FedEx Corp. said Thursday it plans to cut more jobs and trim wages again, as the company reported its fiscal third-quarter profit tumbled 75 percent on severe weakness in the global economy.
The Memphis, Tenn.-based company, often seen as a bellwether for the U.S. economy, said it earned $97 million, or 31 cents per share, compared with $393 million, or $1.26 a year earlier.
Friday, March 20, 2009
Thursday, March 19, 2009
Fujitsu laying off 1,750 employees
Japan's Fujitsu Ltd announced plans to axe 1,750 jobs in the Philippines, blaming the global economic downturn. Workers have been offered early retirement packages to leave Fujitsu Computer Products Corp, which makes disk drives, said Ernesto Espinosa, a manager.
AIG's bonus payment to be deducted from bailout: report
The US will deduct $165 million the troubled insurance giant AIG paid its top executives as bonus from the $30 billion the firm is due to get as part of its bailout package, a media report said today.
A BBC report quoted US Treasury Secretary Timothy Geithner as saying in a letter to Congressmen that the ailing insurer will be required to pay back the hugely controversial bonuses it awarded after taking public bail-out money.
A BBC report quoted US Treasury Secretary Timothy Geithner as saying in a letter to Congressmen that the ailing insurer will be required to pay back the hugely controversial bonuses it awarded after taking public bail-out money.
IBM
What an IBM-Sun deal could mean for India
The news of global IT giant, IBM, buying Sun Microsystems has been doing the rounds for years. So, despite the Wall Street Journal reporting that an approximately $6.5 billion buyout is imminent, analysts remain sceptical.
However, if the deal were to happen, analysts feel IBM and Sun have a lot of overlaps in technology and in product offerings. Hence, it would be an integration challenge.
In the short term, there may be no impact on the 1,200-odd Indian employees of Sun. In the long run, some could get impacted due to platform and technology consolidation. Sun, though, has been cutting staff over the past few quarters.
“IBM will be the clear market leader (if the deal fructifies) in the server market in India, dominated by HP. But there will be conflict of platforms for IBM,” said an analyst.
There’s a lot of software overlap in databases — IBM has DB2 and Sun has MySQL.
India is now an important market for Sun Microsystems, both for its products and creating intellectual property (IP). For instance, the number of programmers working on Sun Microsystems’ platforms in India is 780,000, retaining the country’s position as the leading developer location in the world. This is over half the total developer community in the country.
In fact, the Rs 1,700 crore Sun India, with around 1,200 employees, has consistently witnessed close to 30 per cent q-o-q growth in the country, according to Dataquest India estimates.
Servers garnered around Rs 800 crore, storage Rs 300 crore, and software and professional services accounted for the rest in FY08. Sun’s presence in services is negligible. An attempt was made to address the anomaly in 2008 with Sun Learning Services, which accounted for Rs 50 crore. Its professional services, under Sun Tech Consulting, took off as well.
Sun’s India Engineering Centre (IEC), the first in Asia, was set up in Bangalore in 1998. The company has also set up its APAC’s first Control Centre in Chennai — the third such centre globally.
The India R&D centre has also played an important role in creating IP. Of the total 11,000 patents awarded, over 170 are from the Bangalore R&D centre.
However, for engineers at Sun India, this is much more than just an acquisition. “It’s about the culture that Sun promotes. Some of the people working at Sun India have never shifted to any other firm,” said a source.
Java is Sun’s best asset, but the platform was never monetised. IBM could help it do so. Sun also has some interesting ideas on cloud computing, IBM’s forte. Finally, Sun can allow IBM to consolidate a data centre rival and bring things back to equilibrium, now that Cisco has entered the market.
Globally, IBM — which also has a significant presence in India, with over 70,000 employees — can acquire server and storage share. With Cisco entering the server market, profit margins could be squeezed, especially if the server essentially becomes a storage and networking box, too. By acquiring Sun, IBM could get more scale. The same argument holds for storage hardware.
Sun is a powerhouse in Unix, still a key platform, but isn’t exactly making waves. IBM could acquire Sun and establish both Linux and Unix. Sun would enable it to put pressure on HP’s Unix-based businesses, too. However, IBM sells AIX Unix servers, while Sun sells Solaris.
There are issues to be worked out on hardware. IBM has refrained from commodity servers and Sun plays in that space. Hardware is often the entry point for IBM’s software and services. With a stronger hardware business, it can fend off HP in the marketplace.
Courtesy:BusinessStandard
However, if the deal were to happen, analysts feel IBM and Sun have a lot of overlaps in technology and in product offerings. Hence, it would be an integration challenge.
In the short term, there may be no impact on the 1,200-odd Indian employees of Sun. In the long run, some could get impacted due to platform and technology consolidation. Sun, though, has been cutting staff over the past few quarters.
“IBM will be the clear market leader (if the deal fructifies) in the server market in India, dominated by HP. But there will be conflict of platforms for IBM,” said an analyst.
There’s a lot of software overlap in databases — IBM has DB2 and Sun has MySQL.
India is now an important market for Sun Microsystems, both for its products and creating intellectual property (IP). For instance, the number of programmers working on Sun Microsystems’ platforms in India is 780,000, retaining the country’s position as the leading developer location in the world. This is over half the total developer community in the country.
In fact, the Rs 1,700 crore Sun India, with around 1,200 employees, has consistently witnessed close to 30 per cent q-o-q growth in the country, according to Dataquest India estimates.
Servers garnered around Rs 800 crore, storage Rs 300 crore, and software and professional services accounted for the rest in FY08. Sun’s presence in services is negligible. An attempt was made to address the anomaly in 2008 with Sun Learning Services, which accounted for Rs 50 crore. Its professional services, under Sun Tech Consulting, took off as well.
Sun’s India Engineering Centre (IEC), the first in Asia, was set up in Bangalore in 1998. The company has also set up its APAC’s first Control Centre in Chennai — the third such centre globally.
The India R&D centre has also played an important role in creating IP. Of the total 11,000 patents awarded, over 170 are from the Bangalore R&D centre.
However, for engineers at Sun India, this is much more than just an acquisition. “It’s about the culture that Sun promotes. Some of the people working at Sun India have never shifted to any other firm,” said a source.
Java is Sun’s best asset, but the platform was never monetised. IBM could help it do so. Sun also has some interesting ideas on cloud computing, IBM’s forte. Finally, Sun can allow IBM to consolidate a data centre rival and bring things back to equilibrium, now that Cisco has entered the market.
Globally, IBM — which also has a significant presence in India, with over 70,000 employees — can acquire server and storage share. With Cisco entering the server market, profit margins could be squeezed, especially if the server essentially becomes a storage and networking box, too. By acquiring Sun, IBM could get more scale. The same argument holds for storage hardware.
Sun is a powerhouse in Unix, still a key platform, but isn’t exactly making waves. IBM could acquire Sun and establish both Linux and Unix. Sun would enable it to put pressure on HP’s Unix-based businesses, too. However, IBM sells AIX Unix servers, while Sun sells Solaris.
There are issues to be worked out on hardware. IBM has refrained from commodity servers and Sun plays in that space. Hardware is often the entry point for IBM’s software and services. With a stronger hardware business, it can fend off HP in the marketplace.
Courtesy:BusinessStandard
Layoffs in India
Mentor Graphics to downsize Indian staff
Mentor Graphics, the US-based electronic design automation (EDA) company, is downsizing its workforce in India. The company, which provides software and hardware design solutions for EDA worldwide, has two R&D centres in India. It employs about 350 engineers at the centres in Noida and Hyderabad.
Mentor Graphics also has a sales and services centre in Bangalore. Globally the $800 million company employs about 4,500 people. Financial Chronicle spoke with a couple of employees in the Hyderabad centre who confirmed that the company was downsizing. Speaking on condition of anonymity, an employee said, “As of now, 50 to 60 employees have been asked to leave by April-end at the Hyderabad centre and some more employees have been absorbed in other projects. Few have also got the option of moving to the US.”
He added, “The company is trying to consolidate different teams as a part of geographical restructuring move. This means that looking at the size of the team in a particular region the entire team is being consolidated there.”
Mentor Graphics also has a sales and services centre in Bangalore. Globally the $800 million company employs about 4,500 people. Financial Chronicle spoke with a couple of employees in the Hyderabad centre who confirmed that the company was downsizing. Speaking on condition of anonymity, an employee said, “As of now, 50 to 60 employees have been asked to leave by April-end at the Hyderabad centre and some more employees have been absorbed in other projects. Few have also got the option of moving to the US.”
He added, “The company is trying to consolidate different teams as a part of geographical restructuring move. This means that looking at the size of the team in a particular region the entire team is being consolidated there.”
BPO
'Employee referrals have worked for us': Genpact COO
Source: BusinessStandard
Interview with VN Tyagarajan chief operating officer (COO) of Genpact.
How tough is doing business now?
The going is indeed tough for IT firms, with pressure on pricing and less work coming in. Much depends on the company one deals with, as leaders could have changed and one would have to start the dialogue all over again. However, the number of companies wanting to outsource is rising. Genpact’s IT services business is only around 20 per cent. This part will surely feel the impact. However, around 85 per cent of our BPO work (accounting for 80 per cent of Genpact’s revenue) is non-discretionary. Hence, the impact can be contained.
But what are your clients telling you?
They want us to help them streamline processes, make these more efficient, which in turn will help them cut costs and do decent business in a slowing economy. All our services come under the broad umbrella of business process management. While this may sound another buzzword, we are unique in the sense that we have developed detailed benchmarks for each process and business insight. This helps us provide better end-to-end solutions and satisfy clients.
So, is there any change in your strategy?
We are accelerating work with existing customers to increase mindshare. Then, we are helping clients manage their inventory and receivables better, while reducing delinquencies. This helps them conserve more cash. We are also looking at domestic business, now a separate business division. On this front, we are discovering that many banks and institutions want to outsources services like finance and accounting (F&A), insurance, collections, customer service and procurement. We also plan to expand our business in China. We have around 3,500 employees there. The Philippines (unit) has around 700 employees.
Are you hiring more?
We have never done much lateral hiring since we promote (almost 85 per cent) from within the company. Most of our hiring is just-in-time, so we do not have a “bench”. Besides, employee referrals have worked for us. It’s also a channel that sees the least attrition.
For the past five years, Genpact has had 16 storefronts in cities like Vizag, Lucknow, Bhubaneshwar, Jamshedpur and Chandigarh. Though, currently, with reduced focus on hiring, and our tie-up with NIIT, we don’t require a separate storefront for hiring anymore. Around 15-20 people enter our storefront daily. We interview them and the hiring is done on the spot if the candidate is found fit. For 2008, storefronts contributed 17 per cent of the total associate (employee) level hires.
The approximate initial investment for each storefront varies from Rs 10 lakh to Rs 30 lakh, subject to multiple factors such as the city, location and the nature of the work managed such as hiring, training, vendor sourcing, campus drives, etc.
The set-up is also dependent on employability options in the region. Most centres are on a lease model, with Genpact bearing the infrastructure cost.
Are you asking people to leave, given the tough environment?
Given the GE legacy, Genpact has always believed in performance appraisals. The poor performers have always been asked to go. This period is no different.
What’s your inorganic growth strategy?
Forecasting is tough in this environment. How do we value a company today? We would rather be happy with cash in safe havens. Having said that, our acquisitions (four till date) have always been to fulfil a gap which our clients want.
Interview with VN Tyagarajan chief operating officer (COO) of Genpact.
How tough is doing business now?
The going is indeed tough for IT firms, with pressure on pricing and less work coming in. Much depends on the company one deals with, as leaders could have changed and one would have to start the dialogue all over again. However, the number of companies wanting to outsource is rising. Genpact’s IT services business is only around 20 per cent. This part will surely feel the impact. However, around 85 per cent of our BPO work (accounting for 80 per cent of Genpact’s revenue) is non-discretionary. Hence, the impact can be contained.
But what are your clients telling you?
They want us to help them streamline processes, make these more efficient, which in turn will help them cut costs and do decent business in a slowing economy. All our services come under the broad umbrella of business process management. While this may sound another buzzword, we are unique in the sense that we have developed detailed benchmarks for each process and business insight. This helps us provide better end-to-end solutions and satisfy clients.
So, is there any change in your strategy?
We are accelerating work with existing customers to increase mindshare. Then, we are helping clients manage their inventory and receivables better, while reducing delinquencies. This helps them conserve more cash. We are also looking at domestic business, now a separate business division. On this front, we are discovering that many banks and institutions want to outsources services like finance and accounting (F&A), insurance, collections, customer service and procurement. We also plan to expand our business in China. We have around 3,500 employees there. The Philippines (unit) has around 700 employees.
Are you hiring more?
We have never done much lateral hiring since we promote (almost 85 per cent) from within the company. Most of our hiring is just-in-time, so we do not have a “bench”. Besides, employee referrals have worked for us. It’s also a channel that sees the least attrition.
For the past five years, Genpact has had 16 storefronts in cities like Vizag, Lucknow, Bhubaneshwar, Jamshedpur and Chandigarh. Though, currently, with reduced focus on hiring, and our tie-up with NIIT, we don’t require a separate storefront for hiring anymore. Around 15-20 people enter our storefront daily. We interview them and the hiring is done on the spot if the candidate is found fit. For 2008, storefronts contributed 17 per cent of the total associate (employee) level hires.
The approximate initial investment for each storefront varies from Rs 10 lakh to Rs 30 lakh, subject to multiple factors such as the city, location and the nature of the work managed such as hiring, training, vendor sourcing, campus drives, etc.
The set-up is also dependent on employability options in the region. Most centres are on a lease model, with Genpact bearing the infrastructure cost.
Are you asking people to leave, given the tough environment?
Given the GE legacy, Genpact has always believed in performance appraisals. The poor performers have always been asked to go. This period is no different.
What’s your inorganic growth strategy?
Forecasting is tough in this environment. How do we value a company today? We would rather be happy with cash in safe havens. Having said that, our acquisitions (four till date) have always been to fulfil a gap which our clients want.
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