Financial Collapse RSS

Nov 27, 2008

Speedy Hire warns of more job cuts

Britain's biggest tool rental group gave warning on Wednesday that the slowdown in the construction industry next year would be worse than previously forecast.

Speedy Hire warned its 5,000 employees that a further round of job cuts would be inevitable as conditions deteriorate.

The company, which based in Haydock, Merseyside, has already let 429 staff go and expects a further 63 to leave by the end of the year. It has closed 33 depots this year and plans to cut 260 vans and lorries from its vehicle fleet.

However, Steve Corcoran, the chief executive, said that a second round of cost-cutting was likely in the new year. He told The Times: “We haven't done anything wrong as a business — but the private sector has effectively exited the market. There have been 800 construction projects cancelled or deferred in the last five weeks and we have to take a view on that. We can't have a cost base geared for work that isn't there.

“We are taking a fairly aggressive view on the market. We feel it will be worse than some are reporting.”

Mr Corcoran said that Speedy Hire was assuming there would be £63 billion of construction work completed during the next year, compared with an annual average of £80 billion since 2000, as housebuilding and other private-sector projects, including retail developments, are shelved.

He added: “If you annualise current run rates, you have a market that runs substantially downwards. That points to 5,000 new construction projects next year, rather than 9,000. We see more downside than upside.”

Mr Corcoran said that activity in London had tailed off before other parts of the UK — but predicted that infrastructure work associated with the Olympics, including projects to showcase the capital, would keep activity ticking over. He said that business was also holding up in Scotland and Wales but gave warning that the North East of England and the West Country were most problematic.

He said: “When you go down into Devon, Cornwall, Somerset, Dorset, it is heavily geared to the residential and leisure sectors, and those areas are not doing well.”

He was speaking as Speedy Hire reported a 3.9 per cent rise in half-year pre-tax profits to £23.8 million as sales rose by 22 per cent to £256.2 million. Sales from the company's top 50 construction clients were up 36 per cent in the period.

Mr Corcoran added: “It isn't all doom and gloom and it is important that we don't just concentrate on private-sector work. Work from infrastructure projects, regulated industries and Government is still pretty good.

“Things could also change if nuclear and renewable energy projects are accelerated, but these are big projects that require a lot of planning, political will and money, so we are erring on the side of caution there as well.”

However, shares fell 3¼p to 180½ p. Nick Spoliar, of Altium Securities, the broker, said: “The unavailability of credit for small and medium-sized companies, which make up around 40 per cent of Speedy's client base, has generated the significant revenue declines, which the group is seeing from this sector of the market.”

Chrysler nearly 5,000 job cuts

Chrysler LLC says it expects minimal involuntary layoffs will be needed to reach its goal of cutting 25 percent of its salaried and contract work forces.

The deadline for white-collar workers to accept the company's buyout and early retirement offers is Wednesday.

Spokeswoman Shawn Morgan wouldn't say how many workers have taken the offers so far because they have until Sunday to change their minds. For those who take the offers, their last day at work will be Wednesday.

She said Chrysler may still have to make involuntary cuts to reach its goals.

"We anticipate it to be minimal," she said.

Chrysler announced last month it would slash about 5,000 white-collar and contract workers to deal with a continued downward spiral in U.S. auto sales.

Industry analysts said the cut is so large that it would affect the company's product development plans.

Workers were offered buyouts of up to $75,000, six months of health care and a $25,000 voucher toward the purchase of a new Chrysler vehicle.

Chief Executive Robert Nardelli, in a memo announcing the cuts in October, warned that more restructuring is coming at a pace faster than ever.

"In the near future, we will be making organizational announcements as a result of restructuring actions reflecting the need to find new ways to operate," he wrote.

Morgan said it's too early to tell if more cuts are coming. The company, though, is preparing a restructuring plan for Congress next week as it and other automakers go after $25 billion in government loans.

Chrysler said in a statement issued Wednesday that the reductions are "necessary to ensure the company's long-term viability and competitiveness as we appeal to Congress for a $7 billion working capital bridge loan."

The company now has about 17,300 salaried workers in the U.S. Morgan would not say how many contract workers it has. Contract workers generally are employed by other companies but work at the automaker's facilities.

Macquarie cuts 10-15 pct jobs across Asia

Macquarie Group Ltd, Australia's top investment bank, is cutting 10 to 15 percent of jobs in Asia, the latest in a wave of worldwide job cuts at banks hit by the financial crisis, two sources said on Thursday.

Macquarie spokeswoman Paula Hannaford in Sydney said the bank would not comment on market rumours, and spokesmen in Seoul and Hong Kong declined to comment.

When asked on Nov. 18 about possible job losses, Macquarie Chief Executive Nicholas Moore said there was no overall figure for job cuts across the group, which has 13,800 staff around the world. He said it was up to individual divisions to manage staff levels depending on market conditions.

"Each of the businesses will have their own plans," Moore said at the group's results briefing last week.

Macquarie cut 45 out of just over 300 staff in South Korea, a person with direct knowledge of the matter said.

Last week Citigroup (C.N: Quote, Profile, Research, Stock Buzz) announced 52,000 job cuts, but Asia was left relatively unscathed.

Unlike its Wall Street rivals, Macquarie reported a first-half profit last week of A$604 million ($393 million), albeit down 43 percent on a year ago, dented by A$1.14 billion in gross asset writedowns.

In the April-September half, it slashed employee costs nearly in half, largely by cutting bonuses.

Fujitsu Siemens to cut 700 jobs in Germany

Fujitsu Siemens Computers plans to slash around 700 jobs in Germany -- 12 percent of its workforce in the country -- due to continued competitive and economic challenges, it said on Thursday.

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 percent 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 commoditized and fiercely competitive on price.

ArcelorMittal to cut up to 9,000 jobs

ArcelorMittal, the world's largest steelmaker, unveiled plans on Thursday to slash up to 9,000 more jobs, saving $1 billion a year in response to a deepening global economic downturn.

The company said it would launch a voluntary redundancy scheme for largely white collar staff to make the cuts, which could affect about 3 percent of its workforce.

Up to 6,000 of the job losses would come in Europe, where its largest offices are in Luxembourg and Paris.

The company warned on Tuesday that it might indefinitely lay off 16 percent of its U.S. workforce, or around 2,400 people, as it cut steel output there by 40 percent. It has since settled on 490 positions going through a voluntary scheme.

"The global economic reality means that it is only sensible to adopt such measures," Bernard Fontana, a member of ArcelorMittal's management committee, said in a statement.

ArcelorMittal, which has a global workforce of over 326,000 in more than 60 countries, has called a meeting of the European works council in Luxembourg on Thursday to present the plans.

Investor concerns about the impact of a dramatic downturn in steel demand on the industry have been building for months. The company's shares hit a four-year low of 12.93 euros a week ago and five-year credit default swaps in the company, a sign of how likely the market believes it will default on debt, have risen above 900 basis points from below 100 at the start of the year.

A rapid slowdown in sales by carmakers, key users of steel, a Chinese economy that has slowed to single-digit growth, and tougher times for Russia all bode ill for the sector, which has closed furnaces, slashed production and extended holiday breaks.

ArcelorMittal shares rose steadily on Thursday and were 4.7 percent higher at 19.67 euros by 1600 GMT. The DJ Stoxx European basic resources index was up 5.0 percent.

The Luxembourg-based company announced earlier this month that it would cut worldwide production by 35 percent, up from a previous target of 15 percent. It also said it would pause its growth strategy and seek deeper cost cuts.

The company said the timing of the job cuts would differ from country to country.

Michael Shillaker, analyst at Credit Suisse, described the industry's massive production cuts as unparalleled.

"There can't be anyone out there who isn't impressed," he said, adding the output cuts should be temporary as long as the downturn does not become a depression.

"Arguably by Q2 we could see steel prices rebound ... and in 12 to 18 months we could be talking about capacity constraints again."

Earlier on Thursday, the company said it was considering output cuts and short-time working in December at its German plants in Hamburg, Bremen, Duisburg and Eisenhuettenstadt.

Nov 25, 2008

Skanska to Cut 3,400 Nordic Jobs

Sweden’s biggest builder, will cut about 3,400 jobs in Nordic countries as a slump in the European housing market spreads to commercial and civil building.

Orders in the region will probably decline about 15 percent next year, Stockholm-based Skanska said today in a statement. The cuts amount to 17 percent of employees in Scandinavia and 5.7 percent of the total.

The company, which gets just 4 percent of its construction orders from housing, has followed homebuilders and building materials companies down as a credit crunch chilled property markets. Last year Skanska got more than 40 percent of its revenue in Scandinavia, where it also maintains back-office departments whose costs have outpaced revenue growth.

“Skanska is doing this restructuring later in the cycle than other construction companies, and it will see an upturn later as well,” Andrew Gardner, a London-based analyst at MF Global Securities Ltd., said in an interview.

Skanska closed up 1.2 percent at 61.75 kronor after dropping by 9.8 percent in Stockholm trading earlier in the day.

About 2,000 workers in Sweden, 800 in Norway and 600 in Finland will lose their jobs, the company said. Skanska said it will take a 600 million-kronor ($75 million) charge in the fourth quarter because of the program.

“Once projects finish, it’s unlikely Skanska will renew contracts with all their temporary workers,” Gardner said. “We also expect to see some more writedowns.”

More Cuts Possible

Skanska said this month it would cut jobs in response to falling orders. Its latest forecast for orders comes even as the Swedish government plans to increase infrastructure spending next year. Skanska today predicted a “significantly” smaller volume decline in markets outside the Nordic region.

“It’s mainly the residential building that has decreased dramatically, and we also see a continuing slowdown on other building,” Chief Executive Officer Johan Karlstroem said in an interview. “Depending on how the markets will go, I won’t exclude that we will have to take a new round of cuts.”

Most of the job cuts will take place in the first half of next year, spokeswoman Karin Lepasoon said. About half the cuts in Sweden will affect white-collar positions, Skanska said.

Public-Private Projects

As building markets slump, Skanska has tried to widen margins by investing in public-private development projects where it jointly owns or maintains public facilities such as hospitals and highways. Its projects include highways in Finland and Norway, hospitals in the U.K., and power plants in Brazil.

“Public spending is by and large still there, but anything that’s a public-private project has a question mark because of the private funding component,” Gardner said. MF has a “trading sell” recommendation on Skanska.

The company has written down 120 million kronor this year on construction projects and 570 million kronor on U.K. public- private partnerships where costs rose on fixed-price contracts.

Skanska joins other global builders and construction- materials suppliers in retreating as demand deteriorates. Wolseley Plc, the world’s No. 1 plumbing-gear supplier, said Nov. 18 it will cut 380 jobs in the Nordic region. YIT Oyj, Finland’s biggest builder, replaced its CEO and is in talks to cut 350 jobs as its stock of unsold apartments grows in Finland and the Baltics. NCC AB, Skanska’s next biggest rival in Sweden, plans to make additional job cuts in 2009, beyond the 1,700 targeted for this year, as housing markets slump in the Nordic countries and Germany. Swedish homebuilder JM AB has also given notice to 600 employees since June.

Nov 24, 2008

The 2008 Christmas Carol of Financial Collapse

The 2008 Christmas Carol
[To the tune of Santa Claus is Coming To Town]

You'd better watch out
You'd better not cry
You'd better keep cash
I'm telling you why:
Recession is coming to town.

It's hitting you once,
It's hitting you twice
It doesn't care if you've been careful and wise
Recession is coming to town

It's worthless if you've got shares
It's worthless if you've got bonds
It's safe when you've got cash in hand
So keep cash for goodness sake, HEY

You'd better watch out
You'd better not cry
You'd better keep cash
I'm telling you why:
Recession is coming to town!

Finance products are confusing
Finance products are so vague
The banks make you bear the cost of risk
So keep out for goodness sake, OH

You'd better watch out
You'd better not cry
You'd better keep cash
I'm telling you why:
Recession is coming

[tags : ]

Citigroup gets $20bn lifeline from US government

The US government last night took a $20bn (£13.4bn) stake in Citigroup, the tottering US banking behemoth, to shore up confidence in the American financial system.

The move boosted confidence in the markets, with shares moving ahead throughout Europe. The FTSE 100 index, which suffered its third worst week ever last week, jumped 81.41 points to 3862.37, a gain of just over 2% in early trading.

The US treasury secretary, Henry Paulson, and the Federal Reserve chairman, Ben Bernanke, worked with officials throughout the weekend on the lifeline for the institution whose collapse would have wreaked havoc on the US economy.

The New York Federal Reserve Board president, Timothy Geithner, who is expected to be nominated later today to succeed Paulson as treasury secretary, also was closely involved.

"With these transactions, the US government is taking the actions necessary to strengthen the financial system and protect US taxpayers and the US economy," the authorities said in a statement issued late last night. "We will continue to use all of our resources to preserve the strength of our banking institutions, and promote the process of repair and recovery and to manage risks."

The $20bn cash injection by the treasury will come from the $700bn US financial bail-out package. The move follows an earlier $25bn infusion in Citigroup for which the government received an ownership stake.

As part of the plan, the treasury and the Federal Deposit Insurance Corporation will guarantee against the "possibility of unusually large losses" on up to $306bn of risky loans and securities backed by commercial and residential mortgages.

Under the loss-sharing arrangement, Citigroup will assume the first $29bn in losses on the risky pool of assets. Beyond that amount, the government would absorb 90% of the remaining losses, with Citigroup absorbing 10%.

The agreement places restrictions on executive compensation, including bonuses, and calls on Citigroup to take steps to help distressed homeowners.

The move is the latest in a string of high-profile government bail-outs. The Fed provided financial backing to JPMorgan Chase's buyout of ailing Bear Stearns in March. Six months later, the government was forced to take over mortgage giants Fannie Mae and Freddie Mac and throw a financial lifeline to the insurance giant American International Group.

Citigroup yesterday ran full-page newspaper adverts in the US to reassure investors and creditors it could survive the latest bout of turmoil in the markets. A slump in Citigroup stock last week saw its shares lose 60% of their value.

Once the world's largest bank, Citigroup's asset base of $2tn is much larger than Lehman Brothers, whose bankruptcy in September led to a deepening of the credit crisis that was threatening to engulf Citigroup.

Citigroup is adamant that the price slump, which has pushed its stock to the lowest point since 1992, is a product of mistaken fears for the strength of its balance sheet. In its adverts, it said financial markets had been tested in "unprecedented ways" this year, but its diversified business model – which ranges from credit cards to transaction services and investment banking – would steer it through the uncertainty. It ended with a clarion call and an unintentional allusion to the exhaustive talks this weekend at Citigroup's Manhattan headquarters: "That's why now, more than ever, you can feel confident that Citi never sleeps."

Mike Mayo, an analyst at Deutsche Bank, believes reserves of $25bn and other resources should cover estimated losses of $50bn on bad loans.

Richard Bove, at Ladenburg Thalmann & Co, said it would take a repeat of the Great Depression to threaten Citigroup's survival.

However, concerns over the US economy are focusing on Citigroup. Sean Egan, at Egan-Jones Ratings, has argued that the bank might need a further $50bn. The fear is that Citigroup will be exposed to more losses if US growth deteriorates severely. Last month, the bank obtained $25bn from the treasury's troubled asset relief programme.

Vikram Pandit, Citigroup's embattled chief executive, has ruled out a break-up, dismissing reports it might sell Smith Barney, its wealth management arm. But it is understood executives have not ruled out a break-up.

Market professionals said Citigroup's stock would be hammered again this morning if a deal was not struck with the US government.

Joe Saluzzi at Themis Trading said it needed to announce a break-up, management change or restructuring by today. "That would probably continue a rally on Monday morning," he said.

3M hit by more job cuts

3M Canada is starting to buckle under the weak global economy, announcing about 100 job cuts yesterday.

The layoffs for the traditionally stable manufacturer have been in the works since June, said plant chairperson Randy Mason, who represents 3M's unionized workers.

"It's not a very good day. These are good, solid jobs in the community that are going to be leaving," he said. "It should concern everyone."

About 60 hourly and salaried manufacturing positions in the company's Oxford Street plant and 40 others in its head office will be cut. About 40 sales and manufacturing positions outside London also are being eliminated.

The latest job cuts are in addition to 20 announced last month that take effect in February, said Mason, unit chairperson at the plant, represented by Local 27 of the Canadian Auto Workers Union.

In July, workers at the London plant -- which makes products such as adhesives, sandpaper and duct tape -- opened their contract mid-term and agreed to a wage freeze to help the company cut costs.

However, the poor U.S. economy and its effects on other industries, such as automakers, has taken a toll, Mason said.

"People aren't buying," he said, referring to both industry and consumers. "You can draw the lines right across to the whole auto thing.When people stop buying, everything snowballs."

The declining economy is the largest concern for 3M workers, Mason added. Many of the cuts won't take affect until September 2009, he said.

The 40 unionized jobs being cut at the London plant are from a division that makes double-sided tape, he said.

Yesterday's announcement has left many employees worried about their futures, Mason added.

"We're dealing with some employees that are obviously very concerned -- people who are angry (and) very devastated," he said. "This is serious stuff.

"There's people's lives here."

Source : LondonFreePress
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Palm Cuts Jobs: Losing ground to RIM and Apple

Palm has started making job cuts but has yet to announce how many of its 1050 workers are going to face redundancy.

The announcement comes just a couple of weeks after Palm's shares dropped a whooping 21% following doubts voiced by an analyst.

Morgan Keegan analyst Tavis McCourt downgraded the stock and said in a note to clients that the company may need to raise some serious capital to complete its turnaround plan.

Now Palm has admitted it needs to make job cuts, as Reuters says it continues to lose market share to rivals Apple and Research in Motion (RIM).

Spokeswoman Lynn Fox would not be drawn on how many jobs are going to go but said: "The goal is to consolidate resources and focus our efforts more effectively".

Nov 23, 2008

Escalating Bank Layoffs still Far From Over

The size and nature of the latest round of staff cuts suggests the banks believe the decline in business activity will last for some time.

While the scramble to raise capital by most major banks over the past few months has left no doubt about the seriousness of the financial crisis, the current wave of layoffs gives a clear indication that the banks expect it to last for some time yet. The percentages vary from bank to bank, but the cutbacks announced so far have all been significant as the firms position themselves for another slow quarter – at least.

That message comes across all the stronger since the layoffs are being made across all regions – squashing the long-held belief that Asia, being a region of comparatively higher growth, would be able to ride out the storm – and more importantly includes staff within most divisions of the banks and at all levels of seniority, from juniors and associates all the way up to managing directors.

The latter in particular shows that there are no safe havens anymore and that banks are prepared to let go of high profile and highly regarded bankers in their quest to cut costs. To be sure, the staff cutbacks are being made in response to the slowdown in business this year and the divisions that have seen a particularly sharp drop-off in activity are also the ones facing the most severe staff reductions. In Asia, one major investment bank is said to have closed down its entire leverage finance desk, while another is said to have let go of its real estate team. And on the trading floors, juniors are fast becoming a bit of a luxury as banks try to adjust the size of their teams in response to the drop in daily turnover.

During a more “normal” cycle downturn, investment banks wouldn’t close down entire departments and typically would hold on to their most senior staff while riding out the downturn in order to be ready to do business when things pick up again. The fact that they are not doing so this time, suggests that, for certain parts of their business at least, they are not expecting a recovery of any major significance in the next six to 12 months.

“We are now in a time when even good people are being let go,” reflected a banker at one of the firms that announced layoffs in Asia last week.

Within investment banking, equity capital markets issuance in Asia ex-Japan is down 64% so far this year compared to the same period last year, while debt issuance is off by more than 50% with no G3 issuance at all for the past 10 weeks, according to Dealogic. M&A has held up better and is largely flat on a year-on-year basis, partly because of the acquisition opportunities arising from falling valuations. However, this part of the market too has seen an almost cliff-like drop-off in the number of announced deals over the past couple of months.

Among the divisions that still have plenty of work are those that structure products specifically for risk management and hedging purposes, for which there is still strong interest. Banks with significant corporate banking businesses, like Citi, Deutsche Bank and HSBC, are also seeing continued good demand for their cash management services. Private banking is also widely regarded as another area that ought to hold up okay in the current downturn, although sources say Citi laid off a sizeable number of its private bankers in Asia last week. Although not confirmed, the latter would be worrying since it suggests that Citi may be losing clients because of concerns about its balance sheet.

Citi’s shares were among the top losers on Wall Street last week and ended the week below $4 amid talk that the world’s largest commercial bank was looking for a potential new owner who could inject fresh capital. The share price has plunged 86% this year, including a 74% drop in the past three weeks, as investors worry about the overall health of the bank, the potential for a further decline in the value of its subprime-linked assets and its ability to raise new capital if needed. Amid this bubbling confidence crisis, investors paid little attention to the positive elements of Citi’s pledge to cut costs and reduce the overlap between the commercial bank and the investment bank, focusing instead on potential problems that may have prompted these drastic measures.

In a so called “Town Hall meeting” to the staff last Monday, Citi’s CEO Vikram Pandit said the bank is aiming to cut both costs and the number of employees by 20% from their respective peak levels in the near term, but stressed that the bank’s current capital position is strong with a tier-1 capital ratio of 10.4%.

With regard to the reduction in staff, Pandit said the bank will reduce its total headcount to about 300,000 from 352,000 at the end of the third quarter. However, about half of that will be achieved through the sale of businesses, resulting in actual layoffs of about 26,000 people. And the management wasted no time in implementing the plan – at least not in this region. According to sources, the bank let go of about 15%-30% of its employees across most departments in Asia last week. In investment banking, the numbers were said to be at the low end of that range, translating into about 15-20 people, most of whom were at or below the vice-president or associate level, although several sources said the cull went up to the MD level.

An obvious reason for letting go of an MD instead of an associate is that the salary savings will be greater. However, since even senior bankers are not expecting to get much of a bonus this year (if at all) the salary gap is currently a lot smaller than in a typical year. That said, the reason why the layoffs are happening now, towards the end of November, is obviously that the management wants to reduce the number of staff that it has to reward from the tiny bonus pool that it does have.

Partly because of its massive size, but also because of the overlap between the corporate bank and the investment bank, the layoffs at Citi are the most numerous among what has been announced in Asia so far. But the downsizing appears to be happening across the board and sources say no one bank is expected to be spared.

Also last week, HSBC laid off 500 people in Asia, of which 450 were based in Hong Kong. The bank provided no breakdown, but sources say the majority of the reductions came within the Personal Financial Services division, which includes the retail bank. Rough estimates suggested that about 25 people were let go from the investment bank in Asia and another 15 from global markets, which includes sales and trading. Again, at least one MD was among those who lost their job.

Media reports also said Morgan Stanley reduced its staff in Hong Kong last week by about 100 people, or roughly 6% of its total staff based here. Among those leaving was the bank’s head of prime broking for Asia, Kurt Baker. Baker had spent more than 15 years at the firm and was widely respected in the industry for his insights into the alternatives and hedge fund world.

This latest round of layoffs comes after Goldman Sachs reduced its investment banking staff in Hong Kong by about 100 people a few weeks ago and by about 13 people in Tokyo, accounting for about 10% of the investment banking division in each country. The cuts were part of a plan to reduce staffing levels by 10% globally to the levels they were at in 2007. This suggests the total layoffs were about 3,200 people, of which Asia accounted for around 300. Aside from Hong Kong and Tokyo, India was also hit quite hard, according to sources.

And in mid-October, Merrill Lynch said it would reduce its global headcount by about 500 people in response to the decline in trading volumes and revenues as well as the worsening outlook for financial markets. The cuts included at least 75 jobs in Asia-Pacific, of which most were in sales and trading. Given the relatively low global number, most industry observers expect Merrill to announce another round of job cuts in early January once its merger with Bank of America has been completed.

And the expectations are that there is more to come over the next couple of weeks. On Thursday last week, The Wall Street Journal reported that JPMorgan is planning to let go of 10% of its investment banking staff which number about 31,000 people globally, including 7,000 that it took over from Bear Stearns earlier this year. The report hasn’t been confirmed.

And although drastic, bankers at several firms note that the current round of layoffs only position the banks to deal with the expectations of a slow beginning to 2009. If there are no signs of improvement, or indeed, if the market situation continues to deteriorate, there could well be another industry-wide cull in three or six months’ time.

Source : FinanceAsia
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Philips says to cut 1,600 healthcare jobs

Dutch Philips Electronics will lay-off 5 percent of its workforce at its Healthcare division in coming months, a company spokesman said on Saturday, confrming an earlier report in a Dutch newspaper.

Some 32,000 workers are employed at Philips' healthcare division, giving a total number of 1,600 job cuts.

Earlier, regional newspaper Eindhovens Dagblad also quoted a company spokesman confirming the job cuts, but he declined to reveal where and how the layoffs will be made.

Source : Reuters
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Nov 22, 2008

Toyota to Cut 3000 Jobs in Japan

Toyota Motor Corp., Japan's biggest carmaker, will cut its domestic temporary workforce by 50 percent as vehicle demand slumps globally.

Toyota will cut the number of temporary workers to 3,000 from 6,000 by the end of March, spokesman Paul Nolasco said today in a phone interview.

The automaker follows Mazda Motor Corp. and Isuzu Motors Ltd., which yesterday said they would slash a combined 2,700 temporary jobs in Japan in response to slowing sales. Earlier this month, Toyota forecast a 68 percent drop in full-year net income, the biggest decline in at least 18 years, as a global recession cripples auto demand.

``Falling export demand is having a big impact on production in Japan,'' said Hirofumi Yokoi, a Tokyo-based analyst at automotive consulting company CSM Worldwide. ``It's unlikely plants will get shut down, but if things get worse, lines, shifts will have to be stopped and plans for new factories will be delayed.''

Japanese companies, which focused on hiring easy-to-fire contract workers during the 15 years of lackluster economic growth that followed the bursting of the bubble economy in 1990, are now shedding them as the global recession cuts demand. Temporary and part-time workers make up 33 percent of Japan's workforce, up from 20 percent in 1991, according to the Labor Ministry.

Honda, Nissan

Honda Motor Co., Japan's second-largest carmaker, also said today it is cutting 270 temporary workers at its Saitama plant, where the carmaker is reducing output of Accord sedans by 40,000 units. Honda is also cutting production in the U.K. of Civic compacts and CR-V sport-utility vehicles by 21,000 units.

Nissan Motor Co. said last week it will reduce its domestic production by an additional 72,000 units. Japan's third-largest automaker had its credit rating cut one notch today by Fitch Ratings, which cited the company's dependence on the weak U.S. auto market and an appreciation of the yen.

Toyota gained 4.6 percent to 3,080 yen at the close of trading today in Tokyo. The shares have dropped 49 percent this year, set for the worst annual performance since at least 1975.

Credit Crunch

The credit crunch has crippled U.S. vehicle sales, forcing General Motors Corp., Ford Motor Co. and Chrysler LLC to seek a combined $25 billion in U.S. government loans as they burn through cash. U.S. unemployment claims for the week ended Nov. 15 surged to the highest since 1992 as Americans filed 542,000 initial jobless claims.

Japan's exports declined at the fastest pace in almost seven years in October, and Toyota's U.S. sales plunged 23 percent last month.

Toyota, heading for its first drop in U.S. sales in 13 years, will extend the Christmas-New Year closure at its U.S. and Canadian plants by two days. The carmaker will also cut Sienna minivan output in Indiana by half in January and slow one of two Georgetown, Kentucky, factory lines.

While no full-time employees will be laid off, the company will eliminate at least 50 percent of its 500 temporary workers at the Georgetown plant during the first three months of 2009.

Taiwan's Largest Home Appliance Chain - Tsann Kuen to lay off 600 employees

Tsann Kuen Trans-Nation Group, the parent company of Tsann Kuen Enterprise Co. -- Taiwan's largest home appliance and consumer electronics chain -- confirmed Friday it will reduce its work force by 3 percent -- about 600 employees -- to cope with the economic downturn.

Executives of the group said the redundancy plan will cover Tsann Kuen's operations both in Taiwan and overseas.

They added that despite the economic recession, Tsann Kuen is striving to maintain a profit margin for its shareholders, and that the company had adopted the redundancy plan, so as not to have to force its workers to take unpaid leave or slash their salaries instead.

"For those hard-working employees in some of our busy retail stores, the company will raise their pay by 1.5 percent," the top management said.

The group's retail chain has 263 retail outlets in Taiwan and on the offshore and outlying islands of Penghu and Kinmen. It also has a production base in Zhangzhou, China's Fujian province, and eight retail outlets in Japan.

It not only has Taiwan's largest retail chain selling mainly computer, communication and consumer (3C) products, but also is a manufacturer of small-size electric home appliances.

Products produced by the company include irons, coffee makers, pop-up toaster ovens, conventional ovens, electric saucepans, juice extractors, electromagnetic ovens, electric vacuum cleaners and microwave ovens.

Statistics show that the group's revenue in October dropped 20.88 percent from the same month of 2007, while revenue in the first 10 months of this year also decreased 3.76 percent, compared with the corresponding period last year.

Since 2003, the group has ventured into the travel business, with good results. Its subsidiary, Star Travel, recorded a 20 percent business increase in September in spite of the economic recession.

Source : TaiwanNews
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Bank of New York Mellon cuts 1800 Jobs

Bank of New York Mellon Corp on Thursday said it plans to cut 1,800 jobs as falling equity markets reduce the assets it oversees, cutting into potential profit.

The reductions affect about 4 percent of the New York-based company's 43,000-person workforce, with the bulk beginning in January and continuing through 2009, spokesman Ron Gruendl said. Some cuts will come through attrition, the bank said.

Bank of New York Mellon declined to say which businesses or geographic regions will be affected.

Thursday's cuts are not related to Bank of New York Co's $18.3 billion purchase in July 2007 of Pittsburgh-based Mellon Financial Corp, which created Bank of New York Mellon. The merger was expected to result in 3,900 job reductions.

"It has become clear that we need to take additional steps beyond our merger synergies to reduce expenses, given the current weakness in the global economy," Chief Executive Robert Kelly said in a statement.

Bank of New York Mellon is the world's largest custodian of assets for institutional investors and one of its biggest asset managers and even before this quarter's stock market selloffs had seen assets decline.

Assets under custody fell to $22.4 trillion as of Sept 30 from $23 trillion three months earlier, while assets under management fell to $1.07 trillion from $1.11 trillion.

Third-quarter profit fell 53 percent from a year earlier, largely because of a charge to bail out money market funds.

Bank of New York Mellon joins other asset managers to announce job cuts over the last few weeks, including: Fidelity Investments, Janus Capital Group Inc (JNS.N: Quote, Profile, Research, Stock Buzz), Legg Mason Inc (LM.N: Quote, Profile, Research, Stock Buzz), MFS Investment Management and Putnam Investments. MFS on Thursday announced 90 job cuts, or 5 percent of its workforce.

Last month, the bank said it would receive a $3 billion capital injection from the U.S. Treasury Department. It was one of the nine original banks to receive funds from the government's $700 billion bank rescue package.

Shares of Bank of New York Mellon closed Thursday down $1.03 at $24.36 on the New York Stock Exchange. They have fallen 50 percent this year.

Source : Reuters
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JP Morgan Chase To Cut 3000 Jobs

JPMorgan Chase & Co plans to cut about 3,000, or 10% of its investment banking staff, to tackle with the global economy downturn, reports said.

The job cuts are expected to be complete by the end of 2008 and follow suit with such cuts made by rival Goldman Sachs. Sources noted that the cuts will affect all levels, asset classes, and geographies.

Meanwhile, a report said that JPMorgan is also planning to freeze base salaries next year for most employees who earn more than $60,000 to $70,000.

Source : RTTNews
[tags : ]

Nov 20, 2008

Bangkok Factories to Layoff 1000 Workers and posibly 100,00 jobs in 2009

Factories in Ayutthaya, one of the major industrial areas in the vicinity of Bangkok, have started to see the affect of the economic downturn, with about 1,000 workers being laid off and a large number of employees at risk of becoming unemployed next year.

The Federation of Thai Industries, Ayutthaya chapter estimated about 100,000 employees or 50 per cent of the workforce in 1,700 factories in Ayutthaya were vulnerable of losing their jobs in 2009 due to slowing export orders. To survive the imminent crisis, entrepreneurs are likely to cut overtime pay and lay off workers. The provincial labour chief admitted the situation was worrisome.

"Nine businesses have laid off about 1,000 employees so far," said Pongthai Musikapong,
chief of Provincial Labour Protection and Welfare Department.

Negative signs are also seen in the job recruiting business, as there is now no demand for labour from factories. The recruitment companies might have to close down.

"Slashing overtime pay and stoping recruitment of new employees are the first doom signs. Normally, there is demand for labourers every month, but since October, we haven’t received any request for recruitment of new employees from factories," Siam Interbusiness Co.,Ltd Managing Director Manus Sabmeechai.

Pressured by on uncertain future of their career, many factory workers struggle to survive by taking courses at a vocational college, which has seen the number of students triple this month. All courses were full with around 10,000 people.

Apinya Chumwapee, an electronic factory worker, said she feels insecure as she can lose her job anytime, so she enrolled in a make-up course to create her own opportunity of a new occupation if she is laid off.

Waewduan Phoyai and her factory colleagues are learning to bake, so they can open their own shop at home if they are forced to leave their current jobs.

"I could be one of the workers laid off soon. I need some skills to help me earn a living,"
Waewduan Phoyai, a factory worker said

Echoeing the voices of these concerned workers, relevant agencies in the province called a meeting to gather details on the unemployment situation. It will be submitted to Deputy Prime Minister Olarn Chaipravat who’s scheduled to visit Ayutthaya next week to address the potential mass lay-offs, also likely to occur in other provinces as well.

Latest statistics by the labour ministry disclosed that 166 firms had terminated about 18,000 workers. Another 81 companies with 29,000 employees were expected to be affected later.

Source : MCOT
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GlaxoSmithKline to Cut 620 Jobs

GlaxoSmithKline has announced plans to cut 620 jobs at its Kent manufacturing site, blaming the "fiercely competitive environment" within the pharmaceutical industry.

The company said it will close the Dartford factory by 2013, because patents for its epilepsy drug Lamictal and herpes treatment Valtrex, which both account for 60pc of production at the site, are set to expire over the coming months.

The loss of patents mean that cheaper generic versions of the drugs can be manufactured by rival companies.

The closure of the plant is part of a £1.5bn cost-cutting program announced last year by the company to deliver annual pre-tax savings of up to £700m by 2010. The company said it has begun consulting with unions over the job losses, expected to be made over the next four years.

Production of newer products manufactured at the site will be transferred to other GlaxoSmithKline sites.

"The proposal is no reflection on the professionalism and commitment of Dartford employees, but that of the fiercely competitive environment in which the pharmaceutical industry operates," said Joe Foley, director of the Dartford site.

The announcement comes a week after the company revealed it was cutting 1,000 jobs or 12pc of its sales workforce in the United States.

Earlier this year, the firm announced that it was closing its Sussex site in 2011, with the loss of 493 jobs, and was cutting 330 jobs at its Ulverston factory in Cumbria.

The job losses follow similar cuts made by its rivals within the pharmaceutical industry, including German group Merck and US company Schering-Plough.

Astra Zeneca to cut 1400 Jobs

AstraZeneca, the UK's second largest pharmaceutical company, is to cut 1,400 global jobs in an effort to improve efficiency.

The company's site in Macclesfield will see 250 job losses by 2010, while facilities in Spain, Belgium and Sweden will close. Shares in AstraZeneca fell 4pc following the announcement.

David Smith, executive vice-president for operations, said: "I realise these changes are difficult for our affected employees, with whom we will be consulting in the coming months. We believe these changes are necessary for the long-term strength of the business.

"These moves are a continuation of AstraZeneca's programme to improve the organisation's productivity and efficiency. It moves the supply process closer to the customer, responding to their requirements and improving the security of the product wherever it is bought."

Just over 1,050 of the job cuts be will made by 2010 with the remainder, mainly positions in Sweden, made between 2010 and 2013. The restructuring relates to changes to AstraZeneca's global manufacturing and supply chain operations, which it hopes to make more efficient. The company will be investing more in its Wuxi plant in China as part of the move, an area of the world that helped AstraZeneca to announce a 29pc increase in profits last month.

The news comes a day after the company warned profits would be at the bottom end of expectations because of generic competition for its asthma drug pulmicort, which sent the shares down 11pc.

However, the company said today it had won a temporary restraining order against Teva Pharmaceutical Industries' generic alternative after it was approved by the FDA, the US equivalent of Nice, earlier this week.

The order will remain in place until January, when the a US court will decide on the validity of AstraZeneca's patent for pulmicort.

The company said its earnings per share forecast remained at $4.90 to $5.05 but that "actual performance within this range is dependent upon the performance of the business for the remainder of the year and further developments in the pulmicort situation, including the outcome of the preliminary injunction hearing on 25 November 2008".

Citigroup Job Cuts Begin in Asia

Citigroup Inc.’s head of Asia- Pacific sales trading, Richard Patterson, has left after more than five years as the New York-based bank starts cutting jobs in the region, two people familiar with the matter said.

Patterson, who joined Citigroup in April 2003, left today as a managing director, the people said, asking not to be identified because the information is still private. He could not be reached immediately on his mobile phone.

Citigroup Chief Executive Officer Vikram Pandit said this week the bank will eliminate 52,000 jobs over the next year as loan losses surge and the U.S. slides into recession. Asia- Pacific, home to the fastest-growing major economies in the world, has not escaped global headcount reductions as banks cut workers across the board to combat the financial crisis.

“You’re seeing the bulge-bracket banks looking at rationalizing their management,” said Andrew Sullivan, a sales trader at Mainfirst Securities Hong Kong Ltd. and previously head of Asian sales trading at Daiwa Securities SMBC Co. in Hong Kong. “Now, they’ve got to downsize to match the revenues that are in the market and other banks will be looking to make similar cuts.”

James Griffiths, a Hong Kong-based spokesman at Citigroup, declined to comment.

More Job Cuts

Patterson would be one of the most senior employees in Asia to leave after Citigroup announced the global job cuts this week. The firm is expected to start firing investment bankers in Asia in the next two days, the people said.

Banks and brokerages worldwide have announced more than 166,000 job cuts since the subprime mortgage market collapse last year sparked a credit crisis.

HSBC Holdings Plc, Europe’s largest bank by market value, cut 500 jobs in Asia this week, citing deteriorating economic conditions and a “cautious outlook.” Morgan Stanley last week announced plans to cut 10 percent of the workforce in its global institutional securities unit.

Goldman Sachs Group Inc., which converted from the biggest U.S. securities firm into a commercial bank, this month started to cut an estimated 3,200 jobs, or 10 percent of its workforce.

Citigroup’s stock is at its lowest price in more than a decade on concern a global recession may extend the bank’s losing streak. The shares have slumped 72 percent this year.

Source : Bloomberg
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BAE Systems to Cut 200 Jobs

Defence giant BAE Systems is cutting 200 jobs in its army vehicles business in the UK.

The job losses will affect factories in Leeds, Newcastle, Leicester and Barrow and Telford in Shropshire.

Managing director David Allott said a voluntary redundancy programme was being set up.

The firm has blamed the cuts on a decline in workload on the Ministry of Defence's Armoured Fighting Vehicle programmes.

Mr Allott said: "We recognise the impact these job losses will have on our employees and the communities in which we operate.

"We always aim to mitigate as much as possible the impact of losses by offering voluntary redundancy where we can, as well as retraining people for alternative roles.

"We have been able to postpone this decision due to high workload on meeting urgent operational requirements, but that activity is now tailing off."

An MoD spokesman said: "BAE Systems continues to support our existing fleet of armoured fighting vehicles and has the capacity to do so, but the terrain of Afghanistan requires different types of vehicle such as Mastiff, Ridgback and Jackal, which are manufactured and integrated by different companies.

"We prioritise getting the right vehicles for current operations with over £1bn spent on a wide range of vehicles taking numbers to 1,200."

Wendys to Lay Off Workers in 2009

About 14 local Wendy's headquarters employees will lose their jobs early next year and 120 positions at the Dublin headquarters will move to Atlanta in phases during 2009. In addition, about 45 field-organization jobs will be eliminated. None of the 45 is local.

In September, Triarc Cos. Inc. which already owned Arby's, purchased Wendy's for $2.3 billion. The merged company, known as Wendy's/Arby's Group, is based in Atlanta.

"Since the completion of the merger, Wendy's employees have known a number of shared services positions would be moved to Atlanta," said Wendy's spokesman Bob Bertini.

The goal is to reduce costs through more efficient operations, he said, adding some of the positions that will move to Atlanta include corporate accounting and finance.

Bertini said it is too soon to know how many of the 120 Dublin employees will move to Atlanta.

"Each circumstance is different," he said.

The 14 employees whose jobs will be cut were notified this week. They will remain on the job at least through the end of the year.

The 45 other cuts come from "field" jobs, such as marketing, quality control, real estate and finance. Bertini added that "no other work force reductions are planned beyond the ones announced this week."

Toyota to Lay Off 120 Workers by 2009

It's another sign that the automotive industry is taking a huge hit during these hard times. According to published reports, Toyota Manufacturing in Buffalo will lay off approximately 120 temporary workers by the end of January 2009.

It's a companywide move to cut costs.

Those primarily affected are part-time workers in the engine and transmission plant. In addition, the company will closely monitor overtime and reduce hours where possible.

While Toyota will soon takeover General Motors as the Automotive leader, the company has seen sales diminish.

That decline in revenue now has the Nation's top three automakers, GM, Ford Motor Co. and Chrysler LLC, on Capital Hill with their hand out on a proposed $25 billion auto industry bailout package.

Source : wowktv
[tags : ]

Russia close to Economic Collapse

Russia is now lurching towards a major economic crisis, experts predicted today, following news that the price of oil had slumped to under $50 a barrel.

The collapse in the value of oil was likely to have several catastrophic consequences for Russia including a possible devaluation of the rouble and a severe drop in living standards next year, they warned.

With oil prices tumbling, and his own credibility at stake, Russia's prime minister Vladimir Putin today insisted that the country's economy was still robust.

Speaking at a meeting of the pro-Kremlin United Russia party, Putin told delegates in Moscow the country would survive the current global financial turmoil - which he blamed on the US.

But the Kremlin is acutely aware that any loss of confidence in the Russian economy could lead to a loss of confidence in Putin and his ally Dmitry Medvedev, who took over from Putin as Russia's president in May.

Medvedev's biggest initiative so far has been to float an extension in the presidential term from four to six years - a proposal that entrenches the current Kremlin's grip on power, and which Russia's loyal Duma is likely to approve on Saturday.

Putin today said his administration would do everything it could to prevent a recurrence of Russia's last oil-related financial crash in 1998 - which saw the savings of many ordinary Russians wiped out. But the plummeting oil price leaves him little room for manoeuvre. Experts suggest that Russia's economy is now facing profound difficulties, despite two massive stabilisation funds accumulated during the booming oil years.

The fall in oil prices from $147 this July to below $50 today has blown a gaping hole in the government's budget calculations. It is now facing a $150bn shortfall in its spending plans - and will have to slash expenditure in 2009.

Today Putin sought to assure hard-up Russians that their social benefits would not be affected, promising a $20bn assistance package. "We will do everything, everything in our power ... so that the collapses of the past years should never be repeated," he said.

The oil slump, however, exacerbates Russia's already severe economic problems. Since May Russian markets have lost 70% of their value. Russia's central bank, meanwhile, has been spent $57.5bn in two months trying to prop up the country's ailing currency.

"If the current trend continues with the government supporting the rouble, oil prices falling and a slowing economy we are going to have a major crisis," said Chris Weafer, an analyst with the Moscow brokerage Uralsib.

He added: "There will be more pressure on the rouble and an extremely difficult first quarter next year." Russia was more vulnerable than other countries because it was still an oil state, and had failed to diversify its economy, Weafer added.

Both Putin and Medvedev have blamed the Bush administration for the current financial mess. Putin today accused the US of recklessness. "Cheap money and mortgage troubles in the US have caused a real chain reaction, [and] paralyzed the global financial market," he complained.

Russia's state-controlled TV has also sought to portray the crisis as an American problem, largely ignoring its impact at home. This strategy was not very sensible, analysts suggested today, since job losses and salary cuts in Russia were beginning to mount.

"In terms of the trigger Putin is correct. The bomb came from the US," Weafer said. He added, however: "The shockwaves have hit a much weaker structure than the [Russian] government has acknowledged. The economy is going to hell in a handcart."

Source : Guardian
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BASF to lay off 20,000 Workers

BASF, the world's leading chemical maker, said yesterday that it was slashing production at 180 plants as the global downturn reduces demand from key customers.

The Ludwigshafen-based company warned that slowing sales and order cancellations meant it would not match last year's earnings and the outlook for the coming year was difficult to predict.

BASF said it was temporarily shutting 80 plants worldwide and cutting production at another 100. Some 20,000 employees will be affected. BASF said the production cuts primarily applied to plants serving the automotive, construction and textile industries. BASF has two small plants in the UK, in Derbyshire and on Deeside. It was unclear yesterday if they would be affected.

J├╝rgen Hambrecht, chairman of BASF's executive board, said yesterday: "We already drew attention to the difficult economic situation at the end of October. Since then, customer demand in key markets has declined significantly. In particular, customers in the automotive industry have cancelled orders at short notice."

Hambrecht said customers were cutting inventories and finding credit harder to find. "In 2008 BASF will therefore not achieve the previous year's excellent EBIT [earnings before interest and tax] before special items. How the coming year will develop is difficult to foresee - BASF is preparing for tough times."

BASF said it had already begun to implement some cuts and the reductions were expected to last until January next year. It added: "Should the period of weak demand continue and if all the other flexible working-time models have been exhausted, the company cannot rule out the need for short-time working in individual sites worldwide."

BASF shares fell sharply in response to news of the cutbacks. However, Marcus Konstanti, a Sal Oppenheim analyst, said: "Hambrecht is doing the right thing to reduce capacity. The question is how things will develop after January. The destocking effect, coupled with lower demand volumes, makes business trends very hard to predict at the moment."

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