TCS to hire local talent in US

To expand its U.S. operation, TCS (Tata Consultancy Services) plans to hire 1,000 local workers at its new facility near Cincinnati, Ohio, by the end of 2010, reports DNA.

The company opened a $20 million delivery and software development centre in Milford, Cincinnati in Ohio, in March last year - in a bid to win federal contracts and be closer to the headquarters of its U.S. clients. Suryakant, President of TCS North America said, "The Cincinnati region is a great place for U.S. to recruit local talent to meet the demands of our customers as they grow out of the downturn."

The ohio facility is also aimed at securing what some major Indian service providrs are chasing - defence and avionics work. TCS is reportedly in talks with Boeing and Lockheed Martin for defence and aerospace contracts. This work can only be done by American citizens or green card holders.

Recently, the company bagged projects related to unemployment insurance for the states of Nebraska, New Mexico and Mississippi. "The U.S. by far our largest market and the seven hills park facility in Ohio plays an integral role in our strategy of putting our customers first," said Suryakant.

Currently, TCS employs 15,000 people in the U.S. The company has been shipping quite a bit of work to U.S, ignoring India's popular IT hubs.

How not to look desperate

Desperate times can lead you to show how desperate really are to land that job. But no matter how tough a time you’ve been having—dwindling savings, unemployment running out, bills overdue—that’s the last impression you want to give a prospective employer.

Job hunting is like dating. People are attracted to confidence and turned off by the hard-up. So how can you seem self-assured while looking for work and land that job as the market heats up? Keep in mind these dos and don’ts.

DO
Remember that the more you have going on, the less desperate you will feel. So keep your pipeline full. Have a job search plan to follow. Set a goal of meeting five new people a week, whether it’s for coffee, lunch or an informational interview.

Follow up with the people you’ve met—and when you call or email, make sure to have a noteworthy topic to discuss. Stay on top of industry and company news easily with Google Alerts—go to the alerts tab in Google and set it up to send you relevant company information. When you see something interesting, forward it along with a comment. Also another way to reach out is to invite the person to connect on linkedin.com

Once you get an interview, be prepared to be asked about your down time. Don’t let the question faze you. Practice your response at home if it helps. Explain how productive you’ve been. Discuss what you’ve learned. “I’ve been strategically aligning myself with contacts that would give me access to organizations XYZ, ABC, and DEF.” “I’ve been keeping on top of the industry, and based on my research on your organization, here’s why I could add tremendous value to your team.”

Leverage a positive response. If, after a first interview you’re told you are a strong candidate, don’t act overjoyed—or to take the opportunity for granted. Follow up on the other resumes you have sent out, and send out emails to contacts and employers. Explain that you would like to make sure you’ve explored all your options before you wrap up your job search. Employers hate losing out on a good candidate.

DON’T
Call daily to follow up on a resume or an interview. Just like in relationships, that reeks of desperation.

Act non-committal or over confident—it will come back to haunt you. Any follow up conversations should be pleasant and your enthusiasm to join their organization should be transparent.

Don’t tell an employer that you took to time to find yourself, and that’s why you have been out of work so long. You will come off as lazy and not serious about your career.

Don’t try to engage a recruiter to help get you feedback at a company you already interviewed with. A recruiter only receives a commission for a candidate that has not already applied to a company.

When working with a recruiter, don’t contact the hiring manager directly. Always let the recruiter do the follow up.

Are you on the Layoff List

So many people report that being laid off came as a total surprise. One morning they show up for work as usual. An hour later they’re sitting behind their steering wheel stunned, with a box of pictures and books in the backseat.

It’s bad enough to lose your job. But to have it take you by surprise is just unfathomable. How can you read the tea leaves on something like this so that it doesn’t happen to you? Or so that it doesn’t happen to you again?

Here are some signs that you might be on a list of people to be laid off:

* Your company has hit hard times and has publicly announced that it will institute “cost-cutting measures.”
* Your industry sector has taken a dive on Wall Street.
* Your company has been acquired, and there’s someone just like you already ensconced in the acquiring company.
* Your company just bought your competitor, and there’s someone just like you in the newly acquired company.
* You work for a closely held family business—and you’re not family.
* You work for a publicly traded business that prides itself on being “one big happy family.”
* You’ve been asked to research ways the business can reduce expenses.
* Your otherwise congenial boss starts avoiding you.
* Your otherwise congenial boss starts snapping at you.
* Your boss starts looking at you strangely.
* Your boss starts looking right through you.
* You inexplicably feel compelled to ask your boss if there’s about to be a layoff.
* You are one of the highest paid people in the organization.
* You are one of the lowest paid people in the organization.
* You’re somewhere in the middle.
* You wonder how your long-time coworker could be taking such a lengthy leave of absence without saying good-bye.
* There is an unusually bulky FedEx package from headquarters that’s addressed to your local HR department.
* There is absolutely nothing out of the ordinary going on in the company whatsoever.
* You have a job.

The best thing you can do:

Recognize that everyone is subject to being laid off.

The worst thing you can do:

Think it won’t happen to you.

The first thing you should do:

Keep in mind that getting laid off has nothing to do with your performance.

Nelson: Bad Economy Means We Should Wreck Economy, Destroy Planet, Let Health Care Languish

I suspect we’re going to be hearing a lot more of this sort of thing in the weeks to come:

Democrat Ben Nelson, a Senator from Nebraska, said the slumping economy and rising joblessness will be factors as Congress considers climate change and health care legislation. They are also driving concerns about the budget deficit, which widened to a record $1.42 trillion in the fiscal year that ended on Sept. 30, he said.

“When the economy’s not strong there’s a lot of interest in controlling spending,” Nelson said.

This really makes no sense. If Nelson thinks the health care and climate legislation before congress would have a ruinous economic impact or something, then of course he shouldn’t vote for either bill. But that’s independent of the current state of the labor market. In reality, neither bill will have much of any impact on a 12-18 month time horizon since their provisions take time to phase-in. Both are aimed at long-term problems—the economic devastation wreaked by an out-of-control health care system and the environmental devastation wreaked by out-of-control greenhouse gas pollution. There’s never a perfect day to tackle a long-run problem, but delaying action doesn’t help the economy in the short-run and only makes it harder to tackle the problem.

On controlling spending, this is nuts. With the economy weak Nelson wants to do . . . what? Lay off teachers? Halt infrastructure projects? Make sure that kids whose parents are unemployed end up malnourished? The economy is suffering from a catastrophic collapse in overall spending with households, businesses, states, and municipalities all pulling back. If the federal government pulls back too we’re going to go down the drain.

November : Unemplyment rate in US at highest 10.2 percen

Nov. 6 (Bloomberg) -- The unemployment rate in the U.S. jumped to 10.2 percent in October, the highest level since 1983, casting a pall over the prospects for a sustained recovery and risking further erosion of President Barack Obama’s popularity.

Payrolls fell by 190,000 last month, more than forecast by economists, a Labor Department report showed today in Washington. The jobless rate rose from 9.8 percent in September. Factory payrolls dropped by the most in four months, and the average workweek held at a record low.

Treasury two-year notes rose on bets the Federal Reserve is more likely to maintain its pledge to keep interest rates near zero. The figures prompted Obama, who signed a bill today extending jobless benefits, to promise fresh measures to help put some of the 15.7 million unemployed Americans back to work.

“We will certainly have very bad payroll numbers in November and December,” said Harm Bandholz, an economist at UniCredit Global Research in New York, whose forecast for a 10.1 percent unemployment rate matched the highest among economists surveyed by Bloomberg. “We don’t foresee businesses going on a hiring spree anytime soon.”

Two-year note yields fell four basis points, or 0.03 percentage point, to 0.84 percent at 4:45 p.m. in New York. The yield touched 0.83 percent, the lowest since Oct. 2. The Standard & Poor’s 500 Stock Index closed up 0.3% to 1069.30 after falling as much as 0.7 percent.

Steeper Drop

Payrolls were forecast to drop 175,000 after an initially reported 263,000 decline for September, according to the median estimate of 84 economists surveyed by Bloomberg News. The jobless rate was projected to rise to 9.9 percent.

Obama signed into law a measure extending a tax credit of up to $8,000 for homebuyers and benefits for unemployed workers, and he promised to pursue further measures to create jobs.

“My economic team is looking at ideas such as additional investments in our aging roads and bridges, incentives to encourage families and business to make buildings more energy efficient,” additional tax cuts, and more steps to ease the flow of credit to small business and promote exports, he said today at the White House.

Jason McKinnon, 34, a San Francisco resident, is among those who could benefit from the measure Obama signed today to add up to 20 additional weeks of unemployment insurance.

Expired Benefits

McKinnon lost his $18-an-hour job in April as a video-game software analyst, and last month his benefits ran out. He said he has sent out hundreds of resumes to companies such as Facebook Inc. and Sony Corp., received about 50 responses and no offers. “I’m feeling like there’s less jobs out there and more qualified people,” he said in a telephone interview. Now he plans to take night classes at City College of San Francisco to improve his chances.

For congressional Democrats facing challengers in midterm elections next year, the continuing erosion in the job market puts them at political risk. Voters on Nov. 3 overwhelmingly cited unease with the economy and worries about jobs as they ousted the Democratic governor of New Jersey and installed a Republican governor in Virginia after eight years of Democratic rule there. Obama carried both states in 2008.

The entire House of Representatives, 34 senators and 37 governors are up for re-election in 2010.

Since Obama took office in January, the economy has lost 3.49 million jobs. The U.S. economy has lost 7.3 million jobs since the recession began in December 2007, when the unemployment rate stood at 4.9 percent.

The administration said last week that the $787 billion stimulus package plan signed into law in February was directly responsible for saving or creating about 640,000 jobs.

Under-Employment Record

The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- reached a record 17.5 percent from 17 percent in September, today’s report showed.

“We’ve got lots of people just giving up and leaving the labor force,” said Julia Coronado, a former Fed economist who now works at BNP Paribas in New York. “Consumer incomes are under pressure, and that raises questions about the sustainability of the improvement we’ve seen in consumer spending.”

Some people are pulling up stakes and moving to where they think the job prospects may be brighter. Beth Rubin, 41, lost her position as a receptionist at the law firm Goldstein Bershad & Fried, PC in Southfield, Michigan, in October. The resident of Ferndale, a Detroit suburb, is now selling her furniture and moving to Georgia. “I’m looking to get a job in Georgia, and I don’t know about the job market there, but I can tell you Michigan is horrible,” Rubin said in a telephone interview.

Average Work Week

The average work week held at a record low of 33 hours in October, while average weekly earnings rose to $617.76 from $616.11 a month earlier. Workers’ average hourly earnings were 2.4 percent higher than October 2008, the smallest gain since 2004.

Some companies are cutting payrolls amid concern spending will cool as government-assistance programs wane. The New Brunswick, New Jersey-based Johnson & Johnson, the world’s largest health-products company, said Nov. 3 it will shrink its workforce by as much as 7,000 workers.

Factory payrolls dropped 61,000 after decreasing 45,000 in the prior month, today’s report showed. The median forecast by economists called for a drop of 42,000. The decline included a gain of 4,600 jobs in auto manufacturing and parts industries.

Auto Sales

Sales of cars and light trucks rebounded last month after plunging in the wake of the government’s so-called cash-for- clunkers incentive plan. Vehicles sold at a 10.5 million annual pace in October, up from a 9.2 million rate in September.

Inventories at U.S. wholesalers dropped in September for a 13th consecutive month, a separate report today from the Commerce Department showed, clearing the way for a pickup in orders as sales improve.

Today’s report contained some bright spots. Revisions added 91,000 to payroll figures previously reported for September and August, and the number of temporary workers rose by 34,000, the third consecutive gain.

Payrolls at temporary-help agencies often turn up before total employment because companies are not certain increases in demand will be sustainable enough to warrant the expense of taking on permanent staff.

‘Very Ugly’

“The rise in the unemployment rate is very ugly,” Ethan Harris, head of North America economic research at BofA Merrill Lynch Global Research, said in an interview with Bloomberg Television in New York.

The U.S. economy expanded last quarter for the first time in a year, growing at a 3.5 percent pace as government incentives spurred consumers to spend more on homes and automobiles.

Some companies are gaining confidence. Deere & Co., the world’s largest maker of agricultural equipment, said last week it’s recalling 452 workers, the majority of manufacturing employees dismissed earlier this year at a factory in Iowa.

Fed officials met in Washington this week and signaled that a return to economic growth alone won’t result in higher interest rates. Economist Joseph LaVorgna of Deutsche Bank Securities Inc. in New York said in a note to clients that the central bank “has never raised rates with unemployment rising.”

Productivity gains may be bad news for job seekers

Productivity gains may be bad news for job seekers

WASHINGTON — Companies across the economy are finding ways to do more with fewer workers, dimming hopes that hiring will take off anytime soon.

Employers became leaner and more efficient in the third quarter. Wages, meantime, remain flat or falling. The result is that productivity — output per hour of work — jumped at the fastest pace in six years.

The good news for companies, though, may be bad news for the jobless. As long as companies can get their workers to produce more, they have little reason to hire — at least until consumer spending picks up. And the squeeze on incomes could depress consumer spending, putting the economic recovery at risk.

Still, some economists were encouraged by the productivity report. They say that eventually, employers won’t be able to squeeze more from their staffs. They will then have to ramp up hiring — something that could happen next year, even though the jobless rate is expected to hit double digits.

Productivity rose at an annual rate of 9.5 percent in the July-September quarter, the Labor Department said Thursday. That was much better than the 6.4 percent gain economists had expected. Unit labor costs fell at a 5.2 percent rate.

While companies aren’t doing much hiring, they’re not cutting as many workers, either. The number of newly laid-off workers filing claims for unemployment benefits last week fell to the lowest level in 10 months.

On Wall Street, the better-than-expected jobless claims report and an upbeat forecast from Cisco Systems Inc. buoyed investors. The Dow Jones industrial average added nearly 204 points to 10,005.96, and broader indexes also gained.

The 9.5 percent productivity rise followed a 6.9 percent surge in the second quarter and was the fastest since a 9.7 percent increase in the third quarter of 2003.

The gain reflected that the overall economy, as measured by the gross domestic product, grew for the first time in a year — at an annual rate of 3.5 percent. The higher output came as companies continued to lay off workers. That meant employers produced more with fewer workers.

The 5.2 percent drop in unit labor costs marked the third straight decline and was larger than the 4 percent decrease economists were expecting.

Productivity is the key ingredient to rising living standards. It lets companies pay their workers higher wages. Those increases tend to be financed by increased output, rather than higher costs for products.

But as they struggled with the recession, companies boosted productivity while continuing to lay off workers. Many produced more goods; others kept their output down but slashed costs. Companies kept wages down by freezing pay or imposing unpaid furloughs.

“Survival meant cutting costs as rapidly as possible and fulfilling orders with the fewest number of workers,” said Joel Naroff, chief economist at Naroff Economic Advisors.

Some companies in hard-hit sectors have managed to boost productivity despite job cuts. They’ve had to find ways to stretch their remaining workers to keep up with demand.

Fein Tool North America, a Cincinnati company that supplies auto parts manufacturers, has cut about 100 workers, or 33 percent of its staff. But Fein president Ralph Hardt said the company can still fill its orders by using more overtime shifts and temporary workers.

“We are asking more of our people than ever before,” he said.

Fein also has made technical changes, including increasing their presses’ strokes per minute so they can stamp more metal.

Hardt said he plans to rehire once the economy picks up again. But he’s hesitant to do so quickly.

“If I see signs of recovery, I am going to hire back, but I am going to be very prudent,” he said.

Elsewhere, Union Pacific has found ways to reduce the number of crews it needs and is using more fuel-efficient locomotives. The rail company also rewarded train engineers who saved fuel on their routes with free gas cards for their personal vehicles, all while furloughing nearly 10 percent of its 45,000 workers.

Naroff said hiring could remain sluggish for months. But other analysts are more optimistic. They were encouraged by the productivity report, noting that companies are starting to reach the limits of how much they can produce with their shrunken work forces.

“We believe businesses will have to start to increase hours worked and payrolls around the turn of the year since they cannot expect their current work force to sustain such rapid productivity growth,” said Michelle Meyer, an economist at Barclays Capital.

The problem is that consumer demand could falter once the government removes the stimulus programs it has put in place, such as record-low interest rates and homebuyer tax credits. Companies could stop hiring if they think demand will slump again.

Temporary surges in labor productivity tend to follow the end of a downturn, said Cliff Waldman, an economist with trade group Manufacturers Alliance.

“You’re having a turn in output from negative to positive with a significantly depleted labor force,” he said. “It gives the illusion that productivity has increased. It’s really just arithmetic more than reality.”

In a separate report, the Labor Department said first-time claims for jobless benefits last week fell by 20,000 to a seasonally adjusted 512,000. That’s better than economists’ estimates of 523,000.

Economists closely watch initial claims, which are considered a gauge of the pace of layoffs and an indication of employers’ willingness to hire new workers.

The four-week average of jobless claims, which smooths fluctuations, dropped to 523,750, its ninth straight decline. That’s 135,000 below the peak for the recession, reached in early April.

Despite the improvement, initial claims remain well above the roughly 400,000 that economists say will signal job creation.

Another 4.1 million people claimed extended unemployment benefits in the week ended Oct. 17, the latest data available, an increase of about 100,000 from the previous week. Congress has added 53 weeks of emergency aid on top of the 26 weeks typically provided by states.

Still, as roughly 7,000 Americans run out of extended benefits every day, Congress has approved legislation that would add another 14 to 20 weeks. President Barack Obama is expected to sign the bill.

The National Employment Law Project, an advocacy group, estimates that up to 1.3 million people would exhaust their benefits without the extension.

Economists expect the nation lost a net total of 175,000 jobs last month, adding to the 7.2 million lost since the recession began in December 2007. And many expect the jobless rate could rise as high as 10.5 percent before the recovery gains enough steam to start pushing it down next summer.

TCS Hires 300 for US Center

Mumbai: Tata Consultancy Services (TCS) has hired around 300 associates for its North America Domestic Delivery Center, TCS Seven Hills Park. Seven Hills Park provides a wide-range of IT solutions, consulting, business process outsourcing and engineering services for TCS customers across industries including banking and financial services, life-science and health care, as well as manufacturing and retail.

"I welcome these new associates into the TCS family and am sure they will help our customers achieve even greater success in the future," TCS's Chief Executive Officer and Managing Director, N Chandrasekaran, said.

TCS Seven Hills Park is also the location of TCS's new North American Training Center. Over the last several months, more than 225 associates have joined the company from top universities throughout the country, the release said. TCS has over 1,40,000 trained IT consultants in 42 countries.

US Technology Industry loses 1,15,000 jobs in first half of 2009

Seems Indian techies have been luckier than their counterparts in the US. According to a study by TechAmerica Foundation, US technology industry cut 115,000 jobs in the first half of 2009, compared to the 72,900 tech jobs added in the same period in 2008.

However, in the US too, the tech sector seems better than other industry verticals. While between June 2008 to June 2009, tech lost 224,100 jobs, a 3.7% decline; the US private sector shed jobs at a higher pace of 5.1%.

The Washington-based non-profit foundation also said that high-tech manufacturing in the US continues to shed jobs, having lost 69,500 from January to June 2009. The high-tech services sectors shed 45,500 jobs from January to June 2009, a 1% drop.

The report also said that for the first time in its 5-year history, all three services sectors saw losses: engineering and tech services lost 21,500 jobs, while communications services shed 13,600 jobs. In software services the job cuts stood at 10,400.

US should be concerned about OutSourcing

From steel to textiles, industries that once employed cities worth of Americans have disappeared, the work heading overseas. The common argument is that globalization is nothing to worry about in the long view because those lost jobs, many of them blue-collar, are being replaced with high-tech ones.

However, in this flat world, even high-tech, high-skill jobs are heading overseas — often with the United States’ urging, says Ron Hira, assistant professor of public policy at Rochester Institute of Technology.

“The narrative is offshoring doesn’t affect the total number of jobs in the U.S., what happens is the change in the mix,” said Hira, who wrote a chapter about the offshoring of research and development for Manufacturing a Better Future for America, published in July by the Alliance for American Manufacturing. “The problem with that is it’s not clear it’s only low-level jobs moving offshore. What it doesn’t talk about is the fact trade can be win/lose. When China gets better at the things the U.S. is good at, the U.S. can get poorer.”

Hira, also the author of Outsourcing America, in 2005, talked recently about his views. Here are excerpts:

On jobs moving overseas:

Hewlett-Packard Co., when it took over Electronic Data Systems, announced it was going to lay off about 24,000 workers as part of the restructuring plan. That work is not going to disappear. At least half of those jobs will end up in low-cost countries somewhere. They’ll be basically offshored.

IBM has gone from a 6,000 headcount in 2003 in India to, they won’t say exactly how many, but estimates are over 90,000. That’s a 16-fold increase in six years.

People say these are kind of the lower-wage, lower-level jobs within IBM, within EDS. But that’s not true, either. There are a number of R&D centers that are being opened up in India and China. Boeing just recently announced an R&D center opening in Bangalore (India). Google has a facility in Bangalore. Microsoft has cutting-edge basic research being done in China. The offshoring of R&D and innovation is clearly happening. Clearly, high-skill, high-wage jobs are moving offshore.

On how much of this is going on:

No one has a really good handle, in part because the companies have a strong interest in not talking about these things. They don’t want to get the bad press on it. They don’t want to get on the Lou Dobbs list, so to speak, of companies that are offshoring. They don’t want their current employees to know because they need a lot of them to train their foreign replacements. One of the main things, (they don’t) want their customers to know. Once the customer knows you’re offshoring work, they know you’re getting cost savings and they expect you to pass along some of those cost savings to them.

On how this is different from the rise of Japan in the 1980s:

They made better consumer electronics, they made better cars. They had a better management system. What did (GM) have to do? They learned the Toyota manufacturing system, they learned from Japan. This time around it’s not GM vs. Toyota. This time around it’s IBM competing its U.S. workers vs. its Indian workers. This time around, what do you do? How do you make these American workers justify their five-times salary differential?

On companies’ motivations:

From the companies’ point of view, they’re acting rationally. One of the big problems in the public discussion was really started in 2004 when presidential candidate John Kerry called CEOs who offshore and outsource “Benedict Arnolds.”

The CEOs of these companies making the decisions aren’t compensated by how many U.S. workers they have (or) how much R&D they keep in the U.S. vs. Singapore or China. They’re compensated by their profits, their focus on shareholders. We have a systems issue here, where the interest of IBM or Kodak isn’t necessarily in the interest of the U.S. They’re global companies — why should they care more about their U.S. workers than their Indian workers or their Chinese workers?

Sam Palmisano, the CEO of IBM, wrote sort of the manifesto — “The Globally Integrated Enterprise” — where he talks about companies having been restructured and the notion of a multinational corporation has become anachronistic. In the past, you set up an IBM India to serve the Indian market (and) an IBM China to serve the Chinese market. That’s no longer true. We’re going to do the design and development from wherever it makes sense geographically. So we have an integrated enterprise across these country boundaries.

On what is to be done:

We should open our eyes that there’s a problem here from a U.S. national interest point of view. Politically, we have to have countervailing forces. These companies have huge influence over policy and the political process. They have millions of dollars they spend on lobbying. They have a huge presence in Washington and rightfully so; they’re big employers.

But there’s no group that represents the national interest in any way in Washington to counterbalance this. Which is why you see no action in Washington to address these issues. Who represents American workers in this debate? Who represents accountants? Who represents engineers? No one.

Europe Lags behind US in Tech Spending

The rate of recovery in tech spending in the US is going to be twice the rate of Western and Central Europe next year as America steps out of recession quicker.

Europe has been experiencing a deep recession and with the problems originating in the US those factors have pointed to the recovery starting on the other side of the Atlantic first before spreading to the UK and the rest of Europe.

According to Forrester research the US will see a 8% increase in technology purchases next year compared to 4% in Western and Central Europe with €297bn being spent this year in Europe with the major countries all seeing drops ranging for IT goods and services from 12% here in Britain to 3% in France and Germany in 2009.

In the Forrester report, European IT market outlook 2009 to 2010, the analyst Andrew Barels, said that the market for IT goods and services would decline in Europe by 6.3% this year and would be slow to recover: "In both regards it will lag behind the US tech market, which will have a smaller drop in 2009 and stronger growth in 2010."

"The main reason? The European economic recession has turned ouyt to be deeper than the US recession, with Europe's downturn starting later and probably lasting into 2010 . All categories of IT purchases will be down, with computer equipment and communications equipment being especially weak," he stated in the report.

There have already been sings that the US economy has stablised with plenty of CEOs and financial officers making that call in statements accompanying recent financial results. But in Europe only Germany and France have officially recently come out of recession with the UK still lagging behind.

US Unemployment Rate in July Increases

Job cuts announced by US employers jumped 31 per cent in July to over 97,000, increasing for the first time in six months, warning of a further hike in downsizing activity by the last quarter of the year, a report said on Wednesday.

After falling to a 15-month low in June planned job cuts announced by US employers jumped to 97,373 in July. It was the first increase in monthly job cuts since January, global outplacement consultancy Challenger, Gray & Christmas Inc said here in its latest report.

"After June's surprisingly low job-cut total, a July rebound was not entirely unexpected. While there are signs that the economy is stabilising and the pace of layoffs slowing, we are still a long way from a full recovery. In fact, monthly job cuts are likely to return to levels in excess of 100,000 by the fourth quarter," Challenger, Gray & Christmas CEO John Challenger said.

Job cuts had fallen 33 per cent in June to 74,393, the lowest monthly total since March 2008. The July total was 6 per cent lower than the same month a year ago, when employers announced 1,03,312 cuts. So far this year, employers have announced 9,94,048 job cuts, 72 per cent more than 5,79,260 layoffs through the first seven months of 2008.

The July surge in job cuts was led by firms in the transportation industry, which announced plans to reduce payrolls by 27,954 positions, a five-fold increase from the June layoff total of 5,587.

The telecommunications sector also experienced an increase in layoffs last month with job cuts surging to 17,601 in July from 802 in June.

Meanwhile, the automotive sector, which leads all other industries in year-to-date job cuts with 1,22,212 layoffs has seen layoff announcements decline in each of the last three months. These companies announced 2,716 job cuts in July.

"Declining layoffs in the automotive industry may not be indicative of a turnaround. Instead, these employers simply may not have any room for additional job cuts if they hope to build new fleets of more eco-friendly cars," Challenger added.

With consumer and business spending at a standstill transportation companies have little choice but to make further cutbacks in staffing, it said, adding, that a surge in hiring could take place around the holidays.

Other sectors which saw downsizing during July are government/non-profit (7,131), industrial goods (6,548) and financial (5,030). While economic conditions and cost-cutting claimed over 58,000 jobs, voluntary severance led to 15,070 job cuts in July.

Employers also announced plans to hire a total of 17,183 employees with retail (14,200) and aerospace/defence (1,160) leading the pack.

Senator wants Foreigners to be laid off first

Washington: An influential senator has asked U.S. companies to make efforts to fire foreign workers first while making lay-offs during the current economic downturn - a move that could affect thousands of Indian professionals.In a letter to Microsoft, which employs thousands of people through the H-1B visa programme, a majority of them Indians, senator Chuck Grassley urged the IT giant to make efforts to retain qualified American workers during its recently announced lay-offs.

Noting that last year, Microsoft had advocated for more H-1B visas in the US Congress, he said the purpose of the H-1B programme for professionals in "specialty occupation" is to help companies hire foreign guest workers on a temporary basis when there is not a sufficient qualified American workforce to meet those needs, he said.

However, the programme is not intended to replace qualified American workers, Grassley said asking questions of both American and foreign based companies about their use of the H-1B visa programme. A majority of the 60,000 professionals given H-1B visa every year are from India.

In his letter reacting to Microsoft Corporation's reported move to layoff 5,000 jobs over the next 18 months, Grassley expressed concern "that Microsoft will be retaining foreign guest workers rather than similarly qualified American employees when it implements its layoff plan"."As you know, I want to make sure employers recruit qualified American workers first before hiring foreign guest workers," he told Microsoft Chief Executive Steve Ballmer.

It is imperative that in implementing its layoff plan, Microsoft ensures that American workers have priority in keeping their jobs over foreign workers on visa programmes, Grassley said."

My point is that during a layoff, companies should not be retaining H-1B or other work visa programme employees over qualified American workers," he said."Our immigration policy is not intended to harm the American workforce.

I encourage Microsoft to ensure that Americans are given priority in job retention.""Microsoft has a moral obligation to protect these American workers by putting them first during these difficult economic times," he said.Microsoft spokesperson in a statement said: "We care about all our employees, so we are providing services and support to try to help every affected worker, whether they are US workers or foreign nationals working in this country on a visa."

Obama's move to end tax breaks for US firms who outsource

New Delhi: India Inc believes the move by the Barack Obama administration to reduce tax breaks for US firms that ship jobs overseas will hit American companies more than impact on the Indian outsourcing industry.

"It's a more US-US issue rather than one aimed at stopping outsourcing, or off-shoring, or anything to do with India," said Som Mittal, president of the National Association of Software and Service Companies (Nasscom), a representative boddy for the industry.

"If you look at Indian companies operating in the US, or elsewhere, they work there and pay taxes there. Hence, it is not about stopping outsourcing, or off-shoring, but just to collect taxes," Mittal told IANS.

His comments came after President Barack Obama said Monday that the current US tax system gave US-based multinationals that shipped jobs to places like India an unfair advantage over other domestic rivals and wanted corrective steps.

"It's a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York," Obama said, explaining why he intended to close tax loopholes and crackdown on overseas tax havens.

"I want to see our companies remain the most competitive in the world. But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens."

According to a McKinsey-Nasscom study, the Indian software and outsourcing industry employs some two million people, earning total revenues worth $52 billion, of which nearly $48 billion comes from exports.

The Confederation of Indian Industry also felt that the remarks were more in the nature of posturing and that it was not intended at curbing outsourcing of work by US firms to Indian companies.

"It's an internal issue. It will only reduce their competitiveness," said Hari Bhartia, vice president of the chamber. "It is a populist posture. Perhaps his (Obama's) intention was not the same. However, it sends a wrong message."

According to Girish Vanvari, a tax expert and executive director with accounting and consultancy major KPMG, the Obama administration's move was aimed at keeping American money within the country.

"I don't think this will happen. America is one of the largest free markets in the world - otherwise, you will have companies paying as much as 70 percent of their revenues as taxes," Vanvari told IANS.

Nasscom maintained that large US companies had subsidiaries across the world and that more than 50 percent of their revenues were coming from outside the US. The US move was to ensure that the large profits kept outside are also brought into the tax net.

"President Obama is intending to collect those taxes to create more jobs in US," said the industry lobby that sent a delegation to the US last month to meet lawmakers, urging them to refrain from protectionist measures.

Infosys Technologies, India's second largest software and outsourcing company, also felt that the US proposal was aimed at closing corporate tax loopholes and crack down on overseas tax havens.

"We do not believe that it has anything to do with IT outsourcing done by US corporations," a spokesperson for the company said.

Indian IT Professionals Upset with Obama

Bangalore: Indian IT professionals Tuesday slammed President Barack Obama's move to end tax incentives for US companies that ship jobs to countries like India, saying it will neither benefit the U.S. nor its corporate sector."Obama's latest move was expected, but unwelcome at a time when Bangalore's IT and BPO sectors are already reeling under the global economic meltdown," said Padma Nair, 26, an IT-professional working for a Bangalore-based American company.

"Obama's new policy is not going to benefit anyone, neither the outsourcing companies nor the country the job is outsourced to. The cost saved in outsourcing is higher than that saved by tax exemption," Nair told IANS.Expressing a similar view, Shankar Banerjee, 25, a quality analyst working for another American IT company, said if Obama's proposal is pushed through, it will hit business coming India's way and many Indians would lose their jobs."IT and BPO companies in India have already suffered due to the slowdown. A lot of people have lost jobs. Obama's latest move will cause more problems," added Banerjee.

The comments came after President Obama said Monday that the current US tax system gave US-based multinationals that shipped jobs to places like India an unfair advantage over other domestic rivals and wanted corrective steps."It's a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York," Obama said, explaining why he intended to close tax loopholes and crackdown on overseas tax havens."I want to see our companies remain the most competitive in the world. But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens."

According to the National Association of Software and Services Companies (Nasscom), the US accounts for about 60 percent of India's software services export revenue. Bangalore-based firms account for one-third of this.A recent study by the association, conducted along with McKinsey, shows the Indian software and outsourcing industry employs some two million people, earning total revenues worth $52 billion, of which nearly $48 billion comes from exports.

American IT companies that have set up offices in Bangalore include Accenture, Microsoft, Amazon, AOL, Cisco, Dell, IBM and Intel.An estimated 600,000 people are employed in Bangalore's software and outsourcing sectors. And industry professionals say many could lose their jobs following Obama's latest move.

UNITES-Professionals India, a trade union for IT enabled services sector, predicts 50,000 employees in India will be handed the pink slip over the next few months. Bangalore, hailed as India's Silicon Valley, could be the worst affected.Concurred Sumana Prasad, 32, an IT employee working for an Indian company: "The slowdown has already hit Bangalore's IT and BPO companies. Obama's latest step will affect more people."

Anti India Bill Introduced in the US

WASHINGTON: A legislation has been introduced in the US Senate on reforming the H-1B and L1 visa programmes, popular among Indians, under which th e American firms looking for skilled foreign professionals are required to make a "good faith" attempt to recruit local workers first.
Given that the skilled professionals from India are the one who account for the maximum number of H-1B and L1 visas, Indian professionals followed by those from China are likely to be hit the most if the legislation introduced by Senators Chuck Grassley and Dick Durbin is passed by the Congress and then signed into law by the President.

The bill, introduced yesterday, requires all employers who want to hire an H-1B guest worker to first make a good faith attempt to recruit a qualified American worker. Employers would be prohibited from using H-1B visa holders to displace qualified American workers.

"Our bill will put a stop to the outsourcing of American jobs and discrimination against American workers," Senator Durbin said in a statement. "The H-1B visa programme should complement the US workforce, not replace it," he argued.

The bill prohibits the practice of 'H-1B only' ads and prevents employers from hiring additional H-1B and L-1 guest workers if over 50 per cent of their employees are H-1B and L-1 visa holders, Grassley said in a statement. It gives power to the Department of Labour to investigate, audit and penalise abuse of H-1B and L1 visa employers.

However, Grassley argued the bill does not eliminate the programme or change the numerical cap of visas available to petitioning employers. "The H-1B programme was never meant to replace qualified American workers. It was meant to complement them because of a shortage of workers in specialised fields. In tough economic times like we're seeing, it's even more important that we do everything possible to see that Americans are given every consideration when applying for jobs," he said.

If there are not qualified Americans, companies can use the legal immigration programmes available, "but we must return the H-1B and L visa programmes back to their original intent," Grassley said.

"Congress created the H-1B visa programme so an employer could hire a foreign guest worker when a qualified American worker could not be found. H owever, the H-1B visa programme is plagued with fraud and abuse and is now a vehicle for outsourcing that deprives qualified American workers of their jobs," Durbin said.

He claimed that the H-1B visa programme is currently being used by some companies to outsource American jobs to foreign countries. "Under current law, an outsourcing company can use American workers to train H-1B guest-workers, fire American workers and outsource the H-1B workers to a foreign country where they will do the same job for a much lower wage. In fact, Indian Commerce Minister Kamal Nath has referred to the H-1B as 'the outsourcing visa," he said.

It was Grassley and Durbin who were mainly instrumental in the Congressional legislation early this year which stopped hiring of foreign workers by US companies receiving the federal stimulus money. As a result of this, coupled with the general economic recession, the filing of H-1B visas has dropped quite significantly.

In the first three weeks after they started receiving applications, US authorities received about 44,000 H-1B visa petitions against the Congressional mandated quota of 65,000. In previous years, they had been receiving H-1B petitions several times the number of Congressional mandated quota.

In October last year, they had released a Benefit Fraud and Compliance Assessment that highlighted rampant fraud in the H-1B programme. The report revealed more than a 20 per cent violation rate by those who use the H-1B visa programme.

"When Citizenship and Immigration Services report that there is more than a 20 per cent violation rate in the H-1B visa programme, it's pretty clear that many companies are abusing the programme and not using it as was intended. Fraud and abuse of the H-1B visa programme will not be tolerated and our bill puts companies on notice," Grassley said.

"Our legislation to reform the programme will benefit American workers, while still ensuring that US companies get the highly specialised workers they need."

Grassley alleged that fraud and abuse had become all too prevalent in the H-1B programme and thus there was need to close loopholes and enact reform.

India Accounts for 38 percent H1B Visas

WASHINGTON: As the US is having a tough time in filling up its annual quota of 65,000 H-1B work visas for highly skilled categories, an official report here has said that the Indian nationals accounted for the 38 per cent of the total H-1B visas issued by the United States last year.
India also accounts for maximum number of people entering the US on L-1 visa, which is primarily used for intra-company transferees, said the Annual Flow Report released by the Office of Immigration Statistics.

The report is based on the information gathered from the I-94 on the number and characteristics of non-immigrant admissions to the US in 2008.

The report said Indian nationals accounted for 157,726 (37.8 per cent) of the 409,619 H-1B Admissions in the US in 2008. In actual figures, this is a drop of about 3,000 as compared to 2007 when 157,613 Indian citizens were admitted to the US on H-1B visas. In 2006 the figure was 125,717.

The annual report reveals that Canada is a distant second in terms of H-1B visa admissions. In 2008 as many as 23,312 Canadian nationals were admitted to the US on this visa category, followed by Britain (19,209), Mexico (16,382) and China (13,828).

"The leading countries of citizenship for H1B admissions in 2008 were India (38 per cent), Canada (5.7 per cent), and the UK (4.7 per cent). Nationals from these three countries accounted for 48 per cent of H1B admissions," the report said.

As for the L-1 visas, it said, in 2008 leading source countries in this category were India (17 per cent), Britain (14 per cent), and Japan (9.8 per cent). The nationals of these three countries accounted for 40 per cent of L1 admissions, it said.

Of the total of 382,776 L-1 Admissions in 2008, as many as 63,156 were from India. This is almost twice the 33,414 admissions in 2006.

This is for the first time that India has topped in the L-1B visa category, which so far was occupied by Britain for the past few years.

With H-1B visas becoming tough in the last few years, Indian companies had increasingly relied on L-1 visa category for sending highly skilled workers to the US.

Microsoft Corp Senator asks to retain US Jobs

According to Reuters: “A U.S. senator has asked Microsoft Corp about its plans to slash up to 5,000 jobs, urging the world’s biggest software company to preserve the jobs of Americans ahead of foreigners working on visas.”

“The letter asked Microsoft Chief Executive Steve Ballmer to provide a breakdown of the jobs to be eliminated, and how many of those are individuals with H-1B visas and how many are Americans. Grassley also wants to know what the breakdown will be when the layoffs are complete.”

“I am concerned that Microsoft will be retaining foreign guest workers rather than similarly qualified American employees when it implements its layoff plan [...] Microsoft has a moral obligation to protect these American workers by putting them first during these difficult economic times”, said Sen. Charles Grassley, an Iowa Republican.

China Calls for a New Global Currency to Replace Dollar

China calls for new global currency
BEIJING (AP) — China is calling for a new global currency controlled by the International Monetary Fund, stepping up pressure ahead of a London summit of global leaders for changes to a financial system dominated by the U.S. dollar and Western governments.

The comments, in an essay by the Chinese central bank governor released late Monday, reflect Beijing's growing assertiveness in economic affairs. China is expected to press for developing countries to have a bigger say in finance when leaders of the Group of 20 major economies meet April 2 in London to discuss the global crisis.

Gov. Zhou Xiaochuan's essay did not mention the dollar by name but said the crisis showed the dangers of relying on one nation's currency for international payments. In an unusual step, the essay was published in both Chinese and English, making clear it was meant for an international audience.

"The crisis called again for creative reform of the existing international monetary system towards an international reserve currency," Zhou wrote.

A reserve currency is the unit in which a government holds its reserves. But Zhou said the proposed new currency also should be used for trade, investment, pricing commodities and corporate bookkeeping.

Beijing has long been uneasy about relying on the dollar for the bulk of its trade and to store foreign reserves. Premier Wen Jiabao publicly appealed to Washington this month to avoid any steps in response to the crisis that might erode the value of the dollar and Beijing's estimated $1 trillion holdings in Treasuries and other U.S. government debt.

The currency should be based on shares in the IMF held by its 185 member nations, known as special drawing rights, or SDRs, the essay said. The Washington-based IMF advises governments on economic policy and lends money to help with balance-of-payments problems.
Some economists have suggested creating a new reserve currency to reduce reliance on the dollar but acknowledge it would face major obstacles. It would require acceptance from nations that have long used the dollar and hold huge stockpiles of the U.S. currency.

"There has been for decades talk about creating an international reserve currency and it has never really progressed," said Michael Pettis, a finance professor at Peking University's Guanghua School of Management.

Managing such a currency would require balancing the contradictory needs of countries with high and low growth or with trade surpluses or deficits, Pettis said. He said the 16 European nations that use the euro have faced "huge difficulties" in managing monetary policy even though their economies are similar.

"It's hard for me to imagine how it's going to be easier for the world to have a common currency for trade," he said.

China has pressed for changes to give developing countries more influence in the IMF, the World Bank and other finance bodies. G20 finance officials issued a statement at their last meeting calling for such changes but gave no details of how that might happen.

Russia also has called for such reforms and says it will press its case at the London summit.
Zhou said the new currency would let governments manage their economies more efficiently because its value would not be influenced by any one nation's need to regulate its own finance and trade.

"A super-sovereign reserve currency managed by a global institution could be used to both create and control global liquidity," Zhou wrote. "This will significantly reduce the risks of a future crisis and enhance crisis management capability."

Zhou also called for changing how SDRs are valued. Currently, they are based on the value of four currencies — the dollar, euro, yen and British pound.

"The basket of currencies forming the basis for SDR valuation should be expanded to include currencies of all major economies," Zhou wrote. "The allocation of the SDR can be shifted from a purely calculation-based system to one backed by real assets, such as a reserve pool, to further boost market confidence in its value."

Obama First TownHall Meeting

President Barack Obama held his first online town hall meeting on Thursday with Americans across the country posing questions to him over the Internet.

The session focused on people's concerns about jobs, the economy, health care and education. During his presidential campaign, Barack Obama used the Internet to build an unprecedented grassroots movement of volunteers and to raise record sums of money.

Now he is using the World Wide Web to interact one-one-one with the American people from the East Room of the White House."When I was running for president, I promised to open up the White House to the American people," said President Obama. "

And this event, which is being streamed live over the Internet, marks an important step towards achieving that goal."

More than 92,000 Americans submitted questions to the president online, some of them in video form. Online visitors could also see the questions submitted by others and vote for the ones they liked best.

Some 3.5 million votes were cast for favorite questions on a variety of topics, including unemployment, the federal budget, the country's financial stability, home ownership, health care and education. T

he first video question came from a woman in the southern state of Georgia:"When can we expect the jobs that have been outsourced to other countries to come back and be made available to the unemployed workers here in the United States," she asked.

The president told her that not all of these jobs will return, especially low-skilled, low-paying jobs.But Mr. Obama said his recovery plans aim to create new jobs that cannot be outsourced."

So we've got to go after the high-skilled, high-wage jobs of the future," he said.

Some groups mobilized their members to use the question and answer session creatively to raise their own issues, as President Obama explained."

I have to say that there was one question that was voted on that ranked fairly high and that was whether legalizing marijuana would improve the economy and job creation," he said. "I don't know what this says about the online audience."The president then answered that he did not think legalizing marijuana would help the economy.

The many votes cast for this question show that the White House might have been successful in reaching out to a younger audience with the virtual town hall meeting - involving people who might not watch a more formal, televised news conference.

US Could Kill Indian Outsourcing

Mumbai: George F Baker professor of economics at Harvard University, Martin Stuart Feldstein, 70, has been heading the US National Bureau of Economic Research for 25 years. Feldstein has also advised US presidents on the economy, his latest role being a member of Barack Obama’s economic recovery advisory board.
The economist was in Mumbai and spoke with Mint on a variety of issues, including the latest bailout plan of the US treasury, his worries and how planned curbs on Wall Street could impact outsourcing.

On the latest US bailout plan.

Raising concern: Martin Feldstein. Ashesh Shah / MintIt’s an ingenious plan. There are a lot of positives to be said about it. It’s goal is ambitious—take a large part of impaired assets away from banks; keep them in private hands rather than under government management; avoid nationalizing the banks, protect taxpayers in the sense that they will have some potential positive gains if things work out well (with the plan).

On his worries about the plan

One issue is: Is it enough? A trillion dollars is a lot of money even in the US. By contrast, banks have more than $10 trillion balance sheets and they have residential mortgages of $3 trillion. They have mortgage-backed securities on top of that and commercial mortgages of $2 trillion...And if this new treasury plan—the private-public partnership—doesn’t take away most of the impaired assets, then what exactly does it accomplish? It will still not put the banks in a position where...they can lend.

There’s also a question of whether the banks will actually sell the mortgages. When you are a bank looking at several hundred millions of mortgages, would you want to write them down and sell them 50 cents to the dollar?

On excess liquidity leading to inflation.

Most of the money pumped in is going directly to the Federal Reserve. The Fed’s balance sheet expands; the reserves expand; and the bank’s balance sheets expand. But they are not lending this money, they are depositing this at the Fed. And the Fed pays interest on those deposits.
I think there is a potential for inflation. It is not this year’s worry, but I think it is something that could come along. If there is $2 trillion or more excess reserves in the banks, they will have every reason to want to use those reserves to make loans. That would push up demand and could be inflationary.

Beyond what they want, the Fed can normally go into open market operations. But it doesn’t have $1 trillion or $2 trillion of assets with which to conduct open market operations. All they got is junk—for lack of a better name. And it is not clear, when the time comes, they will be able to persuade the banks to take the junk back.

On the possibility of Asia’s export-led growth model collapsing as US consumers start saving.

It won’t collapse. I think it will be less when the dollar comes down, as I think it will, and there will be more demand from the US consumers for US-made goods and services.
On outsourcing.

Well, I read in the Wall Street Journal today that IBM is laying off people in the US and expanding in India. The US companies are under financial pressure; it becomes a question of more incentives. When you need to save money, those things (a call centre or accounting back office in India or China) look attractive.

On curbs on the financial sector in the US and its impact on outsourcing in India.

It’s scary. It’s a frightening thought. What I don’t know is whether they will actually try to
enforce that and if they do, there will be indirect ways of going around it. Because of the British tradition, the English language and the quality of secondary education, India has an ability to be competitive in outsourcing.
Could we kill it unintentionally or intentionally? Yes, the US could and that is a real danger.