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.

Gold remains unchanged at Rs 15,700; silver coins rise

Gold maintained an unchanged level at Rs 15,700 per 10 gram as retailers and stockists refrained from buying at record high levels amid reports of the metal remaining high on the overseas front.

However, silver coins maintained an upward march in the national capital on sustained buying by stockists to meet marriage season demand on Friday.



Marketmen said there was hardly any worthwhile buying activity in the market as people postponed their decision of buying for the current marriage season.

Slump hits China multinationals

Nearly 70% of multinational companies in China plan to cut recruitment this year, and more than a quarter have laid off staff already, a survey suggests.

Of the more than 350 companies questioned in different sectors across the country, finance, communications and IT firms were the hardest hit.

Two years ago the multinationals were competing to hire the brightest talent from China's universities.

But since the financial crisis, jobs there no longer look so secure.

Jobs in multinational companies are highly prized in China especially white collar jobs.

For a start the pay is often better than you might get as a public servant or the employee of a state-owned enterprise.

The jobs tend to be concentrated at the moment in the larger cities like Beijing or Shanghai, or in the areas where there are many factories making goods for export.

'Safer' alternatives

Since the financial crisis, jobs are less secure in multinational firms whose parent companies have run into trouble overseas like CitiGroup or Motorola.

This year there was a record number of applications for the civil service. More than 750,000 people applied for just 13,500 places.

The surveys of the multinationals reported in the state media suggest that those applicants were wise to seek safer alternatives.

Almost seven out of 10 of the firms polled made clear they planned to recruit fewer staff in the year ahead - that will make life even harder for this year's graduates.

There are fewer jobs available than before and they will be competing with other unemployed graduates from previous years and with newly laid-off workers who already have experience.

The graduate employment market has always been tough in China but this year it is looking like it will be tougher than ever.

Economy fears send stocks falling

Global stock markets fell on Friday amid fears over the state of the world economy and the banking industry, with finance firms among the main fallers.

The Dow Jones index was 1.8% lower in afternoon trade on Friday after seeing its lowest close since 9 October 2002.

Investors are worried over how long the slowdown will last, despite government intervention to boost their economies.

France's Cac 40 fell 4.25% to its lowest since April 2003, the FTSE 100 shed 3.2% and Germany's Dax shed 4.7%.

The Paris-based benchmark index ended at 2,750.55. The FTSE closed at 3889.06.

The Dow Jones industrial average declined 133.25 points to 7,332.70 just after noon in New York, while the Standard & Poor's 500 Index fell 1.84% to 764.58.

Japan's Nikkei index ended 1.8% down and Hong Kong's Hang Seng shed 2.49%.

'Lack of clarity'

South Korea was among the worst hit in Asia. Its main stock index fell 3.7%, while its currency, the won, weakened on fears about the health of local banks.

This week , US President Barack Obama signed a $787bn (£548bn) stimulus plan into law, but there is uncertainty over how much this will help boost the ailing banking sector.

Bank of America shares fell nearly 17%, while Citigroup shed more than 21%.

"We're going through a tug of war between optimism and pessimism," said Wasif Latif, portfolio manager at USAA Investment Management CoLatif.

"When there is a lack of clarity, it becomes more of an emotional or psychological environment. The mood can sway on any given day, based on the flow of news coming out."

ILO suspects unemployment in Asia to surge by 23 million

The number of people out of work in Asia could surge by 23.3 million in 2009 as the global financial crisis continues to batter the region's economies, says an ILO study.

The crisis could also force rural-to-urban migration to slow down, with many facing the prospect of returning to low paying agricultural sector as factories and firms slash jobs, the International Labour Organization (ILO) report said.

"A dramatic increase in working poverty of more than 140 million people by 2009 is projected under this scenario, representing regression of the Asia and Pacific region to a working poverty rate of 2004," the study said.

"These projections are not just numbers, they carry with them a real risk that children may be forced to withdraw from school in order to work and support their families," it said.

It said the region's robust growth in the past was not matched by "broad-based gains in real wages," leading to sharp inequalities in many countries.

"The substantial growth slowdown taking place is likely to lead to stagnant or falling real wages, with the potential for increased incidences of wage related disputes," the study said.

As Asia moves to spend about 3.9 percent of its gross domestic product (GDP) on stimulus packages, there is also a need to protect employment and support household purchasing power, it said.

Obama signs USD 787 billion stimulus package

US President Barack Obama has signed into law the USD 787 billion economic stimulus package, which according to him would rejuvenate the American economy and create as many as three to four million jobs in the next two years.

Minutes before he put his signature on the 1,534-page American Recovery and Reinvestment Act in Denver, Colorado, Obama said: "We have begun the essential work of keeping the American dream alive."



The stimulus bill was passed last week by the US Congress House of Representative and Senate - without much support from the opposition Republicans. While no Republican voted in its favour, only three Senators supported the bill in the Senate.



Obama cautioned Americans not to immediately expect miracles with the passage of the bill, as the US has a long way to go in reviving its economy.



"Today does not mark the end of our economic troubles. Nor does it constitute all of what we must do to turn our economy around," he said.



"But it does mark the beginning of the end the beginning of what we need to do to create jobs for Americans scrambling in the wake of layoffs; to provide relief for families worried they won't be able to pay next month's bills; and to set our economy on a firmer foundation, paving the way to long-term growth and prosperity," Obama said.



Terming it as the sweeping economic recovery package in the US history, Obama said: "What makes this recovery plan so important is not just that it will create or save three and a half million jobs over the next two years.



It's that we are putting Americans to work doing the work that America needs done in critical areas that have been neglected for too long work that will bring real and lasting change for generations to come."



The money would be used to not only save and create three to four million jobs, but also would result in mega

investment into modern infrastructure projects, funding projects which would help the US become energy independent, education and push more funding into scientific research.



"It will make the most significant investment in America's roads, bridges, mass transit, and other infrastructure since the construction of the interstate highway system. It will make investments to foster reform in education, double renewable energy while fostering efficiency in the use of our energy, and improve quality while bringing down costs in healthcare," Obama said.



Middle-class families will get tax cuts and the most vulnerable will get the largest increase in assistance, in decades, he said. "With this Act we begin the process of restoring the economy and making America a stronger and more prosperous Nation," he added.

US tycoon charged over $8bn fraud

Texan billionaire and cricket promoter Sir Allen Stanford has been charged over a $8bn (£5.6bn) investment fraud, US financial regulators say.

The Securities and Exchange Commission said the financier had orchestrated "a fraudulent, multi-billion dollar investment scheme".

The SEC said the fraud was "based on false promises and fabricated historical return data".

English cricket bosses have pulled out of sponsorship talks with Sir Allen.

The charges against Sir Allen, three of his companies and two executives of those companies followed a raid by US marshals on the Houston, Texas, offices of Stanford Financial Group.

A US judge has frozen the assets of Sir Allen and the other defendants as well as those of the Stanford Group, its Antigua-based subsidiary Stanford International Bank (SIB) and another subsidiary, investment advisor Stanford Capital Management.

A receiver has been appointed to "preserve assets for investors", the SEC said.

'Close circle'

Sir Allen last year promoted the Stanford cricket series which saw a West Indian all-star team - the Stanford Superstars - beat an England team for a $20m prize.

The England and Wales Cricket Board (ECB) suspended sponsorship negotiations with him following the fraud charges.

The ECB has a five-year deal to play games against the Stanford Superstars.

The SEC said that the Stanford International Bank - the largest in the Caribbean - sold approximately $8bn worth of certificates of deposit to investors, promising "improbable and unsubstantiated high interest rates".

The bank was "operated by a close circle of Stanford's family and friends", the SEC said in a statement.

"We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world," said Rose Romero of the SEC.

The SEC began investigating Stanford Group last year and intensified their probe following the arrest of US financier Bernard Madoff in December over an alleged $50bn (£35bn) investment fraud.

In the wake of that scandal, SIB falsely told its investors it had no exposure to the funds involved in the alleged Madoff fraud.

The Stanford Group lists its worth as more than $40bn. Antigua and Barbuda granted Sir Allen citizenship about 10 years ago and knighted him in 2006.

Forbes magazine lists him as the world's 605th richest man, with assets of $2.2bn.

Japan finance minister steps down

Japan's Finance Minister Shoichi Nakagawa has resigned, amid claims that he was drunk at a recent G7 meeting.

Mr Nakagawa said earlier that he would wait until parliament had approved a supplementary budget to step down.

But he brought forward his departure after calls for his immediate exit escalated.

Prime Minister Taro Aso said he respected Mr Nakagawa's decision and named Economics Minister Kaoru Yosano to take over the finance portfolio.

At a news conference just hours after his appointment, Mr Yosano said the country's economy had deteriorated "beyond expectation".

Mr Yosano said his priority was to "smooth" the financial system as well as stimulating demand.

He said he would decide whether to take additional steps after consulting not only the government but business leaders, academics and the media.

'Embarrassing'

Mr Nakagawa's departure is seen as a major blow to Mr Aso's government in an election year.

The prime minister was already facing plummeting support; a poll by broadcaster NTV on Sunday put backing for his cabinet at 9.7%.


Voters are worried both about the economy and Mr Aso's leadership credentials in the wake of a series of gaffes, analysts say.

Mr Nakagawa apologised for "causing such a big fuss" and told journalists: "I decided that it would be better for the country if I quit."

He has already apologised for his behaviour at last weekend's news conference in Rome but blamed cold remedies for a slurred performance there.

He said he had not drunk more than a sip of alcohol before facing the media.

The news conference in Rome followed a meeting of finance ministers focussing on the current world economic crisis.

Footage showed Mr Nakagawa slurring his speech and closing his eyes repeatedly as if he was dozing off.

At one point, he mistook a question aimed at the governor of the Bank of Japan as one intended for him.

"It's embarrassing," said Democratic Party Secretary General Yukio Hatoyama. "This has sent a message to the whole world. He's damaged the national interest."

He explained that he had sipped wine at a luncheon toast on the day of the news conference, but had not consumed an entire glass.

He said he had taken too much medicine, including cold remedy, and that had made him drowsy.

Mr Nakagawa has denied reports - including the view of a former prime minister - that he is a regular drinker.

US car giants seek $21bn funding

Troubled US carmakers GM and Chrysler have asked the US government for another $21.6bn (£15.2bn) in support, on top of the $17.4bn already received.

The auto giants also plan to axe 47,000 and 3,000 jobs respectively, as well as shedding a number of car models.

The moves form part of their drastic restructuring plans submitted to the US Treasury Department on Tuesday night.

It came as the United Auto Workers (UAW) union reached agreement with GM, Chrysler and Ford on contract changes.

Plant closures

The UAW is one of a number of stakeholders whose agreement is needed before the proposed plans can be pushed through.

General Motors said it would try to borrow up to $16.6bn more from the government, on top of the $13.4bn it has already received.

Its plan includes cutting 47,000 jobs and closing five more US factories.

GM says that it could be in profit within two years and fully repay its loans by 2017.

'Lot of work'

In December GM had said it would cut the number of plants from 47 in 2008 to 38 by 2012, but has now added another five factories facing the axe, which would leave it with 33 facilities.

The carmaker's brands would also be reduced from eight to four - Chevrolet, Buick, Cadillac and GMC.

GM chief executive Rick Wagoner said the company's plan was "comprehensive, responsive, achievable and flexible".

"We have a lot of work in front of us, but I am confident it will result in a profitable General Motors," he added.

Models cut

The plan came after Chrysler, which was given a $4bn loan by the US government at the end of 2008, revealed its own survival plan.

Chrysler has asked for another $5bn funding, and plans to cut 3,000 posts.

The firm will also cut three car models in 2009 - the Chrysler Aspen and PT Cruiser, and the Dodge Durango.

Unveiling its proposals, Chrysler said it now expects the current downturn in the US car market to last another three years.

'Said right things'

The US's third biggest carmaker said its radical surgery had the support of the United Auto Workers (UAW) union, dealers, and suppliers.

The UAW says it has also reached tentative agreement with Ford and General Motors to help cut those firms' labour costs.

Meanwhile, Chrysler also said it planned to cut outstanding debt by $5bn and reduce fixed costs by $700m in 2009.

Analyst Lincoln Merrihew, of TNS Automotive Consulting, said: "I'm curious to see how the government responds to this plan, but Chrysler has said all the right things."