Slowdown forces cos to put hiring plans on hold

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Slowdown forces cos to put hiring plans on hold

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India Inc cuts jobs, frills to stay in shape

NEW
DELHI/MUMBAI: Layoffs, firings and salary cuts are increasingly
becoming all too common across India Inc, highlighting a deepening
slowdown in the economy that has forced companies to take the knife to
costs to protect their bottom line.

From banking and finance to
aviation, from manufacturing to information technology, no sector
appears immune, as companies look beyond hiring freezes to job cuts,
mirroring a trend across much of the developed world which has seen
tens of thousands of people out of employment.

Admittedly India,
among the few major global economies that will see respectable GDP
growth this year, may not see job losses quite like that being felt in
the West, it has nevertheless got policymakers worried.

Prime
Minister Manmohan Singh earlier this week urged industry to desist from
laying off people and promised to cut interest rates and levies to
shore up the economy. The Reserve Bank of India (RBI) has already
turned its attention to driving up growth from containing inflation,
and cut key reserve ratios for banks and a short-term interest rate,
signalling a bias in favour of lower rates.

Yet on Friday, news
about job cuts came in from different directions. L&T Infotech, a
wholly-owned subsidiary of the country's largest engineering company
Larsen & Toubro (L&T), is shedding up to 5% of its workforce of
nearly 10,000 employees, according to market sources.

"Rather
than give out pink slips, people are being forced to hand in their
resignations," said one person familiar with the development. The
company declined to comment, but the move has a worrying significance
considering that L&T Infotech gets much of its revenues from the
manufacturing sector and outside the crisis-hit financial services
industry.

The financial sector continued to see more
blood-letting, as the blows from the axe wielded in New York and London
were felt in India. The Indian arms of Goldman Sachs and Credit Suisse
started retrenching employees while Merrill Lynch's operations in the
country saw the second wave of firings.

On Thursday, Goldman
slashed its workforce by close to a dozen in its Mumbai office, which
has close to 100 employees. Goldman Sachs has also lowered headcount at
its Bangalore operations by around 30.

There were grim warnings
from the country's textile sector, where the industry body, the
Confederation of Indian Textile Industry (CITI), said some 7,00,000
people had lost their jobs so far this year, and 5,00,000 more were
likely to go in the next 2-3 months.

A majority of layoffs have
affected daily-wagers who constitute about 25-30% of a company's
workforce. The Indian textile industry employs some 35 million people.
"Mills are running for hardly 3-4 days a week, or operating just 75% of
their capacities or have reduced shifts from three to one," said CITI
secretary general DK Nair. Overseas, the gloom on the job front
continued unabated as fund manager Fidelity Investments became the
latest to announce that it was cutting nearly 1,300 jobs and warned of
more layoffs early next year in response to declining markets.

Friday's
closely-watched jobs data out of the US showed that employers cut
payrolls by a much steeper-than-expected 2,40,000 jobs in October, as
unemployment rate shot up to its highest in more than 14 years, Reuters
reported. The US Labour Department's report showed that last month's
job cuts followed a steeply revised cut of 2,84,000 in September, the
most severe monthly loss since November 2001, just after that year's
September terror attacks, the agency added.

Meanwhile, Indian
steelmaker Tata Steel slashed about 400 jobs in the UK and Ireland at
its Corus Steel unit, citing poor business conditions as a result of
the slowdown in the steel industry. However, Tata Steel has firmly
ruled out any job cuts at its Indian operations.
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10 Nov 2008, 0000 hrs IST, Nina Mehta, ET Bureau

MUMBAI:
Recruitments by companies have come to a virtual halt due to the global
financial turmoil, said HR managers participating in the annual
national human resources
conference organised by SIES College of Management Studies (SIESCOMS).

Karthik
Narendra, an HR manager at the country's largest engineering firm
Larsen & Toubro, said: "We are only recruiting in our power
business since it is an emerging sector. Recruitments for all other
businesses have stopped. We are engaged in more internal reshuffling to
try and promote talent in-house."

Consumer goods company Voltas
has also halted its recruitments plans. "The services sector has been
hit badly by the recent meltdown. We have stopped hiring, but are
engaged in training the talent that we already have," said a senior
official at Voltas.

High attrition rates, a problem that was
prevalent across sectors, is no longer a serious issue for HR managers.
With many companies laying off people to cut costs, those who haven't
been given the pink slips are holding on to their jobs.

Ispat
Industries, which was hit badly in the recent crisis, is fine-tuning
its operations and is trying to cut costs. Said Ispat Industries HR
director BR Singh: "We used to hire trainees every year from campuses,
but we have stopped it this time. Instead, we are focusing on driving
and motivating our current workforce. Earlier, with many new plants
starting, retention was an issue, but not any more."

Johnson
& Johnson, one of the largest healthcare companies in the world,
hasn't been hit as much, according to Vikas Shirodkar, Asia-Pacific
regional head for labour and employee relations. He said attrition will
continue because people want better salaries despite the market
situation.

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Investment banks begin to cut jobs in Indian arms

10 Nov 2008, 1126 hrs IST, George Smith Alexander & Mahima Puri, ET Bureau

MUMBAI/NEW
DELHI: The Indian arms of global banks have started cutting jobs in
sync with the restructuring of operations overseas and with business
volumes declining due to the economic slowdown. Some of the bigger
foreign banks with retail banking operations in India have also started
reducing the number of employees in their consumer banking operations,
according to bankers familiar with the matter.

On Thursday,
Goldman Sachs slashed its workforce by close to a dozen in its Mumbai
office. The Mumbai office, opened a couple of years ago, has close to
100 people working in investment banking, investment research, equity
sales, corporate finance, private equity besides asset management.
Goldman Sachs has also lowered its headcount by close to 30 officials
in its outsourcing arm in Bangalore where it has a staff strength of
more than 2,900.

Goldman has said that it would cut close to 10%
of its workforce globally. Credit Suisse has also slashed some jobs in
the country. A Credit Suisse official spokesperson said, "Due to market
conditions and projected staffing levels required to meet client needs,
we are reducing our global headcount by approximately 500 across our
investment banking division and certain support functions."

The
Mumbai office now has around 160 officials in investment banking,
research, equity sales, corporate finance among other functions. It has
doubled the staff strength in its I-banking department in the last one
year and now has 25-30 officials.

Other than equity and support
functions, both these firms have also cut jobs in the investment
banking business. Goldman Sachs has also reduced the number of staffers
in its principal investment business. The firm, which was also
considering seeking a primary dealership license, has now put this on
the backburner although it will go ahead with its asset management
plans. Credit Suisse is also said to have put on hold its plans for AMC
business.

According to Thomson Reuters, equity market offerings
in India are down by 77% to $6.1 bil-lion, while in Asia the business
is down by 62.4% to $96 billion. Bankers said that most banks had built
up their team in the country in the past one year hoping that business
volumes would go up substantially. Senior bankers pointed that banks
are currently looking at cutting only excess flab.

"We have
received a number of calls from I-bankers, especially those working
with the foreign banks. The calls have multiplied many fold in the past
one month," said Talent Trackers founder Shekhar Vaishnav. "Two
American banks have started 'soft-firing'. This means that employees
have intimated to look out for jobs by January 15, 2009, but in a
discreet manner, so that the bank's reputation does not get affected,"
he added.

Merrill Lynch, which had earlier told 20 of its
staffers to go, now has laid off more officials in a second round
exercise. Foreign banks such as HSBC is also said to be looking at
downsizing its staff in personal loan
, credit card and some of the
other segments. Sources said that the bank could be looking at
downsizing by around 200 officials. Bank officials said: "We have not
asked staff to put in their papers.

We assess our businesses and
our business strategy on an ongoing basis. If, as a result, staff are
freed up from one activity, the effort is to redeploy them in other
businesses and activities. However current dynamic market conditions
require that every organisation’s business strategies be flexible
enough to take on emergent challenges and opportunities."

ABN
Amro is also said to be looking at a similar exercise in the con-sumer
side. Sources said the bank is looking at a major round of lay-offs
across Asia. However, an ABN Amro spokesperson said, "We have not
announced any job cuts or rightsizing of businesses." The bank is
likely to retrench staff in its credit cards
and personal loan segments. It is also looking at other departments too.

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L&T Infotech goes into job cut mode
8 Nov 2008, 0000 hrs IST, N Shivapriya & Deeptha Rajkumar, ET Bureau

MUMBAI:
L&T Infotech, the wholly-owned subsidiary of the country's largest
engineering company Larsen & Toubro (L&T), is trimming its
workforce
by asking some employees to resign. The resignations are happening
across its development centres in Mumbai, Pune and Chennai, according
to people with knowledge of the development.

The staff
downsizing by a major player like L&T Infotech is one of the early
signs of slowing IT spends in areas outside the crisis-hit financial
services industry. Unlike the majority of Indian IT and BPO firms which
earn a large part of their revenues from banking and financial services
clients, L&T Infotech gets most of its revenues from manufacturing
clients.

So far, most of the downsizing in the IT industry was a
fallout of troubles in the financial services sector and in many cases,
a direct impact of customers closing down and project cutbacks and
delays. This is one of the first instances of an IT firm with
significant focus on the manufacturing sector being affected. "Rather
than give out pink slips, people are being forced to hand in their
resignations," said one person familiar with the development.

Sources
close to the company estimated the number of forced resignations till
date to be around 100. Market sources, however, quoted a higher figure
and said it could be as high as 5% of the company's total strength of
10,000. L&T Infotech responded to a mail from ET saying it had no
comments.

In the past, the company's growth has lagged some of
its larger peers because of its focus on the manufacturing sector.
Financial services players have far more aggressive tech spends than
those in the manufacturing. The latest Nasscom survey ranks the company
as the tenth largest software exporter from India.

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Fidelity to cut 1,300 jobs this month
7 Nov 2008, 2018 hrs IST, PTI

NEW
YORK: World’s leading fund house Fidelity Investments has announced
chopping about 1,300 jobs later this month, followed by a second round
of layoffs in the first quarter next year.

Fidelity business
units would commence with a layoff of about 2.9 per cent of its 44,400
employee workforce later this month, the company said in a statement.

The
fund house also announced a second layoff in the first quarter next
year, the details of which would be finalised over the coming weeks.

“Though
we regret having to implement any expense reduction that impacts valued
employees who have made substantial contributions to our success, we
believe this staffing adjustment is necessary,” the company stated.

Global
economic conditions and the unsettled nature of the world’s stock
markets all year long have required businesses around the globe and
across all industries to examine their operations and make adjustments.

Fidelity
executives have been carefully reviewing their work units and
prioritising their business initiatives in order to ensure the company
is well-positioned for the future, the statement added.

“These
are extraordinary times and while Fidelity remains strong and growing,
prudent management warrants that we carefully examine all of our costs
to make certain we come out of this economic downturn in a position to
capitalise on opportunities for our customers,” the company added.

Fidelity
Investments is one of the world’s largest provider of financial
services, with assets of USD three trillion under custody, including
managed assets of $1.4 trillion as of September 30, 2008. The fund
houses’ assets have declined sharply following the meltdown in the
stock markets.

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NEW DELHI: The textile industry, which has warned the government of 5-6
lakh lay-offs due to the global downturn, today said the PMO “totally
Jobs
Right approach for different stages of career
ignored” its interests and the largest employment-generating sector after agriculture was feeling “let down”.

The
Northern India Textile Mills Association (NITMA) said that none of its
representatives was invited to the meeting convened by Prime Minister
Manmohan Singh on November 3 to discuss the state of the economy.

“The
Prime Minister had appealed to industry to avoid large-scale layoffs in
the wake of the global economic crisis … The textile industry was
totally ignored by the Prime Minister’s Office. This is the industry
which is going to lay off maximum jobs due to increased maximum cotton
price and cancellation of orders by the US due to recession,” NITMA
President Sunil Jain said.

Top industry leaders like Mukesh
Ambani and Sunil Bharti Mittal and the heads of three apex chambers -
the CII, the FICCI, Assocham - attended the meeting convened by the
Prime Minister.

Jain said the spinning sector in particular is
in a difficult situation because of increased costs of inputs, mainly
cotton.The industry, directly and indirectly, employs about 35 million
people.

Jain said the export sops have been withdrawn in India,
while countries like China and Pakistan have substantially increased
incentives for their exporters.

Garment exporters have reported a 30-35 per cent drop in volume in the July-September quarter.

The
Confederation of Indian Textile Industry (CITI) has estimated 6-7 lakh
people are facing job threats because of a slump in export demand.

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American Express sacks ‘less than 100′ employees

NEW DELHI: Global travel and payment services major American Express on
Monday said that it has sacked less than a hundred employees in India to
restructure its workforce as part of its global strategy.

“The number is less than a hundred,” American Express India’s
Public Affairs and Communications Director Vibha Bajaj told reporters.

Earlier,
there were reports of about 200 India-based employees of the US company
having been handed over pink slips by the management of India
operations. However, the company spokesperson had declined to comment
upon the development.

The company had, however, said in a
statement that “reduction will occur throughout the company and across
business units, markets and staff groups, primarily focusing on
management and other positions that do not interact directly with
customers”.

Those laid off, according to the information
available, were mainly working in the back offices of the company in
Delhi and Bangalore, sources said.

When asked whether those
“less than a hundred” laid off employees included manager- and senior
manager-level officials, Bajaj answered in the affirmative but she did
not respond to a query whether the number included director-level
officers as well.

Incidentally, the reports of downsizing the
workforce in American Express comes on a day when Prime Minister
Manmohan Singh asked India Inc to “refrain from large-scale layoffs”.
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