British insurance giant Aviva said on Thursday it would cut 1,100 permanent jobs and 590 contract positions by the end of 2009 -- the latest British financial group to axe jobs amid the economic crisis.
"There is expected to be a reduction of 1,100 permanent roles by the end of 2009," Aviva said in a statement.
"In addition, 590 contract positions will be closed over the next few months," it added.
The leader of Britain's biggest union, Unite, said the announcement to shed 1,100 permanent roles "will cause alarm across the insurance industry."
"It is unacceptable that once again shareholders received their full dividends while the workers who brought the company this success are rewarded with job losses," said Unite boss Derek Simpson.
"The Aviva workforce is continuing to live under constant uncertainty about their future," he added.
Agencies
Saturday, April 4, 2009
Will US face second recession in 2010?
Although the US economy is expected to return to growth later this year, there is a danger of a second recession if monetary easing and Tough times a weak dollar lead to increased inflation expectations, a report said.
Massive stimulus spending and moves by the Federal Reserve to fuel economic activity is expected to jump-start the anemic US economy in the last quarter of this year after it contracted 6.3 percent in fourth quarter of 2008.
But the Fed's moves to boost the economy by slashing interest rates and buying up billions in government debt could have undesired consequences, The Conference Board, a private research group, said in the report.
"If the United States experiences a too-rapid recovery, there may be a risk of another recession in 2010," said Bart van Ark, vice president and chief economist of The Conference Board.
"It may fuel expectations for a return to inflation, adding to the uncertainty concerning the pattern and path of economic recovery," he said.
The U.S. economy has the potential for a "double-dip" recession, Van Ark noted, similar to 1980 and 1982, as commodity prices rise on the back of a falling dollar and monetary easing.
He added, however, that the likelihood of this scenario taking place is small as deflation risks are great, while government stimulus spending should stem further economic decline and ease the flow of job losses.
The U.S. economy could contract by 2.6 percent in 2009, the largest annual decline since 1946, the Conference Board said.
Agencies
Massive stimulus spending and moves by the Federal Reserve to fuel economic activity is expected to jump-start the anemic US economy in the last quarter of this year after it contracted 6.3 percent in fourth quarter of 2008.
But the Fed's moves to boost the economy by slashing interest rates and buying up billions in government debt could have undesired consequences, The Conference Board, a private research group, said in the report.
"If the United States experiences a too-rapid recovery, there may be a risk of another recession in 2010," said Bart van Ark, vice president and chief economist of The Conference Board.
"It may fuel expectations for a return to inflation, adding to the uncertainty concerning the pattern and path of economic recovery," he said.
The U.S. economy has the potential for a "double-dip" recession, Van Ark noted, similar to 1980 and 1982, as commodity prices rise on the back of a falling dollar and monetary easing.
He added, however, that the likelihood of this scenario taking place is small as deflation risks are great, while government stimulus spending should stem further economic decline and ease the flow of job losses.
The U.S. economy could contract by 2.6 percent in 2009, the largest annual decline since 1946, the Conference Board said.
Agencies
Friday, April 3, 2009
Like Boeing, Bombardier to layoff 3,000 jobs
Canadian plane maker Bombardier, which is the third largest aircraft company in the world, on Thursday joined giant Boeing in axing 3,000 jobs worldwide citing sagging demand for its business jets.
Boeing has already announced to lay off 10,000 staff as the global downturn takes toll on the aviation sector.
Surprisingly, job cuts at the Montreal-based Bombardier came the day the company reported higher profits and revenue for the fiscal year 2009. But "there is no doubt that we are going through challenging times and our business environment is changing fast," said Bombardier CEO Pierre Beaudoin in a statement.
"However, we believe we are well positioned to face this difficult economic environment with a strong balance sheet, high level of liquidity as well as a large and diversified backlog, both by product and geographies," he added.
Thursday's job cuts, which account for 10 per cent of the company's total workforce, are in addition to 1,360 jobs it eliminated in February after fall in demand for its Learjet and Challenger aircraft, the Bombardier statement said.
Apart from eliminating hundreds of positions in Canada, the latest job cuts will also affect the company's facilities in the US, Mexico and Northern Ireland, the statement said.
With companies avoiding buying of corporate jets amid the global downturn, Bombardier said it expected to sell 25 per cent less business aircraft in the current fiscal year.
In its annual fiscal report Thursday, Bombardier posted a net income of $1 billion for the fiscal year 2009 ending January 31 - up from $317 million during the previous year.
The company earned a total revenue of $19.7 billion in 2009, compared to $17.5 billion in fiscal year 2008.
However, despite its strong financial showing, the company said its sales were slipping, forcing it to scale back its operations and axe jobs.
Agencies
Boeing has already announced to lay off 10,000 staff as the global downturn takes toll on the aviation sector.
Surprisingly, job cuts at the Montreal-based Bombardier came the day the company reported higher profits and revenue for the fiscal year 2009. But "there is no doubt that we are going through challenging times and our business environment is changing fast," said Bombardier CEO Pierre Beaudoin in a statement.
"However, we believe we are well positioned to face this difficult economic environment with a strong balance sheet, high level of liquidity as well as a large and diversified backlog, both by product and geographies," he added.
Thursday's job cuts, which account for 10 per cent of the company's total workforce, are in addition to 1,360 jobs it eliminated in February after fall in demand for its Learjet and Challenger aircraft, the Bombardier statement said.
Apart from eliminating hundreds of positions in Canada, the latest job cuts will also affect the company's facilities in the US, Mexico and Northern Ireland, the statement said.
With companies avoiding buying of corporate jets amid the global downturn, Bombardier said it expected to sell 25 per cent less business aircraft in the current fiscal year.
In its annual fiscal report Thursday, Bombardier posted a net income of $1 billion for the fiscal year 2009 ending January 31 - up from $317 million during the previous year.
The company earned a total revenue of $19.7 billion in 2009, compared to $17.5 billion in fiscal year 2008.
However, despite its strong financial showing, the company said its sales were slipping, forcing it to scale back its operations and axe jobs.
Agencies
Despite hope of recession easing layoffs rise
American employers are laying off workers at a faster pace despite a few hopeful signs recently that the recession, now the longest
since World War II, could be easing.
The Labor Department on Friday is slated to release a report expected to show that a net total of 654,000 jobs were lost last month. That's more than the population of Baltimore.
If economists are right, it would mark a record four straight months that job losses topped 600,000.
``It's going to be another month of gargantuan jobs losses,'' predicted Stuart Hoffman, chief economist at PNC Financial Services Group. ``Companies were slashing jobs and not filling vacant positions.''
With employers axing payrolls, the US unemployment rate is expected to jump to 8.5 per cent, from 8.1 per cent in February. If that happens, it would mark the highest jobless rate since late 1983, when the country was recovering from a severe recession that drove unemployment past 10 per cent.
As the recession, which started in December 2007, eats into their sales and profits, companies are laying off workers and resorting to other cost-saving measures. Those include holding down hours, and freezing or cutting pay, to survive the storm.
Looking forward, economists expect monthly job losses continuing for most, if not all of, this year.
However, they are hoping that payroll reductions in the current quarter won't be as deep as the roughly 650,000 average monthly job losses in the January-March period. In the best-case scenario, employment losses in the present quarter would be about half that pace, some economists said. That scenario partly assumes the economy won't be shrinking nearly as much in the present quarter.
Federal Reserve Chairman Ben Bernanke said the recession could end later this year, setting the stage for a recovery next year, if the government is successful in bolstering the banking system. Banks have been clobbered by the worst housing, credit and financial crises to hit the country since the 1930s.
Even if the recession ends this year, the economy will remain frail, analysts said. Companies will have little appetite to ramp up hiring until they feel the economy is truly out of the woods and any recovery has staying power.
Given that, many economists predict the unemployment rate will hit 10 per cent at the end of this year. The Fed says unemployment will remain elevated into 2011.
Economists say the job market may not get back to normal _ meaning a 5 per cent unemployment rate, until 2013.
``There's going to quite a long haul before you see the jobless rate head down,'' said Bill Cheney, chief economist at John Hancock Financial Services.
To brace the economy, the Fed has slashed a key bank lending rate to an all-time low and has embarked on a series of radical programs to inject billions of dollars into the financial system.
And the Obama administration had launched a multi-pronged strategy to turn the economy around. Its $787 billion stimulus package includes money that will flow to states for public works projects, help them defray budget cuts, extend unemployment benefits and boost food stamp benefits.
The administration also is counting on programs to prop up financial companies and reduce home foreclosures to help turn the economy around.
On the economic front, some glimmers of hope have emerged recently.
Orders placed with US factories actually rose in February, ending a six straight months of declines, the government reported Thursday. Earlier in the week, there was better-than-expected reports on construction spending and pending home sales. And last week a report showed that consumer spending, an engine of the economy, rose in February for the second month in a row, after a half-year of declines.
Still, skittish employers announced more job layoffs this week. 3M Co., the maker of Scotch tape, Post-It Notes and other products, said it's cutting another 1,200 jobs, or 1.5 per cent of its work force, because of the global economic slump. Fewer than half the jobs will be in the US, but include hundreds in its home state of Minnesota. The 1,200 figure includes cuts made earlier in the first quarter.
Elsewhere, healthcare products distributor Cardinal Health Inc. said it would eliminate 1,300 positions, or about 3 per cent of its work force, and semiconductor equipment maker KLA-Tencor Corp. said it will cut about 600 jobs, or 10 per cent of its employees.
Agencies
since World War II, could be easing.
The Labor Department on Friday is slated to release a report expected to show that a net total of 654,000 jobs were lost last month. That's more than the population of Baltimore.
If economists are right, it would mark a record four straight months that job losses topped 600,000.
``It's going to be another month of gargantuan jobs losses,'' predicted Stuart Hoffman, chief economist at PNC Financial Services Group. ``Companies were slashing jobs and not filling vacant positions.''
With employers axing payrolls, the US unemployment rate is expected to jump to 8.5 per cent, from 8.1 per cent in February. If that happens, it would mark the highest jobless rate since late 1983, when the country was recovering from a severe recession that drove unemployment past 10 per cent.
As the recession, which started in December 2007, eats into their sales and profits, companies are laying off workers and resorting to other cost-saving measures. Those include holding down hours, and freezing or cutting pay, to survive the storm.
Looking forward, economists expect monthly job losses continuing for most, if not all of, this year.
However, they are hoping that payroll reductions in the current quarter won't be as deep as the roughly 650,000 average monthly job losses in the January-March period. In the best-case scenario, employment losses in the present quarter would be about half that pace, some economists said. That scenario partly assumes the economy won't be shrinking nearly as much in the present quarter.
Federal Reserve Chairman Ben Bernanke said the recession could end later this year, setting the stage for a recovery next year, if the government is successful in bolstering the banking system. Banks have been clobbered by the worst housing, credit and financial crises to hit the country since the 1930s.
Even if the recession ends this year, the economy will remain frail, analysts said. Companies will have little appetite to ramp up hiring until they feel the economy is truly out of the woods and any recovery has staying power.
Given that, many economists predict the unemployment rate will hit 10 per cent at the end of this year. The Fed says unemployment will remain elevated into 2011.
Economists say the job market may not get back to normal _ meaning a 5 per cent unemployment rate, until 2013.
``There's going to quite a long haul before you see the jobless rate head down,'' said Bill Cheney, chief economist at John Hancock Financial Services.
To brace the economy, the Fed has slashed a key bank lending rate to an all-time low and has embarked on a series of radical programs to inject billions of dollars into the financial system.
And the Obama administration had launched a multi-pronged strategy to turn the economy around. Its $787 billion stimulus package includes money that will flow to states for public works projects, help them defray budget cuts, extend unemployment benefits and boost food stamp benefits.
The administration also is counting on programs to prop up financial companies and reduce home foreclosures to help turn the economy around.
On the economic front, some glimmers of hope have emerged recently.
Orders placed with US factories actually rose in February, ending a six straight months of declines, the government reported Thursday. Earlier in the week, there was better-than-expected reports on construction spending and pending home sales. And last week a report showed that consumer spending, an engine of the economy, rose in February for the second month in a row, after a half-year of declines.
Still, skittish employers announced more job layoffs this week. 3M Co., the maker of Scotch tape, Post-It Notes and other products, said it's cutting another 1,200 jobs, or 1.5 per cent of its work force, because of the global economic slump. Fewer than half the jobs will be in the US, but include hundreds in its home state of Minnesota. The 1,200 figure includes cuts made earlier in the first quarter.
Elsewhere, healthcare products distributor Cardinal Health Inc. said it would eliminate 1,300 positions, or about 3 per cent of its work force, and semiconductor equipment maker KLA-Tencor Corp. said it will cut about 600 jobs, or 10 per cent of its employees.
Agencies
Thursday, April 2, 2009
Samsung partners BSNL, MTNL for 3G services
Korean electronic major Samsung said it has partnered state-run telecos BSNL and MTNL to provide high-end handsets for their 3G services and is looking at up to 45 per cent of its total sales being generated from multimedia and touchscreen phones.
"We have partnered BSNL and MTNL to promote 3G services in India. We are currently giving a special bundling offer for BSNL consumers on our select handsets for 3G services," Samsung India Electronics President and CEO Jung Soo Shin said.
He said, "We have also provided handsets to MTNL to offer 3G services in Delhi."
Samsung today launched an 8 megapixel touchscreen, 3G enabled phone 'Ultra' priced at Rs 27,500 in India. The handset is capable of offering speedy internet access, video telephony, streaming and multimedia services.
"Samsung already has four touchscreen phones available in the Indian market, all of these are 3G enabled," Shin said.
"We are looking at touchscreen and multimedia phone portfolio to contribute 40-45 per cent of our total sales by the end of the year," Samsung Telecom Division Country Head Sunil Dutt said.
Agencies
"We have partnered BSNL and MTNL to promote 3G services in India. We are currently giving a special bundling offer for BSNL consumers on our select handsets for 3G services," Samsung India Electronics President and CEO Jung Soo Shin said.
He said, "We have also provided handsets to MTNL to offer 3G services in Delhi."
Samsung today launched an 8 megapixel touchscreen, 3G enabled phone 'Ultra' priced at Rs 27,500 in India. The handset is capable of offering speedy internet access, video telephony, streaming and multimedia services.
"Samsung already has four touchscreen phones available in the Indian market, all of these are 3G enabled," Shin said.
"We are looking at touchscreen and multimedia phone portfolio to contribute 40-45 per cent of our total sales by the end of the year," Samsung Telecom Division Country Head Sunil Dutt said.
Agencies
Are Satyam employees set to join BoA?
About 250-300 employees at fraud-hit Satyam Computer Services are joining Bank of America, a newspaper said on Wednesday.
The employees were working on a Satyam project for Merrill Lynch, which was taken over by the US bank after it was hit by the subprime crisis last year, it said.
The project was not renewed by Merrill after Satyam was caught in country's biggest corporate scandal and the work of managing its database and providing infrastructure support would now be done in-house, the paper said.
The first of these employees will join Bank of America between April 2 and 8, it said, adding they have been given salary increases of around 10 per cent and joining bonuses.
A spokeswoman for Satyam said, "The report is speculative." An official at Bank of America-Merrill Lynch in India said she could not immediately comment.
Satyam, whose market value has slid to $505.6 million from $7 billion last May, is in the midst of a bidding process to find a new buyer. It plunged into a crisis in January after its founder quit as chairman revealing profits had been falsified for years.
Engineering conglomerate Larsen & Toubro and mid-sized outsourcer Tech Mahindra are among the suitors, and local media have said US private equity WL Ross & Co was also among the bidders.
Agencies
The employees were working on a Satyam project for Merrill Lynch, which was taken over by the US bank after it was hit by the subprime crisis last year, it said.
The project was not renewed by Merrill after Satyam was caught in country's biggest corporate scandal and the work of managing its database and providing infrastructure support would now be done in-house, the paper said.
The first of these employees will join Bank of America between April 2 and 8, it said, adding they have been given salary increases of around 10 per cent and joining bonuses.
A spokeswoman for Satyam said, "The report is speculative." An official at Bank of America-Merrill Lynch in India said she could not immediately comment.
Satyam, whose market value has slid to $505.6 million from $7 billion last May, is in the midst of a bidding process to find a new buyer. It plunged into a crisis in January after its founder quit as chairman revealing profits had been falsified for years.
Engineering conglomerate Larsen & Toubro and mid-sized outsourcer Tech Mahindra are among the suitors, and local media have said US private equity WL Ross & Co was also among the bidders.
Agencies
Wednesday, April 1, 2009
Global IT spending to drop by 3.8% in 2009, says Gatner
The ongoing global slowdown will force companies worldwide to reduce their IT expenditure to USD 3.2 trillion this year against $ 3.4 trn in 2008, according to an IT research company.
"The unprecendented decline of the global economy is impacting the IT industry with worldwide IT spending forecast to total $ 3.4 trn in 2009, a 3.8 per cent decline from 2008 revenue of nearly $ 3.4 trn," IT research and advisory company Gartner said in a report.
Gartner said that all four of the key market sectors of the IT industry-- hardware, software, IT services and telecommunications have been revised downward, with only software spending growth remaining positive.
"Spending in computing hardware
will see a decline of 14.9 per cent with total spending to be around USD 324.3 billion as against $ 3.4 trn in 2008," Gartner said.
The spending in IT services and telecommunications sectors will also fall by 1.7 per cent at USD 796.1 billion and 2.9 per cent at USD 1,891.2 billion, respectively, the report said.
Agencies
"The unprecendented decline of the global economy is impacting the IT industry with worldwide IT spending forecast to total $ 3.4 trn in 2009, a 3.8 per cent decline from 2008 revenue of nearly $ 3.4 trn," IT research and advisory company Gartner said in a report.
Gartner said that all four of the key market sectors of the IT industry-- hardware, software, IT services and telecommunications have been revised downward, with only software spending growth remaining positive.
"Spending in computing hardware
will see a decline of 14.9 per cent with total spending to be around USD 324.3 billion as against $ 3.4 trn in 2008," Gartner said.
The spending in IT services and telecommunications sectors will also fall by 1.7 per cent at USD 796.1 billion and 2.9 per cent at USD 1,891.2 billion, respectively, the report said.
Agencies
New servers for small companies from Microsoft
Microsoft Corp on Wednesday launched a new range of server systems for small companies, (SMBs) scaling down its existing offerings to attack one of the fastest-growing segments of the business computing market.
The world's largest software company is launching into the market for small companies as competitors introduce cheap, open-source alternatives to its relatively costly Windows-based servers, and the use of pirated Windows products proliferates.
Microsoft's new product line, called Windows Server 2008 Foundation, can accommodate up to 15 users and will cost less than $1,000 for the hardware and software combined, the company said.
A server is essentially a powerful computer that provides services to other computers. A doctor's office, for example, might use a server to allow staff to share files, access the same systems or maintain a website.
Analysts reckon the low-end server market for products costing less than $1,000 has grown four times faster than any other price range for comparable single processor servers.
Microsoft's new offering is a stripped down version of its Windows Server
family of products, which tend to be beyond the price range of small businesses.
The computer makers will set the prices for their products, which may vary by country.
Agencies
The world's largest software company is launching into the market for small companies as competitors introduce cheap, open-source alternatives to its relatively costly Windows-based servers, and the use of pirated Windows products proliferates.
Microsoft's new product line, called Windows Server 2008 Foundation, can accommodate up to 15 users and will cost less than $1,000 for the hardware and software combined, the company said.
A server is essentially a powerful computer that provides services to other computers. A doctor's office, for example, might use a server to allow staff to share files, access the same systems or maintain a website.
Analysts reckon the low-end server market for products costing less than $1,000 has grown four times faster than any other price range for comparable single processor servers.
Microsoft's new offering is a stripped down version of its Windows Server
family of products, which tend to be beyond the price range of small businesses.
The computer makers will set the prices for their products, which may vary by country.
Agencies
Tuesday, March 31, 2009
Internet rip-offs causes $265 million loss
Internet-based rip-offs jumped 33 percent last year over the previous year, causing a loss of $265 million to the victims, with the fifth largest number of complaints coming from India, according to a new report.
Americans filed 275,284 reports (92.4 percent), claiming to be ripped off on the Internet, the highest number reported since the Internet Crime Complaint Centre, a partnership of the Federal Bureau of Investigation (FBI) and the National White Collar Crime Centre, began keeping statistics in 2000.
Canada came a distant second with 1.77 percent complaints followed by Britain (0.95 percent), Australia (0.57 percent) and India 0.36 percent.
"This report illustrates that sophisticated computer fraud schemes continue to flourish as financial data migrates to the Internet," said Shawn Henry, the FBI's assistant director of the cyber division.
At $265 million the total dollar loss from such crimes was $26 million more than the price tag in 2007, the Centre said. For individual victims, the average amount lost was $931.
The dollar loss has been on a steady increase since 2004, while the number of cases referred to law enforcement has decreased steadily since that same year.
Henry said the figures show the need for computer users, in businesses and in homes, to be wary and use sound security practices while using the Internet.
The centre said the top three most frequent complaints were about merchandise that wasn't delivered or payment that wasn't received, Internet auction fraud and credit/debit card fraud. Other scams include confidence frauds such as Ponzi schemes, cheque fraud, the Nigerian letter fraud and identity fraud.
One popular identity fraud scam used during 2008 involved sending e-mails crafted to appear as if they had been sent by the FBI. Sometimes the scammers went so far as to say the mailings were from FBI Director Robert Mueller himself, according to the centre.
The e-mails would ask the recipient for personal information, such as a bank account numbers, claiming the FBI wanted the information to look into an impending financial transaction.
One variation of the scheme, according to the centre, was to send an e-mail saying the recipient is entitled to lottery money or an inheritance and the funds can be moved as soon as bank account information is supplied.
The FBI has issued warnings about such scams in the past and Monday's report included a new one: "The FBI does not contact US citizens regarding personal financial matters through unsolicited e-mails."
Agencies
Americans filed 275,284 reports (92.4 percent), claiming to be ripped off on the Internet, the highest number reported since the Internet Crime Complaint Centre, a partnership of the Federal Bureau of Investigation (FBI) and the National White Collar Crime Centre, began keeping statistics in 2000.
Canada came a distant second with 1.77 percent complaints followed by Britain (0.95 percent), Australia (0.57 percent) and India 0.36 percent.
"This report illustrates that sophisticated computer fraud schemes continue to flourish as financial data migrates to the Internet," said Shawn Henry, the FBI's assistant director of the cyber division.
At $265 million the total dollar loss from such crimes was $26 million more than the price tag in 2007, the Centre said. For individual victims, the average amount lost was $931.
The dollar loss has been on a steady increase since 2004, while the number of cases referred to law enforcement has decreased steadily since that same year.
Henry said the figures show the need for computer users, in businesses and in homes, to be wary and use sound security practices while using the Internet.
The centre said the top three most frequent complaints were about merchandise that wasn't delivered or payment that wasn't received, Internet auction fraud and credit/debit card fraud. Other scams include confidence frauds such as Ponzi schemes, cheque fraud, the Nigerian letter fraud and identity fraud.
One popular identity fraud scam used during 2008 involved sending e-mails crafted to appear as if they had been sent by the FBI. Sometimes the scammers went so far as to say the mailings were from FBI Director Robert Mueller himself, according to the centre.
The e-mails would ask the recipient for personal information, such as a bank account numbers, claiming the FBI wanted the information to look into an impending financial transaction.
One variation of the scheme, according to the centre, was to send an e-mail saying the recipient is entitled to lottery money or an inheritance and the funds can be moved as soon as bank account information is supplied.
The FBI has issued warnings about such scams in the past and Monday's report included a new one: "The FBI does not contact US citizens regarding personal financial matters through unsolicited e-mails."
Agencies
Monday, March 30, 2009
From April 1 withdraw cash with no extra charge from any bank across India
Beginning April 1, one can walk into the ATM of any bank and withdraw cash or check the balance, at no extra charge.
This is when the Reserve Bank of India’s guidelines, allowing free access to ATMs, become effective.
It was feared that the move may prompt banks to go slow on ATM expansion, in view of the fee from customers disappearing. But this does not seem to be the case, as most banks plan to continue with their ATM expansion.
This is because, the interchange fee, which is paid between banks, will continue. So, the RBI move could prove to be advantageous for banks with large ATM networks. They could earn more fee income, as more customers access their ATMs. The interchange fee is broadly between Rs 15 and 20 per transaction.
Sanjeev Patel, Head, Direct Banking Channels, HDFC Bank, said the bank, which has about 3,500 ATMs, is not planning to go slow on ATM expansion. “We are a big acquirer. We have a large distribution network and this will benefit us. It is unlikely that my customer will move out. Other banks’ customers will come to us,” he said.
Hemant Kaul, Executive Director, Retail Banking, Axis Bank, said that the beneficiaries of the RBI guidelines would be large banks who have invested money in setting up their own ATMs. The number of ATM transactions per debit card would also register an increase, he added.
Axis Bank, which added close to 400 ATMs this quarter, will have a network of around 3,600 by this fiscal.
For both HDFC Bank and Axis Bank, around 15 per cent of ATM transactions are from customers of other banks.
Banks could see some downward pressure on the network charge, due to the disappearance of the Rs 20 fee charged from customers. But as the interchange fee will continue, a small bank with a smaller ATM network will see more impact.
“Banks that tried to save capital cost by going slow on their ATM expansion would now have to pay for it, as from April 1, customers would not think twice before using another bank’s ATM and their banks would have to pay for it,” said a banking analyst.
Union Bank of India is one of the few banks that already allows its customers to use ATMs of other banks free of cost.
The bank will continue with its own ATM expansion, said M.V. Nair, Chairman and Managing Director.
The bank opened 500 branches and set up 500 ATMs this year. It has set the same target for next year as well.
According to Nair, the decision to expand ATMs will depend on the individual bank. But the RBI move could also give rise to alternative methods of proliferation of ATMs. “I see the distinct possibility of white labelled ATMs, which are present worldwide, catching on in India. The Payment Corporation of India could be the right vehicle to implement this,” he said.
YES Bank also offers its customers free access to ATMs of other banks.
The bank had, in a sense, implemented the RBI move four years ago, when it began operations, as it wanted to increase its retail customer base, said Suresh Sethi, President, Transaction Banking Group.
“We don’t see any change in our core banking operations as our customers already enjoy free ATM use. ATM expansion is critical to improving the visibility of the bank and building its image. Our expansion strategy will be guided by that,” he said.
Source : Business Line
This is when the Reserve Bank of India’s guidelines, allowing free access to ATMs, become effective.
It was feared that the move may prompt banks to go slow on ATM expansion, in view of the fee from customers disappearing. But this does not seem to be the case, as most banks plan to continue with their ATM expansion.
This is because, the interchange fee, which is paid between banks, will continue. So, the RBI move could prove to be advantageous for banks with large ATM networks. They could earn more fee income, as more customers access their ATMs. The interchange fee is broadly between Rs 15 and 20 per transaction.
Sanjeev Patel, Head, Direct Banking Channels, HDFC Bank, said the bank, which has about 3,500 ATMs, is not planning to go slow on ATM expansion. “We are a big acquirer. We have a large distribution network and this will benefit us. It is unlikely that my customer will move out. Other banks’ customers will come to us,” he said.
Hemant Kaul, Executive Director, Retail Banking, Axis Bank, said that the beneficiaries of the RBI guidelines would be large banks who have invested money in setting up their own ATMs. The number of ATM transactions per debit card would also register an increase, he added.
Axis Bank, which added close to 400 ATMs this quarter, will have a network of around 3,600 by this fiscal.
For both HDFC Bank and Axis Bank, around 15 per cent of ATM transactions are from customers of other banks.
Banks could see some downward pressure on the network charge, due to the disappearance of the Rs 20 fee charged from customers. But as the interchange fee will continue, a small bank with a smaller ATM network will see more impact.
“Banks that tried to save capital cost by going slow on their ATM expansion would now have to pay for it, as from April 1, customers would not think twice before using another bank’s ATM and their banks would have to pay for it,” said a banking analyst.
Union Bank of India is one of the few banks that already allows its customers to use ATMs of other banks free of cost.
The bank will continue with its own ATM expansion, said M.V. Nair, Chairman and Managing Director.
The bank opened 500 branches and set up 500 ATMs this year. It has set the same target for next year as well.
According to Nair, the decision to expand ATMs will depend on the individual bank. But the RBI move could also give rise to alternative methods of proliferation of ATMs. “I see the distinct possibility of white labelled ATMs, which are present worldwide, catching on in India. The Payment Corporation of India could be the right vehicle to implement this,” he said.
YES Bank also offers its customers free access to ATMs of other banks.
The bank had, in a sense, implemented the RBI move four years ago, when it began operations, as it wanted to increase its retail customer base, said Suresh Sethi, President, Transaction Banking Group.
“We don’t see any change in our core banking operations as our customers already enjoy free ATM use. ATM expansion is critical to improving the visibility of the bank and building its image. Our expansion strategy will be guided by that,” he said.
Source : Business Line
Is Symphony eyeing more R&D acquisitions in India?
Symphony Services, a provider of outsourced product development, which recently acquired four captive R&D centres in India, expects the trend of captive acquisition to gain further momentum.
Symphony's four captive R&D centres are In-Reality, Intransa, CT Space and Cambridge Tech Partners in India.
Over the last decade, more than 700 product companies have embraced the offshore model and established captives in India, China, Eastern Europe and other lower cost, high talent regions.
Talking to CXOtoday, Ajay Kela, chief operating officer and managing director, Symphony Services, said, "Symphony's four acquisitions in the recent past are software companies with captive operations in India. We are currently in discussion with some of the subscale captives for acquisition and helping them turnaround, but cannot disclose the actual number."
Now with the recession sinking deeper, most parent companies are increasingly conserving cash and tend to avoid additional infrastructure expenses in a captive centre, thus giving opportunities for companies to acquire.
According to a report by Forrester, titled "Shattering the Offshore Captive Center Myth", about 60% of captives are struggling as they fail to meet expectations. There are several common reasons for failure: a poor delivery track record, operational problems, lack of scale, poor morale and high attrition, and escalating costs.
The challenges that captives are facing is resulting in a significant decrease in the number of new captives that are being introduced. According to Management Consulting company Zinnov, the number of new captives started in India over the last few years has declined from 76 to 15. Also, service providers are expected to outpace the growth of captives by more than 300% over the next four years.
Symphony acquisitions have been of different types - from outright purchase or acquisition of a captive to captive transfer where the deals did not have significant monetary implications, but captive transfers of its employees and operations to be run by Symphony.
In a 'captive transfer' employees of the captive entity become Symphonians and both the management teams collaborate to manage the operations and ensure product research and development for the parent company, Kela said.
"Over the last few years, there has been a trend of many subscale captives (manpower of less than 500 people) exploring alternative strategies like transferring their captive operations to services providers for managing their global product engineering operations because it no longer makes economic sense for them to run their own captive centre," said Kela.
Also, most software companies cannot afford to dramatically increase R&D expenditures by moving resources back onshore. Hence transferring their captive to a provider is a viable option for software companies and continues to leverage from the offshoring model, he said.
CXOtoday
Symphony's four captive R&D centres are In-Reality, Intransa, CT Space and Cambridge Tech Partners in India.
Over the last decade, more than 700 product companies have embraced the offshore model and established captives in India, China, Eastern Europe and other lower cost, high talent regions.
Talking to CXOtoday, Ajay Kela, chief operating officer and managing director, Symphony Services, said, "Symphony's four acquisitions in the recent past are software companies with captive operations in India. We are currently in discussion with some of the subscale captives for acquisition and helping them turnaround, but cannot disclose the actual number."
Now with the recession sinking deeper, most parent companies are increasingly conserving cash and tend to avoid additional infrastructure expenses in a captive centre, thus giving opportunities for companies to acquire.
According to a report by Forrester, titled "Shattering the Offshore Captive Center Myth", about 60% of captives are struggling as they fail to meet expectations. There are several common reasons for failure: a poor delivery track record, operational problems, lack of scale, poor morale and high attrition, and escalating costs.
The challenges that captives are facing is resulting in a significant decrease in the number of new captives that are being introduced. According to Management Consulting company Zinnov, the number of new captives started in India over the last few years has declined from 76 to 15. Also, service providers are expected to outpace the growth of captives by more than 300% over the next four years.
Symphony acquisitions have been of different types - from outright purchase or acquisition of a captive to captive transfer where the deals did not have significant monetary implications, but captive transfers of its employees and operations to be run by Symphony.
In a 'captive transfer' employees of the captive entity become Symphonians and both the management teams collaborate to manage the operations and ensure product research and development for the parent company, Kela said.
"Over the last few years, there has been a trend of many subscale captives (manpower of less than 500 people) exploring alternative strategies like transferring their captive operations to services providers for managing their global product engineering operations because it no longer makes economic sense for them to run their own captive centre," said Kela.
Also, most software companies cannot afford to dramatically increase R&D expenditures by moving resources back onshore. Hence transferring their captive to a provider is a viable option for software companies and continues to leverage from the offshoring model, he said.
CXOtoday
Sunday, March 29, 2009
About 26,000 jobs lost in Malaysia due to global crisis
More than 26,000 people have lost their jobs in Malaysia so far this year as the economic slowdown forced employers to cut back, state news agency Bernama reported Sunday.
Malaysian Employers Federation executive director Shamsuddin Bardan told Bernama he expected further job losses in the coming weeks.
He said a 16.2 billion dollar stimulus package unveiled earlier this month had not provided immediate incentive for companies to retain their workers.
The government has slashed its work permit approvals for foreign workers by almost 70 percent so far this year and cancelled work visas for 55,000 Bangladeshi workers after unions said the situation for Malaysians was bleak enough.
In January, the government also banned the hiring of new foreigners in the manufacturing and services sectors after a report forecast 45,000 Malaysians would lose their jobs in the next few months.
Malaysia is one of Asia's largest importers of labour and has an estimated 2.2 million foreign workers, who are the mainstay of the plantation and manufacturing sectors.
However, the government has become concerned about the ramifications of having such a large migrant workforce and periodically tries to reduce it.
Agencies
Malaysian Employers Federation executive director Shamsuddin Bardan told Bernama he expected further job losses in the coming weeks.
He said a 16.2 billion dollar stimulus package unveiled earlier this month had not provided immediate incentive for companies to retain their workers.
The government has slashed its work permit approvals for foreign workers by almost 70 percent so far this year and cancelled work visas for 55,000 Bangladeshi workers after unions said the situation for Malaysians was bleak enough.
In January, the government also banned the hiring of new foreigners in the manufacturing and services sectors after a report forecast 45,000 Malaysians would lose their jobs in the next few months.
Malaysia is one of Asia's largest importers of labour and has an estimated 2.2 million foreign workers, who are the mainstay of the plantation and manufacturing sectors.
However, the government has become concerned about the ramifications of having such a large migrant workforce and periodically tries to reduce it.
Agencies
Are new technologies rescuing Web start-ups?
Web entrepreneurs are increasingly embracing new technologies from "cloud" computing to new computer languages to try and slash costs as investors disappear because of recession.
Investors and entrepreneurs say cloud computing, new and free programming languages, open-source software, and use of the Internet to distribute and publicize products have made starting a company relatively inexpensive and will allow startups to ride out the credit crunch and recession.
"What you're talking about is life or death," said Drew Clark, director of strategy for IBM's venture capital group, speaking to media on the sidelines of a business conference.
Venture capital investment dived 71 percent in January and is not expected to rebound for much of 2009.
"For the best of these companies, this could be the difference. If this had happened three years ago, they'd be gone," Clark said, adding that IBM advocates open source.
One much talked-about innovation is cloud computing using the Web to access programs and data at remote computer centers. That makes costly, long-term capital expenditure and storage unnecessary.
Persistent concerns about the security of data stored on remote servers and the dependability of external systems are offset by its economic advantages, entrepreneurs say.
"In 2005 we needed 10 to 20 times the money we need today. There was a certain amount that entrepreneurial intelligence couldn't get around. Somehow you had to pay that piper," said James Siminoff, chief executive of Grid.com and Simulscribe, which changes phone messages into text.
One hour and $50
A decade ago, Michael Eisenberg, a general partner with Benchmark Capital in Israel, recalls he had to pay $10,000 each for Sun Microsystems servers.
"Today if I want to start up, it takes me one hour and $50 and I can turn on my capacity from Amazon Web Services from anywhere in the world," Eisenberg said.
Some fledgling companies like Delve Networks are capitalizing on that trend, charging clients over $250 a month to host video on their websites. Delve itself owns little more than the personal computers used by its 20 employees.
Time is critical for start-ups because they burn cash every day. Hence the rise of streamlined programming languages such as this year's hit, Ruby.
Ruby is a free, open-source language that Siminoff's chief technology officer, Mark Dillon, said is so concise he can do in three lines of machine code what it took him 25 lines in Java, an older language. That speeds up program revisions.
Corporations have turned to offering free, open source software -- a boon for cash-strapped start-ups. Sun Microsystems, IBM and others give away software to attract developers and gain contracts.
Finally, Internet marketing allows start-ups to publicize their wares at a fraction the cost of more traditional marketing or advertising campaigns.
"There are all these social conventions about companies that assume they are very big expensive things," said Silicon Valley start-up guru Paul Graham, whose "Y Combinator" invests $10,000 to $20,000 into quick, ultra-cheap startups. "It's just not true anymore."
Agencies
Investors and entrepreneurs say cloud computing, new and free programming languages, open-source software, and use of the Internet to distribute and publicize products have made starting a company relatively inexpensive and will allow startups to ride out the credit crunch and recession.
"What you're talking about is life or death," said Drew Clark, director of strategy for IBM's venture capital group, speaking to media on the sidelines of a business conference.
Venture capital investment dived 71 percent in January and is not expected to rebound for much of 2009.
"For the best of these companies, this could be the difference. If this had happened three years ago, they'd be gone," Clark said, adding that IBM advocates open source.
One much talked-about innovation is cloud computing using the Web to access programs and data at remote computer centers. That makes costly, long-term capital expenditure and storage unnecessary.
Persistent concerns about the security of data stored on remote servers and the dependability of external systems are offset by its economic advantages, entrepreneurs say.
"In 2005 we needed 10 to 20 times the money we need today. There was a certain amount that entrepreneurial intelligence couldn't get around. Somehow you had to pay that piper," said James Siminoff, chief executive of Grid.com and Simulscribe, which changes phone messages into text.
One hour and $50
A decade ago, Michael Eisenberg, a general partner with Benchmark Capital in Israel, recalls he had to pay $10,000 each for Sun Microsystems servers.
"Today if I want to start up, it takes me one hour and $50 and I can turn on my capacity from Amazon Web Services from anywhere in the world," Eisenberg said.
Some fledgling companies like Delve Networks are capitalizing on that trend, charging clients over $250 a month to host video on their websites. Delve itself owns little more than the personal computers used by its 20 employees.
Time is critical for start-ups because they burn cash every day. Hence the rise of streamlined programming languages such as this year's hit, Ruby.
Ruby is a free, open-source language that Siminoff's chief technology officer, Mark Dillon, said is so concise he can do in three lines of machine code what it took him 25 lines in Java, an older language. That speeds up program revisions.
Corporations have turned to offering free, open source software -- a boon for cash-strapped start-ups. Sun Microsystems, IBM and others give away software to attract developers and gain contracts.
Finally, Internet marketing allows start-ups to publicize their wares at a fraction the cost of more traditional marketing or advertising campaigns.
"There are all these social conventions about companies that assume they are very big expensive things," said Silicon Valley start-up guru Paul Graham, whose "Y Combinator" invests $10,000 to $20,000 into quick, ultra-cheap startups. "It's just not true anymore."
Agencies
Over 121,000 Filipinos' jobs axed amid global recession
Over 121,000 Filipino workers have either lost their jobs or suffered pay cuts or reduced work loads because of the economic crisis, a government official said Sunday.
Between October last year and mid-March, 11,574 permanently lost their jobs and 38,806 others were temporarily laid off by Philippines-based companies, Labour Undersecretary Rosalinda Baldoz told an economic forum in this industrial enclave north of Manila.
A total of 59,149 others were placed on flexible work arrangements, she added.
Meanwhile, 12,000 out of the 8.5 million-strong Filipino work force abroad had lost their jobs, mostly in Taiwan and the United Arab Emirates (UAE), according to Baldoz.
Last week the government said electronics firms based in the Philippines began giving their remaining workers half-pay or 150 pesos (3.11 dollars) a day in a bid to keep them employed until demand picks up again.
The labour undersecretary said the electronics sector was the worst hit with almost half the total work force affected.
The crisis has also hit about 10 per cent of employees in the automotive, garments, mining, property, services, and woodworking industries, she added.
She went on to say the government expects the crisis to bottom out over the next few months as just 397 workers a day were losing their jobs in mid-March compared to 437 at the start of the month.
"Before the first semester ends, we could say that the worst is over," she said.
"In the next five months, workers' displacements will continue but we expect it to be on a slower pace and only in the export manufacturing sector."
Agencies
Between October last year and mid-March, 11,574 permanently lost their jobs and 38,806 others were temporarily laid off by Philippines-based companies, Labour Undersecretary Rosalinda Baldoz told an economic forum in this industrial enclave north of Manila.
A total of 59,149 others were placed on flexible work arrangements, she added.
Meanwhile, 12,000 out of the 8.5 million-strong Filipino work force abroad had lost their jobs, mostly in Taiwan and the United Arab Emirates (UAE), according to Baldoz.
Last week the government said electronics firms based in the Philippines began giving their remaining workers half-pay or 150 pesos (3.11 dollars) a day in a bid to keep them employed until demand picks up again.
The labour undersecretary said the electronics sector was the worst hit with almost half the total work force affected.
The crisis has also hit about 10 per cent of employees in the automotive, garments, mining, property, services, and woodworking industries, she added.
She went on to say the government expects the crisis to bottom out over the next few months as just 397 workers a day were losing their jobs in mid-March compared to 437 at the start of the month.
"Before the first semester ends, we could say that the worst is over," she said.
"In the next five months, workers' displacements will continue but we expect it to be on a slower pace and only in the export manufacturing sector."
Agencies
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