Millions in Britain face pay freezes, salary cuts in 2010

LONDON: The new year is going to be a cold one for the salaried class in Britain as millions of people are likely to see their spending power slashed again in 2010 due to salary cuts and pay freezes, a media report says.

"Millions of people face a second year of pay freezes or salary cuts next year dashing hopes that the end of the recession will ease the squeeze on family budgets," the Sunday Times said.

Up to two-thirds of companies in the private sector are planning to freeze or cut pay next year -- a substantial increase compared with this year, the newspaper said.

Quoting a poll by the British Chambers of Commerce (BCC), the daily said 58 per cent of company directors were planning wage freezes during 2010 and another 5 per cent planned to cut pay next year.

This grim forecast has, however, enraged union leaders and brought a series of strike-threats for slashing workers' spending power for the second year running.


Unions said the state of the economy should not be used as an "excuse" to impose pay freezes by companies continuing to make profits.

Derek Simpson, Joint General Secretary of Unite, the biggest trade union in Britain with two million members told the Sunday Times, "Our members have been prepared to share the pain and take pay freezes this year. But we will challenge any attempt to freeze pay in companies that are making profits next year."

British Airways, Hewlett-Packard, Fujitsu, Swinton insurance and Ladbrokes have already announced plans to freeze pay next year.

Citing BCC Director General David Frost the daily said, "we face a tough year ahead -- it will be a really long haul. The stark reality is that business finances are still under incredible pressure and they are doing everything they can to keep hold of cash."

Despite signs of economic growth, millions of consumers face a bleak 2010.

Value added tax (VAT) is set to rise to 17.5 per cent this week, unemployment is expected to increase further and City forecasters predict interest rates to rise later in the year. Personal tax allowances will be frozen in April when the new 50 per cent income tax rate also comes in, the report added.

Britain is predicted to have moved out of recession during the final quarter of this year, the last of the leading European economies to do so.

Official: IBM US headcount down to 105,000. Down by 10,000 in 1 year

IBM's United States work force has been in decline for years, but it has recently shrunk more quickly.

News that IBM's American jobs were down to 105,000 came in a presentation to a congressional subcommittee by Maria Ferris, IBM's director of diversity, compliance and employee experience.

That means a decrease of 10,000 IBMers since the end of 2008, when it was 115,000.

Ferris' remarks were reported Nov. 16 as part of a pitch to relax some Fair Labor Standards Act provisions, which she said would increase workplace and time flexibility.

IBM has been cutting costs and raising profits. One way is "work force rebalancing," which involves shifting work around, often overseas, and U.S. downsizing.

"We've been saying that the offshoring of U.S. jobs would bring the IBM employee population down significantly, and I think we're seeing that now," said Lee Conrad, national organizer for Alliance@IBM, a workers' group based in Johnson City.

The Hudson Valley got a dose of downsizing this year. At IBM's East Fishkill plant, 340 jobs were cut, according to IBM documents filed with the state Department of Labor.

IBM cut about 100 to 120 jobs at its Endicott plant this year, Conrad has said, citing information from local employees.

Before the reporting act was toughened, other jobs at IBM plants were cut, however the company won't say how many.

No IBM spokesman in a position to comment could be reached. IBM has previously said it remains a major U.S. high-tech employer.

At the end of 2008, IBM had 398,455 employees globally, with the U.S. portion forming 28.9 percent of that.

Sony Ericsson to cut 2,000 jobs globally

Mobile handset maker Sony Ericsson today said it will cut 2,000 jobs globally as it phases out activities at some of its locations.

"As part of its programme that started a year ago, Sony Ericsson will phase out activities at some of its locations worldwide and plans to reduce headcount globally by 2,000 people," Sony Ericsson said in a statement.When asked if the move will impact the Indian operations as well, company officials declined to provide details when contacted.

Sony Ericsson intends to complete its programme by mid-2010, it added.

The company will phase out activities at some of its locations worldwide, as part of a cost reduction programme.

It added that the company was continuing with its business transformation programme as announced earlier and the main aim was to return to profitability as soon as possible.

Sony Ericsson intends to complete its programme by mid-2010

Sprint cutting up to 2,500 more employees from the payroll

It's been a helluva couple years for Sprint -- new networks, new platforms, and new acquisitions have all been intermixed with a drawn-out recovery effort that's undoubtedly weighed heavy on the hearts and minds of staff at the company's dual headquarters in Kansas and Virginia. With more (albeit slower) subscriber losses in its most recent earning's report, it's still all but impossible to say whether they'll be able to survive in the long term as an independent operation, and we're not quite sure what to make of this latest move, either: a promise of 2,000 to 2,500 job cuts to be announced through the fourth quarter, many of which will be completed before the year's up. It gets a little weird here because Sprint's applying some hardcore spin in its press release, touting the fact that reduced calls to customer service -- ostensibly due to an improved experience -- have lessened the need for call center staff, but we're not really buying it; the business continues to shrink, and staff continue to be cut. The good news is that they're being cut at a much slower rate than before, so it's still entirely reasonable to believe that black ink is in sight -- particularly if they've got a killer 2010 lineup in store.

US Job losses, deep and enduring, especially for the young

NEW YORK: The rise in unemployment that has occurred in the current recession has been hardest on young workers, while having a smaller effect on older workers than previous downturns. Women have been more likely than men to hold on to their jobs.

The overall unemployment rate, which reached 10.2 per cent on a seasonally adjusted basis last month, remains below the post-World War II peak of 10.8 per cent, reached in late 1982. But the proportion of workers who have been out of work for a long time is higher now than it has ever been since the Great Depression.

The persistence of joblessness for so many people – 5.6 million Americans have been out of work for more than half a year even though they have continued to seek employment – may provide the greatest challenge for the Obama administration if it decides to seek a new economic stimulus programme.

The short-term unemployment rate – the proportion of the work force that has been jobless for less than 15 weeks – has begun to decline, however, and stood at 4.5 per cent in October after peaking at 4.9 per cent in May.

That decline is a signal that the recession, which officially began in December 2007, probably has ended. In past recessions since World War II, the National Bureau of Economic Research has always dated the end within two months of the peak in short-term joblessness.

Over the last three years – since October 2006 – the overall unemployment rate has risen by 5.8 percentage points. That is the largest such increase since the Great Depression, providing another indication of the rapidity and severity of the current downturn.

Before this cycle, the sharpest 36-month increase since World War II was a 4.9 percentage point rise in the period that ended November 1982.

A government household survey in October found 7.7 million fewer jobs than in December 2006, when the employment-to-population ratio reached its high for the current cycle. The declines during the two earlier cycles, from November 1973 to June 1975 and from December 1979 to March 1983, were 0.8 per cent and 2.0 per cent, respectively.

Women have held on to jobs better than men have during this downturn, reflecting a pattern that prevailed during the previous cycles.

One major difference is how older workers have fared. The number of jobs held by men over 55 is up 5.6 per cent since the cycle began, and the number of jobs held by women of that age has risen by 9.3 per cent.

There are fewer jobs for workers age 54-64 than when the cycle began, but that group has done much better than younger workers.

By contrast, younger workers were more likely to hold on to their jobs in the two previous downturns.

It is not clear why that pattern has changed. It is against federal law to discriminate against older workers, but that law was passed in 1967, before either of the previous downturns. It could be that the plunge in real estate and stock prices in 2008 led fewer older workers to decide to retire.

The proportion of the work force out of work for more than 15 weeks reached 5.7 per cent in October, well above the 4.2 per cent figure reached in 1982. That had been the highest such figure since the government began calculating the number in 1948.

The proportion that has been out of work for at least 27 weeks – half a year – is now 3.6 per cent, also a record.

Wipro to hire sacked staffers

BANGALORE: If you are a pink slip recipient from Wipro, here’s a piece of good news. Wipro plans to rehire some of the employees it fired a year ago. "Non-performance was the reason for these separations. However, we are open to rehire some of these people who were fired by us a year ago, if they come back to us with additional skill sets. A one-year window would have been enough for them to acquire some additional skills," said Joseph John, vice-president (HR) in Wipro Infotech, the business that looks at the India and Middle-East markets.

The tech major's involuntary attrition rate has gone up by 2 percentage points in the last 16 months. Wipro Infotech said it would also resume campus hiring from January. "We are looking at hiring over 1,000 laterals during the fiscal and 1,000 freshers from campuses in January," said John.

The division, which recruited 1,000 people in the first six months of the fiscal, expects hiring numbers in the second half of the year to be more than double of that.

The additional people requirement comes with Wipro winning a slew of large projects in India and the Middle-East, and also to cater to the growing requirements of existing accounts. The company hired 200 people in Saudi Arabia and Egypt recently.


Wipro is also hiring for its Global Service Management Centre in Mysore with almost 5% jobs earmarked for differently-abled people.

Wipro Infotech is planning to raise the ratio of its women employees from 13% now to 20% in the next two years.
On salary hikes, John said the company had not budgeted a hike at the start of the fiscal. "But we have decided to raise salaries in the fourth quarter across the board."

Monish, Bangalore, says: What an Idea sirjee!!!! Do wipro really have an HR and Startergy Team.. or all has been pink slipped for non-performance.... umm....I pity wipro and its future. Beware dear Wipro Mgmt its time you realize for your mistakes and pay for them dearly.
[10 Nov, 2009 1644hrs IST]

karthik, chennai, says: why would any one who has been laid of at a time of crisis risk joining the same company again?.I bet there will be 0 takers.
[10 Nov, 2009 1631hrs IST]

Amit, Bangalore, says: what a non-sense! One yr back they fired them on performance basis and now they are hiring back. What improvement one can do who is sitting at home for 1 year? They just want to hire the same resources at much lower cost. All this propaganda of firing and rehiring is to save cost nothing else. Actually Wipro is the worst company with no ethics among all indian IT companies.....