BPOs may lose 2.5 lakh jobs

NEW DELHI: Business Process Outsourcing firms are likely to see 2.5 lakh job losses by the first quarter of 2009 in the wake of downturn in the US and other developed economies, BPO industry association said.

Though the industry is likely to see thousands of job losses, the silver lining is that the recession would compel more companies in the US and Europe to look at outsourcing as a way to cut costs and improve efficiencies, the Business Process Industry Association of India (BPIAI) President Samir Chopra said.

Praveen Sengar, Head-Software, Services & Industry (Vertical Reserach), IDC India Ltd saidthe slowdown is likely to impact expansion plans of the industry, as the time taken for signing up new clients is taking longer time.

"It will also result in greater consolidation and promote diversification into areas hitherto considered as non-core activities," Sengar said.

Chopra said that urgent government measures are required to boost the industry, specially for the medium and small enterprises.

Both fiscal and administrative measures like extending tax relief for another 5-10 years and export promotion steps, including market development fund is need of the hour, Chopra said.

He further said the terrorist attacks in Mumbai has led to the widespread cancellations of visits and forthcoming international events.

Courtesy: Times of India

SBI issues 2,000 job letters in Gujarat

AHMEDABAD: At a time when the financial sector all over the world is collapsing, the State Bank of India (SBI), the country's largest public sector bank, is expanding in a major way.

Banking sources said this week SBI has issued job offer letters to around 2,000 persons, selected out of the two lakh persons who had applied for jobs, mostly clerical, from the state. Earlier, it was decided that 1800 persons will be recruited from Gujarat but the number was raised because the bank found more potential in the state.

The new recruits will be designated as customer relations associates and will be permanent employees. About 115 officers had also been recruited by the bank recently in Gujarat for its 962 branches. The bank has mopped up Rs 8163 deposits from April to November this year, as against the total deposits of Rs 4200 crore in the whole of 2007-08.

HC Pattnaik, chief general manager of SBI in Gujarat, said the recruitment test was conducted in July and personal interviews were carried out in October. Nearly 24 lakh applications were received from across the country.

SBI has shown a staggering growth in deposits as more and more people across the country have liquidated their holdings in other instruments, and even private sector banks, to play safe with the country's biggest bank.

Courtesy: Times of India

Nomura says to cut up to 1,000 staff in London

TOKYO: Nomura Holdings Inc said it would cut its staff in London by up to 1,000 people. The decision follows an internal review after the purchase of parts of Lehman Brothers, Nomura said in an e-mailed statement on Thursday.

Courtesy: Times of India

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

GM, Chrysler considering bankruptcy to get bailout

General Motors Corp and Chrysler LLC are considering accepting a pre-arranged bankruptcy as the last-resort price of getting a multi billion dollar government bailout, Bloomberg reported, citing a person familiar with internal discussions.

In response to automakers' bailout plea, staff for three members of Congress have asked restructuring experts if a pre-arranged bankruptcy - negotiated with workers, creditors and lenders - could be used to reorganize the sector without liquidation, media said. General Motors and Chrysler could not be immediately reached for comment by Reuters.

Industry executives and analysts say the immediate carnage from a bankruptcy of General Motors Corp, Ford Motor Co or Chrysler would spread throughout an industry that is bleeding cash in a global slowdown. All three automakers have urged Congress to authorize $34 billion in loans and credit lines, saying they will restructure, and cut models, jobs and executive pay to remain viable.

The White House did not dismiss the industry's $34 billion figure on Wednesday but said it was too early to say what it might support on an emergency basis.

Senate Majority leader Harry Reid wants to try to find a way to avert threatened bankruptcies in the U.S. auto industry with Detroit Three chief executives readying for a make-or-break hearing on Thursday on the bailout request.

Negotiations currently are splintered among small groups, making it unlikely that a proposed solution such as bankruptcy would emerge until next week at the earliest, the person briefed on internal talks told Bloomberg.

GM's failure alone would mean more than $200 billion in interest-bearing debt at the carmaker and its GMAC financing arm could be worthless for countless retirees and taxpayers, further upsetting consumption patterns.

Courtesy: Times of India

AT&T, Adobe set to axe 12,600 jobs

NEW YORK: Continuing with job cutting spree in corporate America, telecom major AT&T will slash 12,000 jobs while software maker Adobe will reduce its workforce by 600.

AT&T in a statement said it planned reduction of about 12,000 jobs or about four per cent of its total workforce.

Adobe has said it would slash 600 full-time positions worldwide. "The restructuring will result in anticipated pre-tax charges totalling approximately $44 to 50 million. Meanwhile, DuPont will cut 2,500 jobs and said it will not turn a profit in fourth quarter as a severe slowdown in markets eats away at chemical sales.

Courtesy: Times of India

Fears for 30,000 jobs at BoA/Merrill

Fresh fears emerged on Wednesday that as many as 30,000 jobs could go after Bank of America's takeover of Merrill Lynch. The bad news for the 260,000-strong combined workforce at the two banks came as an influential employment survey reported record layoffs in the financial services sector in November.

It was one of a number of dire reports on jobs released before Friday's official employment report, which is expected to show that American employers cut as many as 360,000 jobs last month.

Economists gave warning that depressing employment data could send already nervous stock markets tumbling. Rob Carnell, chief international economist at ING, described the outlook for the labour market statistics as “very, very bad”. He said: “Any decline in payrolls of the magnitudes we now expect could drive already jittery markets into a substantial reaction.”

CNBC reported yesterday that Bank of America (BoA) could cut up to 30,000 jobs as it subsumes Merrill Lynch — three times as many staff losses as previously estimated. Ken Lewis, BoA's chief executive, is seeking to extract savings of $7 billion (£4.7 billion) from the $50 billion all-share deal. He declined to comment on the report yesterday, telling the Charlotte Observer that the bank was in the “final stage of our analysis” for job reductions in its Merrill Lynch purchase.

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Nomura to cut up to 1,000 London jobs
Citigroup to cut another 52,000 employees
Most of the cuts are expected to come from Merrill Lynch, the world's biggest brokerage, which was forced to find a suitor in September as a way out of its funding crisis. John Thain, Merrill Lynch's chief executive, admitted in October that the deal would result in “thousands” of layoffs.

Yesterday, the Challenger Report, published by Challenger, Gray & Christmas, America's oldest outplacement firm, said that 91,000 jobs had been shed in the financial services sector in November, hitting a nine-year high.

It is the first snapshot of recent job losses at the banks and other financial companies since Monday's announcement that the economy has been in recession for a full year. The last time that job losses in the financial sector came close to November's figure was in March 1999, when 22,000 positions were lost amid the Russian and Asian crises. November's figures were a sharp increase on the 18,000 layoffs reported for October and the 7,000 cut in November last year. About 226,000 jobs have been lost in American financial services so far this year.

The growing fears over jobs came as the Federal Reserve's Beige Book report found that economic activity had weakened further in recent weeks.

The report, which will be used by the central bank's policymakers for their December meeting on interest rates, indicated a further decline in already grim economic conditions.

“Overall economic activity weakened across all Federal Reserve districts since the last report,” The Beige Book said. It noted weak consumer spending and that car sales were “down significantly” in most regions.Manufacturing declined and housing remained soft, due to “reduced selling prices and low, but stable, sales activity”.

The Beige Book, based on a survey of the 12 regional Federal Reserve banks, found few bright spots. Significantly, the report found credit conditions tightening, further constricting economy activity. “Lending contracted, with many districts reporting reductions in residential, commercial and industrial lending and tightening lending standards,” it said.

Courtesy: Times Online