Massive job losses are in the offing in the textile sector, says the the Apparel Export Promotion Council (AEPC).
“The high prices of cotton have pushed up the cost of the fabric and the end product. We are now in a situation where we are forced to reject repeat orders as we can’t justify the high prices to our foreign buyers. In the coming weeks production would have to go down and it would result in unprecedented job cuts in the industry,” said Mr Rakesh Vaid, Chairman, AEPC.
While he did not give an exact figure on the number of jobs that could be cut, Mr Vaid said “lakhs of jobs” are likely to be lost as companies start reducing production in the coming weeks.
“Right now the demand is growing in the international market. But we are losing out on the opportunity because fabric prices are rising at an unprecedented level. This would eventually hamper job creation,” said Mr Sudhir Dhingra, Member State Level Committee of AEPC.
AEPC voiced concerns that export of cotton is actually aiding other countries to price their fabrics and garments more competitively. “Exporting finished product would provide a greater price realisation and help us capture a greater share of the international garment market,” said Mr Dhingra.
While AEPC says that cotton prices have been increasing at an unprecedented level in the country, prices have been going up internationally as well. In order to give a boost to the domestic manufacturers, AEPC has urged the Government to curtail exports of cotton by increasing the export duty on cotton. “We call upon the Government to take a market survey of the prices and July and the prices prevailing now. We are not calling for a complete ban on cotton exports but we want the Government to encourage the domestic textile industry and create a more conducive atmosphere for the domestic industry.”

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Citigroup has slashed nearly 30,000 jobs in the second quarter of this year as the banking major resorted to cost cutting measures to tackle the financial turmoil.

The banking behemoth has swung into a profit of $4.28 billion in the second quarter on the back of a gain of $6.7 billion from the stake sale of Smith Barney brokerage.

According to the company, in the second quarter, the number of employees stood at around 2,79,000.

“Head count declined by approximately 30,000 from the first quarter of 2009, to 2,79,000, mainly driven by Smith Barney transaction,” Citigroup said while announcing the second quarter results today.

“Head count is now approximately 96,000 below peak levels. June was the 20th consecutive month of head count decline,” the statement said.

In the second quarter of last year, the company had a loss of $2.49 billion, it said in a statement.

Revenues for the second quarter surged 71 per cent to $30 billion as compared to the same period a year ago. In the comparable period, revenues stood at $17.5 billion.

Citigroup has already received three lifelines from the US Federal government including fresh capital injection to the tune of $45 billion to tide over the financial turmoil.Citigroup cuts nearly 30,000 jobs in second quarter

Citigroup has already received three lifelines from the US government including fresh capital injection to the tune of $45 bn to tide over crisis.

Source : economictimes.indiatimes.com

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US computer giant Hewlett-Packard reported a 17-per cent fall in quarterly net profit and said it plans to cut two per cent of its workforce, or nearly 6,400 workers, over the next year. HP said net profit fell to $1.7 billion, or 86 cents per share, in the second quarter of its fiscal year from $2.1 billion, or 87 cents per share, a year ago, in line with the expectations of Wall Street analysts.

The Palo Alto, California-based company, the world’s largest manufacturer of personal computers, said revenue was down three per cent in the quarter which ended on April 30 to $27.4 billion.

Chief financial officer Cathy Lesjak announced the planned layoffs in a conference call with analysts after the release of the results.

“We will be taking some targeted action to structurally change and improve the effectiveness of our product businesses,” she said.

“These actions will result in the elimination of approximately two per cent of the HP workforce as we further streamline and simplify our organization and supply chain. These actions will be implemented over the next 12 months.”

The only bright spot for HP in the quarter was in its services business, which notched up an operating profit of $1.17 billion in the quarter due to its purchase last year of EDS. “Our services business continued to deliver strong profitability with an increased deal pipeline and the EDS integration tracking ahead of schedule,” said HP chairman and chief executive Mark Hurd. HP said revenue from its enterprise storage and servers division fell 28 per cent to $3.5 billion while software revenue declined 15 per cent to $880 million. Computer shipments were flat in a “challenging environment” and the division saw revenue fall 19 per cent to $8.2 billion. Revenue from laptop computers was down 13 per cent while desktop computer revenue fell 24 per cent.

Operating profit for the division fell to $374 million from $544 million a year ago. The imaging and printing group saw revenue decline by 23 per cent to $5.9 billion and operating profit fall to $1.1 billion from $1.2 billion a year earlier.

HP said revenue grew nine per cent in the Americas to $12.1 billion and declined by 11 per cent in Europe, the Middle East and Africa to $10.6 billion. Revenue fell 10 per cent in Asia Pacific to $4.7 billion.

HP said it expects third quarter revenue to be flat and full fiscal year revenue to decline by four per cent to five per cent with full-year earnings per share of between $3.76 to $3.88.

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International Business Machines (IBM) Corp. plans to lay off about 5,000 US employees, with many of the jobs being transferred to India, a media report said on Thursday.

The technology giant has been steadily building its work force in India and other locations while reducing the number of workers based in the US, The Wall Street Journal said citing people familiar with the situation.

Foreign workers accounted for 71 per cent of Big Blue’s nearly 400,000 employees at the start of the year, up from about 65 per cent in 2006.

Noting that outsourcing to India has long been a hot-button topic for IT employees in the US, the Journal said as US employers have shed millions of jobs in recent months, workers and politicians have stepped up their criticisms of the practice with little impact.

For IBM, shifting work to lower-cost countries has helped the company win overseas contracts and maintain healthy profits in its services business, which is its largest in terms of revenue and employment. IBM employed 74,000 people in India in 2007, the latest figures available.

IBM’s latest round of cuts show that even companies that have so far navigated the global recession profitably are continuing to slash costs, the financial daily said. In January, IBM reported $4.42 billion in quarterly profit.

Among other companies that are profitable, Microsoft Corp. announced plans for 5,000 layoffs earlier this year and Hewlett-Packard Co. is cutting some 25,000 people in the wake of its acquisition of Electronic Data Systems Corp., a rival of IBM’s services business.

Many of the IBM job eliminations are scheduled to take place in its global application-services group, which writes specialised software for businesses.

Some of these workers received a notice on Wednesday indicating that nearly 2,000 workers in that group were due to be told they would be “participating in IBM’s current resource reduction action”.

An IBM spokesman declined to comment, the paper said. The company has said it expects to spend about $300 million to $400 million on severance-related charges this year, with most of it in the first half.

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