Month: April 2019

Microsoft to slash 5,000 jobs

US software giant Microsoft announced on Thursday it was cutting up to 5,000 jobs over the next 18 months including 1,400 immediately due to a slowing economy and weak spending on technology.

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Releasing its results for the second quarter of its fiscal year, Microsoft said net profit fell by 11 percent from a year ago to 4.17 billion dollars on revenue of 16.63 billion dollars, a two percent increase over a a year ago.

The Redmond, Washington-based company said earnings per share were 47 cents, less than the 49 cents per share forecast by analysts.

“In light of the further deterioration of global economic conditions,” Microsoft said it was eliminating “up to 5,000 jobs in R&D (research and development), marketing, sales, finance, legal, HR (human resources), and IT (information technology) over the next 18 months, including 1,400 jobs today.”

The world\’s biggest software firm said the jobs cuts were among various steps to manage costs “including the reduction of headcount-related expenses, vendors and contingent staff, facilities, capital expenditures and marketing.”

“These initiatives will reduce the company\’s annual operating expense run rate by approximately 1.5 billion dollars and reduce fiscal year 2009 capital expenditures by 700 million dollars,” Microsoft said.

“While we are not immune to the effects of the economy, I am confident in the strength of our product portfolio and soundness of our approach,” chief executive Steve Ballmer said in a statement.

“We will continue to manage expenses and invest in long-term opportunities to deliver value to customers and shareholders, and we will emerge an even stronger industry leader than we are today,” he said.

Microsoft chief financial officer Chris Liddell said “economic activity and IT spend slowed beyond our expectations in the quarter, and we acted quickly to reduce our cost structure and mitigate its impact.

“We are planning for economic uncertainty to continue through the remainder of the fiscal year, almost certainly leading to lower revenue and earnings for the second half relative to the previous year,” he said.

Microsoft\’s share price fell 7.12 percent to 18 dollars in electronic trading ahead of the opening bell on Wall Street.

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Australia\’s growth near zero: IMF

The IMF warning coincides with official confirmation that China\’s economic growth, the engine room of Australia\’s resources boom, slowed more sharply than forecast, to 6.

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8 per cent from 9 per cent in the final quarter of last year, as the global downturn hit.

Australia affected by China\’s crisis

With the Asian giant now gravely suffering too, reporting just 6.8 percent growth in the last quarter of 2008, signs emerged of a knock-on effect, with Australia warning of the impact on its own prospects.

“The Chinese boom that supercharged Australia\’s economy over the past five to seven years is receding rapidly,” Australia\’s Finance Minister Lindsay Tanner said.

Rate cuts \’may not be enough\’

The IMF\’s first deputy managing director, John Lipsky, told The Australian yesterday the global recession was deepening even as central banks repeatedly cut interest rates.

While backing the principle of using government budgets to support growth, he cast doubt on whether short-term fiscal expansion – such as the Rudd Government\’s one-off payments to households – would boost spending and stave off recession.

Mr Lipsky said governments in the US, Europe and Britain needed to do more to stabilise their financial crises as a precondition for economic recovery.

“The contraction in the major economies in the fourth quarter of last year was as striking and as severe as we have seen in modern times,” he said at the IMF\’s Washington headquarters.

“Moreover, there is no sign the contraction has stopped.”

The IMF is expected next week to lower its global growth outlook for this year for the third time in four months. In early November, the fund predicted the advanced economies would contract by 0.25per cent this year, which would be the first negative result since World War II.

Tanner hints at tax cuts

Mr Tanner hinted yesterday the government could cut taxes to try to stave off a recession.

Mr Tanner says the government will push ahead with another economic stimulus package to boost the economy, if it\’s necessary.

The last package involved cash handouts. The next one could mean tax cuts.

“The options that are in the mix at any time will involve either increased spending or reduced taxation,” Mr Tanner told the ABC.

“At any given time for a government in these circumstances those options are open,” he said.

“I don\’t rule things in, rule them out, whatever, they\’re options that are available there for the budget.”

He said some tax cuts were due to come into effect in the next budget anyway, and noted there was speculation about whether those cuts should be brought forward.

Mr Tanner pulled no punches on the dangers ahead for the Australian economy.

“We are in completely uncharted territory here economically.”

Mr Tanner said the federal budget surplus was smaller than previously predicted, but it was still in the black.

“The government on the latest figures believes the budget remains in surplus … I would necessarily say wafer-thin, but it\’s getting pretty tight.”

Asia\’s champion exporters suffer

China wasn’t the only country affected in Asia as Japan warned it was facing a two-year recession and announced new measures to repair battered credit markets after announcing a 35-percent plunge in exports in December.

“Exports tumbled so much that you cannot believe your eyes,” said Naoki Murakami, chief economist at Monex Securities in Japan.

South Korea said its economy was in the worst shape since the East Asian financial crisis a decade ago while Singapore announced a 13-billion-dollar stimulus package and said it would tap its vast financial reserves for the first time.

Continue reading Australia\’s growth near zero: IMF

Slowing Chinese economy \’will hit Australia\’s growth\’

Official figures released showed China\’s economy grew at 6.

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8 per cent in the December quarter, down from nine per cent.

Australia has ridden the wave of insatiable Chinese demand for iron ore and coal during recent years but that is expected to slow dramatically as its rapid growth begins to falter.

The government believes the slowing Chinese economy could blow $5 billion in export revenue to China.

“What we are now seeing is the unwinding of the mining boom and all of the consequences that will have for our economy and, of course, for growth more broadly,” Mr Swan told Fairfax Radio Network from New York.

“There will be a very significant impact on government revenues flowing directly from the unwinding of the mining boom, particularly this dramatic slowing of Chinese growth.”

Despite the immediate gloomy outlook for the mining sector, Mr Swan said demand for commodities would still be a driver for the Australian economy over the longer term.

“Commodities in the long term for Australia will be a continuing source of our prosperity,” Mr Swan said.

Mr Swan is in New York for the G\’Day USA trade promotion initiative but says it is also an opportunity to discuss the global economic problems.

“A real feature of this global financial crisis which is turning into a global recession is the speed (of changes),” he said.

There had been a marked deterioration in the international outlook since October, he said.

“What we are now seeing in figures for the December quarter throughout the G7 and now in China and South Korea is a marked correction in growth, which is very sobering and which will have knock on effects for countries like Australia.”

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Sony faces record $2.9bn loss

Sony Corp.

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has warned it expects its biggest-ever operating loss of 2.9 billion dollars as the global economic crisis saps demand for televisions, cameras and video game consoles.

The huge loss, which would be Sony\’s first in 14 years, underscores the depth of the problems facing the electronics industry as consumers cut spending amid a wave of global job cuts.

Chief executive Howard Stringer said he would speed up restructuring, closing a television plant in Japan with the loss of 1,000 jobs as part of efforts to save 250 billion yen a year.

“We must now embrace many difficult decisions in order deal with this new reality immediately,” Stringer told a news conference.

Sony will also outsource some software development to India, reduce its executive bonuses and introduce an early retirement programme. Last month it said it would slash 16,000 jobs and axe plants.

The iconic Japanese company said it expects an operating loss of 260 billion yen (2.9 billion dollars) for the current financial year to March, a dramatic reversal from an earlier goal of a 200-billion-yen profit.

Sony sees a net loss of 150 billion yen for the current year, compared with an earlier projection for the same amount in profit.

“This is worse than I\’d expected,” said Kazumasa Kubota, an analyst at Okasan Securities.

“Additional restructuring to cut fixed costs is necessary to staunch the bleeding,” he said.

“But just stopping the haemorrhage is not the final solution. You need a strategy to make a comeback, but I don\’t know who on earth can prescribe such a measure in the severe environment we face today,” he added.

Sony blamed the worsening business environment, the stronger yen, weak financial markets and restructuring costs for the bleak outlook.

Under Stringer, a Welsh-born US citizen, Sony has shed non-core assets and slashed thousands of jobs in recent years.

The huge loss would be a far cry from the operating profit of 475 billion yen the company made last year. It slashed its sales forecast to 7.7 trillion yen from 9.0 trillion.

The company has had a difficult few years in the face of tough competition from rival products such as Apple\’s iPod and Nintendo\’s Wii, but it had enjoyed a strong recovery last year.

Other Japanese companies are also facing tough times as consumers tighten their purse strings to cope with recessions in major economies from the United States to Japan and Europe.

Toyota Motor Corp. last month forecast a first-ever annual operating loss of 150 billion yen.

Sony\’s share prices closed down 2.56 percent at 1,938 yen Thursday ahead of the profit warning.

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Hicks \’excited\’ about Guantanamo closure

David Hicks is reportedly “quite excited” at the possibility his conviction may be quashed as US President Barack Obama’s vows to close the Guantanamo detention facility.

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Hicks was held in Guantanamo after being charged in 2001 with “providing material support for terrorism”. He remained there for more than five years of his suspended seven-year sentence, then served nine months in Adelaide\’s Yatala prison.

David’s father, Terry Hicks, says it\’s “great” that Obama is “sticking to his word” in ordering the closure and freezing the controversial military commissions under which Hicks was originally tried.

The newly-inaugurated President vowed during his election campaign to close the facility and investigate the charges against around 250 inmates who remain there.

Terry Hicks says his son was tortured during his time in Guantanamo, but despite that he is more concerned with clearing his name than seeking monetary gain.

“I think David\’s interest is in challenging the wrongful conviction, I suppose you could look at it that way, with the information extracted under torture for a start,” he told SBS.

“So as far as compensations and that sort of thing, I don\’t think David\’s too worried about that sort of side of it,” he added.

Approximately 420 detainees have been released from Guantanamo without charge since the US began its assaults on suspected al-Qaeda operatives and Taliban militants in Afghanistan in 2001.

Hicks was one of two Australians arrested as an enemy combatant in the conflict. He had trained in al-Qaeda-linked camps and converted to Islam.

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