Microsoft Corp. said Thursday that earnings in the most recent quarter jumped 60 per cent, helped by a rebound in personal computer sales.
The PC industry bounced back during the 2009 holiday shopping season after one of its roughest years to date. Microsoft's earnings are closely tied to computer sales because its two most profitable divisions make the Windows operating system and Office business software.
Microsoft said its net income for the fiscal second quarter that ended Dec. 31 rose to $6.7 billion, or 74 cents per share, compared with $4.2 billion, or 47 cents per share, in the year-ago period. Revenue increased 14 percent to $19 billion.
The latest version of Windows, called Windows 7, was released during the quarter. Revenue from the Windows business jumped 70 percent.
Shares of Microsoft rose 25 cents, or 0.9 percent, to $29.41 in extended trading after the release of results. Earlier, shares closed down 51 cents, or 1.7 percent, at $29.16.
Friday, January 29, 2010
IT market, New Deals, Wipro
Wipro in outsourcing deal with BAT
No. 3 Indian software-services firm Wipro Ltd said on Wednesday it signed a multi-year outsourcing deal with British American Tobacco Plc, the world's second-biggest cigarette maker.
Wipro will help British American Tobacco's application support services for global business operations, the company said in a statement. Financial details were not disclosed.
Wipro will help British American Tobacco's application support services for global business operations, the company said in a statement. Financial details were not disclosed.
IT market, Oracle
Oracle closes $7.4 bn Sun deal
Software major Oracle Corp has completed the takeover of hardware company Sun Microsystems Inc for $7.4 billion.
The deal, which was announced nine months ago, would transform the IT industry, Oracle said in a statement yesterday.
The two companies, which have a significant presence in India, together employs more than 26,000 people in the country. Oracle has more than 25,000 employees in India while Sun Microsystem has 1,200 people.
The Sun Solaris operating system is the leading platform for the Oracle database, Oracle's largest business. With the acquisition of Sun, Oracle can optimise Oracle database for some of the unique, high-end features of Solaris.
"With the addition of servers, storage, SPARC processors, the Solaris operating system, Java, and the MySQL database to Oracle's portfolio of database, middleware, and business applications, we plan to engineer and deliver open and integrated systems--from applications to disk--where all the pieces fit and work together out of the box," Oracle said.
The European Union's antitrust watchdog has approved the Sun-Oracle transaction last week saying the deal would not would restrict competition in the database's market. The approval from the EU came after months of investigation.
In April last year, Oracle has agreed to buy Sun Microsystems for $7.4 billion or $9.50 a share in cash.
The deal, which was announced nine months ago, would transform the IT industry, Oracle said in a statement yesterday.
The two companies, which have a significant presence in India, together employs more than 26,000 people in the country. Oracle has more than 25,000 employees in India while Sun Microsystem has 1,200 people.
The Sun Solaris operating system is the leading platform for the Oracle database, Oracle's largest business. With the acquisition of Sun, Oracle can optimise Oracle database for some of the unique, high-end features of Solaris.
"With the addition of servers, storage, SPARC processors, the Solaris operating system, Java, and the MySQL database to Oracle's portfolio of database, middleware, and business applications, we plan to engineer and deliver open and integrated systems--from applications to disk--where all the pieces fit and work together out of the box," Oracle said.
The European Union's antitrust watchdog has approved the Sun-Oracle transaction last week saying the deal would not would restrict competition in the database's market. The approval from the EU came after months of investigation.
In April last year, Oracle has agreed to buy Sun Microsystems for $7.4 billion or $9.50 a share in cash.
Monday, January 25, 2010
Wipro
Wipro to give salary hike
India's third largest software exporter Wipro said it would hike salaries across the board this quarter, but did not indicate quantum.
According to Pratik Kumar, corporate vice president, human resources, the salary hike will be given out in February. He added, “The hike will be according to the industry standards.”
Wipro beat estimates with a 19 percent rise in December quarter profit and projected growth as a global economic recovery boosts demand for outsourcing services and eases pressure on fees.
New York-listed Wipro expects its IT services revenue to rise 3.6-5.4 percent in January-March from the preceding quarter to $1.16-$1.18 billion, after it posted a 4.9 percent sequential rise in the latest quarter.
The company also announced that it will hire people from campuses. Some 7,500 people hired previously are expected to join in Q4 and early next quarter.
Last week Tata Consultancy Services also announced that it expects to increase wages in the 2011 financial year.
TCS global head of HR Ajoy Mukherjee said the company has decided to give salary increments during financial year ending March 2011, although the exact quantum of hike is yet to be decided.
“There definitely will be a wage hike but the quantum is not finalised. We are considering three options,” Mukherjee said. While giving the hikes, the company will maintain the salary structure it moved to in FY10, which consists of a quarterly variable component and an annual variable component.
However, the company so far has no plans to increase the salaries of junior recruits.
According to Pratik Kumar, corporate vice president, human resources, the salary hike will be given out in February. He added, “The hike will be according to the industry standards.”
Wipro beat estimates with a 19 percent rise in December quarter profit and projected growth as a global economic recovery boosts demand for outsourcing services and eases pressure on fees.
New York-listed Wipro expects its IT services revenue to rise 3.6-5.4 percent in January-March from the preceding quarter to $1.16-$1.18 billion, after it posted a 4.9 percent sequential rise in the latest quarter.
The company also announced that it will hire people from campuses. Some 7,500 people hired previously are expected to join in Q4 and early next quarter.
Last week Tata Consultancy Services also announced that it expects to increase wages in the 2011 financial year.
TCS global head of HR Ajoy Mukherjee said the company has decided to give salary increments during financial year ending March 2011, although the exact quantum of hike is yet to be decided.
“There definitely will be a wage hike but the quantum is not finalised. We are considering three options,” Mukherjee said. While giving the hikes, the company will maintain the salary structure it moved to in FY10, which consists of a quarterly variable component and an annual variable component.
However, the company so far has no plans to increase the salaries of junior recruits.
IT market
IT cos: Pinkslips in '09, attrition in '10
India's top three outsourcing companies are ramping up hiring and increasing pay as global corporations, mainly from the US, send more work offshore to cut costs as they emerge from the downturn.
Tata Consultancy Services, Infosys, and Wipro expanded their global workforces by an average of 5.1 per cent last quarter, together adding 16,701 employees, company documents show -- an early sign that the Great Recession may ultimately benefit India as cost-conscious companies outsource more work, just as they did after the dot-com bust.
Also, after about a year of hiring slowdowns, all three companies are sweetening compensation as the fight to hold on to talented employees in India heats up.
Infosys offered its Indian employees an average 8 per cent pay hike in October, their first raise since April 2008, and executives said last week they are considering another raise to combat rising attrition.
“The market is heating up and we want to retain talent,'' human resources director of Infosys Mohandas Pai told reporters.
Infosys last week raised its gross hiring target for the second time this fiscal year, to 24,000 people. Wipro executives said they plan to offer staffers a raise in February.
Tata Consultancy Services has paid out 150 per cent of performance-linked pay -- which normally amounts to 20 to 45 per cent of compensation -- for the last two quarters, and executives say they will raise salaries next quarter, after a year-long wage freeze.
As demand for workers revives, employers have begun to worry about rising staff turnover. Employees who sat tight during the downturn have started to shop around for better jobs and better salaries.
Attrition at Wipro jumped to 13.4 percent last quarter, up from an average of 8.9 percent over the prior three quarters. Attrition at Infosys rose to 11.6 percent last quarter from 10.9 percent the prior quarter. Attrition at TCS has been stable, at around 11.5 percent, though executives say they expect that number to rise.
Indian firms say they are increasing global hiring, including in the US, as they pursue higher-end work like consulting. But US employees remain a fraction of total staff.
TCS, for example, recently finished hiring 250 Americans for its Cincinnati campus, but US employees still account for less than 0.5 per cent of the company's global workforce.
The employment revival in India's outsourcing sector, which counts on the US for about 60 per cent of global sales, comes as unemployment in the US stagnates around 10 per cent -- near a 26-year high.
Inflation-adjusted wages in the US last year fell 1.6 per cent, the biggest decline since 1990.
“When there is a downturn the compulsion to control costs increases,'' said Dipen Shah, an analyst at Mumbai's Kotak Securities. “The demand for offshoring will increase. That will play to the advantage of Indian IT companies.''
He argues that the cost savings from offshoring has helped US companies survive -- and that's good for the American worker.
“You might say jobs in the US are getting displaced by jobs in India, but because of the value provided by Indian companies and lower costs, there are firms who are able to keep their heads above water and continue to employ their existing employees,'' he said.
TCS, Infosys and Wipro, which can do everything from call center management and claims processing to software development and consulting, all reported stronger than expected results for the December quarter.
Revenues and volumes grew, signaling that the cost-cutting imperative of this last, lean year may be over for India's $60 billion software services industry.
Tata Consultancy Services, Infosys, and Wipro expanded their global workforces by an average of 5.1 per cent last quarter, together adding 16,701 employees, company documents show -- an early sign that the Great Recession may ultimately benefit India as cost-conscious companies outsource more work, just as they did after the dot-com bust.
Also, after about a year of hiring slowdowns, all three companies are sweetening compensation as the fight to hold on to talented employees in India heats up.
Infosys offered its Indian employees an average 8 per cent pay hike in October, their first raise since April 2008, and executives said last week they are considering another raise to combat rising attrition.
“The market is heating up and we want to retain talent,'' human resources director of Infosys Mohandas Pai told reporters.
Infosys last week raised its gross hiring target for the second time this fiscal year, to 24,000 people. Wipro executives said they plan to offer staffers a raise in February.
Tata Consultancy Services has paid out 150 per cent of performance-linked pay -- which normally amounts to 20 to 45 per cent of compensation -- for the last two quarters, and executives say they will raise salaries next quarter, after a year-long wage freeze.
As demand for workers revives, employers have begun to worry about rising staff turnover. Employees who sat tight during the downturn have started to shop around for better jobs and better salaries.
Attrition at Wipro jumped to 13.4 percent last quarter, up from an average of 8.9 percent over the prior three quarters. Attrition at Infosys rose to 11.6 percent last quarter from 10.9 percent the prior quarter. Attrition at TCS has been stable, at around 11.5 percent, though executives say they expect that number to rise.
Indian firms say they are increasing global hiring, including in the US, as they pursue higher-end work like consulting. But US employees remain a fraction of total staff.
TCS, for example, recently finished hiring 250 Americans for its Cincinnati campus, but US employees still account for less than 0.5 per cent of the company's global workforce.
The employment revival in India's outsourcing sector, which counts on the US for about 60 per cent of global sales, comes as unemployment in the US stagnates around 10 per cent -- near a 26-year high.
Inflation-adjusted wages in the US last year fell 1.6 per cent, the biggest decline since 1990.
“When there is a downturn the compulsion to control costs increases,'' said Dipen Shah, an analyst at Mumbai's Kotak Securities. “The demand for offshoring will increase. That will play to the advantage of Indian IT companies.''
He argues that the cost savings from offshoring has helped US companies survive -- and that's good for the American worker.
“You might say jobs in the US are getting displaced by jobs in India, but because of the value provided by Indian companies and lower costs, there are firms who are able to keep their heads above water and continue to employ their existing employees,'' he said.
TCS, Infosys and Wipro, which can do everything from call center management and claims processing to software development and consulting, all reported stronger than expected results for the December quarter.
Revenues and volumes grew, signaling that the cost-cutting imperative of this last, lean year may be over for India's $60 billion software services industry.
IT market, Layoffs in USA
Xerox to cut 2,500 jobs
Xerox Corp said that it plans to cut some 2,500 jobs, or five percent of its workforce, in a cost-cutting move aimed at saving some $200 million a year.
Xerox, which had 53,600 employees at the end of December, has already slashed 3,500 jobs starting in late 2008.
The latest job cuts were announced by Xerox chief executive Ursula Burns during a presentation of the photocopier company's fourth-quarter results.
Burns said some of the job losses would come in Europe but did not give a figure. She said the restructuring would cost $280 million this year with $30 million related to Xerox's $6.4-billion acquisition of Affiliated Computer Services, the world's largest diversified business outsourcing firm.
Burns said she expected the ACS acquisition to close next month. "Once completed, Xerox will be the world leader in business process and document management," she said.
The Norwalk, Connecticut-based Xerox said net profit rose to $180 million in the fourth quarter from $1 million in the corresponding quarter a year ago.
Revenue declined by three percent to $4.22 billion, better than the $3.92 billion expected by Wall Street analysts.
"We delivered a strong close to a difficult year, with solid operational results that reflect our disciplined approach to generating cash and reducing costs," Burns said in a statement.
"During the fourth quarter, we saw signs of improvement in several areas including developing markets, and we remain quite confident in our strong global competitive position," she said
"However, we believe revenue will continue to be under pressure until there is a more sustainable economic recovery," Burns said.
"To help offset this challenge, we remain focused on cost and expense management and sizing our business to better match current revenue levels."
Xerox, which had 53,600 employees at the end of December, has already slashed 3,500 jobs starting in late 2008.
The latest job cuts were announced by Xerox chief executive Ursula Burns during a presentation of the photocopier company's fourth-quarter results.
Burns said some of the job losses would come in Europe but did not give a figure. She said the restructuring would cost $280 million this year with $30 million related to Xerox's $6.4-billion acquisition of Affiliated Computer Services, the world's largest diversified business outsourcing firm.
Burns said she expected the ACS acquisition to close next month. "Once completed, Xerox will be the world leader in business process and document management," she said.
The Norwalk, Connecticut-based Xerox said net profit rose to $180 million in the fourth quarter from $1 million in the corresponding quarter a year ago.
Revenue declined by three percent to $4.22 billion, better than the $3.92 billion expected by Wall Street analysts.
"We delivered a strong close to a difficult year, with solid operational results that reflect our disciplined approach to generating cash and reducing costs," Burns said in a statement.
"During the fourth quarter, we saw signs of improvement in several areas including developing markets, and we remain quite confident in our strong global competitive position," she said
"However, we believe revenue will continue to be under pressure until there is a more sustainable economic recovery," Burns said.
"To help offset this challenge, we remain focused on cost and expense management and sizing our business to better match current revenue levels."
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