50 per share in 2009, lower than the $4.65 to $5.15 per share it previously forecast. The new forecast includes 30 cents to 40 cents per share of restructuring charges, as well as some expected one-time gains.

CEO Louis Chenevert had said in December that strong backlogs would temper the effects of a rising dollar and deteriorating economic conditions in the second half of 2008. ''The outlook for commercial aerospace and global construction markets has continued to deteriorate since UTC's December investor meeting and the economic recovery previously anticipated in the second half of 2009 now appears unlikely,'' he said in today's statement.

The moves, part of an expanded $750 million restructuring program, are being driven by a decline in anticipated revenue, which is now expected to total $55 billion this year, down $2.7 billion from a December estimate. Analysts had expected $55.2 billion. The job cuts make up some of the more than $1 billion in cost savings generated this year.

United Technologies' extensive portfolio includes Carrier air conditioners, Otis elevators, Pratt & Whitney and Rocketdyne aircraft systems, helicopter-maker Sikorsky and safety-equipment manufacturer UTC Fire & Security.

IIM-A average salaries down 25%, but finance sector hires most students

Global slowdown has taken its toll on the country''s top B-School the Indian Institute of Management-Ahmedabad (IIM-A) with average salaries coming down by 25%.

However, despite the Wall Street collapse leading to a financial meltdown, the finance sector recruited the highest number of students (39%) followed by consulting 24% and marketing 13% from the 265-strong batch.

A press conference is being addressed by IIm-A director Dr Samir Barua in Ahmedabad.

The placement week that had to be extended by 2-3 days because of the slowdown saw 109 companies coming in for placements with 95 of them picking up the country’s best management talent.

Though the institute missed Lehman Brothers and other top i-banks, finance sector did not disappoint, with first time recruiter Union Bank of India recruiting 18 students, the highest number recruited by any company, followed by Jaypee Capital, again a first time recruiter, which hired 12 students.

While Bain & Co hired 8 grads, McKinsey recruited 8 and Boston Consultants hired 7 students from the institute. Frost & Sullivan, again a first-timer recruited as many as 5 students.

Although the highest offer is not known yet, the Slot Zero, the placement slot reserved for elite recruiters, hired as many as 34% of the 2007-09 batch. It is learnt that many students received crore-plus salaries in this slot.

Last year, a record high salary of Rs 1.44 crore was offered to an IIM-A grad. The average salaries last year, were in the range of Rs 16-18 lakh.

This year the domestic offers are in the range of Rs 12-17 lakh while average international offers stood at $83,000 (excluding bonus).

Fullerton India lays off 3,000 employees

Temasek-backed NBFC Fullerton India has given pink slips to 3,000 employees, which is around 20% of its workforce in India. The Mumbai-based credit company is also learnt to have shut down 50 branches across the country owing to the liquidity crunch.

A company spokesman said, "This is a consolidation exercise, under which branches have been merged and under-performers have been asked to leave."

Another company official said those people laid-off were probationers and in the first year of their jobs. "Most of these employees were given six to nine months to develop their skills and were also provided with adequate training. Those who could not come up the learning curve have been asked to leave".

A wholly-owned subsidiary of investment major Temasek Holdings, Fullerton specialises in lending to the mass market which consists of small & micro entrepreneurs, small shops and trading establishments, self employed segment (annual turnover of Rs 2.5 lakh to Rs 1.5 crore) and the lower level of salaried individuals (annual salary of Rs 36000 to Rs 3 lakh).
The credit company had 800 branches across the country and employed around 14,000 people. Singapore-based Temasek Holdings has invested $ 300 million in Fullerton India in the last couple of years, the last infusion was made in October last year.

Fullerton India has disbursed close to Rs 5,000 crore since it started operations in 2006 and has an asset book of Rs. 2,500 crore at present. While 70% of its lending portfolio constitutes loans to the self-employed segment, the remainder consists of loans to salaried individuals and two-wheeler loans. Most of these loans are unsecured. The company has an exclusive tie-up with Hero Honda and Honda Motorcycles for two-wheeler financing.

NBFC’s such as CitiFinancial and GE Money have also scaled down operations significantly in the past six months. While CitiFinancial has brought down its branch network from 450 branches to 170 branches, GE Money has reduced its network from 180 branches to less than 80 branches.

Fullerton Holdings is also planning the launch of its subsidiary Fullerton Securities, which will provide retail broking and wealth management services to clients in the mass affluent segment. The team is spearheaded by Rajiv Kakar, formerly head of Citibank’s consumer banking business in Turkey, Middle East and Africa and thereafter member of the board of Visa International for Central Europe, Middle East and Africa and Pallav Sinha, formerly Head of Wealth Management at Standard Chartered Bank, India.

Malaysia to lay off 15,000 foreign employees every month

In a bid to protect domestic workers from retrenchment following global financial crisis, Malaysian government has planned to recruit 15,000 locals every month by replacing foreigners, including Indian, working in various sectors in the country.

The government has said that it is to identify a few sectors where its citizens could work replacing foreigners.

The Human Resources Ministry is looking at turning over to locals 15,000 jobs a month currently held by foreign workers, local media said here today.

At least 15 sectors could be identified, one of them being service industry, Star paper said.

Malaysia relies on the services of foreign professionals for its constructions industry, plantations, restaurants, security and housekeeping. Most of them are sourced from India, Indonesia, Bangladesh, Nepal and Pakistan.

The ministry would identify jobs suitable for locals to take over from foreign workers, Human Resources Minister S Subramaniam said.

"The aim is to ensure that priority for these jobs is given to locals who have been retrenched," Subramaniam said, adding that both employers and employees must have a change of mindset.

Hexaware cuts benched staff's pay

Mid-sized IT firm Hexaware Technologies on Wednesday said it has cut the salaries of about 350 employees, who are currently on the bench, as part of its cost control measures. The reduction in salary would entail a cut of up to 50% from the basic pay.

In addition, employees above a certain designation will take salary cuts ranging from 2-10%, said the IT firm in a statement.

The company also plans to give the 350 employees ‘time-off’ to improve their skills and get re-trained, which are in demand. It will also organise re-skilling and training opportunities for these employees and continue to give them provident fund and gratuity benefits, as well hospitalisation insurance and life cover, added the statement.

“The employees will continue to be on the pay rolls of Hexaware, while the organisation will continue to identify opportunities for them and identification of projects, absorb them into the mainstream,” said the company.

Hexaware is the second IT company to effect what is now being termed as a ‘virtual bench’ concept. Before this, another mid-size IT firm Mastek had put employees, who were not billable, on reduced salaries equivalent to their severance pay for one year.

Apart from introducing a virtual bench, Hexaware will also reduce salaries for all the staff, barring those with less than three years of offshore experience. As a result, salaries of about 40% of employees will be unaffected, according to the company.

HSBC to slash 6,100 jobs in US

Europe's largest bank HSBC will be cutting as many as 6,100 jobs in America, as the entity has decided to close down majority of its business network for consumer finance segment.

The job losses come as the bank would cease to write new consumer finance business through the HFC and Beneficial brands in the US.
Household Bank is a trading name of HFC Bank Ltd, which is a member of the HSBC Group.
"... We will close the majority of the HFC and Beneficial-branded US branch network, regrettably with the loss of 6,100 jobs. This will result in a restructuring charge of $265 million in the first half of 2009," HSBC today said in a statement while announcing its annual results.
The firm has reported a pre-tax profit of 9.3 billion dollars for the full year 2008, a decline of 62 per cent as compared to the year-ago period.
HSBC attributed the decision not to write new consumer business, to lack of home equity, the deteriorating outlook for house price appreciation and very limited refinancing opportunities available to this customer segment in the near term.
"... We will cease to write new consumer finance business through the HFC and Beneficial brands in the US, and will concentrate on running-off the outstanding real estate secured and unsecured portfolio of $62 billion," it added.
HSBC noted that the restructuring charge of $265 million would include closure costs and non-cash charges, and annualised cost savings of about $700 million.
"With downside risks for unemployment and residential real estate in the US, we expect credit provisioning to remain elevated and operating losses to continue in 2009 and 2010," the statement said.
For North America, the company reported a loss of $15.5 billion including the goodwill impairment charge of $10.6 billion in Personal Financial Services

Layoffs possible, says TCS

As part of cost cutting-measures to tackle the global economic downturn, IT major TCS today said job-cuts are possible if the situation worsens, but said there are no immediate plans for lay-offs.

The company has, however, ruled out salary hikes next year and frozen “lateral intake” besides increasing weekly working hours for employees.

TCS managing director S Ramadorai said “there would be no hike in salaries in the forthcoming year” and added that “job cuts are possible if the situation worsens”. He added that the company is reviewing variable pay components of the staff salaries. The variable pay component of TCS employees differs between 22 per cent and 35 per cent of his/her gross salary, depending on an employee’s rank, he said.

Variable pay represents 8 per cent of the total revenue of TCS, whose headcount is 1.4 lakh. “We have around 1,40,000 on our payroll. On an average, 20-35 per cent of an employee’s gross yearly salary is the variable pay component,” said Global Human Resources vice president Ajayendra Mukherjee.