Citigroup Inc unveiled a broad restructuring plan designed to shed weaker businesses and troubled assets, and also reported an $8.29billion fourth-quarter loss, its fifth straight quarterly loss.
The company also said on Friday that it anticipated more departures from its board, which is losing Robert Rubin as a director later this year. Nevertheless, Citigroup shares rose 8.6 percent to $4.16 in premarket trading.
Citigroup's fourth-quarter loss equaled $8.29 billion, or $1.72 per share, and compared with a year-earlier loss of $9.8 billion, or $1.99 a share.
"I think people knew it was going to be bad, but I'm surprised it's this bad," said Matt McCormick, portfolio manager at Bahl & Gaynor Investment Counsel in Cincinnati.
The bank said it was splitting into two operating units, one of which will focus on universal banking, the other on brokerage and retail asset management, local consumer finance, and a pool of assets that require special management.
Revenue fell 13 percent to $5.6 billion, reflecting weak capital markets. The company's global credit card business saw revenue decline 27 percent on weakness in North America.
Consumer Banking revenues declined 22 percent, driven by a 47 percent drop in investment sales. And its institutional clients group, securities and banking revenues were negative $10.6 billion, mainly due to net losses and write-downs of $7.8 billion.
"Our results continued to be depressed by an unprecedented dislocation in capital markets and a weak economy," Chief Executive Vikram Pandit said.
Agencies
Saturday, January 17, 2009
Friday, January 16, 2009
Steve Jobs on leave till June
I am sure all of you saw my letter last week sharing something very personal with the Apple community. Unfortunately, the curiosity over my personal health continues to be a distraction not only for me and my family, but everyone else at Apple as well. In addition, during the past week I have learned that my health-related issues are more complex than I originally thought.
In order to take myself out of the limelight and focus on my health, and to allow everyone at Apple to focus on delivering extraordinary products, I have decided to take a medical leave of absence until the end of June.
I have asked Tim Cook to be responsible for Apple's day to day operations, and I know he and the rest of the executive management team will do a great job. As CEO, I plan to remain involved in major strategic decisions while I am out. Our board of directors fully supports this plan.
In order to take myself out of the limelight and focus on my health, and to allow everyone at Apple to focus on delivering extraordinary products, I have decided to take a medical leave of absence until the end of June.
I have asked Tim Cook to be responsible for Apple's day to day operations, and I know he and the rest of the executive management team will do a great job. As CEO, I plan to remain involved in major strategic decisions while I am out. Our board of directors fully supports this plan.
Thursday, January 15, 2009
IBM plans to open Iowa centre; To create 1,300 jobs
IBM, the world's largest technology services company, plans to open a new computer support center in Iowa, creating up to 1,300 new jobs and defying a trend of widespread corporate layoffs.
The Dubuque facility in a 10-story office building once occupied by now-defunct retailer Roshek's Department Store, will create jobs for high-tech workers at a time when many technology companies are cutting staff.
Workers will provide security services and remote support to IBM customers, helping to maintain computers and software systems primarily located in the United States, IBM said.
International Business Machines Corp said it plans to employ several hundred people in the facility by the end of this year, following renovations to the top eight floors of the building that it will occupy to make it more energy efficient.
By the end of next year, as many as 1,300 IBM employees will work in the building built in the 1930s, IBM said.
On Tuesday, IBM announced plans to work with Michigan State University to build a software development center in East Lansing, Michigan, that will create up to 1,500 jobs over the next five years.
Agencies
The Dubuque facility in a 10-story office building once occupied by now-defunct retailer Roshek's Department Store, will create jobs for high-tech workers at a time when many technology companies are cutting staff.
Workers will provide security services and remote support to IBM customers, helping to maintain computers and software systems primarily located in the United States, IBM said.
International Business Machines Corp said it plans to employ several hundred people in the facility by the end of this year, following renovations to the top eight floors of the building that it will occupy to make it more energy efficient.
By the end of next year, as many as 1,300 IBM employees will work in the building built in the 1930s, IBM said.
On Tuesday, IBM announced plans to work with Michigan State University to build a software development center in East Lansing, Michigan, that will create up to 1,500 jobs over the next five years.
Agencies
Is Microsoft planning massive job cuts?
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
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
Wednesday, January 14, 2009
Barclays likely to layoff 2,100 jobs
Financial services major Barclays is to layoff 2,100 in investment banking and money management, as part of its cost cutting measures.
"Barclays is cutting about 2,100 jobs worldwide in investment banking and money management as it slashes costs to cope with the fall-out from the credit crisis", The Financial Times said.
According to FT, the company is cutting 1,300 people from Barclays Capital, the debt-focused investment banking business, 500 from the Barclays Wealth private banking arm, and 330 in asset management business Barclays Global Investors. Overall, the cuts amount to 7 per cent of the three divisions' staff, it added.
Noting that Barclays declined to reveal where the job cuts would come, the newspaper said that the axe is expected to fall heavily in London and New York.
However, the bank would continue to hire in areas such as equities, the report published online said.
Last year, Barclays had acquired the US operations of bankrupt Lehman Brothers.
Financial Times reported that at Barclays Wealth, cuts are expected in London, Glasgow and the Channel Islands. Quoting Unite, which represents staff at Barclays Wealth's division, the daily said, "We cannot continue with this situation of daily job cuts without any justification or explanation of the broader strategy for the bank."
"The bank, which built the units aggressively over the past five years to account for almost half of revenue, said it wanted to be 'appropriately sized', given the current market conditions," it added.
The move is likely to spark fears of further cost-cutting in Barclays' retail and corporate banking division, which includes its bank branch network, the report noted.
Agencies
"Barclays is cutting about 2,100 jobs worldwide in investment banking and money management as it slashes costs to cope with the fall-out from the credit crisis", The Financial Times said.
According to FT, the company is cutting 1,300 people from Barclays Capital, the debt-focused investment banking business, 500 from the Barclays Wealth private banking arm, and 330 in asset management business Barclays Global Investors. Overall, the cuts amount to 7 per cent of the three divisions' staff, it added.
Noting that Barclays declined to reveal where the job cuts would come, the newspaper said that the axe is expected to fall heavily in London and New York.
However, the bank would continue to hire in areas such as equities, the report published online said.
Last year, Barclays had acquired the US operations of bankrupt Lehman Brothers.
Financial Times reported that at Barclays Wealth, cuts are expected in London, Glasgow and the Channel Islands. Quoting Unite, which represents staff at Barclays Wealth's division, the daily said, "We cannot continue with this situation of daily job cuts without any justification or explanation of the broader strategy for the bank."
"The bank, which built the units aggressively over the past five years to account for almost half of revenue, said it wanted to be 'appropriately sized', given the current market conditions," it added.
The move is likely to spark fears of further cost-cutting in Barclays' retail and corporate banking division, which includes its bank branch network, the report noted.
Agencies
Is Motorola planning more layoffs?
Motorola Inc is expected to make steep cost cuts, including more layoffs, at its mobile devices division as a broad slump in demand for cell phones exacerbates its own market share declines.
With even market leader Nokia warning about weakening phone demand, analysts say Motorola could miss Wall Street's already low expectations for phone sales in the fourth quarter and the current quarter. As a result, they expect Motorola to cut the size of its handset unit -- beyond the 3,000 layoffs the company announced in October, which were mostly in its handset unit and equivalent to 4.5 per cent of its workforce.
"Resizing is necessary beyond the 3,000," said Avian Securities analyst Matthew Thornton, who estimated that Motorola's phone unit could have roughly 28,000 employees after the previously announced layoffs.
Motorola declined to comment. The Schaumburg, Illinois-based company fell to fourth place in the global phone market in the third quarter of 2008, and said key new devices would be ready in the second half of 2009, which could mean deeper market share losses until then.
This was before Nokia said in December that it expected the phone market to shrink 5 per cent or more in 2009. Some analysts now expect sales to fall as much as 15 per cent from 2008. As a result of the deteriorating market, Deutsche Bank analyst Brian Modoff estimated that Motorola needed to cut costs by roughly another $650 million, on top of the $800 million reductions already announced.
"Their cost structure is too high for where they need to be in this environment given their market share," said Modoff, who sees Motorola reporting 22 million phone sales for the fourth quarter just ended, and 17 million for this quarter. He estimated that with its current cost structure Motorola could break even if it sold about 28 million phones per quarter, but said that this figure was too high for comfort in the weak economy.
"I think they need to be profitable below 20 million units," said Modoff. Analysts on average expect Nokia to report 121.5 million phone sales for the fourth quarter, with estimates ranging from 110 million to 135 million.
They expect Sony Ericsson, which overtook Motorola in the third quarter, to sell about 26.6 million phones. Phonescoop.com, a blog about the latest phones, said Motorola could lay off as many as 50 per cent of its mobile phone workers, but analysts said this would be a "drastic" move.
Charter Equity Research analyst Ed Snyder said such a cut would mean giving up workers in research and development, and "dramatically" reducing the number of phones launched. But he said that such a move was not implausible.
"They're hemorrhaging cash. They have to cut the division," he said. But Deutsche Bank's Modoff said Motorola needs to be careful about where it makes cuts because it needs to be able to compete with popular devices such as Apple Inc's iPhone and phones based on Android, the operating system designed by Google Inc.
These phones have made the focus of industry competition more about innovative software and user interfaces than about phone hardware."They should keep (jobs) in software and chop them in hardware. The emphasis needs to be placed on low cost designs and operating systems," said Modoff. In the third quarter, Motorola's mobile unit revenue fell 31 per cent to $3.1 billion, and the unit's operating loss widened to $840 million from $248 million.
Agencies
With even market leader Nokia warning about weakening phone demand, analysts say Motorola could miss Wall Street's already low expectations for phone sales in the fourth quarter and the current quarter. As a result, they expect Motorola to cut the size of its handset unit -- beyond the 3,000 layoffs the company announced in October, which were mostly in its handset unit and equivalent to 4.5 per cent of its workforce.
"Resizing is necessary beyond the 3,000," said Avian Securities analyst Matthew Thornton, who estimated that Motorola's phone unit could have roughly 28,000 employees after the previously announced layoffs.
Motorola declined to comment. The Schaumburg, Illinois-based company fell to fourth place in the global phone market in the third quarter of 2008, and said key new devices would be ready in the second half of 2009, which could mean deeper market share losses until then.
This was before Nokia said in December that it expected the phone market to shrink 5 per cent or more in 2009. Some analysts now expect sales to fall as much as 15 per cent from 2008. As a result of the deteriorating market, Deutsche Bank analyst Brian Modoff estimated that Motorola needed to cut costs by roughly another $650 million, on top of the $800 million reductions already announced.
"Their cost structure is too high for where they need to be in this environment given their market share," said Modoff, who sees Motorola reporting 22 million phone sales for the fourth quarter just ended, and 17 million for this quarter. He estimated that with its current cost structure Motorola could break even if it sold about 28 million phones per quarter, but said that this figure was too high for comfort in the weak economy.
"I think they need to be profitable below 20 million units," said Modoff. Analysts on average expect Nokia to report 121.5 million phone sales for the fourth quarter, with estimates ranging from 110 million to 135 million.
They expect Sony Ericsson, which overtook Motorola in the third quarter, to sell about 26.6 million phones. Phonescoop.com, a blog about the latest phones, said Motorola could lay off as many as 50 per cent of its mobile phone workers, but analysts said this would be a "drastic" move.
Charter Equity Research analyst Ed Snyder said such a cut would mean giving up workers in research and development, and "dramatically" reducing the number of phones launched. But he said that such a move was not implausible.
"They're hemorrhaging cash. They have to cut the division," he said. But Deutsche Bank's Modoff said Motorola needs to be careful about where it makes cuts because it needs to be able to compete with popular devices such as Apple Inc's iPhone and phones based on Android, the operating system designed by Google Inc.
These phones have made the focus of industry competition more about innovative software and user interfaces than about phone hardware."They should keep (jobs) in software and chop them in hardware. The emphasis needs to be placed on low cost designs and operating systems," said Modoff. In the third quarter, Motorola's mobile unit revenue fell 31 per cent to $3.1 billion, and the unit's operating loss widened to $840 million from $248 million.
Agencies
Will global tech spending decline in 2009?
Technology companies face a bumpy ride in 2009. Global business and government spending on computer, software and communications products and consulting services is expected to decline 3 percent this year, Forrester Research said in a report due out Tuesday.
This would mark the first decline since 2002, when information-technology spending dropped 6 percent after falling the same amount in 2001.
However, this downturn is not expected to last as long. Forrester projects tech spending to recover next year, rising as much as 9 percent in 2010.
In addition to the recession, the strengthening dollar is also to blame for the drop-off Forrester sees this year. Just as the weak U.S. currency boosted the growth rate of technology purchases made in dollars in 2008, the now-stronger dollar will hurt it in 2009, according to Forrester. Western Europe's technology spending rate is a good illustration of the currency discrepancy: measured in dollars, tech purchases in the region will be down 7 percent in 2009. Tech purchases in euros will be up 1 percent.
To neutralize the effect of currency changes, Forrester also projected the global technology market using a ``basket'' of local currencies, weighed for how big a share of the market each region holds. Using this measure, technology purchases are expected to have grown by 4 percent in 2008 and post growth of 3 percent in 2009, and 6 percent in 2010.
Certain aspects of technology will fare better. For example, Forrester expects software purchases to total $388 billion this year, the same as in 2008. But computer equipment purchases, which includes personal computers, servers and storage devices _ are expected to decline 4 percent, to $434 billion. That's because businesses often see software as a moneysaving tool, while buying new computer equipment is something that can be put off until more prosperous times.
There are other trends at play, too, such as an ongoing decline in the server market, independent of the economy, said Forrester analyst Andrew Bartels. More companies are embracing server virtualization, a technology that allows one server to function as multiple machines, saving companies money and energy. Businesses are also realizing that their employees can use BlackBerrys, iPhones and small laptops known as netbooks for work. So, the analyst said, rather than issuing workers both a PC and a BlackBerry, companies might stick with just a BlackBerry.
A decline in demand for personal computers and other electronics weighed on the semiconductor industry for much of 2008. Intel Corp., the company behind the bulk of microprocessors that serve as the brains of PCs, lowered its fourth quarter revenue guidance for the second time last week amid weaker than expected demand.
While 2009 does not look good when it comes to tech spending, things aren't as dismal for the sector as they were in 2001 and 2002, after the bursting of the 1990s Internet bubble. In each of those two years, Bartels noted, technology spending declined 6 percent _ and that would have been true regardless of currency fluctuations.
Since then, technology has become so interwoven into how a company operates that it's no longer considered discretionary spending.
``It is the muscle of companies,'' Bartels said. ``It allows them to do what they want to do.''
Agencies
This would mark the first decline since 2002, when information-technology spending dropped 6 percent after falling the same amount in 2001.
However, this downturn is not expected to last as long. Forrester projects tech spending to recover next year, rising as much as 9 percent in 2010.
In addition to the recession, the strengthening dollar is also to blame for the drop-off Forrester sees this year. Just as the weak U.S. currency boosted the growth rate of technology purchases made in dollars in 2008, the now-stronger dollar will hurt it in 2009, according to Forrester. Western Europe's technology spending rate is a good illustration of the currency discrepancy: measured in dollars, tech purchases in the region will be down 7 percent in 2009. Tech purchases in euros will be up 1 percent.
To neutralize the effect of currency changes, Forrester also projected the global technology market using a ``basket'' of local currencies, weighed for how big a share of the market each region holds. Using this measure, technology purchases are expected to have grown by 4 percent in 2008 and post growth of 3 percent in 2009, and 6 percent in 2010.
Certain aspects of technology will fare better. For example, Forrester expects software purchases to total $388 billion this year, the same as in 2008. But computer equipment purchases, which includes personal computers, servers and storage devices _ are expected to decline 4 percent, to $434 billion. That's because businesses often see software as a moneysaving tool, while buying new computer equipment is something that can be put off until more prosperous times.
There are other trends at play, too, such as an ongoing decline in the server market, independent of the economy, said Forrester analyst Andrew Bartels. More companies are embracing server virtualization, a technology that allows one server to function as multiple machines, saving companies money and energy. Businesses are also realizing that their employees can use BlackBerrys, iPhones and small laptops known as netbooks for work. So, the analyst said, rather than issuing workers both a PC and a BlackBerry, companies might stick with just a BlackBerry.
A decline in demand for personal computers and other electronics weighed on the semiconductor industry for much of 2008. Intel Corp., the company behind the bulk of microprocessors that serve as the brains of PCs, lowered its fourth quarter revenue guidance for the second time last week amid weaker than expected demand.
While 2009 does not look good when it comes to tech spending, things aren't as dismal for the sector as they were in 2001 and 2002, after the bursting of the 1990s Internet bubble. In each of those two years, Bartels noted, technology spending declined 6 percent _ and that would have been true regardless of currency fluctuations.
Since then, technology has become so interwoven into how a company operates that it's no longer considered discretionary spending.
``It is the muscle of companies,'' Bartels said. ``It allows them to do what they want to do.''
Agencies
Subscribe to:
Posts (Atom)