HSBC sheds 30,000 jobs, posts surprise profit rise

HSBC will shed 30,000 jobs as it retreats from countries where it is struggling to compete, Europe's biggest bank said on Monday after it reported a surprise rise in first-half profit.

Shares in HSBC rose over 4 percent after it unveiled first-half pretax profits of $11.5 billion, up from $11.1 billion a year ago and better than the $10.8 billion average in a Reuters poll of analysts.

The bank also said it had cut 5,000 jobs following restructuring of operations in Latin America, the United States, Britain, France and the Middle East and that it would cut another 25,000 between now and 2013.
"There will be further job cuts," Chief Executive Stuart Gulliver told reporters on a conference call. "There will be something like 25,000 roles eliminated between now and the end of 2013."

The cuts equate to roughly 10 percent of HSBC's total workforce. They come on top of planned reductions in overall headcount in a program of disposals that also forms part of a plan to focus on HSBC's Asian operations.

The bank is reversing a strategy that had been criticized for "planting flags" around the world.

Gulliver's far-reaching plan unveiled three months ago aims to slash costs and he intends to sell, shut or slim down retail banking in 39 countries.

HSBC said on Sunday it would sell 195 U.S. branches to First Niagara Financial for about $1 billion in cash, and close another 13 of the 470 sites it had.

The bank also intends to sell HSBC's U.S. credit card portfolio, which has more than $30 billion in assets, a move which would free up capital. Capital One Financial Corp and Wells Fargo are among the bidders, sources have said.

Another suitor could be Barclays.

HSBC is the first of Britain's big banks to report for the quarter. Rivals are also cutting jobs and shaking up their business model as the euro zone debt crisis has hit fixed income trading revenues hard and tougher regulations are hurting returns for investors.

The bank on Monday highlighted risks to global economic recovery from increased regulation, particularly as governments grapple with sovereign debt crises and try to plug holes in their budgets.

"The pace and quantum of regulatory reform continues to increase at the same time as the global economy appears to be losing momentum in its recovery," HSBC said.



Source : Reuters
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]

Blackberry RIM Cuts 2,000 Jobs

Research in Motion said it will cut 2,000 jobs (approximately 11% of the company’s workforce) and reorganize upper management.

The company’s COO Don Morrison will retire, and Thorsten Heins will take over the expanded role of COO, product and sales.

The move comes after weak financial results in Q1 and an even worse outlook for the future. As a result of the bleak Q1 report, RIM’s sharestook a beating, dropping 20% overnight.

Once a dominant force in the smartphone market, RIM recently fell to third place behind Apple’s iOS and Google’s Android. The imminent layoffs are necessary to keep the company financially sound, but RIM will have to rethink its entire smartphone and tablet strategy to catch up with its rivals.

Source : Mashable
 [tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]

Cisco warns of sales miss, eyes $1 billion savings

Cisco Systems Inc warned that it will fare worse this quarter than Wall Street had feared, and laid out plans for global job cuts as it struggles to revive growth.
Shares of Cisco fell 3 percent after the world's largest networking equipment maker projected nearly flat sales growth this quarter.
CEO John Chambers, who admitted last month that the Silicon Valley bellwether had lost its way, cautioned that Cisco's fiscal year starting August would also not live up to the company's previous growth expectations.
The company is preparing a round of layoffs around the world, aiming to cut annual expenses by $1 billion, Chambers told analysts on a Wednesday conference call.
Most of the cutbacks would be done by the end of the company's fiscal first quarter, though Chambers would not be drawn on their scale. Employees hurt by the layoffs would know by the end of the summer.
"Cisco is a very strong company in a healthy market with a few problematic areas," he said.
But his optimism failed to impress shareholders, who sent Cisco shares down in late trade after the weak guidance. Cisco's sales warning obliterated an initial 4-percent lift after the company posted quarterly earnings that exceeded low expectations.
"Cisco is in a period of transition. There's a very negative camp that believes that Cisco is in a long decline ... which is why the stock is so inexpensive," said Evercore Partners analyst Alkesh Shah.
The results come as Chambers works to turn around the Silicon Valley bellwether.
Since the rare admission, he has trimmed the company's bloated management structure, offered early retirement to some employees, killed the Flip camcorder and laid off 550 workers. Chambers said he would decide on the next round of layoffs very quickly.
"Each time we've done this in the past, we've done it crisply and emerged out of it stronger. ... We want to do it surgically instead of with a blunt instrument," he said.
"We were all here for the last couple of weeks, 9:30 at night, although the pizza wasn't too good."
ZEROING IN ON SWITCHES
Cisco warned that overall fourth-quarter revenue would be flat to just 2 percent higher than a year earlier, implying a range of $10.84 billion to $11.05 billion, below expectations for $11.59 billion according to Thomson Reuters I/B/E/S.
Cisco shares slid 1 percent to $17.72 after rising as much as 4.2 percent to $18.53 from a Nasdaq close of $17.78.
During the conference call, analysts grilled Chambers about his plans for reviving his bread-and-butter business of selling the plumbing of the Internet and corporate networks. They zeroed in on its switching business, where sales fell 9 percent in the third quarter after sliding 7 percent in the second quarter.
Chief Financial Officer Frank Calderoni told Reuters he could not say when Cisco's switching business would grow again.
Before the company gave out weaker-than-expected guidance investors had been hoping the results would beat forecasts.
The company reported profit, excluding items, of 42 cents per share, for the fiscal third quarter ended April 30, beating the average analyst forecast of 37 cents according to Thomson Reuters I/B/E/S.
"This relieves a bit of investor concern in the near term," said Gleacher & Co analyst Brian Marshall. "While April results look decent relative to expectations, we've longer-term issues the company needs to address."
It delivered a non-GAAP gross margin of 63.9 percent, ahead of its forecast of 62 to 63 percent.
Net income fell to $1.8 billion, or 33 cents per share, from $2.2 billion, or 37 cents per share, a year earlier.



Source : Reuters
 [tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]