Job Cuts Around The World

The world is experiencing one of the worst global financial crisis. As I wrote on one of my previous articles, the main culprit in today’s global recession are the subprime mortgages that originated from risky investments of investment banks.

Because of these global recession, there are a lot of companies cutting costs by cutting jobs. These job cuts and job losses were implemented because of slow demand for company’s products and therefore less profits. With less profits and higher costs, companies may declare bankruptcy in the near future.

Here are some of the latest news on job cuts and job losses around the world. These were compiled from various reports online.

HSBC Holdings PLC , Europe’s largest bank (when market value is considered) , plans to cut 500 jobs in Asia due to the global economic slump , says wire service Associated Press. The cuts will be made in various parts of the business, including back office functions, with about 450 jobs in Hong Kong to be shed, the London-based lender announced to employees on November 17. In September, the bank announced 1,100 job cuts worldwide in the wake of the financial turmoil. HSBC has been hit hard by the financial crisis. The bank was forced to reduce the value of its assets by $4.9 billion in the third quarter, as the cost of bad loans in the US continued to mount and the credit market faltered.

Citigroup has announced it will cut more than 52,000 jobs in the coming months and reduce expenses by 20 per cent in 2009. It said it intends to reduce the total head count to less than 300 , 000 soon. In terms of expenses , the financial services major aims to save $ 50-52 billion in 2009. These cuts are expected to have a ‘limited’ impact on its India staff strength. Citigroup has about 22 , 000 employees currently working in India Of which, 12,000 work for Citigroup Global Services Ltd. Citigroup had a workforce of 352,000 in the third quarter of 2008. In the same quarter , it reported a loss of $ 2.8 billion. In the first three quarters of 2008, Citigroup has reduced its workforce by about 23,000 persons.

Fidelity Investments will cut about 1,300 jobs later this month, followed by another 1,700 jobs in the first quarter next year. This means Fidelity is looking at reducing its 44,400 employee-strong workforce by about 7 per cent. Fidelity Investments, which managed assets worth $ 3 trillion as on September 30, 2008, has seen its assets decline sharply following the meltdown in the stock markets.

The Royal Bank of Scotland will cut about 3,000 jobs in the next few weeks. ‘The positions will go in its global banking and markets workforce, spanning more than 50 countries. Jobs are likely to go in the City of London , ’said a BBC report. The bank has about 170,000 employees, of which about 100,000 are in the UK.

Sun Microsystems has said it is eliminating 6,000 jobs or 18 per cent of its global work force. It expects to reduce its costs by $375-450 million in the current fiscal. Sun Microsystems is also reorganizing its software organization into new business groups. Besides, it will implement a restructuring plan aimed at reducing costs by approximately $700 to $800 million annually.

United States Steel Corp. has laid off about 3 per cent of its production workers in North America as the global economic slowdown cut into the demand for steel used in construction, autos and appliances. The layoffs, effective immediately, include 500 employees in the US and 175 in Canada.

British Telecom will cut 10,000 jobs by March 2009. About 4, 000 of the job losses will be direct BT staff, the remaining 6,000 will be from related employees. The cuts will mainly affect agency and contract staff and offshore workers, the company said, but sub-contractors and other indirect employees would also lose their jobs. BT has also said its India operations won’t be affected. The move to cut jobs comes after the company posted an 11 per cent decline in pre-tax profits at pound 590 million for the September quarter. A report in The Telegraph said, ‘BT has cut its headcount from 250,000 at privatization in 1984 to 160 , 000 today and indicated there is scope for more job losses. The company said 4,000 employees have already left the business this financial year and a further 6,000, mostly in the UK , will go by the end of March.’ BT has a global workforce of 160,000.

Morgan Stanley has outlined plans to cut 10 per cent of its staff by the end of the year. The layoffs follow a 10 per cent cut made earlier this year. Morgan Stanley also plans to restructure its money management business by cutting 9 per cent of its staff. It was not immediately clear how many positions will ultimately be eliminated from the company’s total ranks of about 44,000 employees.

The Virgin Media cable group will be slashing 2,200 jobs, or 15 per cent of its workforce, by 2012. This will result in annual cost savings of more than pound 120 million by 2012. The group said it would not start cutting jobs until the fourth quarter of next year, with the majority of the role reductions taking place before the end of 2010. It also said the cuts were not related to the strained economic environment. Virgin Media was formed through the merger of Telewest and ntl in 2006; Virgin Mobile was later acquired by it. The group has already reduced 4,000 staff jobs after the ntl and Telewest deal.

Yell Group, the publisher of the Yellow Pages in the UK , is planning to cut 1,300 jobs over the coming year , which is expected to reduce costs by pound 100 million.
The company has already cut 1,300 jobs since September last year, resulting in a saving of pound 150 million.

Nokia Siemens Networks said it will slash around 1,800 jobs as part of its restructuring efforts. The company is a 50:50 joint venture of Finnish cell phone maker Nokia and German firm Siemens. Nokia Siemens plans to cut about 750 jobs in Finland It will also close its Hofmannstrasse site in Munich , Germany , which will affect nearly 500 employees. The company separately announced an agreement whereby its manufacturing site in Durach , Germany , will be purchased in a management buy-out. ‘That agreement will result in the transfer of around 500 employees. At the completion of the planned headcount restructuring and employee transfer activities, Nokia Siemens Networks expects to have in the range of 10 , 000 employees in Germany , from an initial base of approximately 13,000, ‘the statement noted. In addition, the company has planned reduction of headcount by about 50 in Egypt and by 20 in the United States.

Swedish truck and bus maker Volvo AB has said it will lay off 1,000 staff at its powertrain unit in Sweden and the United States as the global financial crisis continues to affect the demand for heavy vehicles. He said a number of consultants in Sweden could also receive notices. The Volvo group has previously announced layoffs of 2,000 workers at their truck plants in Belgium and Sweden and 1,350 workers at its construction unit. It has more than 100,000 employees worldwide, including its subsidiaries Renault Trucks, Mack Trucks and Nissan Diesel.

Pfizer cuts 8,000 job in its $68 Billion takeover deal with competitor Wyeth. After the deal, Pfizer expects to cut more jobs in its merged entity with Wyeth.

Intel may cut 5,000 to 6,000 jobs in its plan to reduce its costs. Sales of intel microchips were seen to decline dramatically worldwide. Here in the Philippines, Intel closed its plant at Gateway Business Park cutting 1,800 jobs.

Philips, the dutch and consumer electronics giant said that it planned to cut 6,000 jobs worldwide this year. Sales fell 9.7% and with asset write downs and poor business performance brought by the economic crisis, Philips reported a fourth quarter loss of $A 2.91 Billion.

Mattel Inc., the largest toy company in the world cuts 1,000 jobs in its plan to reduce costs to cope up with the worsening economic performance. Rising costs of raw materials from China and declining sales caused the company to cut jobs.

Barclays has cut around 4,000 jobs worldwide mostly on its investment banking and investment banking units as it tries to lower costs by cutting redundant positions when it acquired the collapsed investment banking firm Lehman Brothers.

These were just some of the job cuts around the world. We can still expect more companies to cut jobs as economies loom.

Everyone is on the hope for newly elected President Obama. We are all hoping that the most powerful leader on Earth will take the neccessary and immediate actions to combat these effects of the global recession.

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