Microsoft cuts 5,000 jobs Where as TCS to hire above 15,000

23 Jan, 2009, A.P

SEATTLE: Microsoft Corp will make the first mass layoffs in its 34-year history, cutting 5,000 jobs as demand for personal computers falls and eve in one of the world's richest companies gets burned by the recession.

The company announced the cuts on Thursday as it reported an 11 per cent drop in second-quarter profit, which fell short of Wall Street's expectations. Microsoft shares plunged more than 11 per cent.

"We're certainly in the midst of a once-in-a-lifetime set of economic conditions," Chief Executive Steve Ballmer said during a conference call. With less access to credit, businesses and consumers are spending less and stretching the life span of their existing computers.

The biggest names in the technology sector have been no stranger to layoffs lately. Giants such as chip maker Intel Corp and even Google Inc are among the companies that have pulled back on jobs to hunker down in the recession.

Google also reported earnings on Thursday and said its quarterly net profit fell 68 per cent, its first such drop ever. The results were better than analysts had expected, however.

At Microsoft, the cuts appeared to reflect uncertainty about when times will get better. The company said it could not issue a forecast for earnings and profits for the rest of the year.

The software maker was already facing tough problems, among them its inability to snag a significant share of the lucrative Web search advertising market from leader Google Inc. It tried to fix this by buying Yahoo Inc and pouring money into its own technology, all the while relying on Office programmes such as Word and Excel, and on Windows to keep bringing home huge profits.

Now, with the recession pinching software earnings, Microsoft's problems seem even harder to fix. Microsoft, which has $20.7 billion in cash on hand, said its business prospects were hurt by the deteriorating global economy and lower revenue from software for PCs. The holiday quarter of 2008 was the worst for the PC market since 2002, with computer shipments declining about a half of 1 per cent, according to IDC, a technology research group.

Making matters worse, the one type of PC consumers have warmed to in tight times -- the low-cost, low-power "netbook" -- actually cut further into Microsoft's earnings. The tiny portable computers run on Windows XP, which is older and less profitable for Microsoft than Windows Vista.

TCS to hire above 15,000

23 Jan, 2009, REUTERS


SINGAPORE: Tata Consultancy Services (TCS) said on Friday that the company expects to add 15,000-18,000 people to its headcount over the next 12 months, compared with nearly 8,700 in the three months to December. TCS currently has about 144,500 staff.

However, CEO S Ramadorai said in an interview that the company expects to slow its rate of hiring new staff this year, as a broad economic downturn affects its global clientele.

Ramadorai said some contracts and projects were being delayed or cancelled, but the company expected to achieve some earnings growth in 2009 despite the worsening global economic outlook.

"We are confident of some growth, but what that amount is difficult to say," he said. "Yes, we are winning some contracts, but then there are delays in the decision making on a number of contracts," he said, adding there were hold-ups in implementing deals that had already been signed as well as several project cancellations.

"The slowdown is very obvious and very visible, and we think it will continue for the foreseeable future."

TCS, part of India's Tata Group, posted a lower-than-expected 1.6 per cent rise in October-December net profit on January 15.