India's software sector is likely to miss the much-touted target of touching 60 billion dollar exports by FY10, due to
unprecedented slowdown in key markets like the US and Europe, IT industry body Nasscom said.
"... the aspiration of $60 billion by December 2010 is likely to be delayed by at least three to four quarters due to unprecedented slowdown in 2009 in key markets, particularly the US and Europe," a Nasscom-McKinsey report said.
The technology and business services industry grew substantially to $52 billion in 2008 including $12 billion in the domestic segment.
Now with the financial meltdown taking its toll, the software and services revenue outlook has been revised downwards.
Nasscom had earlier scaled down the growth rate for software exports to 16-17 per cent in FY09 as against 21-24 per cent announced earlier.
However, the report -- Perspective 2020 -- said the future of the IT industry remains secure in the medium to long term, even in the face of current macro-economic trends.
Agencies
Showing posts with label slowdown. Show all posts
Showing posts with label slowdown. Show all posts
Friday, July 3, 2009
Thursday, April 9, 2009
Will the Obama's policy on US firm to pull back jobs have effect on India?
Sallie Mae, a US-based company which gives loans to students, Monday announced to move back as many as 2,000 overseas jobs, including those from India, even if it means an additional financial burden on the company because of higher labour expenses.
"It's the right thing to do," said Sallie Mae Chief Executive Albert Lord at a press conference which was attended by Democrat Congressman Paul Kanjorski and Senator Robert Casey in an apparent reference to the large scale job losses in the US in the last one year.
The value of a company's franchise is essentially measured in financial terms, but there are a lot of values in a company that relate to the long-term value of a franchise. It's a wise investment in the company's future, Lord said.
"The current economic environment has caused our communities to struggle with job losses. They need jobs, and we will put 2,000 of them into US facilities as soon as we possibly can," he added.
In the next 18 months, some 2,000 overseas jobs would be moved back to the US. These jobs are primarily in India, Mexico and the Philippines and are basically call centres, information technology and operations support positions.
The move would cost the company $350,000 per annum as the workers in the US would have to be paid a much higher wage than those in countries such as India.
Sallie Mae is the largest US-based student loan provider. It employs more than 8,000 people in the US. For quite some time, it has been struggling during the credit crunch to finance loans to students.
In the fourth quarter the company had reported a net loss of $216 million, in which it made $4.8 billion in student loans. Through its subsidiaries, the company manages $180 billion in education loans and serves 10 million student and parent customers.
Agencies
"It's the right thing to do," said Sallie Mae Chief Executive Albert Lord at a press conference which was attended by Democrat Congressman Paul Kanjorski and Senator Robert Casey in an apparent reference to the large scale job losses in the US in the last one year.
The value of a company's franchise is essentially measured in financial terms, but there are a lot of values in a company that relate to the long-term value of a franchise. It's a wise investment in the company's future, Lord said.
"The current economic environment has caused our communities to struggle with job losses. They need jobs, and we will put 2,000 of them into US facilities as soon as we possibly can," he added.
In the next 18 months, some 2,000 overseas jobs would be moved back to the US. These jobs are primarily in India, Mexico and the Philippines and are basically call centres, information technology and operations support positions.
The move would cost the company $350,000 per annum as the workers in the US would have to be paid a much higher wage than those in countries such as India.
Sallie Mae is the largest US-based student loan provider. It employs more than 8,000 people in the US. For quite some time, it has been struggling during the credit crunch to finance loans to students.
In the fourth quarter the company had reported a net loss of $216 million, in which it made $4.8 billion in student loans. Through its subsidiaries, the company manages $180 billion in education loans and serves 10 million student and parent customers.
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
Thursday, February 12, 2009
Has British jobless rate hit decade high?
Britain's official unemployment rate hit the highest level for about 10 years on Wednesday, as experts warned more job cuts would come as the recession deepens.
Although the figures were not so bad as some experts had expected, falling short of the symbolic two million barrier, analysts warned that the figure could hit 3.5 million by the end of next year as the effects of the slowdown filter through.
Protests fuelled by the rising threat of unemployment -- underlined by almost daily job cut announcements -- have snowballed in recent weeks, including a new power plant walkout on Wednesday following wildcat strikes last week.
The percentage of Britons out of work jumped to 1.97 million or 6.3 percent in the three months to December, a rise of 0.2 percent, according to figures from the Office for National Statistics (ONS).
"For every person who is made unemployed, there is a sadness and sorrow and we will do what we can to help people back to work as quickly as possible," Prime Minister Gordon Brown said after the figures came out.
His official spokesman told reporters: "Every job loss is obviously a matter of regret and disappointment."
Brown met 22 business leaders from some of Britain's biggest companies like supermarket chain Tesco and energy firm Centrica at his Downing Street office Wednesday to discuss getting more people into work.
But some observers warned the picture on unemployment looked set to get worse.
The general secretary of the TUC (Trades Union Congress) Brendan Barber said the situation was a "national emergency", adding: "This is another set of dreadful figures and we fear worse is still to come."
Vicky Redwood, an analyst from research consultancy Capital Economics, said the figures did not fully reflect the effects of a major contraction in the fourth quarter of 2008.
"We still think unemployment will reach 3.5 million by the end of 2010," she added.
Unemployment in Britain is lower than in some other European countries -- Germany, Europe's largest economy, has 8.3 percent unemployment and the figure in France stands at around eight percent.
But the global downturn looks set to hit Britain harder than its European neighbours -- the International Monetary Foundation (IMF) said last month that it would suffer worse than any other developed country.
Official figures last month confirmed that Britain was now in recession, while Brown last week used the word "depression" to describe the situation.
Education Secretary Ed Balls, Brown's former economic advisor and one of his closest allies, said this week Britain was facing the worst recession for 100 years.
New job cuts have hit the headlines almost daily in recent weeks -- carmakers like Bentley, Nissan and Jaguar have announced major cuts along with Royal Bank of Scotland (RBS), which is now majority state-owned.
Workers at London Underground were due to stage a demonstration Wednesday against what unions say are plans to cut up to 2,500 jobs on top of 1,000 already announced.
Meanwhile, hundreds of construction staff at the Staythorpe power station in central England walked out Wednesday after being told they faced disciplinary action if they joined a protest over the use of foreign contractors.
Last week, thousands of workers around Britain joined wildcat strikes on the issue.
Wednesday's unemployment figures were calculated using the International Labour Organisation (ILO) measure of unemployment.
Agencies
Although the figures were not so bad as some experts had expected, falling short of the symbolic two million barrier, analysts warned that the figure could hit 3.5 million by the end of next year as the effects of the slowdown filter through.
Protests fuelled by the rising threat of unemployment -- underlined by almost daily job cut announcements -- have snowballed in recent weeks, including a new power plant walkout on Wednesday following wildcat strikes last week.
The percentage of Britons out of work jumped to 1.97 million or 6.3 percent in the three months to December, a rise of 0.2 percent, according to figures from the Office for National Statistics (ONS).
"For every person who is made unemployed, there is a sadness and sorrow and we will do what we can to help people back to work as quickly as possible," Prime Minister Gordon Brown said after the figures came out.
His official spokesman told reporters: "Every job loss is obviously a matter of regret and disappointment."
Brown met 22 business leaders from some of Britain's biggest companies like supermarket chain Tesco and energy firm Centrica at his Downing Street office Wednesday to discuss getting more people into work.
But some observers warned the picture on unemployment looked set to get worse.
The general secretary of the TUC (Trades Union Congress) Brendan Barber said the situation was a "national emergency", adding: "This is another set of dreadful figures and we fear worse is still to come."
Vicky Redwood, an analyst from research consultancy Capital Economics, said the figures did not fully reflect the effects of a major contraction in the fourth quarter of 2008.
"We still think unemployment will reach 3.5 million by the end of 2010," she added.
Unemployment in Britain is lower than in some other European countries -- Germany, Europe's largest economy, has 8.3 percent unemployment and the figure in France stands at around eight percent.
But the global downturn looks set to hit Britain harder than its European neighbours -- the International Monetary Foundation (IMF) said last month that it would suffer worse than any other developed country.
Official figures last month confirmed that Britain was now in recession, while Brown last week used the word "depression" to describe the situation.
Education Secretary Ed Balls, Brown's former economic advisor and one of his closest allies, said this week Britain was facing the worst recession for 100 years.
New job cuts have hit the headlines almost daily in recent weeks -- carmakers like Bentley, Nissan and Jaguar have announced major cuts along with Royal Bank of Scotland (RBS), which is now majority state-owned.
Workers at London Underground were due to stage a demonstration Wednesday against what unions say are plans to cut up to 2,500 jobs on top of 1,000 already announced.
Meanwhile, hundreds of construction staff at the Staythorpe power station in central England walked out Wednesday after being told they faced disciplinary action if they joined a protest over the use of foreign contractors.
Last week, thousands of workers around Britain joined wildcat strikes on the issue.
Wednesday's unemployment figures were calculated using the International Labour Organisation (ILO) measure of unemployment.
Agencies
Sunday, February 8, 2009
Is Infosys getting tougher on poor performers?
The economic slowdown has made Infosys Technologies, India’s second-largest IT services firm by revenues, take a harder look at employee performance. The firm has put 2,200 employees under the scanner for non-performance this year — more than double the number last year, a senior executive said.
Last year, about 1.5% of IT services staff or about 1,000 employees figured among the bottom performers. This year, the percentage has shot up to about 3.5%. About 600 of such non-performers have left the company already this year.
Such employees are put under a performance improvement plan, provided mentoring and their performance is reviewed for a quarter. “When the times were good, people got away with things. Our tolerance of non-performance has come down now,” Infosys director (HR, education & research and administration) TV Mohandas Pai said.
Meanwhile, the IT services major has made about 20,000 job offers to college students across the country for 2009-10. The company will honour the commitment made, Pai said.
However, there could be lower or even no wage increases at Infosys next fiscal. “Wage increase next year will be subdued, if there will be an increase,” the Infosys director said.
The IT services firm said it expects IT budgets of clients to be flat or may even reduce 5-10% next fiscal. “Clients are in pain and they want us to share the pain. Their ability to spend is lower,” he said.
Economictimes
Last year, about 1.5% of IT services staff or about 1,000 employees figured among the bottom performers. This year, the percentage has shot up to about 3.5%. About 600 of such non-performers have left the company already this year.
Such employees are put under a performance improvement plan, provided mentoring and their performance is reviewed for a quarter. “When the times were good, people got away with things. Our tolerance of non-performance has come down now,” Infosys director (HR, education & research and administration) TV Mohandas Pai said.
Meanwhile, the IT services major has made about 20,000 job offers to college students across the country for 2009-10. The company will honour the commitment made, Pai said.
However, there could be lower or even no wage increases at Infosys next fiscal. “Wage increase next year will be subdued, if there will be an increase,” the Infosys director said.
The IT services firm said it expects IT budgets of clients to be flat or may even reduce 5-10% next fiscal. “Clients are in pain and they want us to share the pain. Their ability to spend is lower,” he said.
Economictimes
Wednesday, February 4, 2009
As turmoil continues technology exports to miss target
Exports of software and services in the year to March will be sharply below an earlier forecast as the global slowdown dents Nine trends for IT in 2009 outsourcing, expanding 16-17 percent to about $47 billion, an industry body said.
The National Association of Software and Service Companies (Nasscom) said on Wednesday the export-driven sector's growth had been adversely impacted by the global financial crisis, deepening recessions, and currency fluctuations.
It had earlier forecast exports growth would range from 21-24 percent this fiscal year. "It was an exciting first half, 24 percent growth much in line with industry estimates," Nasscom chairman Ganesh Natarajan said. "In the second half, we have seen a rapid decline."
Total revenue of the software and back-office outsourcing sector, including the earnings from the domestic market, is expected to rise to $60 billion this year, down from the association's July forecast of $62-$64 billion.
It expects the sector's export revenues to rise to $60-$62 billion in the fiscal year 2010/11.
India's export-driven outsourcing companies have thrived for years by bagging contracts from overseas clients, helped by a large pool of English-speaking engineering workforce and cheaper wages.
But an economic slowdown in the United States, which accounts for more than half of the sector's export revenue, and turmoil in the global financial sector have halted the sector's scorching pace of growth.
The sector's export earnings posted growth of 29 percent to $40.4 billion in the fiscal year to March 2008.
The revelation of a massive accounting fraud at leading outsourcer Satyam Computer Services has added to the gloomy outlook for the sector, which accounts for more than 5 percent of India's gross domestic product.
Indian software firms such as Tata Consultancy Services, Infosys Technologies and Wipro provide solutions like system integration, application development, supply chain designing and back-office services.
The firms are expanding in Europe, Asia and the Middle East to lower their dependence on the United States.
Agencies
The National Association of Software and Service Companies (Nasscom) said on Wednesday the export-driven sector's growth had been adversely impacted by the global financial crisis, deepening recessions, and currency fluctuations.
It had earlier forecast exports growth would range from 21-24 percent this fiscal year. "It was an exciting first half, 24 percent growth much in line with industry estimates," Nasscom chairman Ganesh Natarajan said. "In the second half, we have seen a rapid decline."
Total revenue of the software and back-office outsourcing sector, including the earnings from the domestic market, is expected to rise to $60 billion this year, down from the association's July forecast of $62-$64 billion.
It expects the sector's export revenues to rise to $60-$62 billion in the fiscal year 2010/11.
India's export-driven outsourcing companies have thrived for years by bagging contracts from overseas clients, helped by a large pool of English-speaking engineering workforce and cheaper wages.
But an economic slowdown in the United States, which accounts for more than half of the sector's export revenue, and turmoil in the global financial sector have halted the sector's scorching pace of growth.
The sector's export earnings posted growth of 29 percent to $40.4 billion in the fiscal year to March 2008.
The revelation of a massive accounting fraud at leading outsourcer Satyam Computer Services has added to the gloomy outlook for the sector, which accounts for more than 5 percent of India's gross domestic product.
Indian software firms such as Tata Consultancy Services, Infosys Technologies and Wipro provide solutions like system integration, application development, supply chain designing and back-office services.
The firms are expanding in Europe, Asia and the Middle East to lower their dependence on the United States.
Agencies
Saturday, January 31, 2009
MNC software firms step up hiring in India
At a time when top Indian tech firms including TCS, Infosys and Wipro plan to slow down their linear growth by hiring less number of people, multinational software companies such as IBM, Accenture and Cap Gemini continue to hire more software professionals in order to expand their offshore capabilities. Despite lower growth in revenues from top markets such as the US and Europe, Indian offshore vendors are seeing an attrition rate of 11-13%.
“Our attrition rate is still around 11%, which is not significantly down,” said Pratik Kumar, executive VP-HR, Wipro. “We find that smaller captives operating in niche areas, apart from MNCs, are still hiring,” he added.
Captive organisations of large enterprises in the US and the UK are seeking to increase their offshore teams in order to lower their operational costs. Tesco, the world’s second-biggest retailer, plans to add a few hundreds more professionals to its existing team of around 3,000 employees at the Bangalore centre.
“We want this centre to become the engineering hub for us, and there is a lot of scope for scale expansion,” Mike McNamara, director (operations and information technology) at Tesco told ET in an interview earlier this month. The retailer saves around $60 million every year by outsourcing to India. Captives, such as Tesco, are seeking to hire professionals with specialised skills, which is opening newer avenues for experienced workers.
“Openings in the IT industry are becoming more specialised and specific with people looking at roles which are very clearly aligned with their skills,” said Madhu Rao, country head, Allegis India, which is a part of the $5-billion Allegis Group.
In another instance, Atos Origin – the European IT major – has plans to double its workforce in India from the existing level of 3,300 to 6,000 in the next one-year. Accenture has already announced that it would be increasing its India headcount from the current level of 37,000 to 50,000 in a year.
GC Jayaprakash, principal consultant at Stanton Chase International, said movement among IT pros is happening more with the laterals and those looking at moving to a different location. Today, openings in the IT industry are more to do with specific skills and are for professionals who have experience of 5-7 years.
Agencies
“Our attrition rate is still around 11%, which is not significantly down,” said Pratik Kumar, executive VP-HR, Wipro. “We find that smaller captives operating in niche areas, apart from MNCs, are still hiring,” he added.
Captive organisations of large enterprises in the US and the UK are seeking to increase their offshore teams in order to lower their operational costs. Tesco, the world’s second-biggest retailer, plans to add a few hundreds more professionals to its existing team of around 3,000 employees at the Bangalore centre.
“We want this centre to become the engineering hub for us, and there is a lot of scope for scale expansion,” Mike McNamara, director (operations and information technology) at Tesco told ET in an interview earlier this month. The retailer saves around $60 million every year by outsourcing to India. Captives, such as Tesco, are seeking to hire professionals with specialised skills, which is opening newer avenues for experienced workers.
“Openings in the IT industry are becoming more specialised and specific with people looking at roles which are very clearly aligned with their skills,” said Madhu Rao, country head, Allegis India, which is a part of the $5-billion Allegis Group.
In another instance, Atos Origin – the European IT major – has plans to double its workforce in India from the existing level of 3,300 to 6,000 in the next one-year. Accenture has already announced that it would be increasing its India headcount from the current level of 37,000 to 50,000 in a year.
GC Jayaprakash, principal consultant at Stanton Chase International, said movement among IT pros is happening more with the laterals and those looking at moving to a different location. Today, openings in the IT industry are more to do with specific skills and are for professionals who have experience of 5-7 years.
Agencies
Monday, January 26, 2009
UK firms eye India to beat recession
India is top on the priority list of many British corporate houses as many companies having business in India have been able to survive the economic slowdown. Now over 500 UK firms want to expand in India.
"We are no more just talking about India, we are here in India," said Sharon Bamford, chief executive officer of UK-India Business Council. The council opened its office in Mumbai on Thursday.
"India is in a better position than most other nations to face recession," Bamford said."Our survey shows that over 500 UK firms want to expand in India.
" Three companies, incuding architectural firms Benoy, Sturgis and service office provider Avanta have already opened their offices in India this month. Nuclear power generating and ancillary firms from UK want to be part of the nuclear power opportunity in India.
Seventeen such companies, including Rolls Royce, have met Indian government officials.
Agencies
Agencies
"We are no more just talking about India, we are here in India," said Sharon Bamford, chief executive officer of UK-India Business Council. The council opened its office in Mumbai on Thursday.
"India is in a better position than most other nations to face recession," Bamford said."Our survey shows that over 500 UK firms want to expand in India.
" Three companies, incuding architectural firms Benoy, Sturgis and service office provider Avanta have already opened their offices in India this month. Nuclear power generating and ancillary firms from UK want to be part of the nuclear power opportunity in India.
Seventeen such companies, including Rolls Royce, have met Indian government officials.
Agencies
Agencies
Saturday, January 24, 2009
Harley to cut 1,100 jobs as profit falls
Harley-Davidson Inc said Friday it will cut 1,100 jobs over two years, close some facilities and consolidate others as it grapples with a slowdown in motorcycle sales.
The Milwaukee-based company also reported its fourth-quarter profit fell nearly 60 per cent, and said it is slashing motorcycle shipments in 2009 to cope with reduced demand.
The iconic motorcycle maker said it will consolidate two engine and transmission plants in Milwaukee into its facility in Menomonee Falls, Wis. It will shrink its paint and frame operations in its York, Pennsylvania, plant and close its distribution facility in Franklin, Wisconsin, whose duties will be handled by a third party.
Harley also said it will end its domestic transportation fleet operation.
The company said the cuts include 800 hourly production positions and 300 non-production, mostly salaried positions. It said 70 per cent of the job cuts will occur this year and the rest in 2010.
The cuts will result in one-time charges of $110 million to $140 million over 2009 and 2010, Harley said. Once they are finished, the cuts will save between $60 million and $70 million per year.
Harley has been stung by the rapid downturn in motorcycle demand. The economic recession has prompted many consumers to put off purchases of its high-end bikes, while the credit crunch has kept some would-be customers from obtaining financing.
Meanwhile, the company remains in the midst of a shake-up among top management. Chief Executive Jim Ziemer said last month he would retire in 2009, and the company remains in the process of finding a successor. Sy Naqvi, the head of Harley's troubled financial-services arm, resigned earlier this month. Chief Financial Officer Tom Bergmann has taken on Naqvi's old duties until a replacement is found.
Harley said worldwide retail sales fell 13.1 per cent in the fourth quarter, with sales in the U.S. _ its biggest market _ falling nearly 20 per cent. International sales crept higher, though, and the overall heavyweight motorcycle sales fell 25.5 per cent in the same period, Harley said.
For the full year, worldwide retail sales fell 7.1 per cent. Harley said it is slashing new motorcycle shipments in 2009 to between 264,000 and 273,000 to cope with the down market. That would be a drop of 10 per cent to 13 per cent from a year earlier.
In 2008, Harley said it shipped 303,479 new motorcycles, down 8 per cent from 330,619 new motorcycles in 2007.
Agencies
The Milwaukee-based company also reported its fourth-quarter profit fell nearly 60 per cent, and said it is slashing motorcycle shipments in 2009 to cope with reduced demand.
The iconic motorcycle maker said it will consolidate two engine and transmission plants in Milwaukee into its facility in Menomonee Falls, Wis. It will shrink its paint and frame operations in its York, Pennsylvania, plant and close its distribution facility in Franklin, Wisconsin, whose duties will be handled by a third party.
Harley also said it will end its domestic transportation fleet operation.
The company said the cuts include 800 hourly production positions and 300 non-production, mostly salaried positions. It said 70 per cent of the job cuts will occur this year and the rest in 2010.
The cuts will result in one-time charges of $110 million to $140 million over 2009 and 2010, Harley said. Once they are finished, the cuts will save between $60 million and $70 million per year.
Harley has been stung by the rapid downturn in motorcycle demand. The economic recession has prompted many consumers to put off purchases of its high-end bikes, while the credit crunch has kept some would-be customers from obtaining financing.
Meanwhile, the company remains in the midst of a shake-up among top management. Chief Executive Jim Ziemer said last month he would retire in 2009, and the company remains in the process of finding a successor. Sy Naqvi, the head of Harley's troubled financial-services arm, resigned earlier this month. Chief Financial Officer Tom Bergmann has taken on Naqvi's old duties until a replacement is found.
Harley said worldwide retail sales fell 13.1 per cent in the fourth quarter, with sales in the U.S. _ its biggest market _ falling nearly 20 per cent. International sales crept higher, though, and the overall heavyweight motorcycle sales fell 25.5 per cent in the same period, Harley said.
For the full year, worldwide retail sales fell 7.1 per cent. Harley said it is slashing new motorcycle shipments in 2009 to between 264,000 and 273,000 to cope with the down market. That would be a drop of 10 per cent to 13 per cent from a year earlier.
In 2008, Harley said it shipped 303,479 new motorcycles, down 8 per cent from 330,619 new motorcycles in 2007.
Agencies
Tuesday, January 13, 2009
Seagate sacks CEO and to cut 800 workers
Seagate Technology has replaced its top two executives and said it plans to cut 800 jobs — 10 percent of its US work force — as the hard drive maker endures a bruising slowdown in technology spending.
Its stock fell more than 15 percent. In a surprise move, the Scotts Valley-based company announced that William Watkins, 56, Seagate's chief executive since 2004, and Dave Wickersham, 52, the president and chief operating officer, had both left the company, effective immediately. Seagate declined to make either executive available for comment.
The company also announced that it plans to cut 10 percent of its 8,000 US-based workers. It has 53,000 workers worldwide.
A familiar face will fill the CEO slot. Stephen Luczo, 51, a former investment banker who served as Seagate's CEO from 1998 until 2004 amid a wrenching restructuring, will have to engineer another big turnaround to get the company back on track.
Wickersham's jobs will be taken by Robert Whitmore, 46, Seagate's executive vice president and chief technology officer.
Seagate is the world's largest maker of computer hard disk drives, with more than 30 percent of the global market. But its business has suffered badly because of the economic meltdown, which has sapped information-technology budgets and demand for new personal computers and servers that use Seagate's products.
Oversupply in the industry has also hurt Seagate and other disk drive manufacturers. Luczo takes the reigns of a company whose stock price plunged more than 80 percent last year and that warned in December its fiscal second-quarter results would fall far below Wall Street's expectations. Seagate lowered its guidance for sales in the period by about $500 million, cautioning that slumping demand and price pressures were hurting the company more than it had anticipated.
Seagate, which is scheduled to report its full quarterly results Jan. 21, expects revenue of $2.3 billion to $2.6 billion.
Agencies
Its stock fell more than 15 percent. In a surprise move, the Scotts Valley-based company announced that William Watkins, 56, Seagate's chief executive since 2004, and Dave Wickersham, 52, the president and chief operating officer, had both left the company, effective immediately. Seagate declined to make either executive available for comment.
The company also announced that it plans to cut 10 percent of its 8,000 US-based workers. It has 53,000 workers worldwide.
A familiar face will fill the CEO slot. Stephen Luczo, 51, a former investment banker who served as Seagate's CEO from 1998 until 2004 amid a wrenching restructuring, will have to engineer another big turnaround to get the company back on track.
Wickersham's jobs will be taken by Robert Whitmore, 46, Seagate's executive vice president and chief technology officer.
Seagate is the world's largest maker of computer hard disk drives, with more than 30 percent of the global market. But its business has suffered badly because of the economic meltdown, which has sapped information-technology budgets and demand for new personal computers and servers that use Seagate's products.
Oversupply in the industry has also hurt Seagate and other disk drive manufacturers. Luczo takes the reigns of a company whose stock price plunged more than 80 percent last year and that warned in December its fiscal second-quarter results would fall far below Wall Street's expectations. Seagate lowered its guidance for sales in the period by about $500 million, cautioning that slumping demand and price pressures were hurting the company more than it had anticipated.
Seagate, which is scheduled to report its full quarterly results Jan. 21, expects revenue of $2.3 billion to $2.6 billion.
Agencies
Saturday, January 10, 2009
Intel assures employees: No more job cuts
Intel Corp said job cuts it made three years ago should help it ride out the economic slowdown, indicating that Chief Executive Officer Paul Otellini won’t have to eliminate a significant number of workers.
“While we haven’t made specific projections on the size of the workforce, the restructuring we did in 2006 has put us in a good position to weather the current economic environment,” Intel spokesman Tom Beermann said today in an e-mailed statement.
Intel, the world’s top chipmaker, slashed jobs in 2006 and 2007 after losing market share to Advanced Micro Devices Inc. Those cuts helped set it apart from other technology companies, which are shedding workers now. Applied Materials Inc, National Semiconductor Corp and Sun Microsystems -- all based near Intel in Santa Clara, California -- have announced cutbacks.
“They are sufficiently profitable that even in a lousy economy they can hold on to people and sustain their new-market initiatives,” said David Wu, a San Francisco-based analyst for Global Crown Capital LLC. He has a neutral rating on the shares, which he doesn’t own. “The rich can afford to do things the poor cannot.”
Earlier this week, Intel said fourth-quarter sales dropped 23 percent, more than it projected, as the global recession stifled demand for personal computers. The company plans to give its full earnings report on Jan. 15.
Intel’s headcount
Intel had 83,500 employees at the end of the third quarter, down about 20,000 from its peak in 2006. When Otellini made those cuts, he said the company was too large for its revenue opportunities. That reduction helped profit rebound 38 percent in 2007, after a 42 percent decline in 2006.
The company will report a profit of $999.5 million for last quarter, according to a Bloomberg survey of analysts. That would be the first quarterly net income below $1 billion since 2003.
Intel fell 40 cents, or 2.8 percent, to $14.15 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares lost 45 percent of their value last year.
Job cuts might have hindered Intel’s efforts to expand into new areas, Wu said. The company announced an agreement this week to get its chips into television equipment from Toshiba Corp and Samsung Electronics Co.
“They are pretty committed to going into new markets, and they don’t want to have to say, ‘Oops, a recession. Everything stop,’” Wu said. “That wastes a lot of money.”
Agencies
“While we haven’t made specific projections on the size of the workforce, the restructuring we did in 2006 has put us in a good position to weather the current economic environment,” Intel spokesman Tom Beermann said today in an e-mailed statement.
Intel, the world’s top chipmaker, slashed jobs in 2006 and 2007 after losing market share to Advanced Micro Devices Inc. Those cuts helped set it apart from other technology companies, which are shedding workers now. Applied Materials Inc, National Semiconductor Corp and Sun Microsystems -- all based near Intel in Santa Clara, California -- have announced cutbacks.
“They are sufficiently profitable that even in a lousy economy they can hold on to people and sustain their new-market initiatives,” said David Wu, a San Francisco-based analyst for Global Crown Capital LLC. He has a neutral rating on the shares, which he doesn’t own. “The rich can afford to do things the poor cannot.”
Earlier this week, Intel said fourth-quarter sales dropped 23 percent, more than it projected, as the global recession stifled demand for personal computers. The company plans to give its full earnings report on Jan. 15.
Intel’s headcount
Intel had 83,500 employees at the end of the third quarter, down about 20,000 from its peak in 2006. When Otellini made those cuts, he said the company was too large for its revenue opportunities. That reduction helped profit rebound 38 percent in 2007, after a 42 percent decline in 2006.
The company will report a profit of $999.5 million for last quarter, according to a Bloomberg survey of analysts. That would be the first quarterly net income below $1 billion since 2003.
Intel fell 40 cents, or 2.8 percent, to $14.15 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares lost 45 percent of their value last year.
Job cuts might have hindered Intel’s efforts to expand into new areas, Wu said. The company announced an agreement this week to get its chips into television equipment from Toshiba Corp and Samsung Electronics Co.
“They are pretty committed to going into new markets, and they don’t want to have to say, ‘Oops, a recession. Everything stop,’” Wu said. “That wastes a lot of money.”
Agencies
Friday, January 2, 2009
Job losses would be temporary, says Montek Ahluwalia
The government on Friday said the current economic situation could lead to some job losses, but these would only be temporary with economy poised to grow at seven per cent this fiscal.
"Certainly in sectors that are badly affected, if we are not able to completely counter the effect of recession, there may be some job losses. We hope they will be temporary," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters while briefing on the stimulus package.
He said the idea behind this package is to ensure that economy does not slow down too much.
Ahluwalia said the economy is expected to grow at seven per cent this fiscal and that will be a good performance.
"So, when I say that this package will hopefully generate a growth rate of seven per cent, that is a growth rate that is certainly consistent with the total number of jobs in the economy increasing," he said.
The Planning Commission Deputy Chairman, however, said it is not possible to completely counter the impact of an external slowdown.
"But with this package what we are doing is minimising the pain on that score," he added.
Source: Agencies
"Certainly in sectors that are badly affected, if we are not able to completely counter the effect of recession, there may be some job losses. We hope they will be temporary," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters while briefing on the stimulus package.
He said the idea behind this package is to ensure that economy does not slow down too much.
Ahluwalia said the economy is expected to grow at seven per cent this fiscal and that will be a good performance.
"So, when I say that this package will hopefully generate a growth rate of seven per cent, that is a growth rate that is certainly consistent with the total number of jobs in the economy increasing," he said.
The Planning Commission Deputy Chairman, however, said it is not possible to completely counter the impact of an external slowdown.
"But with this package what we are doing is minimising the pain on that score," he added.
Source: Agencies
Thursday, January 1, 2009
Is it tough times ahead for techies in 2009?
With sinking profits, eroding margins, cost-cuttings and an acquisition bid gone awry, 2008 was a year with more jeers than cheers for the country's over $50 billion IT sector, which has seen nearly a decade of uninterrupted boom.
However, as 2008 draws to a close, the sector is bracing up for a tough time ahead as the scars of global recession are showing up on the country's sunrise sector.
The sector, which has been charting a growth of over 30 per cent, had to settle for a growth rate of 20 per cent, as the global slowdown plunged the industry into unpredictable times.
In the year littered with economic disasters, the failed attempt of country's fourth largest software exporter Satyam Computer to botch up two family-promoted firms for $1.6 billion not only resulted in loss of face but also hit the reputation nurtured by the Indian IT sector over the years.
Faced with shareholder's revolt and heavy criticism over corporate governance issues, Satyam withdrew the offer within hours of making the proposal. But within a space of 24 hours, the scrip lost over 30 per cent in India and was down 55 per cent in New York Stock Exchange trade.
As a fallout, the Board size also shrank with four independent Directors resigning from the 10-Directors strong Board of the company in the wake of the fiasco.
The Satyam saga is likely to continue next year as well with the Board scheduled to meet on January 10.
If Satyam made it to the headlines for a failed deal, it was HCL Technologies, the country's fifth largest software exporter next to Satyam that made the country proud by inking the largest takeover deal in the software space overseas.
HCL piped rival country's second largest IT giant Infosys to bag UK-based SAP consulting firm Axon for $658 million. While Infosys had made 600 pence per share offer for Axon, HCL made a counter bid of 650 pence a share to acquire the UK-based firm.
The year was also some significant M&As on the IT front, such as the $13.9-billion acquisition of Electronic Data Services by HP. Back home
, Wipro acquired Citi Technology Services, Citigroup's IT arm in India, in an all-cash $127 million deal.
Earlier, TCS had bought out Citi's captive BPO arm Citigroup Global Services for about $505 million, which reiterates the strength of the Indian IT story. Another reason that will give the software services sector a reason to rejoice is the IT Amendment Bill.
The Lok Sabha passed the Information Technology (Amendment) Bill 2006 this month, which gives the government the power to tackle data theft. The bill might act as a shot in the arm for the BPO firms for whom data security is of utmost importance.
The Bill has provisions to deal with new forms of cyber crimes like publicising sexually explicit material in electronic form, video voyeurism and breach of confidentiality, leakage of data by intermediary and e-commerce frauds, among others.
The US is the world's largest technology market and accounts for between 50 per cent and 60 per cent of the revenues of the top Indian firms. Since September, however, the economic situation in the US and the rest of the world has worsened.
Country's software lobby group Nasscom had estimated that India's software and back-office services industry would grow by 21-24 per cent in the 12 months to March, but its president Som Mittal said recently that this number could be revised downward. With no signs of an early revival, all the IT biggies such as TCS, Infosys, Wipro and Satyam have revised their revenue guidance downwards.
The currency volatility has also compounded the woes of the Indian IT sector. If a rising rupee in the last fiscal had dented export earnings, the steady rise of the US dollar against the rupee, British pound and Euro during the second quarter (July-September) impacted revenue realisation in dollar terms since 30 per cent of the billing is done in these currencies.
The sector also experienced slowdown in hiring. Already, under pressure to cut cost, most of the IT biggies had to freeze their hiring in the year. Moreover, the joining dates of the new recruits were also postponed, ringing the alarm bells in the job market. The top five IT companies posted a 36 per cent decline in their rate of manpower addition in the last quarter.
As for hiring by BPOs -- for long looked upon as poor the cousins of information technology companies -- also faced the heat.
However, BPOs remained a bit sanguine, as Nasscom's figures indicate that the BPO sector recorded revenue growth of 31.6 per cent whereas IT companies grew at 28 per cent.
In 2009, as the new administration led by Barack Obama takes a look at the outsourcing story vis-a-vis India, it is the efficiency and resilience of the IT sector which can help it sail through the troubled waters.
Source: Agencies
However, as 2008 draws to a close, the sector is bracing up for a tough time ahead as the scars of global recession are showing up on the country's sunrise sector.
The sector, which has been charting a growth of over 30 per cent, had to settle for a growth rate of 20 per cent, as the global slowdown plunged the industry into unpredictable times.
In the year littered with economic disasters, the failed attempt of country's fourth largest software exporter Satyam Computer to botch up two family-promoted firms for $1.6 billion not only resulted in loss of face but also hit the reputation nurtured by the Indian IT sector over the years.
Faced with shareholder's revolt and heavy criticism over corporate governance issues, Satyam withdrew the offer within hours of making the proposal. But within a space of 24 hours, the scrip lost over 30 per cent in India and was down 55 per cent in New York Stock Exchange trade.
As a fallout, the Board size also shrank with four independent Directors resigning from the 10-Directors strong Board of the company in the wake of the fiasco.
The Satyam saga is likely to continue next year as well with the Board scheduled to meet on January 10.
If Satyam made it to the headlines for a failed deal, it was HCL Technologies, the country's fifth largest software exporter next to Satyam that made the country proud by inking the largest takeover deal in the software space overseas.
HCL piped rival country's second largest IT giant Infosys to bag UK-based SAP consulting firm Axon for $658 million. While Infosys had made 600 pence per share offer for Axon, HCL made a counter bid of 650 pence a share to acquire the UK-based firm.
The year was also some significant M&As on the IT front, such as the $13.9-billion acquisition of Electronic Data Services by HP. Back home
, Wipro acquired Citi Technology Services, Citigroup's IT arm in India, in an all-cash $127 million deal.
Earlier, TCS had bought out Citi's captive BPO arm Citigroup Global Services for about $505 million, which reiterates the strength of the Indian IT story. Another reason that will give the software services sector a reason to rejoice is the IT Amendment Bill.
The Lok Sabha passed the Information Technology (Amendment) Bill 2006 this month, which gives the government the power to tackle data theft. The bill might act as a shot in the arm for the BPO firms for whom data security is of utmost importance.
The Bill has provisions to deal with new forms of cyber crimes like publicising sexually explicit material in electronic form, video voyeurism and breach of confidentiality, leakage of data by intermediary and e-commerce frauds, among others.
The US is the world's largest technology market and accounts for between 50 per cent and 60 per cent of the revenues of the top Indian firms. Since September, however, the economic situation in the US and the rest of the world has worsened.
Country's software lobby group Nasscom had estimated that India's software and back-office services industry would grow by 21-24 per cent in the 12 months to March, but its president Som Mittal said recently that this number could be revised downward. With no signs of an early revival, all the IT biggies such as TCS, Infosys, Wipro and Satyam have revised their revenue guidance downwards.
The currency volatility has also compounded the woes of the Indian IT sector. If a rising rupee in the last fiscal had dented export earnings, the steady rise of the US dollar against the rupee, British pound and Euro during the second quarter (July-September) impacted revenue realisation in dollar terms since 30 per cent of the billing is done in these currencies.
The sector also experienced slowdown in hiring. Already, under pressure to cut cost, most of the IT biggies had to freeze their hiring in the year. Moreover, the joining dates of the new recruits were also postponed, ringing the alarm bells in the job market. The top five IT companies posted a 36 per cent decline in their rate of manpower addition in the last quarter.
As for hiring by BPOs -- for long looked upon as poor the cousins of information technology companies -- also faced the heat.
However, BPOs remained a bit sanguine, as Nasscom's figures indicate that the BPO sector recorded revenue growth of 31.6 per cent whereas IT companies grew at 28 per cent.
In 2009, as the new administration led by Barack Obama takes a look at the outsourcing story vis-a-vis India, it is the efficiency and resilience of the IT sector which can help it sail through the troubled waters.
Source: Agencies
Wednesday, December 24, 2008
Google staff will not get bonus this year
Google Inc, owner of the world’s most-used search engine, is giving employees mobile phones instead of cash gifts this year as it reins in costs during the recession, according to a person familiar with the matter.
About 85 per cent of workers will get a handset powered by Google’s Android operating system as a holiday gift, said the person, who asked not to be identified. Google handed out $1,000 cash gifts to most employees last year.
Chief executive officer Eric Schmidt said last month that Google is seeking to control expenses and add fewer jobs as the global slump curbs online advertising growth. T-Mobile USA Inc began marketing the G1 Android phone in October, offering many of the same features as Apple Inc’s iPhone, including Web browsing.
The holiday gift is separate from the performance bonus handed out by the company, the person said.
“The current economic crisis requires us to be more conservative about how we spend our money,” Mountain View, California-based Google said in an internal memo that was posted on technology industry blog Valleywag.
The memo lists 17 countries where the phone won’t work, including Brazil, Russia, India and China. Employees in those countries will receive about $400, the cash value of the phone, Google said in the memo.
Krista Bessinger, a Google spokeswoman, didn’t return a call seeking comment.
Ad spending
Google, which offers employee benefits such as free gourmet lunches and massages, has clamped down on costs as the recession squeezes online ad revenue. Douglas Anmuth, an analyst at Barclays Capital in New York, lowered his forecast for US Internet ad spending last week by 11 per cent to $25.1 billion in 2009.
Google added 519 workers in the third quarter, compared with 2,130 in the same period a year earlier. Google said last month it would reduce the use of contract workers. At the end of the quarter, the company had more than 20,000 regular employees, up from almost 11,000 at the end of 2006.
Technology companies throughout Silicon Valley and beyond are grappling with a slowing economy, forcing them to cut workers and roll back other expenses. Printer and computer maker Hewlett-Packard Co. is freezing salaries to lower expenses, people with knowledge of that decision said. Technology services company Unisys Corp said yesterday it was cutting about 4.5 per cent of its workforce and halting some pay raises.
Half of chief information officers are looking to cut consulting-services costs, 35 per cent want to reduce computer and server expenses, and 23 per cent are seeking savings on software, according to a Goldman Sachs Group Inc survey.
Source: Agencies
About 85 per cent of workers will get a handset powered by Google’s Android operating system as a holiday gift, said the person, who asked not to be identified. Google handed out $1,000 cash gifts to most employees last year.
Chief executive officer Eric Schmidt said last month that Google is seeking to control expenses and add fewer jobs as the global slump curbs online advertising growth. T-Mobile USA Inc began marketing the G1 Android phone in October, offering many of the same features as Apple Inc’s iPhone, including Web browsing.
The holiday gift is separate from the performance bonus handed out by the company, the person said.
“The current economic crisis requires us to be more conservative about how we spend our money,” Mountain View, California-based Google said in an internal memo that was posted on technology industry blog Valleywag.
The memo lists 17 countries where the phone won’t work, including Brazil, Russia, India and China. Employees in those countries will receive about $400, the cash value of the phone, Google said in the memo.
Krista Bessinger, a Google spokeswoman, didn’t return a call seeking comment.
Ad spending
Google, which offers employee benefits such as free gourmet lunches and massages, has clamped down on costs as the recession squeezes online ad revenue. Douglas Anmuth, an analyst at Barclays Capital in New York, lowered his forecast for US Internet ad spending last week by 11 per cent to $25.1 billion in 2009.
Google added 519 workers in the third quarter, compared with 2,130 in the same period a year earlier. Google said last month it would reduce the use of contract workers. At the end of the quarter, the company had more than 20,000 regular employees, up from almost 11,000 at the end of 2006.
Technology companies throughout Silicon Valley and beyond are grappling with a slowing economy, forcing them to cut workers and roll back other expenses. Printer and computer maker Hewlett-Packard Co. is freezing salaries to lower expenses, people with knowledge of that decision said. Technology services company Unisys Corp said yesterday it was cutting about 4.5 per cent of its workforce and halting some pay raises.
Half of chief information officers are looking to cut consulting-services costs, 35 per cent want to reduce computer and server expenses, and 23 per cent are seeking savings on software, according to a Goldman Sachs Group Inc survey.
Source: Agencies
Warnings by Russia, China dire economic straits in 2009
Russia and China issued stark warnings on Wednesday about the impact of the crisis on their recently booming economies in 2009, as stocks and oil prices took a hit from economic gloom over Christmas.
A top official in Moscow warned that the crisis could spark popular unrest after a Kremlin economic aide said Russia next year would have its first budget deficit since the 1998 financial crisis, which brought the country to its knees.
Japan also approved a record-high budget aimed at avoiding the worst effects of the crisis and there were reports that Germany was preparing to pump up to 40 billion euros (56 billion dollars) into the economy in a new rescue plan.
"We need to take unprecedented measures when in an extraordinary economic situation," Japanese Prime Minister Taro Aso said at a news conference after his cabinet backed the new 980-billion-dollar (700-billion-euro) budget.
"Japan cannot evade this tsunami of world recession. But by taking bold measures, we aim to be the world's first to come out of recession," he said.
In Asian stock markets, Tokyo tumbled 2.37 percent and Chinese shares closed down 1.76 percent. European stocks also slipped, with the FTSE 100 in London closing down 0.93 percent and the CAC 40 in Paris down 0.39 percent.
There was more bad news coming from the United States, the world's biggest economy, where US government figures showed jobless claims rising by 30,000 over the past week to 586,000 and incomes and spending contracting in November. With oil prices at their lowest level for four years because of weak global demand, the price of light sweet crude for delivery in February shed 1.56 dollars to 37.42 dollars a barrel on the New York Mercantile Exchange (NYMEX).
The low price spells bad news for Russia, the world's second-biggest producer after Saudi Arabia. "The deficit is caused by the fall in oil prices, above all," Kremlin economic aide Arkady Dvorkovich was quoted as saying.
Oil prices reached record highs of more than 147 dollars a barrel in July.
Commenting on the worsening situation, Deputy Interior Minister Mikhail Sukhodolsky warned that unpaid wages, the threat of layoffs and unpopular government anti-crisis measures "may aggravate the protest mood."
China's top economic planner also warned of "great challenges" ahead.
The head of the National Development and Reform Commission, Zhang Ping, told parliament that "grave risks" lay ahead for the government's economic goals if China did not manage to stimulate demand and maintain export growth.
Economists have warned that the global downturn could mean that China will end 2008 with its weakest economic growth for nearly two decades. China has not posted annual growth of less than 7.6 percent since 1991.
The dollar was on the back foot in currency exchanges, falling to 90.37 yen in Tokyo from 90.96 in New York late Tuesday and dropping against the euro in light trading in London to 1.3991 dollars from 1.3924 dollars on Tuesday.
In a sign of the times in Germany, Europe's biggest economy, poodles, terriers and sheepdogs queued up for rations in the country's first soup kitchen for pets in the German capital.
The soup kitchen was opened in October and offers free food for pets belonging to pensioners and the growing ranks of Berlin's unemployed. Julia Raasch, who heads the soup kitchen, said: "We've already signed up nearly 400 people. And our stocks are dwindling fast."
Source: Agencies
A top official in Moscow warned that the crisis could spark popular unrest after a Kremlin economic aide said Russia next year would have its first budget deficit since the 1998 financial crisis, which brought the country to its knees.
Japan also approved a record-high budget aimed at avoiding the worst effects of the crisis and there were reports that Germany was preparing to pump up to 40 billion euros (56 billion dollars) into the economy in a new rescue plan.
"We need to take unprecedented measures when in an extraordinary economic situation," Japanese Prime Minister Taro Aso said at a news conference after his cabinet backed the new 980-billion-dollar (700-billion-euro) budget.
"Japan cannot evade this tsunami of world recession. But by taking bold measures, we aim to be the world's first to come out of recession," he said.
In Asian stock markets, Tokyo tumbled 2.37 percent and Chinese shares closed down 1.76 percent. European stocks also slipped, with the FTSE 100 in London closing down 0.93 percent and the CAC 40 in Paris down 0.39 percent.
There was more bad news coming from the United States, the world's biggest economy, where US government figures showed jobless claims rising by 30,000 over the past week to 586,000 and incomes and spending contracting in November. With oil prices at their lowest level for four years because of weak global demand, the price of light sweet crude for delivery in February shed 1.56 dollars to 37.42 dollars a barrel on the New York Mercantile Exchange (NYMEX).
The low price spells bad news for Russia, the world's second-biggest producer after Saudi Arabia. "The deficit is caused by the fall in oil prices, above all," Kremlin economic aide Arkady Dvorkovich was quoted as saying.
Oil prices reached record highs of more than 147 dollars a barrel in July.
Commenting on the worsening situation, Deputy Interior Minister Mikhail Sukhodolsky warned that unpaid wages, the threat of layoffs and unpopular government anti-crisis measures "may aggravate the protest mood."
China's top economic planner also warned of "great challenges" ahead.
The head of the National Development and Reform Commission, Zhang Ping, told parliament that "grave risks" lay ahead for the government's economic goals if China did not manage to stimulate demand and maintain export growth.
Economists have warned that the global downturn could mean that China will end 2008 with its weakest economic growth for nearly two decades. China has not posted annual growth of less than 7.6 percent since 1991.
The dollar was on the back foot in currency exchanges, falling to 90.37 yen in Tokyo from 90.96 in New York late Tuesday and dropping against the euro in light trading in London to 1.3991 dollars from 1.3924 dollars on Tuesday.
In a sign of the times in Germany, Europe's biggest economy, poodles, terriers and sheepdogs queued up for rations in the country's first soup kitchen for pets in the German capital.
The soup kitchen was opened in October and offers free food for pets belonging to pensioners and the growing ranks of Berlin's unemployed. Julia Raasch, who heads the soup kitchen, said: "We've already signed up nearly 400 people. And our stocks are dwindling fast."
Source: Agencies
Wednesday, December 17, 2008
Indian unorganized retail sector to grow to $496 bn in four years
The unorganized retail sector is expected to grow at about 10 percent per annum to reach $496 billion in 2011-12 despite the steady expansion of organized retailers, a study released Wednesday said.
The report on the impact of organized retail on small shop owners, released in parliament by the Delhi-based think tank Indian Council for Research on International Economic Relations (Icrier), said the retail business in the country would grow at 13 percent annually from $322 billion in 2006-07 to $590 billion in 2011-12.
The unorganized retail industry was valued at $309 billion in 2006-07.
However, given the relatively weak financial state of the unorganized retailers and the space constraints on their expansion prospects, this sector alone will not be able to meet the growing demand, the report said.
Hence, the organized retail that now constitutes a small four percent of the total industry is likely to grow at a much faster pace of 45-50 percent per annum and quadruple its share in total retail trade to 16 percent by 2011-12, the Icrier said.
However, the Icrier added that small shop owners in the vicinity of organized retailers have experienced a decline in their volume of business and profit after the entry of bigger players.
According to the report, consumers have gained with the entry of organised retailers and their overall spending has also gone up.
While all income groups saved through organized retail purchases, the report revealed that lower income consumers saved more.
Moreover, the report said farmers benefit significantly from the option of direct sales to organized retailers.
Profit realisation for farmers selling directly to organized retailers is about 60 percent higher than that received from selling in local markets.
The study made certain recommendations like facilitation of cash-and-carry outlets, like Metro, for selling farmers' produce to unorganized retailers.
It also urged for encouraging cooperatives and associations of unorganized retailers for direct procurement from suppliers and farmers.
Also, simplification of the licensing and permit regime for organized retail and a move towards a nationwide uniform licensing regime in the states to facilitate modern retail have been recommended.
Source: Agencies
I
The report on the impact of organized retail on small shop owners, released in parliament by the Delhi-based think tank Indian Council for Research on International Economic Relations (Icrier), said the retail business in the country would grow at 13 percent annually from $322 billion in 2006-07 to $590 billion in 2011-12.
The unorganized retail industry was valued at $309 billion in 2006-07.
However, given the relatively weak financial state of the unorganized retailers and the space constraints on their expansion prospects, this sector alone will not be able to meet the growing demand, the report said.
Hence, the organized retail that now constitutes a small four percent of the total industry is likely to grow at a much faster pace of 45-50 percent per annum and quadruple its share in total retail trade to 16 percent by 2011-12, the Icrier said.
However, the Icrier added that small shop owners in the vicinity of organized retailers have experienced a decline in their volume of business and profit after the entry of bigger players.
According to the report, consumers have gained with the entry of organised retailers and their overall spending has also gone up.
While all income groups saved through organized retail purchases, the report revealed that lower income consumers saved more.
Moreover, the report said farmers benefit significantly from the option of direct sales to organized retailers.
Profit realisation for farmers selling directly to organized retailers is about 60 percent higher than that received from selling in local markets.
The study made certain recommendations like facilitation of cash-and-carry outlets, like Metro, for selling farmers' produce to unorganized retailers.
It also urged for encouraging cooperatives and associations of unorganized retailers for direct procurement from suppliers and farmers.
Also, simplification of the licensing and permit regime for organized retail and a move towards a nationwide uniform licensing regime in the states to facilitate modern retail have been recommended.
Source: Agencies
I
Thursday, December 11, 2008
IT spending to be on a slowdown across Asia
IT spending in Asia Pacific (excluding Japan) will drop to a growth rate of 7.1% in 2009, a decrease from 10.2% in 2008, said Singapore-based research group Springboard Research.
According to Springboard's executive brief Asia Pacific IT Market Predictions 2009 released today, all countries in the region will be affected, but the degree of fallout from the economic crisis will differ by country.
Countries at highest risk of a slowdown include the most developed economies of the region, such as Australia, New Zealand, Korea, Taiwan, Singapore and Thailand. Less developed, emerging and boom Asian economies, such as Malaysia, Philippines, Indonesia, and Vietnam run a lower risk of a spending slowdown.
Like other regions of the world, Asia will experience an IT spending slowdown during 2009 as all organizations re-look at spending in the wake of the global economic crisis, said Dane Anderson, CEO and EVP of Research at Springboard Research.
However, even with slower growth Asia will continue to emerge as a critical region for IT vendors and we will continue to see a substantial shift in investment moving to Asia and other global emerging markets. While the crisis will affect Asia in 2009, it will also further cement the region as crucial to any global company s growth strategy moving forward, Anderson added.
According to the study, countries in the High Risk Index are Australia, Hong Kong, Korea, New Zealand, Singapore, Taiwan, Thailand. However there is some good news for India as it has been placed in the 'lower risk' segment.
"As illustrated in our predictions, we expect that most organizations in the region will be modifying their IT strategy from a focus on supporting revenue generation to an approach aimed at improving efficiencies," said Ravi Shekhar Pandey, manager - Syndicated Research at Springboard Research. There will be a continued focus on reducing operational expenditure, both from business and IT perspectives. On the positive side, while technology spending will definitely be affected by this crisis, it will be more resilient than other areas that are often easier and quicker to cut.
Technology will be more resilient than other areas of spending among enterprises and will be difficult to cut, according to Springboard.
According to Springboard's executive brief Asia Pacific IT Market Predictions 2009 released today, all countries in the region will be affected, but the degree of fallout from the economic crisis will differ by country.
Countries at highest risk of a slowdown include the most developed economies of the region, such as Australia, New Zealand, Korea, Taiwan, Singapore and Thailand. Less developed, emerging and boom Asian economies, such as Malaysia, Philippines, Indonesia, and Vietnam run a lower risk of a spending slowdown.
Like other regions of the world, Asia will experience an IT spending slowdown during 2009 as all organizations re-look at spending in the wake of the global economic crisis, said Dane Anderson, CEO and EVP of Research at Springboard Research.
However, even with slower growth Asia will continue to emerge as a critical region for IT vendors and we will continue to see a substantial shift in investment moving to Asia and other global emerging markets. While the crisis will affect Asia in 2009, it will also further cement the region as crucial to any global company s growth strategy moving forward, Anderson added.
According to the study, countries in the High Risk Index are Australia, Hong Kong, Korea, New Zealand, Singapore, Taiwan, Thailand. However there is some good news for India as it has been placed in the 'lower risk' segment.
"As illustrated in our predictions, we expect that most organizations in the region will be modifying their IT strategy from a focus on supporting revenue generation to an approach aimed at improving efficiencies," said Ravi Shekhar Pandey, manager - Syndicated Research at Springboard Research. There will be a continued focus on reducing operational expenditure, both from business and IT perspectives. On the positive side, while technology spending will definitely be affected by this crisis, it will be more resilient than other areas that are often easier and quicker to cut.
Technology will be more resilient than other areas of spending among enterprises and will be difficult to cut, according to Springboard.
Monday, December 8, 2008
Legal firms to make hay in slowdown
Fortunes of domestic law firms will continue to rise on account of spurt in layoffs and commercial disputes, even though the government injected a booster dose of over Rs 30,000 crore to propel growth.
"Workload on disputes pertaining to joint venture terminations, franchising problems and layoffs have increased as companies have started taking pre-emptive actions," said senior partner of the law firm Titus and Co, Diljeet Titus.
Although the government has come out with a fiscal stimulus package to boost industrial growth and economy, it is unlikely to have perceptible impact in the short run and raise business confidence, which has led to layoffs, partial and complete closure of plants and termination of joint ventures, especially those involving foreign partners.
According to Titus, who deals mostly with foreign clients, "Recently, we have received more than two dozen references on joint venture terminations, closure of wholly owned subsidiaries, branch offices and liaison offices."
Company law expert U K Chaudhary said, "We have been approached by some big companies for consultation work on compensation package for the employees to be retrenched."
Several big and small companies battling demand slowdown are trying to get rid of surplus employees to save costs.
"It is true that world is suffering from a severe financial crisis, but for many Indian legal firms, it is a boom time and lawyers across the country are getting a lot of works related to litigation and drafting," opined Rabindra Jhunjhunwala, Partner Khaitan and Co.
According to latest IMF estimates, world economic growth rate is expected to slow down to 2.2 % in 2009. Many countries in the world including the US, Eurozone nations and Japan are in recession. Economic growth rate in India too is expected to moderate to 7 % during 2008-09 from 9 % in the previous fiscal.
Source: Agencies
"Workload on disputes pertaining to joint venture terminations, franchising problems and layoffs have increased as companies have started taking pre-emptive actions," said senior partner of the law firm Titus and Co, Diljeet Titus.
Although the government has come out with a fiscal stimulus package to boost industrial growth and economy, it is unlikely to have perceptible impact in the short run and raise business confidence, which has led to layoffs, partial and complete closure of plants and termination of joint ventures, especially those involving foreign partners.
According to Titus, who deals mostly with foreign clients, "Recently, we have received more than two dozen references on joint venture terminations, closure of wholly owned subsidiaries, branch offices and liaison offices."
Company law expert U K Chaudhary said, "We have been approached by some big companies for consultation work on compensation package for the employees to be retrenched."
Several big and small companies battling demand slowdown are trying to get rid of surplus employees to save costs.
"It is true that world is suffering from a severe financial crisis, but for many Indian legal firms, it is a boom time and lawyers across the country are getting a lot of works related to litigation and drafting," opined Rabindra Jhunjhunwala, Partner Khaitan and Co.
According to latest IMF estimates, world economic growth rate is expected to slow down to 2.2 % in 2009. Many countries in the world including the US, Eurozone nations and Japan are in recession. Economic growth rate in India too is expected to moderate to 7 % during 2008-09 from 9 % in the previous fiscal.
Source: Agencies
Saturday, December 6, 2008
Will the slowdown benefit BPO industry?
Indian industry will feel the real impact of the current meltdown in the US and other developed economies in the first quarter of 2009, with the business process industry likely to see job losses of up to a quarter of a million, said Samir Chopra, President, Business Process Industry Association of India (BPIAI).
Addressing delegates at a session on 'Surviving US Recession- Developing & Transforming Policies', Chopra, however, saw a silver lining in the ongoing recession for the BPO sector, saying that it would compel more companies in the US and Europe to look at outsourcing as a way cut their costs and improve efficiencies.
He said that urgent government measures were needed to boost the domestic business process industry, specially the medium and small enterprises. These included both fiscal and administrative measures, like extending the tax relief for the IT sector for another 5-10 years and export promotion steps, including a market development fund. The session was organised here today by BPIAI in association with Confederation of Indian Industry (CII).
According to him, the current situation had been impacted further by the recent terrorist carnage in Mumbai, which had hit sentiments across the board. "It has led to widespread cancellations of visit and even forthcoming international events. The government must now take suitable remedial steps to boost homeland security and the emergency response system."
For Anand Pillai, the current meltdown was an opportunity for the Indian BPO sector to add value to its services. This, he said, was important if they were to retain and expand their client base. Taking an optimistic view of the current slowdown, he said that a positive response and attitude would help shorten the recession cycle. "For this, it was important workplaces should engender learning, preparing employees for the turnaround, when it happens.
Citing the example of his company, HCL Technologies Ltd, Pillai said that "the core asset in any IT industry were its staff and cost-cutting through retrenchments was not the right policy to follow. The savings resulting from such job cuts are miniscule when compared to the damage they cause in terms of employee satisfaction and service delivery."
Disagreeing with Chopra that the current slowdown was temporary, Praveen Sengar, Head-Software, Services & Industry (Vertical Reserach), IDC India Ltd, said recovery from the last slowdown in 2001 had taken six quarters when the sectors affected were much less. "This time, I see a recovery only around the first half or the third quarter of 2010."
According to Sengar, the current slowdown was likely to slowdown expansion in the BPO industry, with the time taken for signing up new clients taking a longer period of time. "It will also result in greater consolidation and promote diversification into areas hitherto considered as non-core activities."
On his part, S N Zindal, former Director-General, Software Technology Parks of India, said that "it was not true that the Indian IT industry was in recession, though he agreed that there could be substantial decline in its growth rate. This is a period when the Indian IT industry, specially the BPO units, should build on their advantage by improving manpower, developing suitable infrastructure and having the right government policies in place."
Agreeing that the SMEs were the most vulnerable to any downturn, Zindal said that the right policies could help such units move up the value chain. He said that even as the slowdown continued in the US and other developed countries; such units could help tide over the crisis by expanding the domestic market.
Emphasizing the need for more reforms, Kiron Prabhakar, Partner, PAV Law Offices, said that amendments had been proposed several times to the Information Technology Act 2000, "but these are yet to see the light of the day". According to her, the other areas needing reform were Incomes Tax Act and the Stamp Duty Act apart from changes in the immigration laws.
Prabhakar also advocated doing away with the cap on royalty and knowhow fees, saying that were impeding technology transfer to Indian companies.Industry has been seeking a change in the labour regulations for quite some time and the government must ensure that these promote outsourcing, she added.
Proposing the vote of thanks, Deepak Ohlyan, Managing Committee Member, BPIAI, and Director, Dell International Services BPO, said that the recent terrorist incidents in Mumbai were a matter of great concern to Indian industry. He said that it was time for the domestic BPO industry to consolidate on its recent growth and prepare for the turnaround by upgrading both staff and services.
A panel discussion on the impact of the recent terrorist attacks on the business process industry was also organized on occasion, with participants seeking stronger government action and greater political will to tackle the situation.
Some participants in the discussion like Col K C Goswami, Consultant, Special Projects, G4S Security Services; Sanjog Gupta of NDTV, and Arjun Wallia, Founder & Chairman, Managing Director, Walsons -- A Securitas Partner Company, felt that the attacks were a wake-up call for the Indian industry to take immediate steps to improve physical security of their establishments. There was no time for complacency, they added.
Other speakers like Srinivas Pingali, EVP, Quatrro BPO Solutions Pvt Ltd, said that the BPO industry had been directly impacted by the attacks and "any such attack in the future could severely dent the prospects of the domestic industry. The immediate business impact has also been minimized by the forthcoming Christmas and New Year holidays."
Responding to a suggestion, Chopra agreed on the need for the association to come out with its own security standards for the BPO sector. This, he said, would reassure potential overseas investors and clients, even as they would enable domestic companies to be prepared for ongoing security audits and checks.
Source: Times of India
Addressing delegates at a session on 'Surviving US Recession- Developing & Transforming Policies', Chopra, however, saw a silver lining in the ongoing recession for the BPO sector, saying that it would compel more companies in the US and Europe to look at outsourcing as a way cut their costs and improve efficiencies.
He said that urgent government measures were needed to boost the domestic business process industry, specially the medium and small enterprises. These included both fiscal and administrative measures, like extending the tax relief for the IT sector for another 5-10 years and export promotion steps, including a market development fund. The session was organised here today by BPIAI in association with Confederation of Indian Industry (CII).
According to him, the current situation had been impacted further by the recent terrorist carnage in Mumbai, which had hit sentiments across the board. "It has led to widespread cancellations of visit and even forthcoming international events. The government must now take suitable remedial steps to boost homeland security and the emergency response system."
For Anand Pillai, the current meltdown was an opportunity for the Indian BPO sector to add value to its services. This, he said, was important if they were to retain and expand their client base. Taking an optimistic view of the current slowdown, he said that a positive response and attitude would help shorten the recession cycle. "For this, it was important workplaces should engender learning, preparing employees for the turnaround, when it happens.
Citing the example of his company, HCL Technologies Ltd, Pillai said that "the core asset in any IT industry were its staff and cost-cutting through retrenchments was not the right policy to follow. The savings resulting from such job cuts are miniscule when compared to the damage they cause in terms of employee satisfaction and service delivery."
Disagreeing with Chopra that the current slowdown was temporary, Praveen Sengar, Head-Software, Services & Industry (Vertical Reserach), IDC India Ltd, said recovery from the last slowdown in 2001 had taken six quarters when the sectors affected were much less. "This time, I see a recovery only around the first half or the third quarter of 2010."
According to Sengar, the current slowdown was likely to slowdown expansion in the BPO industry, with the time taken for signing up new clients taking a longer period of time. "It will also result in greater consolidation and promote diversification into areas hitherto considered as non-core activities."
On his part, S N Zindal, former Director-General, Software Technology Parks of India, said that "it was not true that the Indian IT industry was in recession, though he agreed that there could be substantial decline in its growth rate. This is a period when the Indian IT industry, specially the BPO units, should build on their advantage by improving manpower, developing suitable infrastructure and having the right government policies in place."
Agreeing that the SMEs were the most vulnerable to any downturn, Zindal said that the right policies could help such units move up the value chain. He said that even as the slowdown continued in the US and other developed countries; such units could help tide over the crisis by expanding the domestic market.
Emphasizing the need for more reforms, Kiron Prabhakar, Partner, PAV Law Offices, said that amendments had been proposed several times to the Information Technology Act 2000, "but these are yet to see the light of the day". According to her, the other areas needing reform were Incomes Tax Act and the Stamp Duty Act apart from changes in the immigration laws.
Prabhakar also advocated doing away with the cap on royalty and knowhow fees, saying that were impeding technology transfer to Indian companies.Industry has been seeking a change in the labour regulations for quite some time and the government must ensure that these promote outsourcing, she added.
Proposing the vote of thanks, Deepak Ohlyan, Managing Committee Member, BPIAI, and Director, Dell International Services BPO, said that the recent terrorist incidents in Mumbai were a matter of great concern to Indian industry. He said that it was time for the domestic BPO industry to consolidate on its recent growth and prepare for the turnaround by upgrading both staff and services.
A panel discussion on the impact of the recent terrorist attacks on the business process industry was also organized on occasion, with participants seeking stronger government action and greater political will to tackle the situation.
Some participants in the discussion like Col K C Goswami, Consultant, Special Projects, G4S Security Services; Sanjog Gupta of NDTV, and Arjun Wallia, Founder & Chairman, Managing Director, Walsons -- A Securitas Partner Company, felt that the attacks were a wake-up call for the Indian industry to take immediate steps to improve physical security of their establishments. There was no time for complacency, they added.
Other speakers like Srinivas Pingali, EVP, Quatrro BPO Solutions Pvt Ltd, said that the BPO industry had been directly impacted by the attacks and "any such attack in the future could severely dent the prospects of the domestic industry. The immediate business impact has also been minimized by the forthcoming Christmas and New Year holidays."
Responding to a suggestion, Chopra agreed on the need for the association to come out with its own security standards for the BPO sector. This, he said, would reassure potential overseas investors and clients, even as they would enable domestic companies to be prepared for ongoing security audits and checks.
Source: Times of India
Thursday, December 4, 2008
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).
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).
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