Minimum pay hikes for Infosys employees this year

Infosys Technologies, India's No. 2 outsourcer, would hand out minimum wage rises in April to its staff, its chief executive Kris Gopalakrishnan said on the sidelines of an industry conference.

"This is going to be a prolonged downturn," he said referring to the global economic slowdown.

The company expects IT services business to be slow in the foreseeable future as clients delay technology spending amid the global economic crisis, he added.

India's large pool of English-speaking engineers and cheaper wages has helped attract outsourcing from Western firms such as Citigroup, General Electric, Qantas and Airbus. But a recession in the United States, which accounts for more than half the sector's revenue, and turmoil in the global financial sector have halted the sector's scorching pace of growth and battered stocks.

"The environment continues to be challenging," Gopalakrishnan said. "The feedback we are getting from clients are that the budgets are going to be down, in some cases significantly down," he said of likely technology spending by the firm's customers.

"They are also saying that when the budgets are released there will be a delay in spending."

India's exports of software and services in the year to March will be sharply below an earlier forecast, expanding 16-17 per cent to about $47 billion, the National Association of Software and Service Companies said earlier this month.

On US President Barack Obama's pledge to end tax break for companies that send US jobs overseas, Gopalakrishnan said the Indian IT companies would wait to see how the proposal was implemented.

"My take on it is of course protectionism will only prolong the downturn," he said. "This is a challenge which we all have to face collectively."

Agencies

Is Ad spend moving into internet from TV, radio?

Global economic slowdown has led to cut in media advertisement spending for sure, but internet company Yahoo is seeing a silver-lining.

And in some sense, recession in advance markets may be a blessing in disguise for such companies as advertisers shift ad spend from television and radio to internet.

Yahoo's Co-Founder and Chief David Filo confirmed the trend. "Advertising. while there may be slow-down....it's not going away", he told reporters on the sidelines of Yahoo India R & D-organised second Open Hack Day in India here.

There are other factors, he said. "People consume increasingly more and more internet", as opposed to television and radio, he argued. "People are moving that attention (from television and radio) to internet; that shift is going to increase (further)".

Particularly in times of economic slowdown, advertisers are shifting their ad spend to internet, Filo said. Internet advertising is "measurable" and, so, advertisers are "much more amenable" (to put more dollars into internet advertising)".

CEO of Yahoo India R & D, Sharad Sharma, said broadband access in India needs to improve, while PC penetration needs to be much faster. "Internet growth is modest (in India)", he said.

Agencies

Is IBM likely to layoff 16,000 jobs?

International Business Machines Corp, the biggest technology employer, may cut thousands of jobs this month amid the global economic slowdown, according to the employee group Alliance for IBM.

Employees have been hearing that layoffs will take place in late January, said Lee Conrad, national coordinator of the Alliance, an organization seeking union recognition at Armonk, New York-based IBM. The size of the reduction may be larger than those in the past few years, he said in an interview.

Generally they go in batches of a couple hundred here and a couple hundred there,” Conrad said.
A post on the Alliance’s website said the company may cut 16,000 jobs, which would top the 15,600 eliminated by Chief Executive Officer Sam Palmisano in 2002. The worldwide slump has tightened companies’ technology budgets and IBM may report a 1.6 per cent drop in sales last quarter to $28.4 billion, based on the average analyst estimate.

“There’s likely to be production cutbacks at IBM,” said Timothy Ghriskey, chief investment officer at Solaris Asset Management LLC in Bedford Hills, New York. “There will be job cuts. For now, reducing the workforce to benefit the viability and competitiveness of the company makes sense.”

Solaris, which oversees $2 billion, held 29,000 shares of IBM as of Sept 30.

IBM rose $2.41, or 2.8 per cent, to $89.23 at 4 pm in New York Stock Exchange composite trading. The shares lost 22 per cent last year.

‘Rebalance our workforce’ IBM has frequently pruned its staff over the past few years. The company had two waves of job cuts in 2007, totaling more than 2,000 positions. IBM had $318 million in job-reduction costs that year, compared with $272 million in 2006.

“We constantly rebalance our workforce and continue to invest in growth areas,” said Ian Colley, a company spokesman. He declined to comment further when asked about the Alliance posting.

IBM had 386,558 employees at the end of 2007. Palo Alto, California-based Hewlett-Packard Co, the world’s largest personal-computer maker, had 321,000 as of Oct 31, and Panasonic Corp, based in Osaka, Japan, had 313,594 as of Sept 30.

Agencies

Here is how Google is cutting costs!

Feeling the pinch of the global economic slowdown and the US recession in particular, Google, the Internet search engine giant, is resorting to austerity measures, The Wall Street Journal reported.

Prominent among them include cutting new projects, ratcheting back spending, chipping away at perks and reducing employee strength. Such measure from Google, which is known for its generous perks, has come as a surprise to many industry watchers.

The latest Google measures are understandable as its revenue growth has slowed down dramatically over the past one year.

“We have to behave as though we don't know what's going to happen,” Google chief executive Eric Schmidt was quoted as saying by The Wall Street Journal.

The company will curtail the “dark matter,” Schmidt said, projects that “haven't really caught on” and “aren't really that exciting.”

Schmidt said the company is “not going to give” an engineer 20 people to work with on certain experimental projects anymore. Popular social networking site Orkut was a product of this experiment by Google. Schmidt, however, promised to get this back when things improve.

Google executives had started preparing for the slowdown about a year ago, but things have now accelerated. In recent weeks, Schmidt has held meetings with top executives to determine where to focus investment more narrowly, the Journal said.

Top priorities include display ads, which use graphics and appear on Web pages; advertising on mobile phones; and the company's online business software.

Schmidt says the company is shifting more engineering and sales resources to those areas, and away from less-promising projects. Teams on projects the company is merely "fiddling with," he says, will get "naturally smaller as people get plucked off,” the report said.

The Wall Street Journal said the financial crisis has created a new sense of urgency within the company. Top executives say they remain committed to projects they believe hold long-term potential, but are prepared to “starve” lesser ones.