Is bankrupt Nortel giving away $7.3 m as bonus?

A Canadian court has allowed eight senior executives at Nortel Networks Corp to share in the bonuses that the telecom equipment maker plans to pay out even as it fights for survival in bankruptcy protection.

Bankruptcy courts in both the US and Canada will allow Nortel Networks to pay as much as $7.3 million in incentive bonuses to the executives.

Nortel already had court approval to pay out a total of $45 million in bonuses for close to 1,000 executive and non-executive employees.

Friday's ruling by the Ontario Superior Court makes the eight senior executives, who do not include Chief Executive Mike Zafirovski, eligible to receive a share of this money, company spokesman Mohammed Nakhooda said.

In addition to the $45 million, Nortel has a separate quarterly bonus plan in place for "the vast majority of employees at all levels," he added.

Nortel -- North America's biggest maker of telephone gear -- had argued in an earlier court report that the bonuses were needed because "the commitment and retention of key employees will be essential to the execution of a restructuring of Nortel".

Executive compensation has become a hot-button issue with investors and politicians alike, particularly amid revelations that US insurance giant American International Group (AIG) paid out $165 million in bonuses after receiving $180 billion in government aid.

Some companies, including all of Canada's large banks, have introduced nonbinding shareholder votes on executive compensation in a bid to provide greater transparency and more accountability.

Toronto-based Nortel filed for bankruptcy protection in January, blaming the economic crisis for derailing a turnaround effort that began in 2005.

It had about $2.4 billion in cash when it sought protection and about $4.5 billion in long-term debt.

Nortel shares were unchanged at 10 Canadian cents on the Toronto Stock Exchange on Friday. In mid-2000, at the height of the company's success, they were worth more than C$1,100 each, adjusted for a stock consolidation that took place in 2006.

Agencies

Has SAP lays off unspecified numbers in India?

The German software giant SAP AG reportedly laid off an unspecified number of employees recently as part of its previously announced plan to trim 3,000 jobs.

The lay offs were confirmed by a company spokesman according to the report. The spokesman said that the cuts were not directed at any one particular discipline or area of our business and were spread across the board.

SAP, which implemented cost savings in October after sales dropped sharply, said it would continue to slash costs and announced that it intended to reduce its workforce to 48,500 by the end of this year from 51,800 now.

The world's biggest maker of business management software gave no target for its key software and software-related sales this year but based its margin forecasts on the assumption that core sales would be flat or 1 percent lower than 2008 sales of 8.62 billion euros.

Co-chief executive Leo Apotheker told Bloomberg television in January that SAP was still seeing demand for software despite the global economic slump and that it intended to avoid forced layoffs. However, seems that approach is not working.

SAP said it expects the staff reductions to result in 300 million to 350 million euros in annual cost savings beginning in 2010 but also in restructuring charges this year in a range of 200-300 million euros.

That would weigh on its 2009 operating margin by 2 percentage points to 3 percentage points, the company said. It forecast an operating margin of 24.5 percent to 25.5 percent versus 28.2 percent last year.

SAP said 2008 operating profit rose 4 percent to 2.84 billion euros ($3.75 billion) and total software and software-related sales gained 14 percent to 8.46 billion euros.

Agencies

Is California to layoff 20,000 state jobs?

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

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

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

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

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

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

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

Agencies

Royal Bank of Scotland to axe 2,000 jobs, says report

Royal Bank of Scotland, which is majority-owned by the British government, is about to announce plans to cut 2,000 jobs after forecasting a record annual loss for 2008, BBC television reported on Tuesday.

A company spokesman contacted by reporters refused to comment on the report.

Royal Bank of Scotland (RBS) was bailed out by the government earlier this year after running into trouble raising funds from shareholders because of the credit crunch and is now 68-percent owned by the state.

The report of job cuts came as the bank's former chief executive, Fred Goodwin, apologised Tuesday to lawmakers for failing to foresee the financial turmoil that led to RBS being rescued.

The bank says it expects a 2008 annual loss of up to 28 billion pounds (32 billion euros, 41 billion dollars) -- a record in British corporate history -- due to the crisis and a costly takeover of Dutch lender ABN Amro in 2007.

Agencies

Is Microsoft planning massive job cuts in 2009?

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

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

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

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

The software giant employs about 91,000 employees globally.

Agencies