Goldman Sachs now sees loss of 400,000 jobs in Nov

NEW YORK: Goldman Sachs has revised up its forecast for US job losses in November to 400,000 after reports showing a dismal employment picture in
the private sector, particularly in services.

The analysts at Goldman had previously forecast a decline of 350,000 jobs. The median estimate in a Reuters poll conducted on Friday was -320,000. The Institute for Supply Management's non-manufacturing survey
fell to a record low, as did its employment index.

"Most reports on employment conditions in November have shown additional weakness relative to earlier months, but today's ISM report on conditions outside manufacturing was particularly noteworthy," said Goldman economists in a research note.

"The employment index from this report, which has predictive power for payrolls in the top-down models we have developed, fell more than 10 points from a level that was already the lowest on record for this indicator."

The report also cited weakness in small and medium-sized firms as potentially compounding the pain in the labor market.

Courtesy: Times of India

Look how Google is cutting costs

NEW YORK: Feeling the pinch of the global economic slowdown and the US recession in particular, Google, the Internet search engine giant, is res
orting to austerity measures, The Wall Street Journal reported.

Prominent among them include cutting new projects, ratcheting back spending, chipping away at perks and reducing employee strength. Such measure from Google, which is known for its generous perks, has come as a surprise to many industry watchers.

The latest Google measures are understandable as its revenue growth has slowed down dramatically over the past one year. Google's share price on Tuesday was $275.11 as compared to $741.79 in November 2007.

“We have to behave as though we don't know what's going to happen,” Google chief executive Eric Schmidt was quoted as saying by The Wall Street Journal.

The company will curtail the “dark matter,” Schmidt said, projects that “haven't really caught on” and “aren't really that exciting.”

Schmidt said the company is “not going to give” an engineer 20 people to work with on certain experimental projects anymore. Popular social networking site Orkut was a product of this experiment by Google. Schmidt, however, promised to get this back when things improve.

Google executives had started preparing for the slowdown about a year ago, but things have now accelerated. In recent weeks, Schmidt has held meetings with top executives to determine where to focus investment more narrowly, the Journal said.

Top priorities include display ads, which use graphics and appear on Web pages; advertising on mobile phones; and the company's online business software.

Schmidt says the company is shifting more engineering and sales resources to those areas, and away from less-promising projects. Teams on projects the company is merely "fiddling with," he says, will get "naturally smaller as people get plucked off,” the report said.

The Wall Street Journal said the financial crisis has created a new sense of urgency within the company. Top executives say they remain committed to projects they believe hold long-term potential, but are prepared to “starve” lesser ones.

Courtesy: Times of India

Wipro puts 9,800 freshers on hold

BANGALORE: Reeling under the impact of global meltdown, Wipro Technologies Ltd has kept about 9,800 graduate engineers, hired from campuses last
year, waiting to join the IT bellwether, a company official said.

"Of the total 13,500 campus offerings made across the country last year, we have taken 3,700 of them so far, while the remaining (9,800) have been told to wait for their turn to join," Wipro vice-president for talent acquisition Pradeep Bahirwani told reporters at a hurriedly called press conference.

Due to slowdown in the IT industry and tough business environment, Bahirwani said, the company had discontinued campus offerings this fiscal for the time being.

"We have made 8,000 campus offers across the country in about 200 engineering colleges, including IITs and NITs (National Institutes of Technologies) this year as against 13,500 last year," Bahirwani said.

To make better use of the engineering freshers hired but not absorbed, the company has began to offer them the option of joining its BPO (business processes outsourcing) division at its software development centres in Kolkata, Bhubaneswar and Hyderabad for the same compensation fixed for IT services.

"To meet our BPO division's requirements in technical support, we have offered them the choice of coming onboard or wait as long for the joining date at the salary stack made in the offer letter. We hope to see a turn-around in business after 12-18 months to move them to IT services," Bahirwani said.

The company's novel initiative to ask freshers hired for IT services to join BPO division by paying upfront Rs 75,000 for bond backfired in Kolkata, with the hired engineers protesting against such the move and taking up the matter with West Bengal IT Minister Debash Das on Monday.

"The option has been given in commensurate with our current requirements, which are more in BPO than in IT services, as technical support role
requires engineering grads and not those from science or general stream. There is no compulsion or change in compensation," Bahirwani clarified.

Defending the offer to join the BPO division, the HR official said the decision was taken to give an opportunity to engineering graduates to get on work without further delay.

Wipro's global IT services business had 97,552 employees, including 16,500 in the BPO division till the second quarter (July-September) of this fiscal.

Courtesy: Times of India

Telecom Italia to cut 4,000 jobs

ROME: Debt-burdened Telecom Italia, Europe's fifth-biggest telecoms provider, will shed non-core assets worth up to $3.82 billion and cut 5 per
cent of its workforce in a bid to slash borrowings and trim costs amid a weak economy.

But the company confirmed it aims to strengthen its presence in Brazil as part of its 2009-2011 business plan announced, despite recent reports that it could consider splitting off or selling the unit.

The strategy focuses heavily on slashing costs and trimming its 37 billion euro debt load and relies on growth largely from Italy and Brazil. Telecom's Brazil unit, TIM Participacoes SA, has seen the highest growth for years in the group.

It will also expand in Argentina by exercising a call option to raise its stake in Sofora, the company which controls Telecom Argentina. Non-core assets worth up to 3 billion euros will be divested.

Telecom Italia said it would work to cut overall costs and investments by some 2 billion euros over the next three years, with 40 per cent of those savings coming in 2009. It will cut 4,000 jobs, on top of existing plans to cut 5,000 jobs by 2010. It had around 80,000 employees at the end of September.

The company said it expects 2009 revenue and organic earnings before interest, taxes, debt and amortisation (EBITDA) in line with those of 2008, and forecast investments of around 4.8 billion euros next year.

It expects to grow organic revenues by 3 per cent annually over the three-year period, while generating free cash flow of around 22 billion euros. It forecast cutting its net debt/EBITDA ratio to 2.3 by 2011 from around 3 in 2008.

Telecom Italia shares have halved in value from a year ago partly over doubts related to its belt-tightening strategy. They are trading at around one euro, giving the company a market value of about 17.55 billion euros.

But its shares have rallied nearly 13 per cent over the past month amid signs Chief Executive Franco Bernabe's efforts to trim debt and cut costs without major fireworks are bearing fruit.

Courtesy: Times of India

Fujitsu Siemens to cut 700 jobs

FRANKFURT: Fujitsu Siemens Computers plans to slash around 700 jobs in Germany -- 12 per cent of its workforce in the country -- due to continue
d competitive and economic challenges, it said.

Fujitsu Siemens Computers Holdings (FSC) is Europe's biggest maker of personal computers and employs about 10,500 worldwide, most of whom are in Germany.

It said the job cuts were not a result of its new ownership structure but rather a move to improve profitability and competitiveness.

Management began talks with union representatives about the plans on Thursday, Fujitsu Siemens said.

Earlier this month, Japanese electronics conglomerate Fujitsu Ltd said it will buy Siemens AG's 50 per cent stake in the business for 450 million euros ($580.5 million).

Fujitsu had said at the time it had no plans for any job cuts.

Profit margins are thin in the PC business, which is largely commoditised and fiercely competitive on price.

Wipro to recruits: Join BPO for now

BANGALORE: India’s third largest software exporter Wipro is asking its latest batch of recruits from engineering colleges if they want to join its business process outsourcing (BPO) division instead of the technology services unit for which they were originally hired.

Wipro said it is offering the option because it sees delays in the joining dates for some batches of recruits due to the ‘current business environment.’ According to sources, the students have been given the option of working in the BPO division for a year and later they could be shifted to the IT services vertical. The salary from the original offer remains unchanged.

“Every year campus joining is spread out over the four quarters. This is done for logistical reasons of training and seating. Staggered hiring programme and timelines are also closely linked to our business. Due to current business scenario, we estimate delays in joining dates of some batches of recruits. We are providing them an option of a role in our BPO division. The objective is to let engineering graduates commence work without delay,” Wipro Technologies’ vice president-Talent Acquisition, Pradeep Bahirwani, said.

He declined to comment on the number of recruits who have been given the option or when they were due to join.

The company has made offers to a total of 14,000 students for the 2008-09 fiscal. Wipro said last month that it expects revenue from its IT services business for the October-December third quarter to remain almost unchanged from the $1.1 billion in the previous three-month period because of the deteriorating global economic situation.

Reacting to the slowdown in the key US and European markets, software industry grouping Nasscom is due to revise lower its forecast of a 21-24 per cent increase in IT services exports during the 12 months to March 2009.

There has been a lot of apprehension among students that the difficult economic situation may result in tech companies not honouring the job offer that have been made. But the country’s top three IT services provider--TCS, Infosys and Wipro--have steadfastly maintained that they will keep their word.

At the end of September, Wipro employed nearly 62,000 staff in its IT services business and about 21,000 in the BPO division. It also makes strategic sense for Wipro to recruit the new engineering graduates in the BPO unit as this vertical regularly witnesses higher attrition rates than the IT services division.

Courtesy: Times of India

IT sector high in education fraud

BANGALORE: Education-related discrepancies among the employees in the Indian IT industry has increased during the second quarter of the current
calendar year when compared to the first quarter, according to report by First Advantage.

The IT industry has experienced the highest increase (almost 3.5 times) in education related discrepancies compared to Q1 of 2008, First Advantage said in its second quarterly report ‘Background screening trends-India.’

First Advantage managing director (West Asia) Ashish Dehade said, “Background screening acts as a first line of defence against potential fraud and security breaches. More sectors taking it up actively would employ fewer candidates misrepresenting information and thus, concurrently, fewer likely to engage in frauds or security breaches.”

However, this is not limited to just the IT sector alone as educational qualification-related discrepancies in the banking and financial services (BFSI) sector was the highest in the last quarters.

First Advantage said all the key industries tracked have shown an increase in education-related discrepancies. The report said that maximum discrepancies in educational qualifications were related to institutions in Northern India at 34 per cent, followed by Southern India at 30 per cent.

Almost half (48 per cent) of all fake university cases came from Northern India; followed closely by Western India (43 per cent). Pune topped the city list for education-related discrepancies, followed by Mumbai and Delhi.

Courtesy: Times of India