Microsoft to hire 400 Yahoo employees

Microsoft Corp will hire at least 400 workers from Yahoo Inc if government regulators approve the companies' proposed Internet search partnership, and Yahoo will receive $150 million to cover any unexpected costs during the switch to new technology.

The details emerged in a regulatory filing that elaborated on an agreement announced last week. Sunnyvale-based Yahoo said then that an unspecified number of its 13,000 employees would be offered jobs at Microsoft after the Redmond, Washington-based software maker assumes control of the search results and search advertising on Yahoo's Web site.

The transition is supposed to begin early next year, assuming the alliance is approved by antitrust regulators in the United States and Europe.

Microsoft will pay $50 million annually during the first three years of the 10-year contract to supplement the revenue that Yahoo will receive from the ads appearing alongside its search results. The $150 million in guaranteed payments weren't mentioned last week.

The filing said Yahoo can use the $150 million to pay for unforeseen transition costs. Yahoo's stock has fallen by about 15 per cent since it unveiled the Microsoft deal, largely because announced terms didn't include a large upfront payment.

The disclosure probably won't ease the disappointment much, given analysts had anticipated Microsoft paying $1 billion to $2 billion for access to Yahoo's search engine.

Most of the revenue from the Microsoft deal will flow from ad commissions. Yahoo will receive 88 percent of the search ad revenue during the first five years of the contract. After that, Yahoo's commission will range from 83 percent to 93 percent, depending on whether it still handles some of the ad sales in the partnership.

The main reason Yahoo decided to turn over its search engine to Microsoft was to save money. If Yahoo wants to save even more on technology, it has the option of adopting Microsoft's online mapping service replace of its own, according to the filing.

Yahoo Chief Executive Carol Bartz has already made it known she isn't impressed with Yahoo's online maps. As it is, transferring 400 workers to Microsoft would prune Yahoo's current payroll by about 3 per cent.

Yahoo will lay off some workers if the Microsoft deal goes through, Bartz said last week. Tuesday's filing didn't provide any layoff projections. Although it also has been jettisoning workers because of the recession, Microsoft finished its latest fiscal year end in June with 93,000 employees -- an increase of about 2,000 people from the previous year.

Microsoft is counting on the Yahoo partnership to help it reverse years of losses in its online operations and siphon some traffic -- and ad sales -- from Internet search leader Google Inc.

Yahoo's search engine is the second largest, making it the quickest way for Microsoft to gain ground on Google. Even so, Microsoft and Yahoo combined have less than 30 percent of the US search market compared to 65 percent for Google, according to comScore Inc.

To keep Yahoo happy, Microsoft will have to produce ad revenue per search that is within a certain percentage of Google's industry-leading rate. If Microsoft doesn't hit the target, Yahoo can abandon the partnership before the contract expires.

The filing didn't specify how close Microsoft has to come to Google's revenue per search. Microsoft estimates that Google gets 7 cents in ad revenue for every search, while Yahoo gets 4.3 cents and Microsoft gets 3.9 cents, according to a PowerPoint slide Microsoft mistakenly posted online.

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Wipro adds 710 employees in Q1

In a quarter when peers TCS and Infosys reported a negative hiring, Wipro reported a net addition of 710 staff, as the company continues to follow a more conservative hiring strategy based on the demand from customers.

“Hiring is a reflection of demand. We have started bringing people in certain niche areas and delivery centres, “said HR Head Pratik Kumar.

The company currently has 98,521 professionals in Wipro Technologies. This year, Wipro plans to hire more local workers in its top export markets of US and Europe in order to serve the customers better and also globalize its workforce.

“Almost 30% of our sales force is already foreign, 20% IT workforce onsite are foreigners, We will hire more locals. Each one of us is driving globalization in US, Europe, Middle East and Japan,” said Suresh Vaswani.

In order to gain more business from large, complex customer accounts, Wipro also plans to hire more experienced sales professionals. For instance, Wipro appointed Martha Bejar as the new president for global sales and operations to drive revenue growth. In her last assignment,” Bejar was the corporate vice president for communications sector at Microsoft.

“This clearly demonstrates that we will invest more in our go to market capabilities,” said Kumar. For the quarter ended June 30, 2009, Wipro Technologies reported an attrition rate of 8.4%, which was marginally higher than 7.9% registered in the sequential quarter. However, the company’s involuntary attrition rate dipped to 1.9% as against 2.6% in the sequential quarter.

Wipro Technologies has continued to maintain its higher utilization rate which stood at 78.2% at the end of the first quarter which was marginally higher than 76.8% recorded in the sequential quarter. The company, once again reiterated that it would be honouring all the campus offers made for the current fiscal, though it would be done in staggered manner. Wipro had made offers to around 7,500 fresh engineering graduates.

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Hirings: Ericsson to hire 1000

Ericsson AB, the world’s largest maker of wireless networks, plans to spend $1.5 billion in South Korea over the next five years to devel
op a high-speed wireless Internet technology backed by AT&T Inc and Verizon Wireless.

The Stockholm-based network-equipment maker said it will set up a facility in the Asian nation for research, development and testing of fourth-generation wireless services. The center will develop so-called long-term evolution, or LTE, technology, Minako Nakatsuma Olofzon, a spokeswoman at Ericsson, said.

The infrastructure market for LTE, which will compete against WiMax technology in the wireless Internet market, will reach $5 billion in 2013 after deployment begins in the second half of this year, researcher Infonetics Research said in April. Global sales of equipment and devices for WiMax, which is available commercially in markets including the US and South Korea, will rise almost fivefold to $16.1 billion this year from 2008, according to ABI Research.

“Deployment of WiMax has been slower than expected while LTE’s expansion has been faster,” Kim Dong Joon, an analyst at Seoul-based Good Morning Shinhan Securities Co, said today. “It’s not favorable news for WiMax and it seems Ericsson wants to expand in Korea, which is leading the WiMax technology.”

South Korea’s Samsung Electronics Co and LG Electronics Inc. are the world’s second- and third-largest mobile-phone makers behind Espoo, Finland-based Nokia Oyj.

Supporters of LTE

Verizon Wireless, the biggest U.S. mobile-phone company, aims to begin offering a high-speed network in all US regions by 2015 using LTE, which is scheduled to reach 30 markets by next year. Clearwire Corp., the U.S. provider of mobile WiMax service, plans to spend $1.5 billion to $1.9 billion in 2009 on expanding its network to reach as many as 120 million people across the country by the end of 2010.

Other supporters of LTE include NTT DoCoMo Inc., which plans to introduce the service in 2010, Vodafone Group Plc and Deutsche Telekom AG’s T-Mobile unit. The WiMax standard, which can transmit data to laptops and mobile phones up to five times faster than current technology, is backed by mobile carrier Sprint Nextel Corp., chipmaker Intel Corp, cable operator Comcast Corp and Samsung Electronics.

To qualify as 4G, the wireless technology should be able to transfer data at 1-gigabit per second during low mobility or while stationary, and 100-megabits per second during high mobility, according to the International Telecommunication Union, which has yet to select a standard for 4G technology.

Similar technology

LTE and WiMax are based on similar technology called orthogonal frequency division multiple access. LTE can be upgraded from the current wideband-code division multiple access, or WCDMA, technology, while WiMax, which is aimed mainly at portable devices, is based on the Institute of Electrical and Electronics Engineers 802.16 standard. Wireless Fidelity, or Wi- Fi, which has less coverage than WiMax, is based on the IEEE 802.11 standard.

Ericsson plans to increase the number of employees at its South Korean unit to 1,000 from 80, South Korea’s presidential office said in a statement yesterday.

LG Electronics, Asia’s second-largest mobile-phone maker, said in December that it developed a faster wireless chip for use in handsets based on LTE technology. The LTE market will be bigger than that for rival WiMax products, Skott Ahn, president of LG’s mobile-phone business, said at the time.

Samsung said last month it expects to increase network- equipment sales as more operators begin deploying WiMax services.

The Suwon, South Korea-based company has a share of about 35 percent of the mobile WiMax-equipment market, Executive Vice President Kim Woon Sub, who heads Samsung’s network business, said in an interview last month.

Mobile WiMax, which already has commercial deployments, will outpace LTE over the next few years due to its head start on deployments, according to researcher In-Stat.

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Hirings: Infosys to hire 100 in Australia

Indian IT major Infosys is set to increase its local workforce in Australia by 100 employees after it was awarded 450 million Austral
ian dollars application development and maintenance contract last week.

"Infosys is recruiting for a variety of positions this financial year (April 1, 2009, to March 31, 2010) primarily at senior and middle levels. This may also include some junior level employees who have graduated within the last few years,” Infosys spokesperson said.

"The growth will occur predominantly in Sydney and Melbourne, but also may see some people traveling to New Zealand for assignment."

Infosys Australia last week announced that it had been chosen by Telstra as a key strategic partner to support its five-year 450 million AUD application development and maintenance contracts.

"The recent Telstra win is one of the many factors behind this recruitment. The growth is supported by a desire to hire locally for longer term assignments rather than being dependent on niche skills being supported from India; the build-up of new talent to compliment our Consulting and Systems Integration Unit launched earlier this year and various new opportunities which are opening up across other industry verticals," the spokesperson added.

The company claims to have about 2,500 staff currently serving Australia and New Zealand clients with about 1,000 of them located in Australia.

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Yahoo hires `cost-cutting specialist'

Yahoo Inc has hired a cost-cutting specialist as its new chief financial officer, signaling the Internet company's determination
to weed out the bureaucracy that has been dragging down its profits for the past three years.

The Sunnyvale-based company said that it had lured Tim Morse away from Altera Corp, a computer chip maker based in nearby San Jose. He became Altera's CFO in 2007 after a 15-year career at General Electric Co, where he held various jobs.

Morse's hiring ends Yahoo's 3 1/2-month search to replace its current CFO Blake Jorgensen, who announced his plans to leave a few weeks after the company hired Carol Bartz as its new chief executive.

Since she took the job in January, Bartz has been focused on streamlining Yahoo's management as she tries to remove stumbling blocks that have contributed to the company's inability to keep pace with more nimble rivals such as Internet search leader Google Inc and the online social hangout Facebook Inc.

Morse seems likely to shake things up even more at Yahoo, said Global Crown Capital analyst David Wu. "If Carol Bartz wants a leaner and meaner Yahoo, then she got the right guy," said Wu, who followed Morse while he was at Altera. "His mantra is 'Cost control is a journey, not a destination.' And the journey never seems to end for him."

With Morse overseeing the finances, Altera's selling, general and administrative expenses dropped 16 percent from more than $304 million in 2006 to $255 million last year.

Even before she picked her new CFO, Bartz began to pare Yahoo's expenses by laying off 700 employees, or about 5 percent of the work force.

Bartz has said she doesn't anticipate another mass layoff this year, and Morse's experience at Altera suggests he can extract significant savings without pruning the payroll. Altera ended 2008 with more than 2,700 employees, slightly more than the company employed before Morse became CFO.

In a prepared statement, Bartz described Morse as "natural fit" for Yahoo and hailed his ability "to translate strategy into structure, process, and execution."

Morse will join Yahoo next week, with Jorgensen still there to help with the transition. Jorgensen, who spent just two years at Yahoo, will depart with a $1.8 million severance package when he leaves the company at the end of the month. He is set to become CFO of jeans maker Levi Strauss & Co. beginning July 1.

Yahoo is paying Morse a $500,000 salary — a 33 percent raise from his paycheck at Altera. Morse also is getting a $500,000 signing bonus, 400,000 shares of stock options and 150,000 shares of restricted stock.

Morse appears to be the last major piece of the management team that Bartz has put together in the latest attempt to boost Yahoo's fortunes.

Although its Web site remains one of the busiest on the Internet, Yahoo has had trouble capitalizing on its popularity as its revenue growth slowed and its profits sagged — much to the dismay of its shareholders.

Bartz, a tough-talking executive from the computer software industry, is the third CEO in two years to try to end Yahoo's funk. During the malaise, Microsoft Corp. last year made an unsuccessful $47.5 billion bid to buy Yahoo.

Microsoft has said it remains open to joining forces with Yahoo in an online search partnership, but Bartz has indicated a deal is unlikely to come together any time soon.

Yahoo shares fell 13 cents Thursday to close at $16.19, leaving the company with a market value of about $23 billion.

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Hiring: White House plan to create 600K jobs in 100 days

Tech layoffs will continue through year-end, survey says

The real impact of the nearly $800 billion stimulus package on shrinking IT employment remains in the future, despite President Obama's plan, announced today, to expedite hiring of some 600,000 people over the next 100 days. Many of the jobs in this summer boost will be aimed at the construction and education fields and at young people.

Meanwhile, the forecast for the next six months is for more tech sector layoffs, according to a new survey.

Of the 1,900 technology recruiters and hiring managers queried about the tech labor market by jobs board Dice.com, 43% believe that layoffs are either "likely" or "very likely" over the next six months. The semi-annual survey also found that companies are giving themselves more time to vet candidates, extending the hiring process.

"It's still a pretty rough market," said Tom Silver, a senior vice president and chief marketing officer at New York-based Dice. Employers that are hiring "are looking for candidates that truly fit like a glove and are lengthening the interview process," he said. Dice has about 48,000 jobs listed on its Web site, which is about 45% below this time last year.

But IT is holding up better than the overall market. Although tech employment has been declining month over month since December, IT unemployment is at 5.6%, compared with a national average of 9.4%.

The IT job market has always been quirky, however. Some companies, especially in health care, open source and Web applications may be aggressively hiring, while tech jobs in problem industries, such as automotive and manufacturing, are shrinking.

David Foote, CEO and chief research officer at IT workforce research consultancy Foote Partners LLC, pointed out in his own analysis of labor data that technical consulting services added jobs in the last two months, as did communications, while jobs in computer systems design and related services have been declining. The recession has had minimal impact in areas such as architecture, project management, business processes, security, communications, and several ERP and infrastructure specializations.

Foote said IT companies will lead the U.S. out of a recession because of the role IT plays in new product creation, delivering services and other areas.

The White House jobs announcement today will create, among other things, 125,000 summer youth jobs, 135,000 teaching and support staff jobs, and will fund construction at Veterans Administration medical centers, new waste water and treatment systems, and clean-up of Superfund Sites.

In the long run, the stimulus is expected to increase tech employment. The Information Technology and Innovation Foundation in Washington estimates that the stimulus will ultimately create 1 million "person years" of work given its plans for broadband, health IT and the smart grid. A person year is based on an estimate of the amount of work done by one person in a year.

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TCS hiring Americans

Seeking to mitigate protectionist measures like visa restrictions being adopted by countries like US, the top Indian IT exporter, TCS, is looking to hire more local nationals in key markets.

Besides, the company, which already has more than 10,000 non-Indian nationals on its payroll, is also cutting down on the amount of work at its customer locations and move the work to other remote locations to ensure continuity for customers.

Listing out the various macro-economic risks for its businesses across the world, Tata Consultancy Service said in its annual report for 2008-09 that there has been "a rise in protectionist sentiment in many countries which are looking to impose tariff and non-tariff barriers affecting companies in the Indian IT industry."

"Some initiatives to curb mobility of IT professionals have been introduced in the US. The company is following the events closely to determine the impact, if any, on its operations," it added.

"To counter possible protectionist tendencies by other countries, the company is refining the business model to reduce the amount of work at customer locations and move work to other remote locations and hiring of more local nationals in key markets to ensure continuity for customers," TCS added.

To address these risks, TCS said, it was taking various steps such as "increasing the breadth and depth of service offerings and penetration of new customer accounts and markets to combat slowdown in some customer segments."

TCS saw the headcount of foreign national employees rising to 11,484 at the end of 2008-09, from 10,005 such employees a year ago. It incurred total overseas business expenses, towards employee allowances paid abroad, rose by about 27 per cent to Rs 4,572.28 crore in the fiscal ended March 31, 2009, from Rs 3,610.47 crore in the previous year.

Such expenses accounted for 16.44 per cent of total revenues in 2008-09, up from 15.96 per cent in the previous year. The company boasts of employees of 67 nationalities in its over 1,43,000-strong workforce. Recently, two other major Indian IT exporters , Infosys and Wipro, have also warned of possible adverse impact on their businesses due to the visa restrictions and other protectionist measures in the US.

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Hirings: Aegis BPO to up headcount by 12,000

At a time when the Bangalore versus Buffalo City debate spooks BPO employees in India, Essar Group's backoffice unit Aegis Ltd will augm
ent its workforce by 12,000, summing up the total headcount to 43,000 by end of this fiscal.

The company plans to hire 1,000 people every month in India and across United States, Philippines, Costa Rica and Africa where it currently has operations.

"We will be recruiting a thousand people every month, so this year we will add 12,000 to our workforce globally. We have already hired 3,000 people since the beginning of this fiscal," Aegis Limited Managing Director and Global CEO Aparup Sengupta said.

US President Barack Obama had last month announced end to years of tax incentives to those US companies, which create jobs overseas in places like Bangalore.

Instead, the incentives would go to those creating jobs inside the US, in places like the Buffalo city -- bordering Canada in upstate New York. "The Ruias-led company has earmarked a capital expenditure of $30-35 million this year, excluding cost on infrastructure," he said.

Despite the downturn, Aegis is eyeing a turnover of over $550 million and aims to grow by over 50 per cent in FY10. "There is still an opportunity for outsourcing. In the next 10 years, domestic business will expand to $50 billion, which is a case for the Indian BPO industry to go after. International BPO business will be another $50-70 billion," Sengupta said.

He said demand will keep up because of changing consumer behaviour, rising discretionary spend and the youth, which does not live frugally. Apart from its capex, Aegis is also looking to spend on acquisitions and is currently evaluating 5-6 prospective assets in India as well as overseas.

"There are no constraints on resources. We have a free budget for acquisitions. We are looking to set up base in China and Continental Europe t
his year," Sengupta said.

He said they are bullish on expanding their global footprint and has just set up a maiden office in South Africa and in Nairobi. "We will mostly acquire overseas, because value expectations in India are too high. It has to be economically viable," he added.

Aegis aims to be a $1 billion company in a span of couple of years, he said. It will complete the acquisition of UCMS Group Ltd, a leading BPO services provider in Australia by the end of August, he said. With this acquisition, the company will add 2,000 UCMS employees.

In the past four years, it has bought the call centre operations of Time Warner Inc's AOL in India, US-based PeopleSupport, and TeleTech among others. Earlier this year, it had offered to buy out US-based ICT Group for $128 million, which the latter rejected.

Aegis offers an end-to-end global delivery platform spanning onshore, near shore and offshore locations to several Fortune 500 companies worldwide in the telecom, banking and financial services, insurance, healthcare and travel verticals.

It services clients from 32 locations with over 20,000 seats and counts American Express Co, AT&T, and Vodafone among its overseas customers.

Hiring: Wipro BPO to hire 1200

HYDERABAD: Despite the economic slowdown, Wipro BPO, the business process outsourcing division of IT giant Wipro Technologies, is hiring personn
el and expanding its operations globally, a top official said.

"For the last six months, we have been hearing depressing news about people losing jobs and companies resorting to cost-cutting measures but we are still looking for people," Wipro BPO head Ashutosh Vaidya said.

The company plans to expand its BPO facility in Hyderabad by recruiting 1,000 to 1,200 people over the next six to eight months, he said. At present, 3,150 people are working at the Hyderabad facility.

Wipro, which has its operations in 14 locations in India and abroad, currently employs 22,600. On an average, it is adding 8,000 to 10,000 employees a year, Vaidya added.

Wipro BPO aims to tap the talent pool in Andhra Pradesh and neighbouring states of Maharashtra and Karnataka. The selected candidates undergo 90 days of training, with focus on communication, technical and process-specific training.

Wipro, which got into the BPO business in 2001-02 with five clients, now has 51 clients. The revenues increased from $11 million in 2001-02 to $290 million in 2007-08.

Vaidya said while the recession had some impact on the BPO industry, it would not be there for long as companies were choosing outsourcing as the best way of cutting costs.

Hiring: Infosys to hire 1,000 in US

HOUSTON: Indian software firm Infosys plans to hire about 1,000 people in the US in the next 12 to 18 months amid a gloomy job market.


In an interview with the local media, Infosys Chief Executive Kris Gopalakrishnan, who is currently in Seattle for Microsoft's CEO Summit this week, said that the company plans to add more than 100 new employees as part of a big US expansion in anticipation of growth resuming in 2010.

Altogether, Infosys plans to hire about 1,000 people across the US over the next 12 to 18 months, he said. Already, 14,000 of the company's 1,04,000 employees are based in the US.

"We believe business will be there if we add capabilities, more services and solutions to our portfolio and increase the business volume with the existing customers -- that's how we see growth coming to our business," Gopalakrishnan said.

Regarding the recovery in the Indian economy, he said that it is in, "Very early stages." Gopalakrishna said, "I hope it is sustained and picks up. The difference with the US is that it has gone from 2-3 per cent in GDP growth to approximately zero, about a 3 per cent decline.”

“India has also declined 3 per cent -- it's gone from 8 to 9 per cent growth to 5 per cent to 6 per cent. On the positive side it's still 5 to 6 per cent growth, but the decline is similar, actually."

Hoping the gathered executives will have insights into what fundamental changes will result from the downturn, so they can distinguish between the greed that marked the financial meltdown and innovations that were happening, he said.

"If you look at the Internet boom, everybody jumped in, many of those companies got funded, lots of money was poured in," he said. "Of course many of those companies failed, lots of money was lost but some good things happened -- some companies emerged very strong, became the leaders in that space..."

Gopalakrishnan clearly sees the dangers in industry consolidation and in changes in the nature of outsourcing, with more businesses taking the same tack as they have with their internal IT organisations by looking at business process applicability rather than discrete technical capability.

Infosys seems well-oriented to adapt to this new world since Gopalakrishnan identifies their value proposition as a strong knowledge of customer businesses.