Working in today's cutthroat economy has become a lot like the old joke about two guys being chased by a grizzly bear. One guy stops to take off his work shoes and lace up some sneakers. For complete story click here
Wednesday, December 3, 2008
Layoffs in India
Job cuts in India a reality?
The government may not admit it but experts say layoffs in India are becoming a reality. Companies who are not ready to hand pink slips to their employees yet are grappling with different ways of cost cutting. Software giant Infosys has offered a sabbatical to its employees allowing them to draw half their salary in that period.
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.
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.
Layoffs in India, Outsourcing
India's outsourcing bubble is bursting
Bangalore, India--Once a high-flying tech hub, Bangalore is seeing more sober days in the wake of the credit crisis. For tech employees, jobs no longer come with a lifetime guarantee. It looks like the global economic turmoil and the dramatic Wall Street meltdown is beginning to hit Bangalore.
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.
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 in USA
Layoffs Coming to WaMu
Source: Wall Street Journal
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.
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
Source: eWeek
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.
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.
IT market, jobs, Layoffs in USA, Recession
Will Technology Job Losses Be Worse than 2001?
Source: eWeek
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.
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.
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