Saturday, January 17, 2009

Is Microsoft planning massive job cuts in 2009?

Microsoft Corp is considering significant layoffs across its various divisions, The Wall Street Journal reported, citing people familiar with the company's plans.

But plans for the cutbacks have not yet been firmed up and Microsoft could end up finding alternative methods to control costs, the Journal reported on its website.

A Microsoft spokesman declined to comment on layoff rumours. The number of potential job cuts is likely to be far less than the 15,000 positions that have been rumoured in recent weeks, the Journal reported.

Microsoft might announce the job cuts when it reports quarterly earnings next week, the Journal said.

The software giant employs about 91,000 employees globally.


Google offers cloud software to businesses

Google is recruiting a sales force to offer the Internet firm's software to business customers worldwide who traditionally use Microsoft programmes.

Google will train people to pitch its Google Apps Premier Edition, an array of business software hosted online in what is referred to as "cloud services."

Cloud services such as spread sheets, word processing, and calendars are maintained and supported on Google computers and users access them when they wish by using the Internet.

Cloud services eliminate the need for packaged software to be installed and maintained on computers in homes or offices.

Google has been steadily increasing its host of cloud services, with a basic array offered for free and a Premier Edition available at a cost of 50 dollars annually.

"Google Apps has reached a level of maturity where it is useful and valuable for almost any business" said Google president of enterprise Dave Girouard.

"This programme gives IT solution providers an easy way to introduce cloud computing to their service offerings, while helping more businesses make the transition to this new era of technology."

Google said it will teach "resellers" how to integrate Apps into customers' business operations and give them a 20 per cent break on the price that they can pass on to customers if they chose to do so.

The programme has been tested with more than 50 pilot partners. "We believe strongly that all companies will adopt SaaS (Software as a Service) to one degree or another, and Google's reseller programme empowers us to be experts in the cloud," said Tony Safoian, president of SADA Systems, an IT consulting firm.

"Reselling Google Apps opens up new opportunities via new conversations we could not have had with prospective clients as little as two years a

Safoian said Google Apps can be an easy sell, given that letting the California technology firm handle software updates, maintenance and disaster recovery can cost businesses 75 per cent less than doing it themselves.

Google Apps is seen as a direct challenge to a Microsoft empire founded on selling packaged software for installation on people's machines.

Until now, Google had relied on its own team to sell businesses subscriptions to its cloud services. Schools and charity groups are able to use the software services free.

Microsoft has responded with its own move "into the cloud" and says that the Windows 7 operating system it is preparing for release has been crafted with that in mind.


Honda Motor likely to layoff employees

Japan's Honda Motor Co. said on Friday it was cutting 3,100 jobs in Japan and reducing domestic production because of a slump in demand due to the economic downturn.

Citi posts $8.29 bn loss, splits up company

Citigroup Inc unveiled a broad restructuring plan designed to shed weaker businesses and troubled assets, and also reported an $8.29billion fourth-quarter loss, its fifth straight quarterly loss.

The company also said on Friday that it anticipated more departures from its board, which is losing Robert Rubin as a director later this year. Nevertheless, Citigroup shares rose 8.6 percent to $4.16 in premarket trading.

Citigroup's fourth-quarter loss equaled $8.29 billion, or $1.72 per share, and compared with a year-earlier loss of $9.8 billion, or $1.99 a share.

"I think people knew it was going to be bad, but I'm surprised it's this bad," said Matt McCormick, portfolio manager at Bahl & Gaynor Investment Counsel in Cincinnati.

The bank said it was splitting into two operating units, one of which will focus on universal banking, the other on brokerage and retail asset management, local consumer finance, and a pool of assets that require special management.

Revenue fell 13 percent to $5.6 billion, reflecting weak capital markets. The company's global credit card business saw revenue decline 27 percent on weakness in North America.

Consumer Banking revenues declined 22 percent, driven by a 47 percent drop in investment sales. And its institutional clients group, securities and banking revenues were negative $10.6 billion, mainly due to net losses and write-downs of $7.8 billion.

"Our results continued to be depressed by an unprecedented dislocation in capital markets and a weak economy," Chief Executive Vikram Pandit said.


Friday, January 16, 2009

Steve Jobs on leave till June

I am sure all of you saw my letter last week sharing something very personal with the Apple community. Unfortunately, the curiosity over my personal health continues to be a distraction not only for me and my family, but everyone else at Apple as well. In addition, during the past week I have learned that my health-related issues are more complex than I originally thought.

In order to take myself out of the limelight and focus on my health, and to allow everyone at Apple to focus on delivering extraordinary products, I have decided to take a medical leave of absence until the end of June.

I have asked Tim Cook to be responsible for Apple's day to day operations, and I know he and the rest of the executive management team will do a great job. As CEO, I plan to remain involved in major strategic decisions while I am out. Our board of directors fully supports this plan.

Thursday, January 15, 2009

IBM plans to open Iowa centre; To create 1,300 jobs

IBM, the world's largest technology services company, plans to open a new computer support center in Iowa, creating up to 1,300 new jobs and defying a trend of widespread corporate layoffs.

The Dubuque facility in a 10-story office building once occupied by now-defunct retailer Roshek's Department Store, will create jobs for high-tech workers at a time when many technology companies are cutting staff.

Workers will provide security services and remote support to IBM customers, helping to maintain computers and software systems primarily located in the United States, IBM said.

International Business Machines Corp said it plans to employ several hundred people in the facility by the end of this year, following renovations to the top eight floors of the building that it will occupy to make it more energy efficient.

By the end of next year, as many as 1,300 IBM employees will work in the building built in the 1930s, IBM said.

On Tuesday, IBM announced plans to work with Michigan State University to build a software development center in East Lansing, Michigan, that will create up to 1,500 jobs over the next five years.


Is Microsoft planning massive job cuts?

Microsoft Corp is considering significant layoffs across its various divisions, The Wall Street Journal reported, citing people familiar with the company's plans.

But plans for the cutbacks have not yet been firmed up and Microsoft could end up finding alternative methods to control costs, the Journal reported on its website.

A Microsoft spokesman declined to comment on layoff rumours. The number of potential job cuts is likely to be far less than the 15,000 positions that have been rumoured in recent weeks, the Journal reported.

Microsoft might announce the job cuts when it reports quarterly earnings next week, the Journal said.

The software giant employs about 91,000 employees globally.


Wednesday, January 14, 2009

Barclays likely to layoff 2,100 jobs

Financial services major Barclays is to layoff 2,100 in investment banking and money management, as part of its cost cutting measures.

"Barclays is cutting about 2,100 jobs worldwide in investment banking and money management as it slashes costs to cope with the fall-out from the credit crisis", The Financial Times said.

According to FT, the company is cutting 1,300 people from Barclays Capital, the debt-focused investment banking business, 500 from the Barclays Wealth private banking arm, and 330 in asset management business Barclays Global Investors. Overall, the cuts amount to 7 per cent of the three divisions' staff, it added.

Noting that Barclays declined to reveal where the job cuts would come, the newspaper said that the axe is expected to fall heavily in London and New York.

However, the bank would continue to hire in areas such as equities, the report published online said.

Last year, Barclays had acquired the US operations of bankrupt Lehman Brothers.

Financial Times reported that at Barclays Wealth, cuts are expected in London, Glasgow and the Channel Islands. Quoting Unite, which represents staff at Barclays Wealth's division, the daily said, "We cannot continue with this situation of daily job cuts without any justification or explanation of the broader strategy for the bank."

"The bank, which built the units aggressively over the past five years to account for almost half of revenue, said it wanted to be 'appropriately sized', given the current market conditions," it added.

The move is likely to spark fears of further cost-cutting in Barclays' retail and corporate banking division, which includes its bank branch network, the report noted.


Is Motorola planning more layoffs?

Motorola Inc is expected to make steep cost cuts, including more layoffs, at its mobile devices division as a broad slump in demand for cell phones exacerbates its own market share declines.

With even market leader Nokia warning about weakening phone demand, analysts say Motorola could miss Wall Street's already low expectations for phone sales in the fourth quarter and the current quarter. As a result, they expect Motorola to cut the size of its handset unit -- beyond the 3,000 layoffs the company announced in October, which were mostly in its handset unit and equivalent to 4.5 per cent of its workforce.

"Resizing is necessary beyond the 3,000," said Avian Securities analyst Matthew Thornton, who estimated that Motorola's phone unit could have roughly 28,000 employees after the previously announced layoffs.

Motorola declined to comment. The Schaumburg, Illinois-based company fell to fourth place in the global phone market in the third quarter of 2008, and said key new devices would be ready in the second half of 2009, which could mean deeper market share losses until then.

This was before Nokia said in December that it expected the phone market to shrink 5 per cent or more in 2009. Some analysts now expect sales to fall as much as 15 per cent from 2008. As a result of the deteriorating market, Deutsche Bank analyst Brian Modoff estimated that Motorola needed to cut costs by roughly another $650 million, on top of the $800 million reductions already announced.

"Their cost structure is too high for where they need to be in this environment given their market share," said Modoff, who sees Motorola reporting 22 million phone sales for the fourth quarter just ended, and 17 million for this quarter. He estimated that with its current cost structure Motorola could break even if it sold about 28 million phones per quarter, but said that this figure was too high for comfort in the weak economy.

"I think they need to be profitable below 20 million units," said Modoff. Analysts on average expect Nokia to report 121.5 million phone sales for the fourth quarter, with estimates ranging from 110 million to 135 million.

They expect Sony Ericsson, which overtook Motorola in the third quarter, to sell about 26.6 million phones., a blog about the latest phones, said Motorola could lay off as many as 50 per cent of its mobile phone workers, but analysts said this would be a "drastic" move.

Charter Equity Research analyst Ed Snyder said such a cut would mean giving up workers in research and development, and "dramatically" reducing the number of phones launched. But he said that such a move was not implausible.

"They're hemorrhaging cash. They have to cut the division," he said. But Deutsche Bank's Modoff said Motorola needs to be careful about where it makes cuts because it needs to be able to compete with popular devices such as Apple Inc's iPhone and phones based on Android, the operating system designed by Google Inc.

These phones have made the focus of industry competition more about innovative software and user interfaces than about phone hardware."They should keep (jobs) in software and chop them in hardware. The emphasis needs to be placed on low cost designs and operating systems," said Modoff. In the third quarter, Motorola's mobile unit revenue fell 31 per cent to $3.1 billion, and the unit's operating loss widened to $840 million from $248 million.


Will global tech spending decline in 2009?

Technology companies face a bumpy ride in 2009. Global business and government spending on computer, software and communications products and consulting services is expected to decline 3 percent this year, Forrester Research said in a report due out Tuesday.

This would mark the first decline since 2002, when information-technology spending dropped 6 percent after falling the same amount in 2001.

However, this downturn is not expected to last as long. Forrester projects tech spending to recover next year, rising as much as 9 percent in 2010.

In addition to the recession, the strengthening dollar is also to blame for the drop-off Forrester sees this year. Just as the weak U.S. currency boosted the growth rate of technology purchases made in dollars in 2008, the now-stronger dollar will hurt it in 2009, according to Forrester. Western Europe's technology spending rate is a good illustration of the currency discrepancy: measured in dollars, tech purchases in the region will be down 7 percent in 2009. Tech purchases in euros will be up 1 percent.

To neutralize the effect of currency changes, Forrester also projected the global technology market using a ``basket'' of local currencies, weighed for how big a share of the market each region holds. Using this measure, technology purchases are expected to have grown by 4 percent in 2008 and post growth of 3 percent in 2009, and 6 percent in 2010.

Certain aspects of technology will fare better. For example, Forrester expects software purchases to total $388 billion this year, the same as in 2008. But computer equipment purchases, which includes personal computers, servers and storage devices _ are expected to decline 4 percent, to $434 billion. That's because businesses often see software as a moneysaving tool, while buying new computer equipment is something that can be put off until more prosperous times.

There are other trends at play, too, such as an ongoing decline in the server market, independent of the economy, said Forrester analyst Andrew Bartels. More companies are embracing server virtualization, a technology that allows one server to function as multiple machines, saving companies money and energy. Businesses are also realizing that their employees can use BlackBerrys, iPhones and small laptops known as netbooks for work. So, the analyst said, rather than issuing workers both a PC and a BlackBerry, companies might stick with just a BlackBerry.

A decline in demand for personal computers and other electronics weighed on the semiconductor industry for much of 2008. Intel Corp., the company behind the bulk of microprocessors that serve as the brains of PCs, lowered its fourth quarter revenue guidance for the second time last week amid weaker than expected demand.

While 2009 does not look good when it comes to tech spending, things aren't as dismal for the sector as they were in 2001 and 2002, after the bursting of the 1990s Internet bubble. In each of those two years, Bartels noted, technology spending declined 6 percent _ and that would have been true regardless of currency fluctuations.

Since then, technology has become so interwoven into how a company operates that it's no longer considered discretionary spending.

``It is the muscle of companies,'' Bartels said. ``It allows them to do what they want to do.''


ING cuts 750 jobs due to economic slowdown

Dutch financial services group ING Groep NV will cut 750 jobs, or 7 percent of its US workforce, as part of a global programme to cope with the economic slowdown, ING spokesmen said on Tuesday.

"As many companies in the United States we need to align operations with market conditions," ING spokesman Dana Ripley said. US companies such as Bank of America Corp have announced job cuts in the past few months to deal with slowing business activity and the U.S. Labor Department said last week that employers cut payrolls by 524,000 in December.

ING will cut the jobs during the first quarter across all its U.S. banking and insurance operations and it will also not fill 170 vacancies in the United States, Ripley said. ING currently has about 11,000 US employees people and a total global workforce of 130,000.

The US job cuts are part of a global initiative to bring costs and operations in line with market conditions as ING said in November, ING spokesman Raymond Vermeulen said. He declined to say if there could be job cuts outside the United States. ING posted a third quarter loss of 478 million euros ($635.6 million) due to 1.5 billion euros of impairments, making it ING's first quarterly loss ever.


Oracle cuts 500 jobs, says report

Oracle Corp. has trimmed its workforce, but not as much as some people had speculated, The Wall Street Journal reported on Tuesday.

Citing people familiar with the matter, the newspaper said the software giant cut around 500 positions in its North American sales and consulting businesses on Friday.

The Redwood Shores, California-based company had 33,526 employees in the Americas at the end of November and 86,657 globally, the report said.

An Oracle spokeswoman declined to comment to the newspaper and could not immediately be reached.

The Journal said the Internet has been buzzing with rumors of cuts of up to 10 percent of the company's workforce, a move that would affect thousands of people. Some analysts have put the number in the hundreds.


Tuesday, January 13, 2009

Seagate sacks CEO and to cut 800 workers

Seagate Technology has replaced its top two executives and said it plans to cut 800 jobs — 10 percent of its US work force — as the hard drive maker endures a bruising slowdown in technology spending.

Its stock fell more than 15 percent. In a surprise move, the Scotts Valley-based company announced that William Watkins, 56, Seagate's chief executive since 2004, and Dave Wickersham, 52, the president and chief operating officer, had both left the company, effective immediately. Seagate declined to make either executive available for comment.

The company also announced that it plans to cut 10 percent of its 8,000 US-based workers. It has 53,000 workers worldwide.

A familiar face will fill the CEO slot. Stephen Luczo, 51, a former investment banker who served as Seagate's CEO from 1998 until 2004 amid a wrenching restructuring, will have to engineer another big turnaround to get the company back on track.

Wickersham's jobs will be taken by Robert Whitmore, 46, Seagate's executive vice president and chief technology officer.

Seagate is the world's largest maker of computer hard disk drives, with more than 30 percent of the global market. But its business has suffered badly because of the economic meltdown, which has sapped information-technology budgets and demand for new personal computers and servers that use Seagate's products.

Oversupply in the industry has also hurt Seagate and other disk drive manufacturers. Luczo takes the reigns of a company whose stock price plunged more than 80 percent last year and that warned in December its fiscal second-quarter results would fall far below Wall Street's expectations. Seagate lowered its guidance for sales in the period by about $500 million, cautioning that slumping demand and price pressures were hurting the company more than it had anticipated.

Seagate, which is scheduled to report its full quarterly results Jan. 21, expects revenue of $2.3 billion to $2.6 billion.


Will the Rs 2000 crore government package bailout out Satyam?

Speculation is rife that the government is considering a package of up to Rs 2,000 crore to bailout the crisis-ridden Satyam Computer but no confirmation could be obtained.

Shortly after the Prime Minister Manmohan Singh's review meeting on Satyam on Tuesday, there was media speculation that government would be considering a financial assistance ranging between Rs 500 crore and Rs 2,000 crore but the PMO office declined to comment on it.

"We have nothing to say on this," a top PMO official said when asked about if the government was considering giving financial aid to Satyam which is confronting a cash crisis.

Meanwhile, official sources indicated that the government appointed Satyam board has written a letter to the finance ministry raising concerns about the liquidity crunch in the troubled company.

Talking to reporters after the first meeting of the new board in Hyderabad, HDFC chairman Deepak Parekh, who is member of the board, had said "working capital issues require immediate attention and we will work with the team to tide over this situation.

Satyam has 53,000 employees and needs over Rs 500 crore a month to meet the staff cost.

Commerce Minister Kamal Nath, who attended PM's review meeting, had said yesterday that the government was open to consider a financial package for Satyam.


Monday, January 12, 2009

Microsoft delays Windows 7 beta download

Microsoft Corp said on Friday it has paused offering downloads of the public test version of its new version of Windows due to "high demand."

The "beta" launch of the highly anticipated update to Microsoft's Windows franchise began early on Friday, but the company had to halt downloads to add more servers.

"We are adding servers as fast as we can add them," a Microsoft spokesman said at the Consumer Electronics Show in Las Vegas.

He declined to say when Windows 7 downloads would resume.

Microsoft said at CES on Wednesday it would let consumers test the next generation of its computer operating system starting Friday.

Microsoft, the world's biggest maker of software, has said Windows 7 will incorporate touch screen technology and allow users to more easily personalize the system. It promised more user-friendly features, such as a new taskbar that previews all open windows from a single application by hovering over the program's icon.

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