Layoffs: Siemens IT arm lays off 128

IT firm Siemens Information Systems, a unit of German conglomerate Siemens, said it has laid off 128 employees as part of its cost cu
tting measures, debunking union's claim that 500 employees had lost jobs.

The IT-ITeS union UNITES India said the number of employees laid off by the company could be around 500. It added that Siemens is laying off its employees in Bangalore violating the Industrial Dispute Act.

When contacted SISL spokesperson said, "As a part of our cost-cutting initiatives, we have released only 128 employees from one of the business units."

UNITES Professionals India General Secretary Karthik Shekhar said, "The figures provided by the company does not include the number of employees who were on contract. In the last one month, the company has laid off more than 128 employees."

SISL has over 5,500 employees in the country. The union has also written to the headquarters of the firm in Germany. About compensating the employees, the company said it has already compensated the affected employees higher than the contractual terms.

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Layoffs: Oracle plans to lay off up to 1,000

Oracle Corp plans to lay off up to 1,000 workers in Europe, or about 1 percent of its global staff, as the recession erodes the giant software company's earnings, French news agency has AFP reported.

Oracle spokeswoman Deborah Hellinger declined to comment.

The world's No. 2 publicly held software maker would be one of the last major technology companies to undertake significant layoffs in this economic downturn.

Oracle would join EMC Corp, Hewlett-Packard Co, International Business Machines Corp, Intel Corp, Microsoft Corp and SAP AG, among others.

Trade unions learned of the job cuts on Monday and Tuesday during committee meetings of Oracle's European workers, according to the AFP report.

Redwood City, California-based Oracle had some 86,000 employees as of May 31, compared with 84,233 a year earlier. About a third of the software maker's employees are in the United States.

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Adobe Shutting Down North American operations next week

Adobe Inc, the world’s biggest maker of graphic-design software, shut down North American operations this week, part of a plan to
cut operating costs as the recession crimps sales.

Adobe told employees in March it would impose one-week closures in the second, third and fourth quarters, and asked staff to take paid vacation time, the company said today.

“These are in addition to the normal holiday shutdown” between Christmas and New Year’s Day, San Jose, California-based Adobe said in an e-mail.

The company has frozen salaries, trimmed bonuses and variable compensation plans, and curbed travel expenses, Chief Executive Officer Mark Garrett said in an April interview. In December, the company fired about 8 percent of the workforce to help rein in costs during the economic slump.

Second-quarter sales fell 21 percent as customers held off upgrading to the latest version of Adobe’s Creative Suite programs, which account for about 60 percent of revenue. Sales in Europe trailed expectations, the company said on a June 16 conference call.

Adobe advanced 62 cents to $28.62 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have gained 34 percent this year.

Worldwide spending on information-technology products will shrink 9 percent this year as the economy contracts, according to Goldman Sachs Group Inc.

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Govt won’t interfere in Satyam layoffs

The government virtually distanced itself from any controversy around layoffs or job losses at fraud-hit Satyam after its sale to Tec
h Mahindra, saying it was not ready to “meddle” into the affairs of the company.

“Are we going to give them jobs? We have no jobs to give. So why should we meddle,?” corporate affairs minister Salman Khursheed said when asked whether government would interfere in case of mass-scale layoffs initiated by the company’s new owner, a figure that is believed to be around 10,000 in number.

Khursheed’s statement is a volte face considering that he had earlier said that the government would not turn a “blind eye” to any such move initiated by Tech Mahindra “as we have a relevant presence in decision making.” He also said that post its sale to Tech Mahindra, government was now in an “active disengagement mode” from the affairs of the company.
“Our job has been well done... and now they are the ones who are going to find ways and means to revive the company entirely and be responsible for decisions. So we do not come in the picture at all,” he added.

He said the “adverse market conditions” were forcing all companies to take drastic measures. “Every company has got excess staff, every software company... but there is nothing that calls for a special government attention,” he said.

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Layoffs: Microsoft to move jobs

Microsoft Corp Chief Executive Officer Steven Ballmer said the world’s largest software company would move some employees offshore if
Congress enacts President Barack Obama’s plans to impose higher taxes on US companies’ foreign profits.

“It makes US jobs more expensive,” Ballmer said in an interview. “We’re better off taking lots of people and moving them out of the US as opposed to keeping them inside the US”

Obama on May 4 proposed outlawing or restricting about $190 billion in tax breaks for offshore companies over the next decade. Such business groups as the National Foreign Trade Council, the US.

Chamber of Commerce and the Business Roundtable have denounced the proposed overhaul. US tax rules let companies defer paying corporate rates as high as 35 per cent on most types of foreign profits as long as that money remains invested overseas. Obama says he wants to end such incentives to keep foreign profits tax-deferred so that companies would invest them in the US.

Microsoft reported an overall effective tax rate of 26 per cent for 2008 in its last annual report. “Our effective tax rates are less than the statutory tax rate due to foreign earnings taxed at lower rates,” the report said.

Barry Bosworth, an economist in Washington at the Brookings Institution research center, said many software companies such as Microsoft have exploited tax and trade rules in the US and other countries to achieve a low overall tax rate.

Ireland subsidiary

Typically, he said, a company like Microsoft develops a product like Windows in the United States and deducts those costs against US income. It then transfers the technology to a subsidiary in Ireland, where corporate tax rates are lower, without charging licensing fees. The company then assigns its foreign sales to the Irish subsidiary so it doesn’t have to claim the income in the United States.

“What Microsoft wants to do is deduct the cost at a high tax rate and report the profits at a low tax rate,” Bosworth said. “Relative to where they are now, the administration’s proposals are less favorable, so there will be some rebalancing on their part.”

Ballmer is one of 10 US software company executives pushing back against the tax proposals in meetings with White House officials including Jason Furman, deputy director of the National Economic Council, and the heads of congressional committees such as House Ways and Means Committee Chairman Charles Rangel, a New York Democrat.

Expense deductions

Among other things, Obama proposed limiting expense deductions such as those for employee compensation when companies defer US tax on foreign profits.

In a roundtable discussion, Ballmer, Symantec Corp Chairman John Thompson and the heads of smaller companies such as privately held Bentley Systems, an Exton, Pennsylvania-based maker of engineering software, said such policies would hurt domestic investment, reduce shareholder value and increase the cost of employing US workers.

Ballmer said that, while the Obama proposals would preserve expense deductions related to research and experimentation costs, the overall deduction limits for companies that defer tax on foreign profits would raise the cost of employing US workers. Fiduciary responsibility to shareholders would require Microsoft to cut costs, he said, meaning many jobs would be moved out of the country.

Worldwide employees

Microsoft employed 95,029 people worldwide as of April 21, of whom 56,552 were based in the United States, acco
rding to the company’s Web site. The company announced it was firing up to 5,000 people in January while hiring some new workers; the company has shed about 1,000 jobs since then, spokesman Lou Gellos said.

Ballmer estimated that higher taxes under the proposal would reduce profits for companies that comprise the Dow Jones Industrial Average by between 10 and 15 percentage points.

“It’s just a question of how much will the Dow come down,” Ballmer said. “It’s not about companies anyway; we’re talking about shareholders.” In addition to limiting current deductions for companies that defer US tax on their foreign profits, Obama proposed altering a set of rules known as “check the box” that allow companies to shelter foreign profits in offshore subsidiaries that can be disregarded for US tax purposes.

Duck liabilities

While the rules were designed in 1997 to protect US companies from paying excessive tax to other governments, Obama administration officials say it has evolved into a way to duck US liabilities.
Altering the rule, which Obama dubbed a “loophole,” would generate $86.5 billion in new revenue by 2019, the administration says.

The third international tax proposal would change rules governing how companies can claim tax credits for levies paid to foreign governments. Officials say some companies abuse the rule to accelerate tax credits before they could otherwise be claimed.

Obama has said his proposals would protect or create jobs in the United States. Thompson of Symantec, the Cupertino, California-based maker of Norton anti-virus software and similar tools, said software companies are frustrated by being called tax cheats and compared with companies that moved their headquarters to low-tax countries such as Bermuda.

‘Counterintuitive’

Thompson called the Obama proposals “counterintuitive” to the administration’s other stated goals of fostering an innovation-oriented economy.

“It is a little bit ironic that most of our most significant trading partners and partners globally have taken the tack that they’ll reduce corporate tax rates to stimulate economic growth and not raise corporate tax rates,” Thompson said.

Satyam may lay off 5,000

The full board meeting of Satyam Computer is likely to be held on June 11 after its new owner Tech Mahindra assumed charge and the bo
ard may draw a consensus on the sensitive issue of laying off as many as 5,000 employees in phases.

Sources said the meeting is scheduled to be held on next Thursday or Friday and for the first time the full board -- six government-nominated members and four member from Tech Mahindra (through its arm Venturebay Consultants) -- will discuss the business strategies.

A company spokesperson said as and when the meeting takes place, there will be comprehensive discussions on all related issues. He, however, did not divulge details of the agenda or whether or not the meeting would look at ways on how to rationalise the employee strength.

Sources said given the sensitivities of the situation, the board is likely to draw a consensus on the 'lay offs' to be undertaken which may take the shape of keeping 5,000-10,000 people on the bench (reserve).

Tech Mahindra CEO Vineet Nayar had recently said Satyam has 10,000 surplus staff and the company would look at the 'least painful' ways to handle the situation.

"It is a question of revival and viability", they said. Last week, Corporate Affairs Minister Salman Khurseed had said the government will not turn a blind eye to any lay offs in Satyam.

Apple, Adobe extends staff holidays

Hewlett-Packard Co, Apple Inc, and Adobe Systems Inc, three of Silicon Valley's largest technology companies, will shut down over
the December holidays to save on operating costs.

Apple is giving employees eight days of paid leave starting Dec. 24, while HP and Adobe have asked workers to use vacation days to augment the paid holiday days they receive for Christmas and New Year's Day, the companies said yesterday. All three typically close for a number of days every December.

HP, which usually closes for a week, asked employees to take additional vacation days next month so it can shut its doors for two weeks, starting Dec. 22. Workers at the company, the world's largest personal computer maker, will receive four paid holidays during that time. They're being asked to take off six vacation days, three more than usual.

"Shutting down during a period when many employees traditionally take vacation helps HP achieve operational savings," an spokeswoman said.

Apple is offering paid leave between December 24 and January 2 to all its employees, a spokeswoman said.

BT cancels pay hikes, cuts bonuses

LONDON: British telecoms group BT has cancelled all pay rises and cut the majority of its bonuses following two profit warnings from the unit th
at provides network services to multinational companies.

BT said in its annual report the new chief executive of the troubled Global Services unit, Hanif Lalani, would not receive a bonus after he asked not to be considered for one.

But BT had to pay out 2.85 million pounds ($4.5 million) to the former chief executive of the unit, Francois Barrault, who quit at the time of the first warning.

BT said there would be no bonuses relating to financial targets this year as all financial targets, based on free cash flow and earnings per share, were missed. It said executive directors would, however, get some bonuses for performance in other areas.

BT said Barrault's payment covered the period he worked during the year and his termination payment, but did not include a bonus. Group Chief Executive Ian Livingston will receive a bonus of 343,000 pounds, some 20 per cent of his maximum possible bonus, which would be two times his salary. BT said the bonus was based on non-financial elements such as improved customer service, environmental and social measures.

He will convert the bonus into shares and receive no pay rise this year, it said. BT issued two warnings in the year to March 31 at the Global Services unit after failing to take costs out of the business, which resulted in a number of the major contracts being less profitable or even loss making.

Layoffs: To slow to 539K in April, but jobless rate rises

WASHINGTON - The pace of layoffs slowed in April when employers cut 539,000 jobs, the fewest in six months. But the unemployment rate climbed to 8.9 percent, the highest since late 1983, as many businesses remain wary of hiring given all the economic uncertainties.

The Labor Department tally released Friday wasn't nearly as deep as the 620,000 job cuts that economists were expecting, and was helped by a burst of government hiring. The rise in the unemployment rate from 8.5 percent in March matched economists' forecasts.

The new report underscored the toll the longest recession since World War II has taken on America's workers and companies. However, the slowdown in layoffs may bolster hopes that the worst of the downturn's hefty job losses are past.

Still, companies will remain cautious in hiring, making it harder for laid-off workers to find new jobs.

If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 15.8 percent in April, the highest on records dating back to 1994. The total number of unemployed now stands at 13.7 million, up from 13.2 million in March.

Companies also kept a tight rein on workers hours. The average work week in April stayed at 33.2 hours, matching the record low set in March.

Since the recession began in December 2007, the economy has lost a net total of 5.7 million jobs.

As the recession eats into sales and profits, companies have turned to layoffs and other cost-cutting measures to survive the storm. Those including holding down workers' hours, and freezing or cutting pay.

Job losses in February and March turned out to be deeper, according to revised figures. Employers cut 681,000 positions in February, 30,000 more than previously reported. They cut 699,000 jobs in March, more than the 663,000 first reported.

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The deepest job cuts of the recession — 741,000 came in January. That was the most since the fall of 1949.

Employers last month cut the fewest jobs since 380,000 in October. Nonetheless, the April job losses were widespread.

Construction companies axed 110,000 jobs, down from 135,000 in March. Factories got rid of 149,000 jobs, down form 167,000 the month before. Retailers cut payrolls by nearly 47,000, less than the nearly 64,000 cut in March. And job losses in financial activities dropped by 40,000, down from 43,000 in the previous month.

The slower pace of job losses — along with 72,000 more government jobs — helped to temper the overall payroll reductions in April.

Looking ahead, economists expect monthly job losses continuing for most — if not all — of this year. However, they are hoping the reductions won't be as deep.

Fallout from housing, credit and financial crises — the worst since the 1930s — has hurt America's workers and companies, and the pain will continue. The jobs market traditionally doesn't rebound until well after an economic recovery starts.

Federal Reserve Chairman Ben Bernanke earlier this week gave his most optimistic prediction yet about the end of the recession, saying he expects the economy to start growing again this year — although the comeback could be weak and more jobs will disappear even after a recovery takes hold.

Companies will have little appetite to ramp up hiring until they feel the economy is truly out of the woods and a recovery is firmly rooted.

Against that backdrop, many economists predict the unemployment rate will hit 10 percent by the end of this year. Bernanke stopped short of that figure, saying it will be somewhere in the 9 percent range. Regardless, both private economists and Bernanke agree the unemployment rate will keep climbing into next year.

The Fed says unemployment will remain elevated into 2011. Economists say the job market may not get back to normal — meaning a 5 percent unemployment rate — until 2013.

And the job cuts have continued this week. Steelmaker Severstal International said it's idling plants in Wheeling, W.Va., and Warren, Ohio, resulting in 3,100 layoffs due to the continuing deterioration of the steel industry. Microsoft Corp. said it was starting thousands of the 5,000 job cuts it announced in earlier this year and left the door open to even more layoffs.

Still, glimmers of hope have emerged that the recession may be losing its grip on the country.

The Labor Department on Thursday said the number of newly laid-off workers filing applications for jobless benefits plunged to the lowest level in 14 weeks, a possible sign that the massive wave of layoffs has peaked. Still, the number of unemployed workers drawing benefits climbed to a new record — 6.35 million.

Other reports showed sales at many retailers fared better in April, with Wal-Mart Stores Inc. leading the way.

In the U.S., the economy shrank at faster than a 6 percent annual rate late last year and early this year, the worst six-month performance since the late 1950s. Analysts think it is still shrinking now — but probably at about half that pace. Many predict the economy could start growing in the third or fourth quarter as tax cuts and government spending on big public works projects included in President Barack Obama's $787 billion stimulus package take hold.

Layoffs: BT plans to cut 15,000 more jobs

LONDON: British telecoms carrier BT cut its dividend and announced 15,000 further job losses on Thursday after a 1.58 billion pound ($2.4 billio
n) writedown tipped it into a quarterly loss and its pension costs almost doubled.

The writedown is to be taken at its Global Services unit, which supplies the IT needs of multinational companies and which the company had for years striven to make its growth engine.

The group also said it would almost double its pension contributions to 525 million pounds ($794.1 million) a year.

BT, which has twice previously in the past year warned about profits at the Global Services unit, said earnings before interest, tax, depreciation and amortisation and contract and financial review charges were 1.35 billion pounds, down 14 per cent.

Profit before tax on an adjusted basis was down 40 per cent and on a reported basis showed a 1.28 billion pound loss. To help meet its increased pension obligations, BT cut its final dividend to 1.1 pence to give a full year dividend of 6.5 pence, which was down 59 per cent on last year.

The pension contributions will almost double from the previous 280 million pound annual payment to 525 million pounds a year for the next three financial years.

BT has been engaged in a three-yearly pension review to establish the size of its deficit and what it should contribute to the scheme on an annual basis, based on its asset values and liabilities.

The last review in 2006 put BT's deficit at 3.4 billion pounds and set annual contributions on a 10-year recovery plan at 280 million pounds. BT said on Thursday the contributions would rise to 525 million pounds but did not reveal the new deficit from the three-year review. A leading pensions expert said that BT's pension deficit now stood at 11 billion pounds.

BT said its triennial pension funding valuation was at an advanced state of completion. It did give its pension position at March 31 on an IAS
19 accounting basis as a deficit of 2.9 billion pounds net of tax, compared with a surplus of 2 billion pounds last year.

BT said its total labour workforce, of both permanent and contract staff, fell by 15,000 to 147,000 in March, 2009 and said they expected a similar number next year.

The job cuts were all voluntary and through not replacing staff and BT said they expected this to be the case next year.

"Although far from impressive, the worst seems to be out of the way for BT," Trader Manoj Ladwa said.

"Shareholders are likely to be encouraged by its dividend policy and measures undertaken to turn around its underperforming Global Services Division."

Layoffs: Nokia to cut 490 more jobs

HELSINKI: The world's top cellphone maker Nokia Oyj said on Tuesday it plans to cut a further 490 jobs as part of its global cost cutting progra
mme.

The Finnish firm said it would cut 170 jobs in logistics, production management and production support and would offer a voluntary resignation package for up to 320 employees working at its Salo plant in Finland.

Nokia, which made its first ever quarterly pretax loss in January-March, is cutting annual costs at its key handset unit alone by more than 700 million euros ($948.7 million) to counter plunging demand.

The overall mobile phone market is expected to shrink 10 per cent this year, as consumers rein in spending and handset sellers try to clear out unsold phones.

Including the job cuts announced on Tuesday, Nokia has slashed some 4,000 jobs across the organisation this year.

Layoffs: Satyam may sack 8K non-billable staff

NEW DELHI: Satyam Computer is likely to sack most of its non-billable staff of up to 8,000 working in marketing, HR and administration wings, af
ter Tech Mahindra takes charge of the company from June 1.

A Satyam official said there is no doubt that there will be large-scale sacking mostly of the support and non-billable staff (other than hardcore software engineers) once Tech Mahindra (the new owner of the company) directors come on board from June 1.

The surplus staff is about 10,000-12,000 and the ‘least painful’ ways of sacking is asking the bench, non-billable and support staff to go. The company spokesperson, when contacted, said that at the moment these are mere speculations.

Sources also said the outsourcer may opt for “virtual pool” sacking method whereby the company would ask some of the staff to take 75 per cent of its salary and take one-year off and look for a job elsewhere with the fragile assurance that they would be recalled, if required.

Layoffs: Nikon to cut 1,000 jobs

TOKYO: Japanese camera and precision equipment maker Nikon Corp said on Tuesday that it would cut about 1,000 jobs, mostly at its domestic plant
s, as it braces for a loss this year.

Nikon said it would overhaul its operations making devices for use in the production of semiconductors. It will also downsize its subsidiary in Singapore and transfer part of the business to Taiwan. The group aims to reduce its annual costs by about eight billion yen ($84 million).

Nikon has been hit by weak demand. Earlier this month it forecast a net loss of 17 billion yen for the current business year to March.

Many manufacturers in Japan have announced job cuts in recent months to cope with the global economic downturn, which has depressed demand for the country's cars, electronics and other exports.