Tuesday, December 9, 2008
Layoff news in USA - Dec 8th: Update
Netflix cuts 50 tech jobs; streaming issues linger
Web video-rental store Netflix has laid off 50 technical specialists, the people who typically do most of the trouble-shooting for customers with tech issues, such as struggling to connect the service to their laptop or set-top boxes.
Steve Swasey, a Netflix spokesman, said 15 of the company's 65 technical specialists will join the 300-person Customer Service group. According to Swasey, Netflix also plans to add 50 more people to its customer service unit sometime after the New Year.
Netflix cuts jobs, points finger at Silverlight
Netflix is trimming 50 jobs because of Microsoft Silverlight. At least that's what the company claims in a blog post on its website, citing significantly improved streaming video performance on the Silverlight platform as the reason it needs to cut 50 technical customer service positions. Silverlight was the platform for all Netflix streaming, after the company announced Mac compatibility in late October.
The layoffs will be enacted in January after the rush of holiday customer service traffic. The company expressed remorse about the layoffs, but said that Silverlight is simply too good, and the terminated employees simply didn't have enough to do anymore.
Monday, December 8, 2008
BPOs may lose 2.5 lakh jobs in India by first quarter of 2009
Business Process Outsourcing firms are likely to see 2.5 lakh job losses by the first quarter of 2009 in the wake of downturn in the US and other developed economies, BPO industry association said.
Though the industry is likely to see thousands of job losses, the silver lining is that the recession would compel more companies in the US and Europe to look at outsourcing as a way to cut costs and improve efficiencies, the Business Process Industry Association of India (BPIAI) President Samir Chopra said. Click here for complete story.
Slowdown to benefit BPO industry:
Layoff news in USA - Dec 6th and 7th: Update
Layoff news in USA - Dec 6th and 7th
Saturday, December 6, 2008
Layoffs in India: list from different sources
Layoffs at Ramco Systems Ltd in June 2008
Number of Employees: 800
Percentage of Employees: 50
Level: All
Department: All
Notice Period Offered: No
Severance Package Offered: No
Layoffs at Pitney Bowes Mapinfo Pvt Ltd in August 2008
Number of Employees: 25
Percentage of Employees: 12%
Level: All
Department: IT & Developement
Notice Period Offered: NIL
Severance Package Offered: NIL
Layoffs at Integral in 2008
Number of Employees: 100
Percentage of Employees: 75
Notice Period Offered: 0
Severance Package Offered: 2 months
Layoffs at LinkedIn in November 2008
Mountain Views,
Number of Employees: 36
Percentage of Employees: 10
Source: Techcrunch
Source Link: http://www.techcrunch.com/2008/11/05/linkedin-cuts-10-of-staff/
Layoffs at Edelweiss Capital in November 2008
Pan
Number of Employees: 300
Percentage of Employees: 25
Level: All Levels
Department: Mutual Fund, Asset Management, Wealth Management, Private Client
Notice Period Offered: 1 Month
Severance Package Offered: Nil
Source: Self
Layoffs at Indiabulls in August 2008
Number of Employees: 100
Percentage of Employees: 75
Level: Senior + Middle Management
Department: Retail Function
Notice Period Offered: nil
Severance Package Offered: nil
Source:
Layoffs at Tanla in
Layoffs at Goldman Sachs in November 2008
Number of Employees: NA
Percentage of Employees: supposedly 10%
Level: Basic level
Department: All
Notice Period Offered: amount paid in lieu of notice period
Source: self
Source Link:
Layoffs at Aquest Systmes in November 2008
Number of Employees: 27
Percentage of Employees: 100%
Level: All Employees
Department: All company
Notice Period Offered: 0
Severance Package Offered: 0
Source: Self
Layoffs at Adventity Global Services in November 2008
thane,
Number of Employees: 45
Percentage of Employees: 50%
Level: 50% fresher from top universities
Department: retail analytics
Notice Period Offered: 0
Severance Package Offered: 0
Source: Employee
U.S. job losses worst since 1974 as downturn deepens
Reliance group(including Reliance Info Systems) ask 5,000 to resign
Some of the companies involved in the exercise are Reliance Retail, Reliance Logistics, Reliance Info Systems and Reliance Corporate Park. The resignations, as against a straight lay-off, leave employees in a better position to find new jobs.
Friday, December 5, 2008
More working hours for Indian techies
Sr IT exec fired for faking degree
NEW DELHI: Broadcom Corp, the maker of chips for phones and consumer electronics, fired Senior Vice President Vahid Manian after questions surfaced about the validity of academic degrees listed in his company biography.
RealNetworks Cuts 130, 7.5 Percent of Workforce
Indian techies hit by recession in US
New York (IANS): Less than three weeks ago, Saurabh (name changed) relocated along with his family from Edison, the Indian neighbourhood in New Jersey, to Silicon Valley in California as he switched jobs. Before moving, he put his house, which he had bought last year, on sale and leased an apartment at his new work place.
One fine morning, two weeks after he moved with bag and baggage to Silicon Valley, he was quietly handed the pink slip by his boss in his chamber along with about two dozen of his colleagues. Saurabh, who has two kids to support, is jobless again.
"It is very difficult, these days. There are no jobs available," Saurabh told IANS, requesting that his name and the name of the company not be disclosed. So did others interviewed for this report.
Luckily enough, he has a permanent residency visa, which is more popularly known as the Green Card, because of which he can stay in this country and search for a new job. But many of his colleagues do not even have that luxury. They are getting ready to go back home as they can't live in this country on an H-1B visa if they don't have a job.
"Even retaining a job is a luxury these days," said Manish Gupta who works with another multinational company in mid-town Manhattan. Some of his friends have already left for India after they received the pink slip last month.
While there is no official figure about the number of Indian Americans who have lost their jobs, in the US pink slips are being handed out in hundreds and thousands.
Anand Kumar, software professional, who works with a Swiss multinational in New York City, was informed by his HR department that his salary has been slashed by 10 per cent from the next pay cheque. Still he says he is ok. "That is fine. At least I have my job so far," he said.
Stories of pink slips and losing jobs abound among the Indian American community here. In fact, this seems to be the only topic of conversation when two techies meet or at any of their social gatherings.
The reports that the economic meltdown will continue has made a large number of Indian American software professionals -- who account for a majority of those holding the most sought after H-1B visa -- edgy.
"People are being fired even from companies which were earlier considered safe. These are tough days," said Rakesh Tyagi, who lost his job last week. He was working with a chemical company in Buffalo, in upstate New York. Rakesh, who came to the US just before the 2001 twin-tower attack, said the situation then was not as bad as it is now.
When contacted, officially none of these companies are willing to talk about job loss, but even a small chat with those working there indicates the grim scenario.
"Nothing is certain. We are now living on a day to day basis," said Ashutosh Sen. Several of his friends and colleagues have lost jobs in the past one month. "Hardly a day passes when I do not hear this story," he said.
Job cuts in Constellation, Credit Suisse, United Airlines
Constellation NEW YORK - Constellation Energy Group Inc. says it will cut some 800 jobs from its global work force. About half of those will be in the Baltimore area.
Credit Suisse
Credit Suisse said Thursday that it will cut roughly 5,300, or 11%, of its jobs after posting a loss of around 3 billion Swiss francs ($2.5 billion) for the first two months of the fourth quarter. Most of the job cuts will come in the group's investment-banking arm, where it is also sharply cutting its risk exposure and reducing or eliminating trading activities in certain sectors.
United Airlines
United will furlough more than 1,000 workers from positions across the country The Associated Press reports, citing "layoff notices and the unions that represent the workers." The Chicago Tribune says "the latest furloughs are among the 7,000 jobs that the Chicago-based carrier had said it would eliminate as it reduces its workforce to match its shrinking airline operations amid the tough economy. United is in the process of grounding 100 airplanes, about 20% of its fleet."
IT staff desperate to keep their jobs
Recession trickles to India's tech industry
Adobe Systems to cut 600 jobs, or eight per cent of workers
Adobe Systems Inc. released better-than-expected preliminary earnings for the fourth quarter late Wednesday, but said it will cut 600 jobs, or eight per cent of its work force, because of slower revenue growth.
The company said it expects earnings of 45 cents to 46 cents per share, compared with 49 cents per share in the year-earlier period. Excluding certain items, Adobe said it expects to earn 59 cents to 60 cents per share. Analysts, who typically exclude one-time charges or gains, projected 51 cents, according to Thomson Reuters.
Adobe said revenue should come in between US$912 million and $915 million, up from $911 million a year earlier, but below the average Street estimate of $930 million.
"The global economic crisis significantly impacted our revenue during the fourth quarter," Adobe chief executive Shantanu Narayen said in a statement.
The company said it will cut 600 jobs across all locations and business units. The layoffs will cost between $44 million and $50 million in charges, Adobe said.
The company's shares gained 54 cents, or 2.5 per cent, to $22.54 in the regular session, but fell $1.56, or 6.9 per cent, to $20.98 in after-hours trading following the release of the outlook.
AT&T cuts 12,000 jobs, Viacom also trims workforce
* Taking a $600 million severance charge
* Shares down 2.5 percent
* Viacom, Adobe also cutting staff
Top U.S. phone company AT&T Inc said it will eliminate 12,000 jobs, or about 4 percent of its workforce, in a fresh wave of cuts to cope with an economic downturn that has exacerbated a decline in traditional phone sales.
Joining a raft of companies slashing costs to survive a slump in spending, AT&T said on Thursday it will cut the jobs over the remainder of 2008 and 2009, and take a charge of about $600 million in this year's fourth quarter for severance.
The carrier also plans to cut its 2009 capital spending from this year's levels, though spending plans have not been finalized. AT&T said it would provide details in late January.
The cuts come as phone companies struggle with declining land line sales, as more consumers switch to wireless or alternative, cheaper services offered by cable and Internet companies. AT&T cited "economic pressures, a changing business mix and a more streamlined organizational structure".
for complete storyClick here
Thursday, December 4, 2008
State Street to cut up to 1,800; Wellington also confirms layoffs
Two more Boston financial companies disclosed large rounds of layoffs yesterday, the latest in a wave of cuts sweeping the local investment industry in the wake of plunging stock markets.
State Street Corp. said it plans to eliminate 1,600 to 1,800 positions over the next several months, or about 6 percent of its workforce. Separately, Wellington Management also confirmed a cut, reportedly 10 percent of a 2,100-person workforce.
Fidelity Investments is in the midst of eliminating 3,000 jobs, and MFS Investment Management is cutting about 90. The Chicago staffing firm Challenger Gray & Christmas reported yesterday that financial firms cut 91,356 jobs in November, the largest monthly reduction since September 2001, when 96,333 positions were eliminated.
State Street is initiating the cuts just weeks after receiving $2 billion in taxpayers' funds as part of the Treasury Department's plan to loosen squeezed lending markets by loaning capital to the financial sector. The government funds came with few restrictions, although government officials urged the recipients to use the money to increase lending. State Street, however, is not a retail or investment bank; much of its business is providing services, such as recordkeeping, trade settlements, and the like, to the money-management industry. It does have an investment management arm, too.
Steve Adamske, a spokesman for Representative Barney Frank, the Newton Democrat who spearheaded the financial industry bailout in the House of Representatives, said he didn't have enough information to comment directly on State Street's actions.
But Frank hasn't criticized layoffs in the past by other companies that received government funds, including Citigroup Inc., and Adamske said the first priority of the money should be to encourage bank lending.
"We sincerely hope the funds provided by the government will go for the stated purpose in the act, to provide liquidity in the financial system and get lending moving again," Adamske said.
State Street spokeswoman Carolyn Cichon said it would be "apples to oranges" to compare the public cash infusion to the layoff decision, since the government money was meant to boost the company's capital level rather than cover operating costs. "Our core business remains extremely strong," she said.
The firm emphasized the job cuts would help its financial position. "It is important for State Street to continue to deliver consistent earnings growth, particularly during this difficult environment," State Street chief executive Ronald E. Logue said in a statement. "Taking this action increases our ability to do so."
State Street employed 28,900 people worldwide as of October, about 13,900 in Massachusetts. Cichon said she couldn't detail how many local jobs would be eliminated.
The reductions will mainly occur among middle and senior managers, the company said, instead of among lower level positions that provide customer service. About two-thirds will be at its North America operations, with the rest in Europe and Asia, the company said.
State Street said severance benefits and other costs will lead to pretax charges of $325 million to $350 million, or 51 to 55 cents per share. The action will save as much as $400 million annually, it said.
Separately, Wellington Management has eliminated 10 percent of its workforce, the industry publication Pensions & Investments reported yesterday, citing an unnamed source.
A company spokeswoman wouldn't confirm the figure but said that given the market's recent turmoil, the firm has made efforts to cut expenses.
"Included in these efforts was the difficult decision to reduce our workforce, which has been implemented over the last several days," Wellington said.
"In doing so, we focused on eliminating work and restructuring positions where the change would have minimal impact on our investment and client capabilities."
Cisco CEO Says No Layoffs Planned Despite Downturn
Cost-cutting measures in Major MNCs and Indian companies
Over 1 million U.S. layoffs so far this year in USA
Over 65,000 people lose jobs in three months in INDIA
NEW DELHI: Over 65,000 employees have lost jobs during the three-month period ending October in the country on account of economic slowdown, official sources said.
"A sample survey of 21 companies found that 65,507 jobs were lost across the country in various sectors between August and October," an official said.
Besides, the exporters have lost orders worth Rs 1,792 crore on account of slowdown in global trade and lack of demand from the US and European markets, the main destinations of Indian products.
A different survey conducted by the Apparel Export Promotion Council, a body sponsored by Textile Ministry, in Noida suggested that over 9,000 textile workers employed in export-oriented units were rendered jobless after the slowdown gripped the economies of the developed nations.
India's exports entered negative territory for the first time in five years in October, with the overseas sale dipping to $12.8 billion, 12 per cent lower than the $14.6 billion recorded in the corresponding month last year.
The country, according to official estimates, is unlikely to achieve export targets of $200 billion for this fiscal as a result of drying up orders from overseas buyers.
Job fears make NRIs stay at work
Ready with their backpacks, they wait for the Christmas break impatiently to head home for reunion with their families in India. This year however, global slowdown is forcing several NRIs to stay put in their respective countries of employment fearing jobloss behind their backs.
With employers following “out of sight, out of mind” policy, more aggressively than even before in wake of the ongoing economic crisis, fear-psychosis has gripped almost all employees—locals and migrants—alike , observes Ma Foi Management Consultants CEO E Balaji. “Since the last several years, it has been a practice among NRIs to visit India during Christmas break. But not this year.
No matter what the employment contract says, it is easier to fire white-collared employees in these times. At a time when even locals are turning up at their workplaces well before time and deliberately staying put till late hours just to ensure their visibility to their employers, do NRIs stand a chance to hold on to their jobs if they take breaks? The fear of losing job at these times is well-founded ,” he points out. “One must remain visible at these times to assert their association with an organisation,” Balaji reasons.
IT professional Ramesh Krishnan (name changed) for instance, has been given an ultimatum by his company in the US. Scheduled to get married later this month, the 28-year-old was to head for India in the first week of December . But now, he has been asked to make a choice - remain a bachelor for now, or get fired! Even as Krishnan’s fate hangs in balance, his counterparts have decided to not do anything to trigger such action from their companies.
Satyam plans to send staff on sabbatical to trim costs
The company is looking at sending its employees on a sabbatical, but will take a final decision depending on the third-quarter results. Satyam has already scaled down its hiring projections for the current fiscal to around 8,000-10,000 compared to 15,000 that it had earlier projected.
“We are looking at various options to reduce costs and sabbatical is one such option. We will be able to shift our employees to take up social activities relating to our own corporate social responsibility programmes. Employees can also look at working with NGOs during the time of sabbatical. But, they will have to compromise on their salary during sabbatical as the pay structure will be lower than what they are currently drawing,” said SV Krishnan, global head (HR), Satyam Computer Services.
According to him, the firm will finalise a decision depending on its third-quarter result. “If the result is in line with our expectations, we may not adopt any drastic cost-cutting measures,” he said.
Currently, Satyam employs 47,000 people in the IT services segment. Inclusive of the BPO arm, the overall headcount is around 53,000. “It is not a viable option to shift IT employees to the BPO subsidiary as it is engaged in specialised works,” said Krishnan.
Infosys, Satyam’s peer, had issued letters to its employees saying they could opt for a one-year sabbatical to engage themselves in philanthropic activities. Infosys had said the employees would continue to draw 50% of their salary during the sabbatical.
Though Infosys’ move coincided with the global financial meltdown and likely slowdown in the growth rate of the IT industry, the firm said that the option would be entirely voluntary for employees.
Industry observers reckon programmes of this kind will help IT firms cut down their costs as their major market, the US, is facing recession. “Visibility from the US market is still not clear and firms are under pressure to cut costs. It has triggered IT firms to look at ways to trim costs,” said Harit Shah, analyst (IT, telecom), Angel Broking.
At present, wage bill accounts for over 60% of Satyam's revenues. Belt-tightening measures could help the firm cushion the impact of the global economic meltdown on its profitability.
SV Krishnan had earlier told ET that the company could take a relook at the guaranteed component of the variable pay given to its employees.
“Employee-related expenses account for almost 55-60% of an IT firm’s total spending cost. They have tried to cut that expenses by scaling down hiring projections. Sabbatical programmes will help reduce costs further,” said Shah. But the challenge would be in managing utilisation rates as they will have to manage projects with existing employees. This may put additional burden on them.
“Considering that most IT firms have a utilisation rate of about 75-80%, there is not much room left for manoeuvre. It may not be possible for firms to increase it beyond 85-90%. This, in another way, can be an indication of their order pipeline getting dried up and renewal of projects becoming difficult,” said another industry analyst.
40 sacked for fudging travel bills in Satyam
“We take a strong view on this issue.
We reimburse employees’ travel costs as they go on trips and relocate. When they are not using the bookings done at the company offices, they submit bills given by the service providers,” a Satyam spokesperson said.
“In this case, we found that the bills were fudged over a period of three months,” the spokesperson added.
The idea is to send a strong message to the staff on this issue, keeping in mind the increasing travel costs.
In the quarter ended September 30, 2008, the company spent $28.70 million (4.4 per cent of the revenues) on travel expenses as against $26.30 million in the same quarter last year, a growth of about 9 per cent.
Recession-proof jobs: Software design, network administration, IT security
Will your IT job survive the financial meltdown?
IT sector job seekers face pressure
Wipro, Infosys employee cost cutting measures
The company has set up a portal which invites employees to send in ideas which could range from ensuring all computers and lights are switched off at the end of the day to bigger business ideas which could be incubated.
So far the company has apparently received over 1000 such ideas which it is in the process of evaluating. It also says there could be more such measures in the near future.
Wipro on the other hand has asked the employees hired for the tech services arm to join the BPO arm instead. This it insists is a way to overcome delays in joining dates. This is being offered in Kolkata so far and Wipro says that such an option could also be made available in Orissa and Hyderabad as well.
“We are giving time bound offers which could extend anywhere between 12 to 18 months and they would be then able to join tech services again,” says VP Talent Acquisition Wipro Tech Pradeep Bahirwani.
The company insists there is going to be no change in salary structure for such employees. Employees who don't wish to take up such an offer will face a delay in on boarding by six months. It also says it will meet all 13,500 offers made for the year.
More financial services IT jobs cut
IT Job cuts in the UK financial services sector are continuing as companies get themselves ready for worsening economic conditions.
HSBC will cut another 500 jobs and Swiss banking giant credit Suisse has announced 650 UK jobs to go. Both announcements include IT jobs cuts.
Banks have been reducing staff numbers. They see IT and back office functions as surplus to requirements when business levels fall.
HSBC cut 1,100 jobs in its investment banking division in September including 500 front and back office jobs in London.
Credit Suisse, which made a loss in the third quarter of this year of £704m, has announced 650 job cuts including IT support functions.
"Due to market conditions and projected staffing levels required to meet client needs, we are reducing headcount by approximately 650 in the UK," said Credit Suisse.
Citigroup plans to cut its global workforce by 52,000 jobs across all businesses and geographies in the near future. Citigroup CEO Vikram Pandit revealed last month that the bank would cut 20% of its employees at the group.
A Citigroup spokeswoman said half of the job cuts will come from the sale of business units. The company had earlier announced 18,000 job cuts when it sold its Global Services unit in India to Tata Consultancy Services for £300m.
Pandit said earlier this year that it was feasible for the bank to take 10%, 15% or 20% off its cost base, especially in IT and operations.
The Royal Bank of Scotland (RBS) is expected to make thousands of job cuts as it comes to terms with the economic slowdown. According to various reports last month, up to 3,000 jobs will be cut in the bank's global banking and markets divisions.
Barclays is also expected to cut IT jobs at its FirstPlus loans business as it closes to new business. It will keep its IT infrastructure to process existing customer loans, but is scaling it back.
Wednesday, December 3, 2008
Bank of America job cuts likely to be worse than expected
If there's any good news in this for Charlotte, it's that the vast majority of the job cuts are supposed to be in New York City.
UNC Charlotte professor Tony Plath says most of the cuts are rumored to be in investment banking.
"It's going to hit the Merrill Lynch side harder than it will hit the general bank," Plath told us. Plath added that even the cuts on the Bank of America side are likely to be mostly out of New York, because that's where B of A's investment banking is headquartered.
Still, Plath says if 30,000 jobs are cut, there's no way Charlotte can escape unscathed. He estimates the Queen City will lose anywhere from a few hundred to a few thousand jobs, but says it's too early to tell.
Plath says the timing of these cuts couldn't be worse. They'll likely take effect late this year into the first quarter of next year. During that first quarter, Wells Fargo is also expected to announce job cuts when it completes its expected takeover of Wachovia.
"Both of those layoff rounds are going to hit the market in Charlotte at the same time," Plath said. "It's going to be a bad first quarter here."
Plath says the effect of Wells Fargo/Wachovia job cuts is likely to hit the Queen City harder than the Bank of America cuts will -- meaning the bad news for Charlotte is far from over.
Bank layoffs: J.P. Morgan, Goldman Sachs, Standard Chartered and more
With the recession official, banks are trimming back. Tuesday many banks announced more layoffs. See the latest announcements after the jump.
Many U.S. banks are trimming back before the end of the fourth quarter.
J.P. Morgan Chase & Co. will lay off 9,200 or 21% of Washington Mutual Inc.'s employees by the end of 2009. Around half of the layoffs will be before the end of January.
- Bank of America Corp. is expected to cut about 10,000 investment banking jobs at in its combination with Merrill Lynch & Co., according to CNBC.
- Goldman Sachs Group Inc. has cut its Dubai-based work force, a bank official told the Gulf Times.
International banks are also announcing layoffs.
-German-based bank, Bayerische Landesbank, plans to slash 5,600 jobs.
-Credit Suisse Group said it was cutting 650 jobs.
-HSBC Holdings plc said it was cutting 500 jobs at its British banking business and will cut 200 jobs in Hong Kong, according to the International Herald Tribune.
-Standard Chartered plc is trimming 572 jobs at its main office in South Korea and 200 in Hong Kong.
-Royal Bank of Scotland Group plc and Macquarie Group Ltd. are eliminating a combined 260 jobs in Hong Kong, according to the China Morning Post. Royal Bank of Scotland is eliminating 3,000 jobs in its investment banking division. Rumor is that 250 cuts will be in the bank's division in India.
Hit by downturn, Wipro keeps 9,800 freshers waiting...
"Of the total 13,500 campus offerings made across the country last year, we have taken 3,700 of them so far, while the remaining (9,800) have been told to wait for their turn to join," Wipro vice-president for talent acquisition Pradeep Bahirwani told reporters here at a hurriedly called press conference.
Due to slowdown in the IT industry and tough business environment, Bahirwani said, the company had discontinued campus offerings this fiscal for the time being.
"We have made 8,000 campus offers across the country in about 200 engineering colleges, including IITs and NITs (National Institutes of Technologies) this year as against 13,500 last year," Bahirwani said.
To make better use of the engineering freshers hired but not absorbed, the company has began to offer them the option of joining its BPO (business processes outsourcing) division at its software development centres in Kolkata, Bhubaneswar and Hyderabad for the same compensation fixed for IT services.
"To meet our BPO division's requirements in technical support, we have offered them the choice of coming onboard or wait as long for the joining date at the salary stack made in the offer letter. We hope to see a turn-around in business after 12-18 months to move them to IT services," Bahirwani said.
The company's novel initiative to ask freshers hired for IT services to join BPO division by paying upfront Rs.75,000 for bond backfired in Kolkata, with the hired engineers protesting against such the move and taking up the matter with West Bengal IT Minister Debash Das Monday.
"The option has been given in commensurate with our current requirements, which are more in BPO than in IT services, as technical support role requires engineering grads and not those from science or general stream. There is no compulsion or change in compensation," Bahirwani clarified.
Defending the offer to join the BPO division, the HR official said the decision was taken to give an opportunity to engineering graduates to get on work without further delay. Wipro's global IT services business had 97,552 employees, including 16,500 in the BPO division till the second quarter (July-September) of this fiscal.
Wipro seeing a few cancellations, more delays
Girish Paranjpe added that Wipro, India's third-biggest software services exporter, was feeling minimal impact from last week's attacks that killed almost 200 people in Mumbai, and reiterated that the company expects business to improve next year.
Referring to the Mumbai attacks, he told Reuters in an interview on Monday, "I don't see any operational impact of that ..." When asked about cancellations by Wipro's customers -- who include Cicso, Credit Suisse and Nortel -- he said: "Some few, but much more delay, postponement, resizing -- a few cancellations."
Paranjpe said he remained hopeful that business would pick up in the company's first quarter beginning in April next year after a slowing that began about a quarter ago. Customers cannot sustain constrained spending indefinitely, he said.
"About six months you can manage with compression, three to six months you can manage with compression. Beyond that, you have to start thinking longer-term," he said. "I'm still kind of optimistic that we would have gone past the bottom some time in the first fiscal quarter" next year, he added.
Sector leader Tata Consultancy Services and fellow large Indian outsourcer Infosys have recently expressed cautious optimism about the market, but like most peers they face at least short-term uncertainty.
Let’s begin by saving $10 per staff: Infosys CEO Kris
Detailing the most serious slowdown faced by the three decade-old IT offshoring story, Infy CEO Kris Gopalakrishnan, in an internal mail circulated to all the employees, says: “If each one of us is able to identify a savings of even $10–not just per day or per month–but $10 as a one-time effort from each one of us, that would translate to a saving of close to $1,000,000—which is a substantial amount.”
The $5-billion Infosys, the country’s second-largest software exporter, has over one lakh employees spread across globally. Mr Gopalakrishnan continues: “I urge each one of you as a key stakeholder of the company’s success, to examine your work environment and look at opportunities that will optimise utilisation and control expenditure. What may appear to be an insignificant saving at the ground level, may well add up to substantial savings when aggregated at the regional or global level..”
Mr Gopalakrishnan’s mail, drawing on varied research reports, has projected a longer recession in the global economy that may severely constrain the IT spending of its several clients.
“The recent economic developments across the globe are forcing all organisations, small, medium and large, to re-evaluate priorities and establish fiscally responsible measures that will ensure sustainability over the next 12–18 months.” Infy honcho’s mail said the recession is expected to continue well into 2009 with US and Japan economies shrinking.
Given this backdrop, Infosys has charted out four main objectives: to increase the billability and utilisation of all its employees around the globe; to increase revenues and margins; to identify cost optimisation opportunities, which may include increased leveraging of its lower cost locations for delivery; to improve the control over spend and optimise return on investment.
Recently, Wipro Chairman Azim Premji sent out mail to all its employees talking about controlling expenditure. Many IT companies have already begun rationalising costs by cutting down travel expenditure and with a freeze on hiring.
The internal mail adds, “As we explore and work through the opportunities toward creating sustainability, each of the units is looking to drive optimisation at all levels, and will draw upon you to support the process in a transparent manner, and with minimal disruption to business. A successful outcome will position Infosys well within the client base, and demonstrate our ability to positively respond to the dynamics of this global economy.”
After layoffs, Citi now cuts down severance package for staff
In an internal mail to all its employees in the US, Citi's Human Resources Head Paul McKinnon said on Monday that it would eliminate some “supplemental severance payment'' for the employees with 10 or more years of service, with effect from January 15, 2 009. ''... we have continued to review our policies and practices to ensure that they support our overall business objectives and remain competitive with industry standards. As a result, a decision has been made to amend the Citigroup Separation Pay Pl an (SPP) for US employees,'' the mail said.
Earlier last month, Citigroup's India-born CEO Vikram Pandit has said that the bank would bring down its headcount to below 3,00,000-- a plan that entails more than 52,000 job cuts in the current quarter alone. Prior to this announcement, Citi had alread y cut close to 25,000 jobs since the beginning of this year. Citi's headcount stood at 3,52,000 at the end of September quarter.
A few days after the massive layoff announcement, the US government came in to support crisis-ridden Citigroup with a rescue package that entails an overall capital infusion of about 40 billion dollars, alongside a guarantee for troubled assets worth 306 billion dollars with the bank. The rescue package has stripped down bank's dividend as well as executive compensation payments.
IT Careers: 7 Tips for Job Security in a Bad Economy
Job cuts in India a reality?
At the same time its chief says they will still hire a few thousands this year. “At Infosys we have been very clear that we will take all people we have made offers to and we are on target on that,” said Nandan Nilekani, co-chairman of Infosys Technologies.
On reports of Infosys asking its employees to take a sabbatical, Nilekani said, “The timing is a bit coincidental. We had planned it even when the economy was booming.”
But experts say layoffs will become a reality in India. The head of world's second largest headhunting firm says there will be 5-10 per cent job cuts across sectors.
“Clearly as multinationals are feeling the pinch throughout the entire world, it is going to contract here in India as well. Without sounding too pessimistic, the worst is yet to come,” said Jeffrey Joerres, Global Chairman and CEO, Manpower.
Many say cost cutting is the beginning. If it doesn’t work, companies will be forced to resort to job cuts and with demand shrinking by the day, thousands of workers across sectors face an uncertain future.
India's outsourcing bubble is bursting
Until recently, in India's outsourcing hub it used to be one big Googlefest, with all the pampering and cosseting that employees enjoy at the company's Googleplex headquarters in Silicon Valley. I don't know what the latest from Googleplex is. But in Bangalore, it sure looks like the party is slowing down.
The first sign is in real estate. In a city where residential communities like Silver Manor, Golden Enclave and Platinum City sprouted to house thousands of young, upwardly mobile technology workers, instead of 200 million-rupee homes, developers are now beginning to market 2 million-rupee condominiums.
Departmental stores sport 'sale' signs every other week as credit-card-happy tech workers are cooling off consumption. In India's top management schools, including the Bangalore branch of the Indian Institute of Management, technology outsourcing firms, multinationals and Wall Street banks used to slug it out for Day Zero spots during Placement Week. For students in the graduating class, that exercise is months away. But the schools are already planning to offset an expected slowdown in placements by inviting more companies.
The collapse of top US financial firms will cause a dramatic slowdown in hiring among outsourcing companies. The banking, financial services and insurance sectors account for 40 per cent of revenues for India's $52 billion outsourcing industry (as of 2007-2008). Firms such as now-bankrupt Lehman Brothers and bought-out Merrill Lynch were big customers and provided millions of dollars worth of lucrative contracts to Indian technology services companies.
Consequently, in the past home-grown Indian outsourcing companies grew by impressive numbers. Infosys and Wipro, the big two employers in Bangalore, were each hiring 10,000 employees or more during recent years. Such spectacular ramp-ups are unlikely to recur any time soon. One large call centre with European and US customers is now refusing to hire anybody that does not stay within a five-mile radius of their centers: the costs are just too high.
Layoffs Coming to WaMu
J.P. Morgan Chase & Co. announced plans to lay off about 21% of Washington Mutual Inc.'s employees by the end of 2009 as it weaves the thrift's operations into its retail-banking network.
J.P. Morgan, which acquired WaMu in September for $1.9 billion after it was seized by the government, told employees yesterday that it will lay off 4,000 workers by the end of January, according to J.P. Morgan spokesman Tom Kelly. Another 5,200 are being asked to stay on through various dates in 2009 to help with the deal's integration.
Seattle-based WaMu had 43,198 employees as of June 30. J.P. Morgan Chief Executive Officer James Dimon and Charles Scharf, who runs the bank's retail operations, met with employees and local officials in Seattle on Monday.
Many of the layoffs come from WaMu's home town of Seattle and two operations centers in California. Some 1,500 workers in Seattle received notice on Monday that they will be laid off in 60 days.
That came on the heels of 1,600 employees in Pleasanton, Calif., and San Francisco who received notice last week that they will be laid off by next spring. Workers who are being asked to stay on for a period of time will receive double their usual salary.
The rest of the layoffs will be sprinkled throughout WaMu's presence across the country.
The cutbacks announced on Monday aren't likely to be the end of the layoffs that will be associated with the WaMu deal. That is because the figures don't take into account the hundreds of retail branches that are expected to be shuttered in coming months. Shares of J.P. Morgan fell $5.54, or 17.5%, to $26.12 in 4 p.m. composite trading on the New York Stock Exchange.
Job Cuts at Recession Levels, CEO Exits Spike
Challenger, Gray & Christmas, the outsourcing consultant company, alerted reporters and analysts today, Nov. 24, that its November jobs report, due Dec. 3, put the number of jobs lost "even closer to the 172,373 job cuts per month averaged during the last recession."
The October report saw planned job cuts soar 19 percent to 112,884, but significant layoff announcements from Citigroup, Sun Microsystems, Circuit City and others will push November's numbers close to 177,000, according to Challenger, Gray & Christmas.
The numbers in Challenger's November CEO turnover report, to be released Dec. 8, are expected to exceed the 2007 total one month early. In October, 125 CEOs abandoned ship.
Will Technology Job Losses Be Worse than 2001?
It will not because there has not been a large quantities of technology hiring as there were during the Internet bubble buildup in the late 1990s, according to what Tom Silver, the CMO of the technology jobs' website Dice told CIO.com.
Given that U.S. government data came out today that now shows the recession began a year ago in December of 2007, it seems a little premature to be calling the game when we have not finished 2008 (as much as we'd all love it to be over). Evidently, there are some key indicators that you cannot see when a recession is going on, one of which is that "gross domestic product remained positive until the third quarter this year," according to a Reuters article from today.
Silver told CIO.com that job postings for technology jobs are down across the board about 20 percent, but are particularly bad in regions you'd expect like Silicon Valley. Here are some of the specifics from the CIO.com article including Dice's numbers about technology-heavy regions of the U.S.:
[Silver] says that the number of IT jobs advertised on his site had been holding steady at between 85,000 and 90,000 jobs until the September-October time frame, when the number of ads for IT jobs dipped significantly. "We've seen a drop of roughly 20 percent versus where we were last year," he says. "We're now around 70,000 jobs on the site." The big markets for tech jobs--NYC, Silicon Valley, Chicago and Dallas--are experiencing the most significant declines in IT job opportunities, says Silver. Job opportunities are down 30 percent in Silicon Valley year over year, 25 percent in New York, 24 percent in Dallas and 21 percent in Chicago, according to Dice.com's data.
Given the information I've seen over the last few weeks with IDC cutting its forecasts for nearly everything technology related (in tech services and tech infrastructure), to research Ed Cone of CIO Insight pointed out recently showing corporate IT spending to be a "historic collapse," the economic data on the technology sector is not good, but as Dice's Silver pointed out (with little consolation to those affected), it's better than other industries.
Researcher Paul Carton of ChangeWave sums it up like this in his post on the spending collapse (make sure to look at his charts for the wider historic view):
U.S. corporate IT spending is in the midst of a huge nose-dive, the likes of which hasn't been seen before in a ChangeWave survey dating back to 2001. In short, the current ChangeWave survey findings virtually guarantee that we'll be seeing the technology sector get hammered with pre-announcements before the January earnings season gets underway. I want to believe that 2009 will not be the bubble-bursting of 2001, but I have a feeling, much like Eric Lundquist of CIO Insight, that a big portion of work in technology over the near future will be for systems integrators, contract project management and other programming and business analyst skills that can be outsourced (and not necessarily offshored) using existing or low-cost infrastructure. As Lundquist points out, the CTOs and CIOS of companies he is talking to are dealing with internal customer and financial data issues. These guys need as close to real time numbers for budgets that they can get, and are looking for easier ways to make data consistent, and they need it--like now.
Don't we all.