AOL CEO fires off lay-off warning

Time Warner’s AOL is to lay off 10% of its 7,000 employees worldwide because of the struggling economy and decline in advertising revenues.

AOL CEO Randy Falco has sent an internal memo confirming that the lay-offs will be rolled out in the coming few quarters. US workforce reductions will be completed by March. He added that the company will eliminate merit pay increases in 2009.

Falco writes: "Online marketers have tightened their ad buying across the board, reducing their spend by hundreds of millions of dollars. As a result, we will be reviewing our entire organisation to further align resources and expenses against the real revenue opportunities in this difficult market. Part of this will involve consolidating groups to gain efficiencies that will unfortunately lead to head-count reductions."

The deal is not expected to affect India. AOL India told IT Examiner, "This is a worldwide phenomenon now. Every company is looking to come up with better profitability and shaping up operational aspects." Senior management officials at AOL India are confident that the lay-offs will not affect its operations India, as the country has a cost advantage compared to locations like the US.

Operational expenses, like frequent trips to the US, have been cut. But there is an intense insecurity among the AOL employees here. AOL had a similar reduction earlier, but it had hardly any impact on India.

While AOL may be considering a sale of Bebo, for now the site is still the centrepiece of its People Networks business.

Falco said, "We combined Bebo with our longtime community assets AIM and ICQ as well as newer acquisitions Goowy, Yedda and Social Thing, to build People Networks, gaining AOL a foothold in the critical social media space, with more announcements to come on the next phase of development in both the social media space and in the integration of social and publishing capabilities."

AOL has been talking to Yahoo and Microsoft about integrating its advertising business with either or both of those companies for a broader reach. Earlier this month, Time Warner Chief Executive Jeffrey Bewkes met Microsoft CEO Steve Ballmer and Yahoo Chairman Roy Bostock at Time Warner's New York headquarters.

The latest move from the company seems to indicate that potential partners are concerned about profitability and operational aspects in these hard times for the online advertising market.

The valuation of the deal is also on the decline. Last week Google recorded a $726 million write-down of its five per cent stake in AOL. The writedown implies that AOL is now valued at around $5.5 billion. In 2005, Google valued AOL at around $20 billion. X

Boeing May Lay Off 10,000 Workers

Boeing executives said Jan. 28 that the company is considering cutting 10,000 jobs.

The Chicago-based defense and aerospace giant announced a loss of $56 million, or 8 cents a share, for the fourth quarter of 2008, though most analysts were predicting a profit of 76 cents a share.

While revenue fell in both the commercial and defense portions of the company, it was the commercial side that got the most attention during Boeing's fourth-quarter conference call.

The loss was due in large part to a strike by Boeing machinists last fall, Boeing executives said. That hurt potential fourth-quarter revenue by $4.3 billion and earnings per share by $1.02, the company said.

James McNerney, Boeing's chairman, president and chief executive, acknowledged that 2008 was a "challenging year," and said Boeing is aiming to cut 6 percent of its workforce while also cutting discretionary capital expenditures and "unnecessary work."

The job cuts will happen through a combination of layoffs, cuts in contract labor, attrition and retirements, McNerney said.

Another hit to fourth-quarter earnings came from delays on the company's 747-8 jumbo jet program. Boeing put the impact to earnings from those delays at 61 cents a share. McNerney said the company underestimated how much engineering work was needed on the aircraft, resulting in "substantial" design changes.

Boeing had revenue of $12.7 billion in the fourth quarter, down from $17.5 billion in the same quarter in 2007. Fourth-quarter earnings were $1.36 a share in 2007.

In contrast to the commercial division, Boeing's defense division had a much smaller drop in revenue. In defense activities, which make up roughly half of Boeing's business, fourth-quarter revenues were $8 billion, down from $8.4 billion a year ago. Executives highlighted international contract wins, such as agreements to sell P-8 maritime patrol aircraft to India and C-17 transport planes to NATO.

McNerney also said Boeing is sticking to the schedule it issued in December for the 787 Dreamliner, with the first flight planned for the second quarter of 2009, despite delays from the machinists' strike and the need to replace certain fasteners. Boeing plans to produce 10 787 airliners a month in 2012. The backlog for the 787 is about 900 planes, McNerney said.

Boeing's total backlog at the end of 2008 stood at $352 billion, $73 billion of which was for the company's defense division.

McNerney said Boeing is expecting more pressure on defense budgets in the United States and other countries because of spending on economic recovery programs. Moreover, financing for airplanes continues to be challenging, he said.

There were six order cancellations in Boeing's commercial division in 2008, and about 110 aircraft deferrals, but there will likely be more cancellations and deferrals in 2009, the CEO said.

"We are indeed facing one of the more difficult commercial and financing markets that most of us have ever seen," McNerney said. "However, we have a solid foundation from which to work through this environment, with half our business in defense, strong commercial products and a large backlog. Equally important is the fact that the actions we are taking now are not business as usual."

McNerney said Boeing is working to reform its operating model to move away from business units operating as "islands."

He said the company "waited too long" to integrate functions that span the entire company and foster the sharing of best practices. Boeing has already started doing that, with reorganization in its commercial airplanes business late last year, but more changes will come, he said.

Within the commercial division, "We are reintroducing rigorous functional discipline, with clear lines of sight and accountability and tighter integration to program, business unit and corporate decision making," McNerney said. "It's time to end the era where development programs were stood up to operate as islands of their own. While this structure served a purpose to foster the kind of tremendous innovation like the 787, our recent experience has shown it to do so at the expense of execution and predictable performance."

Global layoffs hit India as well

It was a bloody Monday in the US with thousands of people being laid off. As the economy slows down, India has not remained insulated.

Multinational companies, outsourcing companies have started laying off people. Others have ordered a freeze on hiring.

It's been six months since Jayesh Gholap, a computer engineer lost his job. The knowledge process outsourcing firm he worked in, shut when the US company it served went bust six months ago.

"First thing that hit me was when is the next bill, the next EMI due. Getting a new job, getting used to it is not easy," said Jayesh Gholap, computer Engineer.

Everyday, there are fewer and fewer jobs to go around. On Monday seventy thousand people were laid off in the United States. And India is not insulated.

One more multinational company Unilever has announced plans of cutting costs. In a letter to its employees, the company has warned of job cuts across its subsidiaries globally and India too will be impacted.

The numbers are reflected in the job applications by people already laid off. At an HR firm ABC consultants, 25 per cent of applications are from people who have lost jobs.

"There is a hiring freeze. They are not filing existing positions and letting natural attrition happen. Another aspect is performance appraisal has become stronger and taken a whole new meaning, instead of half yearly it has become quarterly," said Shiv Agrawal, consulatant.

In a global economy several jobs in India like those of Gholap depend on the conditions abroad.

After freeze on hiring and tougher performance appraisals, jobs across the world including India will face a tough test for survival.

Microsoft layoff: Desi techies target?

Indian IT professionals working for Microsoft Corp in the US could be among those who lose jobs after it announced plans to sack 5,000 employees with the software giant indicating some of the affected would likely be non-Americans amid calls to first target foreigners working on H-1B visas.

The world's biggest software company has been asked by an influential Republican Senator from Iowa Chuck Grassley to first fire foreign workers hired on H-1B visas, a majority of whom are Indians, while implementing the layoff plan and "protect" the jobs of Americans.

An indication that foreigners who also include Indians could be targetted during the layoffs came when a Microsoft spokesperson in a statement said, "We care about all our employees, so we are providing services and support to try to help every affected worker, whether they are US workers or foreign nationals working in this country on a visa."

The company has been in the forefront for expanding the H-1B visa programme, a temporary visa programme that lets American companies and universities hire thousands of foreign workers in a category considered by the government requiring specialised skills.

Dashing off a letter to the company after it recently announced its intention to slash the workforce by 5,000 in the next 18 months, Grassley voiced concern that this would result in American workers losing jobs and not the foreigners hired on H-1B or L visas.

"During a layoff, companies should not be retaining H-1B or other work visa programme employees over qualified American workers," Grassley said in the letter to Microsoft Chief Executive Steve Ballmer.

Microsoft is one of the major beneficiaries of H-1B work visa programme, which is mainly for overseas professionals. A majority of the 60,000 professionals given H-1B visa every year are from India.

SAP to cut 3,000 jobs

Software maker SAP AG said that it would cut 3,000 jobs worldwide as its 2008 net profit fell 2 per cent, weighed by a difficult year-end when the financial crisis deepened.

The software giant has declined to forecast revenue for 2009 and said that it would accelerate cost cuts to handle what it called a "challenging operating environment" this year.

SAP, the world's biggest maker of business management software, said in a statement that 2008 operating profit rose 4 per cent to 2.84 billion euros ($3.75 billion) and total sales for the group gained 14 per cent to 8.46 billion euros.

The sales number was exactly in line with the average in a Reuters poll of analysts. The Walldorf-based company had told investors on October 6 that business suddenly fell off in the closing two weeks of its third quarter, which ended September 30.

Its closest competitor, US company Oracle, in December posted second-quarter results that were better than feared and gave investors reason to hope that Oracle would manage the economic slowdown relatively well.

SAP is valued at around 13 times estimated 2009 earnings compared with a sector average of 11, according to Reuters data.

Infy puts over 5K jobs under scanner

The economic crisis seems to be deepening and with it the layoff count. The latest round of bad news comes from India's second largest IT services provider, Infosys, who till now claimed to have stayed away from layoffs.

According to reports, the company has put at least 5,000 employees or 5 per cent of its total global workforce under the performance scanner. Media reports also suggest that the company has asked senior managers (project managers, senior and group project managers, delivery managers) to give lowest performance rating (4 on a scale of 1-4) to the 'underperforming' 5 per cent as a part of its consolidated relative ranking (CRR).

Incidentally, while lowest rankings are not new in the company, this is the first time that Infosys has made it compulsory.

Some 40-50 sales executives have also been reportedly asked to quit in the last two months. Most of these were located in the US and were from consulting background who are in a client-facing role.

The company, however, claims it to be a usual process. Its Group HR head said that there was no change in the policy, and the percentage of employees who are ranked four in the scale varies every year between one percent to five percent.

The official said that the company has decided to implement a six-month mentoring programme for these employees after which it will decide their future based on the improvements they have made. As a part of this programme, each affected employee will be asked to work under the supervision of a mentor who is a senior executive.

During this period, the employee will not be given any important assignment, though he will be allowed to work on his present project. If the concerned employee is on bench, he will give all his time for the mentoring programme.

Last year, Infosys' rivals TCS, Wipro and Satyam too axed a sizeable number of jobs terming them `performance-based'.

Indian companies lay off expat executives

As part of cutting costs in a tough economic situation, Indian companies have started showing door to highly-paid expat executives. Most of the companies now seek people for higher positions from inside the country itself as it would be less expensive
compared to hiring expats, reported The Economic Times.

K Sudarshan, Managing Director, executive search firm EMA Partners' India unit said, "Many of the expatriate executives, who have been asked to leave, are subject experts. Their value diminishes in a downturn as companies are no more expanding, and thus don't need people to guide in a new venture."

Since last few months, some companies have replaced their expat executives by Indian ones at the senior level. For instance, Aviva Life Insurance removed Bert Paterson and appointed former Citibank executive TR Ramachandran as the CEO for its Indian operation. Another Insurance firm Metlife replaced its CFO Nick Paket with an Indian hire. Aditya Birla Retail is reportedly hiring an Indian executive from a beverage company to head its supermarket chain, More, which was earlier led by Andrew Denby. Dabur Retail replaced its three expats, including CEO Peter Baker with Indians.

Expats were in big demand during the boom period of 2003-07, as Indian companies expanded rapidly and diversified into new sectors.

Most of these expatriates drew high salaries as compared to their Indian counterparts. "At least in one case, an expat CEO who was heading a sunrise foray of an Indian company was getting paid Rs 4 crore per annum, twice the amount that was being paid to his Indian counterparts," said an executive search professional, who requested not to be named.

Economic crisis to trigger more job loss in '09: ILO

The global economic crisis is expected to lead to a "dramatic increase" in the number of people joining the ranks of the unemployed and working poor and those in vulnerable employment, says the International Labour Office (ILO).

Global unemployment in 2009 could increase over 2007 by a range of 18 million to 30 million workers, and more than 50 million with the situation likely to deteriorate, the ILO said in its annual Global Employment Trends report released on Wednesday.

Based on new developments in the labour market, the report said some 200 million workers, mostly in developing economies, could be pushed into extreme poverty if the situation worsened.

"The ILO message is realistic, not alarmist. We are now facing a global jobs crisis. Many governments are aware and acting, but more decisive and coordinated international action is needed to avert a global social recession," ILO Director-General Juan Somavia said in a statement from Geneva.

The latest report said that based on November 2008 IMF forecasts, the global unemployment rate would rise to 6.1 per cent in 2009 compared to 5.7 per cent in 2007, resulting in an increase of the number of unemployed by 18 million people in 2009 in comparison with 2007.

If the economic outlook deteriorates beyond what was envisaged in November 2008, "which is likely", the global unemployment rate could rise to 6.5 per cent, corresponding to an increase of the global number of unemployed by 30 million people in comparison with 2007, it said.

IBM quietly cuts thousands of jobs

With the recession forcing tech companies to announce thousands of layoffs, IBM Corp. is joining the fray — but not advertising it.

The Armonk, N.Y.-based company has cut thousands of jobs over the past week, including positions in sales and the software and hardware divisions. IBM says the cuts are simply part of its ongoing efforts to watch costs, and the company won't release specific numbers, even as reports of firings stream in from IBM facilities across the country.

Workers have reported layoffs in Tucson, Ariz.; San Jose, Calif.; Rochester, Minn.; Research Triangle Park, N.C.; East Fishkill, N.Y.; Austin, Texas; and Burlington, Vt.

Meanwhile, other tech companies such as Intel Corp., Microsoft Corp., Texas Instruments Inc., Sprint Nextel Corp. and Google Inc. have all publicly revealed job cuts as part of their strategies for riding out the economic crisis. More than 20,000 jobs will be lost from those companies alone.

One of IBM's biggest rivals — Hewlett-Packard Co. — is also laying people off. HP is shedding 24,600 jobs, nearly 8 percent of its 320,000-employee work force, as it digests the acquisition of Electronic Data Systems Corp.

IBM says it doesn't have to reveal the number of jobs it is cutting, since the Securities and Exchange Commission requires companies to disclose only "material" events. And IBM considers its job cuts a regular part of the company's business model, since thousands of jobs are cut every year but are usually added back in other places.

Because of that, IBM contends it doesn't have to break out its layoffs in regulatory filings unless it suddenly changes course and makes substantially more or fewer job cuts.

That's why while IBM's head count keeps growing, topping 400,000 at the end of 2008, laid-off IBM workers have flooded online job boards with complaints about the company's stealth cuts.

One estimate of IBM's recent cuts put the number at more than 4,000 jobs lost since IBM's fourth-quarter earnings announcement last week. Those earnings contained an unexpected surprise: IBM forecast at least $9.20 per share in profit in 2009. IBM shares are up more than 10 percent since then.

To get the cost savings that will help spur the higher profits, IBM appears to have acted quickly. The estimate of at least 4,000 jobs cut comes from AllianceAtIBM, a union that is affiliated with the Communications Workers of America and represents a small number of IBM workers.

The Associated Press reviewed one document sent to laid-off workers that identified some of the positions that were cut. Employees weren't identified by name, but positions and the workers' ages were listed. The document listed nearly 3,000 jobs.

In Vermont, IBM remained tightlipped about layoffs at its Essex Junction facility, but state Labor Commissioner Patricia Moulton Powden said the total number would be less than 500.

IBM recently employed 5,300 workers at the Essex Junction plant, down from 8,500 in 2001.

Jim Gallo, 48, who said he worked in IBM software support for 27 years, was among those let go from that facility. Gallo, drinking a Grey Goose and ginger ale at nearby Lincoln Inn on Tuesday, said he hadn't told his four children yet.

He said he has until Feb. 26 to find another job in IBM, but he put his chances at "slim to none." Gallo said he gets six months' pay as part of a severance package.

"It's too bad they're not doing what they were doing before. They offered some sweet packages for people to jump out," he said.

IBM's ongoing labor adjustments have led the company to add bodies in cheaper and higher-growth parts of the world, like India.

In 2007, the last full year for which detailed employment numbers are available, 121,000 of IBM's 387,000 workers were in the U.S., down slightly from the year before. Meanwhile, staffing in India has jumped from just 9,000 workers in 2003 to 74,000 workers in 2007.

Over 50,000 job cuts in the US | 'Bloody Monday'

Tens of thousands of job losses were announced in the US on Monday. American economists say they expect the recession to worsen this year.

US heavy vehicles maker Caterpillar said it would cut over 20,000 jobs to deal with the challenging global business environment.

The company had earlier announced axing 15,000 workers in 2008. The people who will lose their jobs amount to about 18 per cent of the company's total workforce. Caterpillar currently employs about 1,13,000 workers.

Last week, Microsoft said it would cut 5,000 jobs over the next 18 months.

Research-based biomedical and pharmaceutical company Pfizer/Wyeth has announced a layoff of 20,000 workers while Texas Instruments will axe 3,400 employees.

In Europe too, more than 10,000 job cuts have been announced.

Financial firm ING has announced that 7,000 employees will be sacked.

Other companies that have recently announced job cuts include electronic giant Philips which will axe 6,000 workers and UK's steel manufacturer Corus which will layoff 3,500 among others.

Hoping to deal with the financial crisis soon, US President Barack Obama is lobbying for a quick Congressional passage of his $825 billion stimulus package.

Caterpillar, others unveil massive job cuts

A tidal wave of layoffs washed across the world on Monday, sending tens of thousands of workers into joblessness as the pain of the global recession worsened.

Amid reports of tumbling corporate profits, dire outlooks and a lowered global growth forecast from the International Monetary Fund, companies in Europe and the United States announced they would cut vast numbers of employees in a dramatic effort to reduce costs and keep their businesses afloat.

Despite the corporate gloom, markets rallied on some of Monday's other news: No. 1 drugmaker Pfizer said it would buy rival Wyeth for $68 billion, Barclays said it had no need to raise capital, and sales of existing U.S. homes unexpectedly rose 6.5 percent.

"In the midst of a global recession, here is Pfizer, hopefully spending their dollars wisely," said Andre Bakhos, president of Princeton Financial Group in New Brunswick, New Jersey. "It adds a little confidence that all is not lost."

Monday's layoff announcements, affecting more than 70,000 workers, started in Europe, with electronics maker Philips announcing 6,000 job cuts as it posted a bigger-than-expected 1.5 billion euro ($1.9 billion) loss, its first quarterly loss since 2003.

ING cut 7,000 of its 130,000 jobs, replaced its CEO and got guarantees from the Dutch government as other European banks sought to reassure investors they are coming to grips with the turmoil in financial markets.

Corus, Europe's second-largest steelmaker, said 3,500 jobs would go worldwide, including 2,500 in Britain, as the company, owned by India's Tata Steel, sought to boost operating profit.

CATERPILLAR, SPRINT, HOME DEPOT

In the United States, Caterpillar, the world's largest maker of heavy equipment, said it would eliminate nearly 20,000 jobs, reported a 32 percent drop in profit and forecast the weakest year for business since the end of World War Two.

Sprint Nextel Corp the No. 3 U.S. mobile service provider, said it will cut up to 8,000 jobs, or about 14 percent of its workforce. Retailer Home Depot Inc said it will cut 7,000 jobs, or about 2 percent of its workforce.

The International Monetary Fund slashed its forecast for 2009 global growth to 0.5 percent from 2.2 percent in last economic outlook in November, a source told Reuters.

Stock markets rose, with Europe's FTSE 300 index up 3 percent and major U.S. indexes up more than 1 percent. The Dow Jones Industrial Average was up 1.1 percent. Bond prices fell as the rise in existing-home sales raised questions whether the housing market was as weak as thought.

Gold climbed above $900 an ounce, the highest in more than three months.

Although it did not announce job cuts, Dubai-based DP World, which operates 48 marine terminals and 13 new port developments in 31 countries worldwide, said it was putting all expansion projects under review and would cut costs and freeze recruitment as growth slows in 2009.

"The economic environment remains extremely fragile," said Commerzbank equity strategist Hans-Juergen Delp.

Meanwhile, the credit crunch claimed the government of Iceland, which Prime Minister Geir Haarde said had fallen apart under the pressures of the financial crisis.

The Norwegian government was forced to dip deeper into its reserves and presented a $2.87 billion fiscal stimulus package to prevent unemployment surging.

"This is the most ambitious fiscal stimulus proposed in more than 30 years to boost growth and employment," Finance Minister Kristin Halvorsen told parliament.

Banks have borne the brunt of the credit crisis, which was sparked by mass defaults on U.S. home loans. The sector has seen a wave of consolidation as leading banks around the world have collapsed or been taken over.

But shares in Britain's Barclays leaped by 73 percent after it said its projected 2008 pretax profit of more than 5.3 billion pounds ($7.3 billion) would include significant writedowns of 8 billion pounds and that the bank had made a good start to 2009.

British shoe retailers Barratt and Priceless, with 400 stores and 5,450 workers across the country, went into administration in the latest sign of the consumer slowdown.

Japanese stocks closed at their lowest in almost three months.

India's outsourcing sector faces bleak outlook: analysts

India's software sector, reeling from a huge accounting fraud in one of its flagship companies, faces further problems as US firms scale back in a troubled global business environment, analysts said.

Two of India's top IT companies -- Infosys Technologies and Wipro -- have acknowledged that their revenues are under pressure.

Meanwhile, India's largest software exporter Tata Consultancy Services (TCS) saw its third-quarter net profit rise by a lower-than-expected 1.57 percent from a year earlier because of the global economic slowdown. It traditionally gives no guidance.

The flurry of dismal earnings news and a one-billion-dollar false accounting scandal at Satyam Computer Services earlier this month has combined to cool investor sentiment towards the once red-hot sector, which employs two million workers in India.

"We're seeing a clear slowdown for the IT giants (in the latest quarter) and it's not a surprise," said Apurva Shah, head of research at brokerage Prabhudas Lilladher.

Brokerage firms and analysts say the outlook appears bleak for the top IT companies for at least the next two quarters.

"The near-term outlook for India's IT sector is cautious and uncertain," said Harit Shah, software analyst at Angel Broking.

"Revenue visibility has become hazier than ever. With the US economy likely to undergo an extended period of painful transition, any recovery is likely to take some while," Shah said.

Infosys chief executive S. Gopalkrishnan said last week the budgets of overseas clients would be clearer by mid-February and they were expected to be "slightly less or flat".

TCS does not forecast revenues but admitted it was "operating in a challenging environment".

Infosys Technologies and Wipro said they lowered revenue guidance in their latest earnings forecasts because of the global economic situation.

Infosys' full-year dollar guidance was cautious with revenues expected in the 4.67 billion dollars to 4.71 billion dollar range -- representing growth of 11.8 to 12.8 percent, a far cry from earlier growth of plus 30 percent.

Meanwhile Wipro this week lowered its revenue guidance for the next three months to 1.04 billion dollars -- below the 1.12 billion dollars it notched up in the three-months to December last year.

"While Infosys has twice cut its annual guidance in the year to March 2009, Wipro commented on the difficulty in giving guidance even for a quarter," said analyst Abhiram Eleswarapu of BNP Paribas.

"We continue to be skeptical about Wipro's prospects" as its clients "continue to face turmoil," an analyst with BRICS Securities added.

Meanwhile, the National Association of Software and Services Companies (NASSCOM) lobby group has now delayed its growth forecast for India's IT sector for the year to March 2010 due to the Satyam scandal.

India's business community has been rocked by Satyam founder B. Ramalinga Raju's declaration on January 7 that he had fudged the company's accounts for years and that one billion dollars in cash on its books was non-existent.

A new set of auditors are now restating its earnings.

Uncertainty in the sector's future business volumes could be compounded if outsourcing laws undergo a change now that Barack Obama has been installed as the 44th US president.

During his election campaign, Obama said he would offer incentives to companies that created jobs at home and halt tax breaks to those that ship work abroad.

Close to four-fifths of the world's biggest companies outsource work to India, with about 60 percent of the contracts coming from the United States.

However, India's IT firms have brushed off concerns that Obama would formally seek to curtail outsourcing.

NASSCOM has said it believes that these fears are unfounded, despite Washington's efforts to boost job opportunities at home.

Microsoft To Cut 5K Jobs, No Job Cut In India

Microsoft would cut up to 5,000 jobs in R&D, HR, Marketing, Sales, Finance, Legal and IT over the next 18 months, a company statement said. However, the Indian operations would not be impacted and there would not be any job cuts in India, PTI reported quoting a Microsoft India spokesperson.

The company is reducing head-count-related expenses, vendors and contingent staff, facilities, capital expenditures and marketing to control costs, estimating further deterioration in global economic conditions. The company's profit declined 11% in the second quarter.

Tata Steel's Corus to cut up to 3,500 jobs: report

Steelmaker Corus is poised to axe up to 3,500 jobs next week, The Sunday Times reported.

The precise number of lay-offs at the Anglo/Dutch steelmaker, owned by India's Tata Steel, were being thrashed out over the weekend, according to the paper.

The job cuts are part of a long-term restructuring drawn up by outgoing chief executive Philippe Varin, but it has been accelerated by the crisis in the global steel industry, the paper said.

Recession hit Microsoft to cut 5,000 jobs

Microsoft Corp shocked Wall Street on Thursday with disappointing results and said it would slash up to 5,000 jobs and stop offering profit forecasts for the rest of the fiscal year.

The world's top software maker blamed the weakness of the PC market and the popularity of low-cost netbook computers for the miss.

Its shares fell 8 per cent in early trading. Microsoft posted a profit of $4.17 billion, or 47 cents per share, in its fiscal second quarter ended December 31, versus a profit of $4.71 billion, or 50 cents, a year earlier.

Analysts were looking for earnings per share of 49 cents, according to Reuters Estimates.

Revenue rose 2 per cent to $16.63 billion, missing the average analyst forecast of $17.1 billion. “Clearly business conditions are worse than people were expecting,” said Richard Williams, analyst at Cross Research.

“This is a substantial amount of jobs cuts. Microsoft has never had a layoff like this in my knowledge and it's sending a signal that the times are definitely changing.”

Microsoft said it will eliminate up to 5,000 jobs in research and development, marketing, sales, finance, legal, human resources and information technology over the next 18 months, including 1,400 jobs on Thursday.

That amounts to about 5 per cent of its estimated 95,000 work force. Microsoft said these moves would help cut its annualized operating expense by about $1.5 billion and reduce fiscal year 2009 capital expenditures by $700 million.

The company will also cut travel spending by 20 per cent, eliminate merit salary increases in September, and significantly reduce spending on vendors and contingent staff.

It also plans to scale back budgets for marketing and the expansion of its Puget Sound campus. “Economic activity and IT spend slowed beyond our expectations in the quarter,” Chief Financial Officer Chris Liddell said in a statement.

“We are planning for economic uncertainty to continue through the remainder of the fiscal year, almost certainly leading to lower revenue and earnings for the second half relative to the previous year.”

Shares of Microsoft fell to $17.84 in early trading on the Nasdaq, from their previous close of $19.38.

Motorola to Lay Off 4,000, plans to close India sales unit

Mobile phone maker Motorola has decided to close down its distribution division in India, owing to tumbling sales and aggressive competition. Distribution activities are now likely to be carried out from its Singapore offices.

This decision is in line with the company’s recent 4,000 job cuts, more than 3,000 of which will come from its ailing handset unit. A senior Motorola India official confirmed Motorola's plans to close the unit.

The handset maker has reportedly informed about 150 employees about the move. As of now, few employees in the distribution segment are likely to get pink slips, but there will be a knock-on effect further up the chain, with job cuts in other business segments, including research and development.

Rather stiffly, Motorola told IT Examiner, "While Motorola has a strong global brand as well as a solid balance sheet and cash position, the company is not immune to the currently weak global economy. Motorola continuously reviews our business and the market to ensure that our resources are aligned with market conditions, and that we are focused on our top strategic priorities. We are working diligently to improve the profitability of our business and are committed to delivering a strong portfolio of exciting new products in 2009 and beyond."

Chopping salespeople is not confined to India, as yesterday it was reported a similar move in the UK, where is has cut its sales team to two.

Motorola yesterday announced plans to lay off a further 4,000 staff, and warned it was likely to report a fourth-quarter loss.

Motorola has been losing out lately to stiff competition in the mobile handset market, with its number two position taken over by Samsung recently. The last quarterly results reflected a drastic slide in its sales on both a year-on-year and a quarter-on-quarter basis. It recorded sales of 19 million units, down from 25.4 million in the previous quarter and 40.9 million units in 2007.

Motorola tasted success on Indian soil with the launch of Moto Razr in 2005, but since then the graph has been in decline. X

Sun Microsystem to lay off staff in India, no fresh hiring in 2009

Santa Clara-based $13.88 billion Sun Microsystems will lay off staff in India Coming to terms with lay-off as part of its plan to cut 6,000 jobs globally. company employs some 33,423 people worldwide. While the company is yet to decide the exact number of job cuts in India, it has no plans for fresh hiring in 2009.

The company, which operates in more than 100 countries around the globe, employs some 1,300 people in India.

"The number of job cuts in India will be minimal as the country is projected as one of the emerging markets along with Brazil, Russia and China. Fresh hiring will hardly be there. We may look at some sporadic hiring as and when required," Mr Anil Valluri, vice-president & managing director of Sun Microsystems India, told ET.

In India, the company is also reorienting its business strategy to earn better revenues during this ongoing recessionary period.

"Our focus is now more on public sector units as there is hardly any cost cutting in the government sector. Earlier, PSUs contributed some 20-25% of our revenues and the rest came from the private sector. But, in 2009, we expect some 40-45% of our revenues to come from PSUs," said Mr Valluri.

Incidentally, some of the leading PSU clients of Sun Micro are Punjab National Bank, Vijaya Bank, Dena Bank and others in the banking sector.

"The telecom sector is also adding subscribers and, therefore, there is business being generated, too. Public sector telecom giants like BSNL and MTNL are two major sources of business for us," he added.

Recession hits placements at IITs

It seems there is no escaping the recession bug, even if you go to the top engineering institute in the country, the IIT. A report shows that placements in IIT-Delhi have declined by 30 per cent as compared to last year.

Ravi Nikumbh, a chemical engineering student at IIT-Delhi, is discussing this year's placements at the coffee shop. He hasn't been able to land a job yet. And with most companies having already visited the campus over the last month, he is running out of options.

"I applied for 30 companies and got shortlisted by 10. But I have not got a job as yet. I don't want to go for higher studies and didn't appear for CAT. So, I have to get a job. I am looking for a job in petroleum sector but many companies like Reliance, BPCL and HPCL haven't come this time. Another problem is that companies, which were recruiting around 10 students last year, recruited around two-three this year," he said.

The economic slowdown is hitting IIT placements hard. Only 400 of the 550 IIT students who applied for placements have been successful. And even the ones who have got offers are not satisfied.

"I wanted a job in Applied Mathematics but I haven't got that. So, I would look for off campus recruitments now," said a student.

Multinational financial firms like Roya Bank of Scotland and Goldman Sachs recruited IITians last year. But this time, they stayed away.

IIT officials say that there has been 25 to 30 per cent drop in the recruitment as compared to last year. But thankfully, the pay package has not been affected much.

With no job guarantee in the private sector, public sector companies like BHEL, IOC and BPCL are a big hit with the students this year.

"Earlier, there was a notion that government jobs are not exciting. But with this economic recession and revised pay package, I am very happy to get into a PSU," said Jatin Kalson, Final Year Student in Electrical Engineering at IIT-Delhi.

The recruitment process will continue till March but with the economic scenario far from improving these are tense times for students who haven't managed to get an offer yet.

Satyam withholds salaries for two months; layoffs feared

Hyderabad / New Delhi: Satyam Computer on Friday announced holding back employees salaries for two months, even as rumours were rife that the company might lay off close to 15,000 workers in the coming days.
The offices of Satyam Computer were rife on Friday with the talks about forthcoming pink-slips at the company, which needs over Rs500 crore every month just to meet its staff costs and has admitted that its cash position was not encouraging.
Employees said they have received an e-mail saying the company would hold back salaries for two months and asked staffers to bear with it.
However, the company spokesperson declined knowledge of any such e-mail and the issue would be looked into.
Even as the company spokesperson denied any layoff plans as of now, the rumours put the estimated job cuts at close to 15,000 by the end of this month.
Employees at the company said on condition of anonymity that they were hearing about imminent lay-off of people who were sitting on the bench or were close to completing their assigned projects. Besides, those being retained would be asked to take substantial salary cuts, they added.
At the same time, global HT consultancy firm Hay Group’s Practice Leader Mark Thompson said that employees would suffer the most from the fraud.
Global HR consultancy firm HayGroup’s Practice Leader Mark Thompson said: “Based on past experience ... as with Enron, Worldcom and the Mirror Group, it is likely to be the employees who will suffer most from the fraud perpetrated by their bosses.”
In early 2000, the collapse of energy trader Enron had left thousands of people out of work, another 8,500 had lost their jobs at accounting firm Arthur Andersen; and Tyco eliminated 15,000 employees in February.
Analysts at technology research firm Forrester said employees and clients would soon desert the company amid competitive wooing by the rivals.
The research firm added that it has already been consulted by over half-a-dozen rivals of Satyam on competitive strategies to be adopted to take over the business from the clients of the beleaguered IT firm.
Satyam on Wednesday made a shocking disclosure of fudging of accounts by its founder Ramalinga Raju, who then quit as chairman, leaving an uncertain future for the company and its 53,000 employees.
Raju, in a statement on Wednesday, said Satyam’s profits had been massively inflated over many years but no other board member was aware of the financial irregularities.
The timing of this news is the most unfortunate part about it given the fragile state of the global economy, Hay Group’s Thompson said.
The scandal will damage corporate India’s reputation, may have implications for the whole BPO and IT Services sector and would certainly give some “hotheads in the US a little more ammunition to use against the logic of outsourcing to India,” Thompson said.
“However, there will not be a long term impact on the employer-employee relationship.
Instead, we may get tied up with a series of reviews into corporate governance and a host of new regulations attempting to prevent this kind of thing from happening again,” Thompson added.
Another global staffing services firm Manpower said at this point of time “employees should assess their current skill sets and explore the opportunities in sectors showing positive hiring intent like energy, telecom and mining.”

EMC to cut 2,400 from workforce

Storage giant EMC on Wednesday announced plans to cut 2,400 positions from its workforce, despite expectations of posting record fourth-quarter revenues.

The job cuts will represent 7 percent of the company's workforce, as part of a restructuring program that will also include consolidation of facilities and back office functions, and a rebalancing of products and markets.

EMC expects to cut US$350 million in costs this year and as much as US$500 million next year.

The cost cuts come as the company issued its preliminary fourth quarter forecast, in which it noted it expects to generate approximately US$4 billion in revenues--a 4 percent increase over the same period a year ago. The company expects to generate net income of 23 to 24 cents a share, excluding restructuring charges. Those figures are in line with the company's previous forecast.

"We managed our costs and investments very carefully throughout 2008," Joe Tucci, EMC chief executive, said in a statement. "However, we believe this additional program will help us strike the right balance between achieving higher levels of efficiency and sustaining strong business agility and performance."

IBM may be laying off 16,000 workers

The IT Examiner source is quoted as saying, "We came to know about the 16,000 job cuts. The reports are true though nothing has been made official yet from the management’s side. The hardware segment will have the most number of job cuts globally. It will definitely have huge impact on IBM jobs mainly in parts like China, Europe and US. No such sign of massive lay-offs in India yet but fractional impact is unavoidable when such a huge numbers reduced globally."

A unconfirmed source told TG Daily in December that upcoming layoffs were known internally as far back as shortly after the October 16, 2008 conference call where IBM's Q3 earnings were reported.

Mark Loughridge, IBM's CFO and Senior VP, was quoted as saying "This is a tough environment, but we were ready for it," and "These ongoing actions to address spending shore up the base in tough times."

He was also quoted as saying "And while the current environment is challenging, we have the right operational plan to drive double-digit revenue growth in emerging markets, substantial productivity in major markets, and continue to extract cost and expense from our spending base and drive ongoing improvements to meet our full year objectives."

IBM had announced their Q3 earnings were up 5% at $25.3 billion, 22% increase in profits on the year.

Satyam may axe 10,000 employees next month

With a big questions mark on its cash position and a minimum outgo on salary estimated at Rs 500 crore a month, Satyam may lay off over 10,000 employees next month, says a recruitment firm.

"It is most likely that Satyam will cut 10,000 jobs next month as the company is left with no cash to pay the salaries. The current fiasco is likely to put pressure on salaries, which may reduce by 10 per cent due to the surplus of about 20,000 people in the jobs market," Headhunters India CEO Kris Lakshmikanth said.

Satyam interim CEO Ram Mynampati while admitting that the cash position is not encouraging, the company, however, has taken care of salary for December. Lakshmikanth said till Tuesday evening there were about 7,800 people from Satyam who had posted their resumes on job sites and by Wednesday afternoon, it has gone up to 14,000.

The uncertainty about jobs is killingly painful for the 53,000 employees of Satyam, especially when the industry is going slow on recruitment. Further, possibility of a takeover too looks distant as the accounting fraud done by the company would make it difficult for any firm to evaluate its correct market value, which is compounding the worries of the employees.

IT-BPO union Unites Professionals general secretary Karthik Shekhar said, "In case of any lay off at Satyam, we may take legal action." "We have received over 7,000 hits since the news break.

On Wednesday, in one hour we have seen over 800 hits (no of people visiting the site) from Hyderabad. People have been enquiries on how the union can help them," Shekhar added.