66% of Active Job Seekers will Increase their Time Spent on Job Search: LinkedIn Workforce Confidence Index

LinkedIn, the world’s largest professional network, today announced the findings of the seventh edition of the Workforce Confidence Index, a fortnightly pulse on the confidence of the Indian workforce. Based on the survey responses of 1,303 professionals in India, findings from June 15-28 reveal India’s rising optimism towards job security as businesses slowly reopened last month.

The seventh edition of the Workforce Confidence Index shows a modest increase in India’s overall workforce confidence, which reflects in this fortnight’s composite score of +50 (up from +48 in June 1-14). This growing confidence comes at a time when the economy continues to reboot, thus sparking hiring prospects across varied industries such as ecommerce, IT services, insurance and gaming. In fact, the economic repercussions of the pandemic have also urged businesses to innovate their offerings to lead through change, thereby stimulating job creation across sectors. Backing this up, Arvind Mediratta, MD & CEO of Metro Cash & Carry India says, “There is going to be a lot of demand for new products and services which, maybe, we’re not even able to envisage right now.”

Active job seekers confident about career progression as economy reboots

The lifting of the lockdown in several states and the continued adversities caused by COVID-19 have instituted a new set of workforce demands, thus creating new economic opportunities across the country’s industrial landscape. This uptick in hiring has fuelled the confidence of active job seekers towards career progression as findings show that about 2 in 3 professionals will increase their time spent searching for (66%) and applying to (64%) jobs in the next 2 weeks. Findings also highlight the active job seekers’ clear intent to upskill today for a safer tomorrow as 68% say they will increase their time spent on online learning to harbor long-term job security and career progression.

Decision makers more confident about job security than junior workers

To understand how this optimism towards job security differs across seniority levels, the LinkedIn Workforce Confidence Index also captured responses from professionals with varied work experience levels. Findings state that decision makers appear to be more confident about their job security when compared to their junior workers. Only 1 in 4 senior professionals said they would increase their time spent on searching for jobs in comparison to almost half (45%) of the junior workforce. Further reinforcing the confidence of senior executives towards job security, findings showed that only 16% of Director+ professionals (decision makers) would increase the number of jobs they apply to, when compared to 48% of the junior workforce.

Commenting on this growing optimism, HR expert Prabir Jha explains why India’s rising hope towards job security comes with slight trepidation - “It must be understood that retaining a job in the present times is in itself a strong confidence booster. Many people are also willing to take up to 50% cut in their salaries for an assured job. This means that whoever retains a job today, clearly knows that his/her role matters to the organization even in the new reality.”

He also added, “More experienced workers may have savings to support them in the long run,” to explain why senior professionals are not as inclined towards increasing their time spent on searching for jobs.

Job-seekers can signal that they are #OpenToWork, with LinkedIn’s new feature

To help job seekers land a job in an uncertain environment, LinkedIn is providing free tools and resources for effective job search and placement. One such profile feature that was recently launched is #OpenToWork, which helps job seekers maximize their visibility on the LinkedIn platform. The feature, which frames the profile picture on LinkedIn, helps members signal to recruiters that they are immediately available to take up in-market opportunities. The feature also helps them specify the types of jobs they are interested in, and what their preferred start date and location is. So far, more than 30 million job seekers have used the #OpenToWork tool to find their next job on the platform.

Here are a few member stories that show how this tool is assisting them to connect with the right opportunities during such testing times -

●     Shilpisweta asked for advice, or opportunities from her network as she embarked on finding a new role in a LinkedIn post.

●     Yash moved back to India and decided to post on LinkedIn to find opportunities in the Social Media Management and Branded Content Strategy fields.

●     Vijay lost his job due to the COVID-19 situation and asked his LinkedIn network to refer him to new opportunities in a LinkedIn post.

●     Gopinath thanked his previous employer- Uber for the learnings in a LinkedIn post and asked his connections for leads to another exciting job opportunity.

Other free tools that help job seekers prepare for interviews and gain the right guidance include ‘Interview Prep’ and ‘Offer Help’. While ‘Offer Help’ makes it easier for our members to share that they are willing and able to extend a helping hand to their connections who are actively looking for opportunities, ‘Interview Prep’ offers free tools, including a new Microsoft-AI powered feature, to help members demonstrate their skills through effective interviewing and real-time feedback.

MSME Day, 27th June 2020: 5 Companies Empowering Indian MSMEs

India’s Micro, Small, and Medium Enterprises (MSMEs) is the second largest in the world and are considered as the backbone of the Indian economy.The pandemic hit the economy and caused  liquidity crunch in the market.  MSME sector faced the most challenging time due to lack of funds and labour as a result of which a lot of MSMEs had to pause or discontinue their business. The government has been taking necessary  decisions and is addressing these  solvency issues, which will help the MSMEs to  stay afloat. Apart from this, there are companies that are also lending a helping hand to support the MSMEs and bridging the market gaps.

Crediwatch

Crediwatch is a ‘Data Insights-as-a-service’ company that provides lenders, businesses with actionable credit intelligence on private entities they need to improve trust and increase their lending and trading activity. Crediwatch does this with no human intervention by deploying the latest practical AI and technology tools that provide the most reliable comprehensive real-time inputs.A bank only looks up 200 of data points while considering decision for a loan. On the other hand, Crediwatch  picks up data from 25,000 different points which is the highest in the industry from already existing information in the regulatory framework. The intelligence can further be deployed for risk management and analysis, due diligence and in future can be used for providing “TrustScore” for MSMEs who are new to credit.

Udaan

Udaan is a Business-to-Business (B2B) ecommerce platform, designed to solve core trade problems for small, medium and large businesses across India. It is the largest such national distribution platform of its kind enabling retailers and businesses to source merchandise from manufacturers, brands, white labels, importers etc. on a single platform. udaan brings to users the power of technology to grow their business.The easy-to-use app gives them the power to BUY & SELL on their terms with secure payments and hassle-free logistics,GROW their network through access to new regions and customers for brands,manufacturers and marketing & sales support for retailers and businesses,DISCOVER customers, suppliers and products across multiple categories,CONNECT directly with sellers and interested buyers to discuss trade

Tradeindia

Tradeindia is India’s largest online B2B marketplace, connecting buyers and suppliers. Their mission is to help SMEs and MSMEs to go Digital. Now more than ever, company is committed to provide SMEs with the resources they need to take their businesses online. As the shift from offline to online accelerates, during these times companies are being asked to do more with less. Tradeindia client Relations team helps SMEs with tools to digitize their business operations and make your business future-ready. 

 Signzy 

Signzy offers a digital on-boarding solution for banks, NBFCs and other financial  institutions. Most banking services are going digital but one key process that is still offline and hampers consumer experience is regulatory compliance. There is a pressure to dilute digital KYC however digital has higher risk. We at Signzy believe that through a combination of Artificial Intelligence and blockchain we can ensure that digital compliance is convenient but yet secure. 

LENDINGKART 

LENDINGKART Technologies Private Limited is a fin-tech startup in the working capital space. The Company has developed technology tools based on big data analysis which facilitates lenders to evaluate borrower’s credit worthiness and provides other related services.LENDINGKART Finance Limited (formerly Aadri Infin Limited), is a non-deposit taking NBFC, providing SME lending in India. The Company aims to transform small business lending by making it convenient for SMEs to access credit easily. The Company uses technology and analytics tools, analyzing thousands of data points from various data sources to assess the creditworthiness of small businesses rapidly and accurately.

Over the next 5 years 1,000 German firms may invest in India

Upbeat on the second fastest growing economy in the world, about 1,000 German firms may invest in India in the next five years, the head of Baden-Wurttemberg, regarded as the most successful German state, said today.

"I am sure, in next five years 1,000 more companies from Germany and may be 200 from our state would be interested in investing in India," Guenther H Oettinger, the Minister- President of State of Baden-Wuerttemberg (Germany) said here.

About 1,800 German firms, including Porsche, Siemens, BMW, Voith and Audi have already invested in India which is being seen as the potential German manufacturing hub for the Asian market.

Indian industry and workers match the quality of Europe's and North America's, Oettinger said at the CII meeting.

With over six per cent expansion, the Indian economy is the second fastest growing after China despite global recession.

German Ambassador to India Thomas Matussek also addressed the meeting stating the India-German bilateral trade is expected to touch $27 billion by 2014 from over $18 billion in 2008.

India's major exports to Germany include garments, machinery and instruments, electronic goods and transport equipment, while imports comprises machinery, iron and steel, machine tools and organic chemicals.

Agencies

Why are banks in the US on the downfall?

The U.S. economy is showing signs of recovery, but despite that fact, the number of bank failures in the U.S. has continued to increase with 123 entities going out of business so far this year. The authorities shut down three banks - Orion Bank based in Naples, Pacific Coast National Bank in San Clemente and Century Bank F.S.B of Sarasota on November 13, taking the count of failed banks to 123 this year, according to PTI.

The Federal Deposit Insurance (FDIC), which was named the receiver of the failed banks, took over Orion Bank, with about $2.7 billion in assets and $2.1 billion in deposits and Century Bank with $728 million in assets and $631 million in deposits. Pacific Coast National Bank was also shut down. It had $134.4 million in assets and $130.9 million in deposits. In addition, FDIC had entered into a purchase and assumption agreement with Iberia Bank of Lafayette, Louisiana, to assume all of the deposits of Century Bank, FSB.

However, the maximum number of collapses this year took place in July, when 24 banks were closed down, while 20 entities bite the dust last month.

Despite the slowly improving economic situation, soaring unemployment rate have resulted in rising defaults, primarily impacting the small and medium banks.

Agencies

Will FII investment touch $2 billion-mark in 2009?

Investment by Foreign Institutional Investors in Indian equities has touched the two billion dollar-mark (nearly Rs 10,000 crore) so far this year, which includes a record single day net purchase of Rs 4,085 crore.

According to the latest available data on SEBI website, FIIs made net purchases worth $2 two billion or about Rs 9,973 crore so far in 2009, with the stock market seeing major investments in the past two weeks.

"FIIs have been in the buying mode for the last couple of months and after their initial sell-off in early 2009, have turned net buyers of Indian equities year-to-date. Positive trend is likely to continue well into FY'10," Angel Broking Head of Research Hitesh Agrawal said.

Yesterday, FIIs put in as much as Rs 4,085 crore ($838 million) in a single day with an over Rs 2,000 crore investment in shares of realty firms DLF alone.

Since the beginning of the new fiscal year, FIIs have started putting money in domestic stocks, including blue-chips like Housing Development Finance Corporation, private sector lender HDFC Bank and realty major DLF.

In May alone, FIIs made gross purchases of equities worth Rs 27,872 crore and sold shares of Rs 18,255 crore, resulting in a net investment of Rs 9,616 crore ($1.93 billion), as per the data available with SEBI.

Three foreign fund houses, Deutsche Securities Mauritius, Euro Pacific Growth Fund and Copthall Mauritius had purchased a total 9.15 crore shares representing 5.39 per cent in DLF for Rs 2,106.1 crore in open market transactions yesterday.

"We believe the positive trend will continue well into FY 2010. Notably, after having reduced their stake in many blue-chip companies in FY 2009 on account of the global liquidity shortage and economic slowdown concerns, FIIs are now coming back into market," Agrawal added.

The previous week also recorded the biggest weekly infusion by FIIs in the current calendar year. With a bulk investment of Rs 1,491 crore in a single day, FIIs remained net buyers in equities in the remaining days.

FIIs have turned net buyers from last week of April, after pulling out a hefty Rs 52,987 crore from Indian stock markets in 2008, which saw Sensex plunging 51 per cent.

Earlier, two Foreign fund houses Capital Group and Sansar Capital Mauritius bought HDFC shares worth Rs 316 crore, while Deutsche Securities bought Rs 422 crore shares of HDFC Bank.

Agrawal said if no further bad news comes, the world wide the markets would revive by 2010 if FII buying spree continues.

"Pre-empting this, FIIs will look at increasing their stakes in firms that are best placed to ride the recovery and large-cap stocks are preferred ones to begin with," he added.

Agencies

Does SAP sees signs of recovery from recession?

SAP Co-Chief Executive Leo Apotheker said the next few months may bring "glimmers of hope" for the global economy.

Apotheker also said he believes the business software maker should stay independent, following fresh speculation in European markets that Microsoft Corp could bid for the German company. The talk was sparked by Microsoft's plans to sell a multibillion-dollar debt issue.

"We're probably starting to see a stabilization of the situation," Apotheker said at a news conference in New York. "We'll probably start to see some glimmers of hope in the second half of the year for the global economy." Global markets will likely see a fuller recovery in 2010, he added.

The S&P 500 and Dow industrials pared losses after his comments. Apotheker, who will become the sole CEO of SAP when Henning Kagermann's retires later in May, declined to comment on the Microsoft speculation, but said he believed it is in SAP's interest to remain independent.

"Our customers believe an independent SAP is the best value they can get," he said. Rumors periodically surface that either IBM or Microsoft might acquire SAP, which sells business management applications to large businesses that neither of those technology giants have in their portfolios.

Apotheker criticized rival Oracle Corp's decision to purchase hardware maker Sun Microsystems Inc, saying that businesses do not want to buy from vertically integrated technology companies that sell software alongside the computers that run it.

"I'm sorry to disappoint you," he said in response to a question on how Oracle's $7.4 billion purchase of Sun might reshape the industry. "It won't affect the industry much."

But Apotheker said SAP will do a few acquisitions "as we go along." SAP announced on Monday that it bought privately held Clear Standards, a small maker of software that helps businesses manage greenhouse gas emissions. Apotheker did not discuss financial terms of the acquisition.

Sterling, Virginia-based Clear Standards sells software that helps companies measure and mitigate greenhouse gas emissions, which contribute to global climate change and are increasingly coming under regulatory scrutiny.

Apotheker also said that previously announced job cuts are progressing as planned at SAP. The company is not planning any more job cuts, he added.

Agencies

Does cost cuts help tech giants ride out weak economy?

A solid crop of earnings reports from the leading lights of technology suggests the sector is proving adept at cost cuts and more resilient to the economic meltdown than previously thought.

While executives from Apple Inc, Google Inc, IBM and Intel Corp were almost uniformly cautious in talking about the rest of the year, they all reported quarterly profits that beat Wall Street expectations.

Microsoft Corp's earnings on Thursday were in line with forecasts, but investors sent its shares higher in part because of cost cuts that the world's largest software maker is undertaking to protect its bottom line.

With corporate and consumer spending under pressure, analysts say many tech companies moved swiftly to slash jobs and output- positioning themselves for growth when a bottom is reached, which some say may have happened already.

"It does look like tech might very well lead us out of the recessionary market," said Enderle Group analyst Rob Enderle. "They are structured to respond more quickly and they've demonstrated they can."

Although the results were not necessarily strong on a historical basis and the outlook for the economy remains extremely uncertain, analysts see positive signs for the sector.

Technology shares have been surging, with the Morgan Stanley Hi-Tech index of major tech stocks up more than 30 per cent since early March.

While a rally may prove difficult to sustain, analysts say the prospects are better for an IT recovery because tech products and services are integral to the day-to-day functioning of the global economy and people's lives.

"Everybody's taking big cuts in their budgets, but a lot of tech spend is not so variable," said M Eric Johnson, director of the Center for Digital Strategies at the Tuck School of Business at Dartmouth. "A lot of their spending needs to and has to occur even in a downturn."

He said the recession in some ways has benefited information technology service providers like IBM, as corporations have moved to outsourcing.

IBM reported an 11 per cent drop in revenue, which was weaker than expected, but higher margins helped its profit beat analysts' forecasts.

There were other encouraging signals in major tech earnings reports. Apple's earnings topped Wall Street forecasts as consumers showed they were still willing to spend on premium devices such as iPhones and iPods even in a tough economy.

Google's and Intel's results also beat expectations, thanks to cost discipline. Intel Chief Executive Paul Otellini declared the worst is over for the PC market, a message echoed by disk drive maker Seagate Technology, but Microsoft Chief Financial Officer Chris Liddell said he saw no sign the bottom had been reached.

Positive signs also emerged from earnings reports from chipmaker Texas Instruments and flash memory maker SanDisk.

"Things at least seem to have stopped falling," said Barry Jaruzelski, a partner at consulting firm Booz & Co He said the key is in how enterprise IT spending plays out.

"It looks like we've found the reset level...The thing IT has going for it is it's often an enabler for cost reductions."

Agencies

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

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

Is India back on FDI radar despite recession?

At a time when the world economy is facing the worst credit freeze in several decades, India attracted USD 2.7-billion FDI in January, up 58.8 per cent from a year ago, and remained a favourite destination for cross-border investments.

"January numbers are very good...it is an indication of the confidence that the rest of the world has in India," Secretary in the Department of Industrial Policy and Promotion Ajay Shankar said.

The foreign direct investment (FDI) inflows for the April-January period aggregated to USD 23.8 billion and is expected to cross the last year's target of USD 25 billion this fiscal.

Though the government had set a target of USD 35-billion FDI for 2008-09, it looked rather ambitious in the wake of the global downturn.

Up to September this fiscal, the monthly inflows were in excess of USD 2 billion. However, the following three months saw a sharp dip in the overseas investments.

The January figures bring a renewed hope that India is back on the radar of global investors.

Agencies

Is US new threat to India in BPO sector?

A downturn in worldwide economy, Satyam's fraud case and the terrorist attacks in Mumbai and supply chain and shipping cost issues in China are causing US technology companies to pull back from the two traditional outsourcing locations.

Citing these three global factors, an annual survey by BDO Seidman, LLP, one of America's leading accounting and consulting organizations, suggested several technology firms would choose US as future outsourcing location over India and China.

"While last year may have produced an outsourcing bubble, 2009 will see companies retrench to survive in the face of reduced demand. The US has become a far more viable option for them," said Douglas Sirotta, a Partner in BDO Seidman's Technology Practice.

"This year we are seeing three global factors that are causing US technology companies to pull back from traditional outsourcing locations, led by the recent boom and bust of the worldwide economy.

"Satyam's fraud case and the terrorist attacks in Mumbai are causing a lot of companies to reconsider operating in India. And supply chain and shipping cost issues in China are negatively impacting the attractiveness of outsourcing technology operations to the Far East."

Currently nearly two-thirds (62 per cent) of chief financial officers (CFOs) at leading US technology businesses say that their companies outsource services or manufacturing, it said.

However, the survey results point to a likely decline in international outsourcing in 2009: 22 percent say the United States is the outsourcing destination they are most likely to consider in 2009, compared to 16 per cent for China and 13 per cent for India. Another 19 per cent report no interest in additional outsourcing.

The survey conducted in January 2009 examines the opinions of 100 chief financial officers at leading technology companies located throughout the US. Other major findings:

Less than half (42 per cent) of the CFOs indicate that they have operations outside the US, compared to nearly double that amount (79 per cent) last year.

Nearly a third (29 per cent) of respondents say their primary concern regarding international growth is an uncertain business or political climate.

About a quarter (26 per cent), cite international business and tax regulations, with 21 per cent citing currency risk, 14 per cent intellectual property risk and exploitation, and 10 per cent training of international employees as their primary concern.

Currently the most common non-US locations for outsourcing are India (50 per cent), Southeast Asia, including the Philippines (31 per cent, down from 50 per cent in 2008), China (19 per cent, down from 46 per cent in 2008), and Western Europe (19 per cent).

For future outsourcing, the CFOs most frequently cite the United States (22 per cent), followed by China (16 per cent), India (13 per cent), Southeast Asia, including the Philippines (7 per cent), Latin America (7 per cent), Western Europe (6 per cent), Canada (5 per cent) and Eastern Europe (3 per cent).

Of those outsourcing, the most common functions being off-shored currently are: manufacturing (54 percent), IT services and programming (46 percent), research and development (35 percent), distribution (35 percent) and call centres (35 percent).

Agencies

Is California to layoff 20,000 state jobs?

California, which is on the brink of running out of cash, will notify 20,000 state workers on Tuesday their jobs may be eliminated, a spokesman for Governor Arnold Schwarzenegger said on Monday.

The announcement came a day after California lawmakers narrowly failed to pass a $40 billion budget that would have plugged the state's deficit with a mix of tax hikes and spending cuts.

"In the absence of a budget, the governor has a responsibility to realize state savings any way he can," said Aaron McLear, a spokesman for the Republican governor. "This is unfortunately a necessary decision."

The layoff notices will affect about 20 percent of state workers, McLear said, adding the cuts would extend to every part of state government.

The positions would be eliminated in June in preparation for California's next fiscal year, which starts in July.

California, America's most populous state and the world's eighth biggest economy, has experienced a dramatic fall in revenues because of the housing downturn, rising unemployment and a sharp pullback in consumer spending.

To conserve cash, the state has stopped public works projects, furloughed state employees for two days a month and postponed sending out tax refunds.

Agencies

Canada layoffs 34,400 employees in December 2008

The Canadian economy lost 34,400 jobs in December, driving the unemployment rate to 6.6 percent, Statistics Canada said in a fresh sign of recession gripping the nation.

It was the second month of heavy job losses, after 70,600 were shed in November. The unemployment rate rose to 6.6 percent from 6.3 percent in the prior month.

The numbers were worse than most analysts's projections of 22,000 job losses and a 6.5 percent jobless rate in December.

And Finance Minister Jim Flaherty said the situation will only get worse in the short term.

"We're in for a very difficult year," Flaherty told reporters. "We regrettably are going to have to expect continuing job losses in Canada.

"We are going to have substantial job losses," he added.

December's employment decline was led by a drop in construction, one of the biggest monthly losses for that industry in the past three decades.

Some 44,000 construction jobs were lost, as housing starts decreased to their lowest level in seven years the previous month, according to the Canadian Mortgage and Housing Corporation.

This was partially offset by an increase in transportation and warehousing.

"The job market is running out of steam," said analyst Pascal Gauthier of TD Securities.

"We believe that the Canadian economy entered a recession in the fourth quarter. Or if we're not there yet, we're knocking at the door," he told the media.

Sherry Cooper, chief economist of BMO Capital Markets, echoed in a research note: "Today's dismal data offer additional strong evidence that the Canadian economy has quickly waded knee-deep into the recession swamp."

For all of 2008, Canada's employment rate increased 0.6 percent with the creation of a total 98,000 jobs, significantly slower than the 2.2 percent job growth observed the previous year.

Gauthier too commented that the dismal December figures are "indicative of what's to come."

"In a typical recession, we can expect 15,000 to 30,000 jobs being cut each month," he said.

But Canada is still faring better than its neighbor and biggest trading partner, the United States, Flaherty and analysts agreed.

The United States lost 524,000 jobs in December.

Agencies

Despite meltdown: No job loses in BPO sector!

Software and BPO industry body Nasscom on Wednesday said the business process outsourcing sector is not in the danger of losing jobs due to the ongoing economic downturn rather a net hirer in the current fiscal.

In a statement here Nasscom said, "Media reports suggest that the Indian BPO industry will see 2.5 lakh job losses by the first quarter of 2009, in the wake of downturn in the US and other developed economies. Nasscom’s research and interaction with its member companies is not in support of this statement. Our detailed industry performance and forecast for FY09 will be released in the next fortnight. However, on employment the industry will continue to be a net hirer in FY09 as a direct corollary of industry growth and fears of large scale job losses at an industry level are unfounded."

The industry body's comment comes in the wake BPO Industry Association President Samir Chopra stating that "severe job loss is expected because of recession. We are going to request for a fiscal package from the Government but if that doesn't happen, then there be huge amount of losses in terms of manpower. I think a quarter of a million jobs will go."

The $11-billion BPO sector employs about seven lakh people.

Source: Agencies

Has US economy sunk deeper into recession?

Bleak housing data showed the United States and Britain were sinking deeper into recession and authorities from Washington to Tokyo worked hard to spend their way out of the worst downturn in decades.

Japan's government on Wednesday approved its biggest-ever budget to revive its economy while US President-elect Barack Obama sought to clinch a deal with congressional lawmakers on a massive stimulus package even before the Christmas Day.

"Japan cannot avoid the tsunami of the world recession, but it can try to find a way out," Japanese Prime Minister Taro Aso said announcing the budget.

"The world economy is in a once-in-a-hundred years recession. We need extraordinary measures to deal with an extraordinary situation," he said.

A record drop in U.S. existing home sales and prices last month reported on Tuesday showed the world's biggest economy was on track for what one Federal Reserve official said could be the longest downturn since the World War Two. Housing is at the root of the U.S. slump and the global malaise and economists expect the economy to decline much more in the current quarter after a 0.5 percent contraction in the third quarter. Britain, the world's fifth-largest economy, is in an equally dire shape.

The Royal Institution of Chartered Surveyors said house prices were set to fall by 10 percent next year, confirming the bleak outlook after Tuesday's data showed the economy shrinking by 0.6 percent in the third quarter.

The relentless flow of bad news overshadowed rescue efforts and prompted a warning from European Central Bank President Jean-Claude Trichet that investors could be overlooking the importance of steps already taken by policymakers.

Japan had its share of gloom this week, reporting a record drop in exports -- the mainstay of an economy dogged by weak consumer spending -- and a similarly sharp collapse in business sentiment.

RECORD BUDGET FOR JAPAN

Grim data and warnings from the central bank that the worst may not be over fanned expectations that it will cut its key rate to zero from 0.1 percent and revive a policy of flooding banks with interest free cash it abandoned just two years ago.

Doing its part, Japan's cabinet approved a record 88.5 trillion yen ($980.6 billion) budget for the next fiscal year starting in April. The plan boosts overall spending, excluding debt servicing costs, by 9 percent compared to this year's initial budget and aims to accommodate part of 12 trillion yen in extra spending on government stimulus packages.

Source: Agencies

Where has the US bailout money gone?

The US Treasury Department said on Tuesday that it completed purchases of equity in 49 banks on Friday and 43 on Tuesday as part of a plan to stabilize the financial system and restore normal lending.

The 49 banks that received Treasury capital on Friday included 14 privately held institutions, marking the first government capital injections into private banks since the Treasury widened the reach of its capital purchase program.

Congress approved a $700 billion financial rescue program in early October, and the Treasury has said it would use $250 billion to bolster banks' capital position. Currently, the Treasury has authority to use only half of the overall $700 billion approved by Congress.

Following are details on what has been spent or pledged so far of the $350 billion the Treasury currently has authority to draw on:

What has been spent so far

==> $250 billion to buy senior preferred shares and warrants in banks and thrifts.

The latest equity purchases brought the total of investments made so far to $162 billion. A further $10 billion is approved for Merrill Lynch but has been deferred pending its merger with Bank of America.

==> $40 billion investment in troubled insurer American International Group, which has been completed.

==> $20 billion investment in Citigroup pledged as part of a bailout announced on November 23.

Global stimulus package I 2008: Year of financial crisis

Recession hits IT companies I India battles credit crisis I Credit crisis strikes Europe I Financial turmoil grips Europe

What has been spent so far

==> $13.4 billion to prop up General Motors Corp and Chrysler LLC. The Treasury has said GM could qualify for a further $4 billion in March, which would have to come from the final $350 billion tranche of the financial rescue fund.

==> $5 billion pledged to cover potential losses on a portfolio of Citigroup mortgage-related assets.

==> $20 billion pledged to cover potential losses for a Federal Reserve program aimed at improving consumer access to credit.

Source: Agencies

Will the Internet economy shrink in 2009?

The Internet economy could shrink in 2009 because of the worldwide downturn, the OECD warned on Monday in a report that forecast contraction of the semiconductor industry and cutbacks by corporate customers.

The Paris-based Organisation for Economic Co-operation and Development said that "with the outlook for the global economy worsening and business and consumer confidence plummeting, growth will remain flat or decline in 2009."

The report also forecast growth of four per cent in the IT industry this year and said some sectors such as software, outsourcing, Internet sales and infrastructure investments would "weather the storm better than others."

The report said the semiconductor industry - seen as a leading indicator for the information technology sector - would fall nearly six per cent in 2009 after weak growth of 2.2 per cent in 2008.

Source: Agencies

Rs 300,000cr package to boost Indian economy

The government on Sunday announced major tax cuts across the board to boost demand and allocated additional funds and incentives for exports, housing, textile and infrastructure to stimulate the economy, hit by the global financial crisis.

"The government has been concerned about the impact of global financial crisis on the Indian economy
and a number of steps have been taken to deal with this problem," an official statement said.

The package, coming on the back of fresh monetary measures announced by the RBI on Saturday, includes a four per cent cut in ad-valoram duty across the board, to boost additional spending, besides enhanced credit for exporters, along with a Rs 10,000 crore mop up for India Infrastructure Finance Company.

The measures include additional plan expenditure up to Rs 20,000 crore in current year; total spending in four months till March expected at Rs 300,000 crore. A series of steps to boost exports; Rs 350 crore additional funds for export incentives; back-up guarantee to ECGC for up to Rs 350 crore; to be allowed refund of services in some areas.

The package also includes import duty on Naptha for use in power sector as well as export duty on iron ore to be eliminated. India Infrastructure Finance Company to raise Rs 10,000 crore through tax-free bonds by March 2009. PSU banks to soon announce package for borrowers of home loans upto Rs 20 lakh. An across-the-board cut on ad valorem rate to encourage additional spending; additional Rs 1,400 crore for textile sector.

Source: Agencies

Oil could plummet down to $25 a barrel!

Oil prices are likely to keep falling until well into next year and could reach $25 a barrel before recovering, US bank Merrill Lynch. In a research report published on Thursday, it said oil prices should begin to rally in the second half of 2009.

Merrill Lynch recently cut its forecast for the average price of US crude oil futures and North Sea Brent crude oil to $50 a barrel from a previous estimate for both crudes of $90.

"With demand vanishing across all key oil consuming regions, benchmark crude oil prices continue to plummet," it said. "In the short-run, market participants will focus on both OPEC and perhaps even non-OPEC producer responses to balance the market."

"A temporary drop below $25 is possible if the global recession extends to China and significant non-OPEC production cuts are required," it said.

"In our view, oil prices could find a trough at the end of Q1 2009 or early Q2 2009 with the seasonal slowdown in demand. Then, as economic activity starts to strengthen, we see oil prices posting a modest recovery in the second half of 2009."

Oil prices hit a peak above $147 a barrel in July but have fallen more than $100 since then as the severity of the global economic downturn has become clear.

Merrill Lynch said a combination of high oil prices and high leverage had proven dangerous for the global economy.

"On October 1, we lowered our average crude oil price forecast in 2009 to $90 per barrel based on a global GDP growth forecast of 3 percent. Since then, our economists have revised their 2009 global GDP growth forecast down to 1.3 percent, a scenario consistent with a global recession.

"As a result, we are now lowering our average WTI and Brent crude oil price forecast to $50 per barrel for 2009."

It said the major downside risk to its price forecast would be a revision of economic growth assumptions for China, which are currently at 8.6 percent for next year.

"In the short-run, global oil demand growth will likely take a further beating as banks continue to cut credit to consumers and corporations," it said. "We now expect an outright contraction in global oil demand in 2009."

Source: Economic Times

40pc of large businesses cut their IT budgets

More than 40 percent of large businesses have cut their IT budgets this year due to the global economic slowdown, according to a new survey by Forrester Research. The Forrester Business Data Services report surveyed nearly 950 senior IT managers across North America and Europe regarding their IT services spending and overall services strategies and priorities.

The economy’s affect on IT spending is evident in some specific data points contained in the report: Forty-three percent of firms have already cut their overall IT budgets in 2008 in reaction to the slow down in the global economy, while 24 percent of firms have put discretionary spending on hold. Twenty-eight percent of respondents said the economy has had no impact on their IT budgets.

Asked how the economy will affect IT services spending, 70 percent of respondents said they will likely negotiate lower rates with suppliers, and 16 percent said they have already cut their IT services spending.

IT departments in the financial services industry were hit hardest — 49 percent of IT shops in the financial services sector have cut their budgets. At the other end of the spectrum is the media, entertainment, and leisure industry, where only 39 percent of respondents said they have had to reduce spending.

IT departments in North America have been affected by the economy more than their European counterparts: 49 percent of North American firms have cut their IT budgets compared with 31 percent of respondents in Europe; although it should be noted that the Forrester survey was fielded in Q2 2008 prior to the deteriorating economic conditions in Europe.

“This is not an across-the-board spending slowdown; the impact of the economy on IT budgets varies widely by industry and geography,” said Forrester Research vice president and principal analyst John C. McCarthy, who is in India at present for a workshop. “With regard to the services sector, the slowdown has firms renegotiating rates, being more selective in choosing vendors, and examining spending plans more thoroughly, but they are still expecting to pay more for services. The demand for enterprise IT services has not dropped significantly.”

Regarding the state of spending on enterprise IT services, the report illustrates a number of trends: The demand for services holds steady. Forty-five percent of firms plan to increase their use of applications outsourcing, while 43 percent of firms are increasing their use of infrastructure outsourcing. Forty-three percent of respondents said they are moving more work offshore.

Infrastructure outsourcing expects to grow. Convergent telecommunications and network management is a hot area of growth as 20 percent of firms will outsource this service in 2008.
Few firms have fully tapped into offshore resources. Only 9 percent of firms use offshore resources wherever and whenever possible. A growing number of firms are interested in exploring more offshore work, with 14 percent ramping up use, 19 percent piloting, and 22 percent not using offshore but actively tracking developments. Of those firms not sending work offshore, a majority cite the questionable quality of the work done.

Satisfaction with outsourcing remains low. While overall firms are satisfied with their decision to use a third party, 52 percent say their biggest challenge with existing IT services and outsourcing relationships is that cost savings are lower than expected. Other noteworthy challenges include inconsistent or poor service quality (40 percent) and the inability of the vendor or contract structure to respond rapidly to changing business needs (35 percent).