Source: reuters.com
American Express Co, the credit card and travel services company, on Monday said it plans to eliminate 4,000 jobs, or 6 percent of its workforce, as the weakened economy causes higher customer defaults.
The cuts are part of the New York-based company's plan to save $800 million over the rest of 2009. They are in addition to 7,000 job cuts and an expected $1.8 billion of savings from a restructuring it announced in October.
Like many rivals, American Express has been hurt by rising delinquencies among cardholders, with the U.S. unemployment rate having risen to its highest level since 1983.
On Friday, American Express said its net charge-off rate, or debt it does not expect to be repaid, rose to 10.1 percent in April from 8.8 percent in March.
"We continue to be very cautious about the economic outlook," Chief Executive Kenneth Chenault said in a statement. He said the cost savings "will be reinvested in the business to make sure we can take competitive advantage of opportunities as the economy begins to rebound."
American Express expects to take an after-tax charge of $117 million to $163 million in the second quarter, largely for severance and other costs tied to the job cuts. It said the cuts will occur throughout the company, saving $175 million.
The company also plans to cut spending by $500 million on marketing and business development and $125 million on consulting and other services, travel and overhead.
Michael O'Neill, a company spokesman, said the "vast majority" of the earlier 7,000 job cuts have taken place, and that the latest cuts will take place over several months.
In the first quarter, American Express's net income fell 56 percent from a year earlier, while the amount set aside for credit losses increased 49 percent, a regulatory filing shows.
American Express was one of 19 banking companies to undergo government "stress tests" of their ability to weather a deep recession.
It was among nine told it did not need more capital. The company has said it would like to pay back the $3.4 billion it took from the government's Troubled Asset Relief Program.
American Express shares fell 5 cents to $26.08 after-hours, after rising $1.90, or 7.8 percent, in regular trading. The company is part of the Dow Jones industrial average.
Tuesday, May 19, 2009
Layoffs in USA
Sutter Health cuts 121 IT jobs in Rancho Cordova
Sutter Health, which runs many of the Bay Area’s largest hospitals and medical groups, is cutting 121 information technology jobs at its Information Services department in Rancho Cordova, near Sacramento.
Sutter, a 26-hospital system based in Sacramento, said the move came in response “to the continued economic downturn affecting the health-care industry and all California employers.”
The IT jobs are being slashed effective July 17. An unspecified number of those jobs support Sutter’s massive electronic health record project, which is on hold at the hospital level but apparently will remain on track for affiliated physician offices.
Top officials at Sutter earlier this month warned about 800 IT staffers at the system that staffing cuts were in the offing, to close a more than $4 million hole in its IT budget.
Sutter, a 26-hospital system based in Sacramento, said the move came in response “to the continued economic downturn affecting the health-care industry and all California employers.”
The IT jobs are being slashed effective July 17. An unspecified number of those jobs support Sutter’s massive electronic health record project, which is on hold at the hospital level but apparently will remain on track for affiliated physician offices.
Top officials at Sutter earlier this month warned about 800 IT staffers at the system that staffing cuts were in the offing, to close a more than $4 million hole in its IT budget.
Indian IT industry has big hopes from new govt.
The result of 15th Lok Sabha election has brought some rays of hope among IT companies, with United Progressive Alliance (UPA) set to retain the power. The software services and outsourcing industry want new government to bring this industry out of the clutches of credit crunch by increasing the investment and stimulating growth.
The result has come at a time when the Obama administration has planned to increase the tax amount for those U.S. firms who outsource their jobs to India, hurting Indian IT.
The meltdown has forced Indian companies like TCS, Wipro, Infosys, HCL, Patni and Cognizant to raise their share in the domestic markets valued at Rs 58,000 crore. Their earnings from domestic market have been less than 10 percent.
The role of government becomes more important as technology usage has played an important role in helping National Rural Employment Guarantee Scheme and other government initiatives to reach to the base level without any difficulty.
S Ramadorai, Managing Director, TCS says, "Given the proven benefits of technology usage in programs like NREGA to speed up development and enable efficient public administration as well as deliver government services to the citizens' doorsteps, the new government should embark on a $5-10 billion investment programme in e-governance initiatives.''
IT industry, which generates the highest number of jobs every year, expects new government to increase the budget to improve job skills and education in the country. Avinash Vashistha, CEO, Tholons says, "Drawing examples from China, the new government should invest significantly in education and training. SMEs are going to drive the next-gen growth of the country, therefore the government should give them better growth incentives.''
Apart from all this, the industry has forwarded its list of demand including the extension of Software Technology Park (STP) scheme and SEZ initiatives. Ashok Soota, Chairman, MindTree says, "The government should extend STPI tax benefit by another five years, thereby removing the uncertainty of getting it extended year by year. Overall, IT industry wants govt. to put economy on high growth."
The result has come at a time when the Obama administration has planned to increase the tax amount for those U.S. firms who outsource their jobs to India, hurting Indian IT.
The meltdown has forced Indian companies like TCS, Wipro, Infosys, HCL, Patni and Cognizant to raise their share in the domestic markets valued at Rs 58,000 crore. Their earnings from domestic market have been less than 10 percent.
The role of government becomes more important as technology usage has played an important role in helping National Rural Employment Guarantee Scheme and other government initiatives to reach to the base level without any difficulty.
S Ramadorai, Managing Director, TCS says, "Given the proven benefits of technology usage in programs like NREGA to speed up development and enable efficient public administration as well as deliver government services to the citizens' doorsteps, the new government should embark on a $5-10 billion investment programme in e-governance initiatives.''
IT industry, which generates the highest number of jobs every year, expects new government to increase the budget to improve job skills and education in the country. Avinash Vashistha, CEO, Tholons says, "Drawing examples from China, the new government should invest significantly in education and training. SMEs are going to drive the next-gen growth of the country, therefore the government should give them better growth incentives.''
Apart from all this, the industry has forwarded its list of demand including the extension of Software Technology Park (STP) scheme and SEZ initiatives. Ashok Soota, Chairman, MindTree says, "The government should extend STPI tax benefit by another five years, thereby removing the uncertainty of getting it extended year by year. Overall, IT industry wants govt. to put economy on high growth."
Monday, May 18, 2009
Layoffs in India
Companies hunt for laid-off talent to drive growth
India’s pink slip brigade — sitting out in the cold since last October as companies began axing jobs to cut through the financial slowdown — is now becoming the hunting ground for firms in the telecom, pharma and consumer goods sectors, as they look for inexpensive talent that suits their expansion plans.
Placement firms that ET spoke to said the companies in these growth intensive sectors had taken it easy on hirings for almost six months, and have now totalled around 25,000 vacancies. For them, the pool of laid-off people is a hunting ground for ‘industry neutral’ executives in functions such as human resource, finance, system administration, marketing and sales.
“Lower recruitment during the slowdown hasn’t helped the talent crisis in India, especially in fast growing sectors. Several such companies are evaluating the laid-off talent pool to hand-pick niche skills,” said Andrew Heard, Asia-Pac head of Watson Wyatt, a global human capital consulting firm.
Headhunters estimate the pool of laid-off talent in India from sectors such as IT, retail, banking and financial services, textiles and others could be as high as seven lakh.
“Of this, at least 15% would be in white-collar roles, and are the prime target for low-cost talent acquisition,” said E Balaji, CEO of HR firm Ma Foi Management Consultant.
This is a significant transformation for Indian companies that are perceived to have a mindset problem when it comes to hiring people who have been laid off.
“We do not differentiate among professionals who may have lost their job,” said Vsevolod Rozanov, president and chief executive officer of telecom firm Sistema Shyam TeleServices (SSTL).
“In areas like customer service, we are indeed looking for people from other sectors, and even the laid-off pool. We can always train them for our needs,” said Mr Rozanov. SSTL currently has 1,600 people, and plans to ramp it up to 3,000 by December, as it plans to expand to 4-6 new circles.
FMCG major Marico CEO (consumer products) Saugata Gupta said several of its ex-employees, who went for more ‘exciting’ roles and are now victims of the global slowdown are coming back.
“We are getting several such people from sectors like retail. It’s a good time to re-calibrate talent,” he said.
Companies, such as Dabur, which had posted handsome quarterly results recently, are now building a talent bench across key functions to tide over the crunch.
“Since we have been clocking double digit growth rate every quarter, we don’t mind having some flab in critical functions,” said Dabur India head (HR) A Sudhakar.
Companies in the pharmaceutical sector, widely counted as recession-proof, say shortage of good talent is an issue, not just in research functions, but also in sales.
According to Prabir Jha, global head for human resources at Dr Reddy’s Labs, getting the right mix of skills is a problem. “In such a case, the laid-off pool can throw up interesting profiles,” he said.
Source: TheEconomicTimes
Placement firms that ET spoke to said the companies in these growth intensive sectors had taken it easy on hirings for almost six months, and have now totalled around 25,000 vacancies. For them, the pool of laid-off people is a hunting ground for ‘industry neutral’ executives in functions such as human resource, finance, system administration, marketing and sales.
“Lower recruitment during the slowdown hasn’t helped the talent crisis in India, especially in fast growing sectors. Several such companies are evaluating the laid-off talent pool to hand-pick niche skills,” said Andrew Heard, Asia-Pac head of Watson Wyatt, a global human capital consulting firm.
Headhunters estimate the pool of laid-off talent in India from sectors such as IT, retail, banking and financial services, textiles and others could be as high as seven lakh.
“Of this, at least 15% would be in white-collar roles, and are the prime target for low-cost talent acquisition,” said E Balaji, CEO of HR firm Ma Foi Management Consultant.
This is a significant transformation for Indian companies that are perceived to have a mindset problem when it comes to hiring people who have been laid off.
“We do not differentiate among professionals who may have lost their job,” said Vsevolod Rozanov, president and chief executive officer of telecom firm Sistema Shyam TeleServices (SSTL).
“In areas like customer service, we are indeed looking for people from other sectors, and even the laid-off pool. We can always train them for our needs,” said Mr Rozanov. SSTL currently has 1,600 people, and plans to ramp it up to 3,000 by December, as it plans to expand to 4-6 new circles.
FMCG major Marico CEO (consumer products) Saugata Gupta said several of its ex-employees, who went for more ‘exciting’ roles and are now victims of the global slowdown are coming back.
“We are getting several such people from sectors like retail. It’s a good time to re-calibrate talent,” he said.
Companies, such as Dabur, which had posted handsome quarterly results recently, are now building a talent bench across key functions to tide over the crunch.
“Since we have been clocking double digit growth rate every quarter, we don’t mind having some flab in critical functions,” said Dabur India head (HR) A Sudhakar.
Companies in the pharmaceutical sector, widely counted as recession-proof, say shortage of good talent is an issue, not just in research functions, but also in sales.
According to Prabir Jha, global head for human resources at Dr Reddy’s Labs, getting the right mix of skills is a problem. “In such a case, the laid-off pool can throw up interesting profiles,” he said.
Source: TheEconomicTimes
Layoffs in India
Graduating Students Uncertain About Job Market In India
The global economy may have shown some signs of recovery, but students in India who are preparing to graduate this summer have chalked out long-term goals differently and changed their strategies to approach companies for jobs.
Pennylaine D'Souza, 21, a graduating student of Sophia College for Women in Mumbai, is one such student who now plans to study further rather than seek work immediately, which has her previous goal, due to the tough job market.
"I have not yet started approaching the companies, but may be after my exams get over on May 26," she told AHN. D'Souza is majoring in Political Science and Education.
She added, "I think I will try to study further. Maybe I'll do a diploma course in human resources or banking. The markets may get stabilized next year. I may even take a part-time job and study alongside it."
She told AHN that her plans after the graduation changed after her friends lost their jobs.
"Some of my friends have lost their jobs because of the recession. And some of them are working in call centers now," D'Souza said, adding that not many companies approached her college to offer jobs.
This year many colleges in Mumbai have received a higher number of voluntary job offers from not-for-profit organizations like Teach for India, who aim to teach low-income students in rural India.
D'Souza said that her college has recommended working for the Teach for India organization if they are unable to find any openings in the institutions.
But firms in India have not stopped offering positions. In fact, a recent survey showed that more than 60 percent of companies in India are still hiring.
Hewitt Associates (HEW), a human resources consulting and outsourcing company, added in the survey that nine out of every 10 companies are still giving promotions and less than 16 percent of companies in India are considering retrenchment.
"India is a strong bet for most global companies, as a growing market as well as a source for highly competent talent that is still more cost efficient than in the West," Sandeep Chaudhary, Hewitt's consulting practice official, said in a statement.
He added, "Moreover, layoffs are a highly sensitive and politicized issue in many markets, including India."
Pennylaine D'Souza's sister, Trudy D'Souza, 20, also had different goals as she wants to pursue a higher degree in Hotel Management in the United Kingdom after her graduation this month, but she has delayed her plans to study abroad.
"I have not been placed anywhere so far," Trudy D'Souza told AHN, who is a BA student of Hotel Management at Anjuman-I-Islam College in Mumbai city.
"Even though having a degree there have not been many companies who have come to our college for placements. It is already competitive to get a job in this field, but now it would be more difficult."
As a graduating student she wanted to start working in the front office of a hotel as well as pursue her options to study abroad.
"Initially, I had decided to go to the UK to do my post-graduation. Everything was financed and I had almost started applying. But due to the recession and because the things are not that good in the UK, I did not go ahead with things," Trudy D'Souza said.
She added, "Right now I am pursuing airlines. But I have kept my options open."
Students like these two sisters are anxious to graduate soon this year, but the uncertainty of the jobs market have poured cold water on their goals, forcing them to change their career plans.
But economists in India believe that in the long-term the country has higher job prospects as more multi-national companies are looking to invest in the emerging markets.
Marriott International, for instance, is planning to construct 24 new hotels in India over the next four years.
Source: allheadlinenews.com
Pennylaine D'Souza, 21, a graduating student of Sophia College for Women in Mumbai, is one such student who now plans to study further rather than seek work immediately, which has her previous goal, due to the tough job market.
"I have not yet started approaching the companies, but may be after my exams get over on May 26," she told AHN. D'Souza is majoring in Political Science and Education.
She added, "I think I will try to study further. Maybe I'll do a diploma course in human resources or banking. The markets may get stabilized next year. I may even take a part-time job and study alongside it."
She told AHN that her plans after the graduation changed after her friends lost their jobs.
"Some of my friends have lost their jobs because of the recession. And some of them are working in call centers now," D'Souza said, adding that not many companies approached her college to offer jobs.
This year many colleges in Mumbai have received a higher number of voluntary job offers from not-for-profit organizations like Teach for India, who aim to teach low-income students in rural India.
D'Souza said that her college has recommended working for the Teach for India organization if they are unable to find any openings in the institutions.
But firms in India have not stopped offering positions. In fact, a recent survey showed that more than 60 percent of companies in India are still hiring.
Hewitt Associates (HEW), a human resources consulting and outsourcing company, added in the survey that nine out of every 10 companies are still giving promotions and less than 16 percent of companies in India are considering retrenchment.
"India is a strong bet for most global companies, as a growing market as well as a source for highly competent talent that is still more cost efficient than in the West," Sandeep Chaudhary, Hewitt's consulting practice official, said in a statement.
He added, "Moreover, layoffs are a highly sensitive and politicized issue in many markets, including India."
Pennylaine D'Souza's sister, Trudy D'Souza, 20, also had different goals as she wants to pursue a higher degree in Hotel Management in the United Kingdom after her graduation this month, but she has delayed her plans to study abroad.
"I have not been placed anywhere so far," Trudy D'Souza told AHN, who is a BA student of Hotel Management at Anjuman-I-Islam College in Mumbai city.
"Even though having a degree there have not been many companies who have come to our college for placements. It is already competitive to get a job in this field, but now it would be more difficult."
As a graduating student she wanted to start working in the front office of a hotel as well as pursue her options to study abroad.
"Initially, I had decided to go to the UK to do my post-graduation. Everything was financed and I had almost started applying. But due to the recession and because the things are not that good in the UK, I did not go ahead with things," Trudy D'Souza said.
She added, "Right now I am pursuing airlines. But I have kept my options open."
Students like these two sisters are anxious to graduate soon this year, but the uncertainty of the jobs market have poured cold water on their goals, forcing them to change their career plans.
But economists in India believe that in the long-term the country has higher job prospects as more multi-national companies are looking to invest in the emerging markets.
Marriott International, for instance, is planning to construct 24 new hotels in India over the next four years.
Source: allheadlinenews.com
IBM, Wipro
Wipro guns for IBM in telecom services market
What the Unitech win means, say analysts, is that Wipro’s earlier win was no fluke--that the company has now acquired the expertise to counter the might of Big Blue, as IBM is known.
Wipro Ltd’s win of a $500 million (Rs2,465 crore) strategic outsourcing contract from Unitech Wireless Ltd is seen by analysts as the Bangalore-based company’s emergence as a formidable competitor to International Business Machines Corp. (IBM) in the fast growing Indian telecom services market.
To be sure, this isn’t the first deal that Wipro has won in this space; in January 2008, it won a similar $600 million contract from Aircel Ltd. What the Unitech win means, say analysts, is that Wipro’s earlier win was no fluke—that the company has now acquired the expertise to counter the might of Big Blue, as IBM is known. Until the Aircel deal was won, IBM had a near-stranglehold on the market for outsourced information technology (IT) deals in the telecom sector.
Anil Jain, vice-president, corporate business unit, Wipro Infotech—the division that handles such business—lists three reasons for the company’s recent successes in IT-for-telcos deals: “We have built competencies in the recent past, have deep understanding of the Indian market and have strong relationships with our partners.”
An executive at IBM seemed to suggest that the company had walked away from the deal because it wasn’t worth it in terms of price. “There is good business and not so good business. IBM will do deals where we are confident of meeting our own metrics…,” said Avinash V. Joshi, director of communications sector at IBM India and South Asia. According to Joshi, IBM had “signed off” on the Unitech deal months before it was announced.
Wipro Ltd’s win of a $500 million (Rs2,465 crore) strategic outsourcing contract from Unitech Wireless Ltd is seen by analysts as the Bangalore-based company’s emergence as a formidable competitor to International Business Machines Corp. (IBM) in the fast growing Indian telecom services market.
To be sure, this isn’t the first deal that Wipro has won in this space; in January 2008, it won a similar $600 million contract from Aircel Ltd. What the Unitech win means, say analysts, is that Wipro’s earlier win was no fluke—that the company has now acquired the expertise to counter the might of Big Blue, as IBM is known. Until the Aircel deal was won, IBM had a near-stranglehold on the market for outsourced information technology (IT) deals in the telecom sector.
Anil Jain, vice-president, corporate business unit, Wipro Infotech—the division that handles such business—lists three reasons for the company’s recent successes in IT-for-telcos deals: “We have built competencies in the recent past, have deep understanding of the Indian market and have strong relationships with our partners.”
An executive at IBM seemed to suggest that the company had walked away from the deal because it wasn’t worth it in terms of price. “There is good business and not so good business. IBM will do deals where we are confident of meeting our own metrics…,” said Avinash V. Joshi, director of communications sector at IBM India and South Asia. According to Joshi, IBM had “signed off” on the Unitech deal months before it was announced.
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