Vodafone announces 500 job cuts

Mobile phone operator Vodafone has announced plans to cut about 500 jobs in the UK in an effort to reduce costs.

Vodafone, the world's largest mobile phone company by income, is shedding jobs as part of previously-announced plans for £1bn ($1.4bn) of cost cuts.

Vodafone, which employs 10,000 workers in the UK, faces rising raw material prices and increasing competition.

The 500 job losses include 170 posts at Vodafone's head office in Newbury, Berkshire, in back-office type roles.

All the group's operations are set to be affected, including a reorganisation of some of its call centres.

Vodafone has call centres and offices in Newark, Banbury, Theale, Trowbridge, London, Warrington, Stoke-on-Trent and Hayes.

Vodafone UK has today announced reductions to its operating costs in order for it to compete more effectively in the UK market," the company said.

"As customers look for best value in their mobile services, Vodafone intends to reduce its cost base whilst continuing to invest in new products and services to meet changing customer needs."

Vodafone said it did not intend to close any stores, but planned to cut costs by offering more online services, as it believed its 19 million UK customers wanted a greater focus on value for money.

The company said in November last year that it expected to reduce its worldwide operating costs by £1bn a year by 2011.

Earlier this month, the firm reported revenue of £10.47bn for the last three months of 2008, up 14.3% on the same period a year ago, and raised its forecast for full-year revenues after benefiting from the weaker pound.

France set to help merging banks

The French government could provide up to 5bn euros ($6.4bn, £4.4bn) in loans to two merging French banks, Finance Minister Christine Lagarde has said.

Banque Populaire and Caisse d'Epargne are expected to finalise the merger deal, which was announced last October, later this week.

The merged group would be France's second biggest retail bank after Credit Agricole with 480bn euros in deposits.

Ms Lagarde said the state might become a direct shareholder of the new group.

"[The loans] could be converted into shares when they come due," she said, calling the merger "an intelligent marriage".

Losses

The government plans to provide the banks with subordinated loans, which do not have to be paid back until after all creditors are reimbursed.

Caisse d'Epargne and Banque Populaire have been hit hard by losses at their investment banking subsidiary Natixis.

Natixis said in December it could potentially lose up to 450m euros, as one of the victims of an alleged fraud involving investor Bernard Madoff costing $50bn.

Meanwhile, at the end of October French police detained a trader for questioning over the loss of 751m euros at Caisse d'Epargne.

The bank's top three executives resigned that month after the loss came to light.

Asian stocks rattled by US falls

Asian stocks fell sharply on Tuesday amid renewed fears over the health of the global financial sector and after US stocks hit a near 12-year low.

Japan's Nikkei index closed down 1.46%, the Hong Kong index closed down 2.9% and the Shanghai index fell 4.3%.

South Korean Kospi share index dropped 3.2%, while indexes in Singapore and Taiwan shed more than 1%.

Most Asian indexes had risen on Monday on hopes the US government was to increase its stake in Citigroup.

However, no formal move was made. US regulators said they were considering boosting government ownership in financial institutions, but without going all the way and nationalising them.

On Monday in the US, the Dow Jones Industrial Average closed down 250.9 points, or 3.4%, at 7,114.8, its lowest level since October 1997.

The tech-heavy Nasdaq index closed down 3.7%, while the Standard & Poor's 500 index fell 3.5% to 743.33, its lowest finish since 11 April, 1997.

No end in sight?

"Investors are just selling out in disgust across the board - disgust with the market, disgust with the financial problems," said Lorraine Tan, director of equities research at Standard & Poor's in Singapore.

"The government seems to keep throwing in money, but there doesn't seem to be any end to the declines or solutions to the problems," she said.

The Shanghai benchmark index fell as China's central bank said the country's economic downturn could worsen.

Meanwhile the index of Asia-Pacific stocks outside Japan, the MSCI, also fell, by 2.3%. And Australia's stock market was also down, by 0.6%. The Indian Sensex was down slightly, by 0.24%.

Among Asian financial shares, Nomura Holdings, Japan's biggest broker, lost 9.3% after announcing plans to raise $3.3bn.

Also in Japan, finance minister Kaoru Yosano said the government would consider a call to buy shares directly to support the stock market, which fell to near 26-year lows on Tuesday.