via reuters.com
Wednesday, November 23, 2011
Nokia Siemens to Cut 17,000 Jobs
By CHRISTOPHER LAWTON And ARILD MOEN
HELSINKI—Network-equipment vendor Nokia Siemens Networks said it would cut nearly a quarter of its staff and restructure its business in a last-ditch effort to reach profitability and position itself for independence.
Rajeev Suri, chief executive of the joint venture owned by Nokia Corp. and Siemens AG, said the company would cut 17,000 jobs globally, or 23% of its work force of 74,000, to save €1 billion ($1.35 billion) in annual costs by 2013—double its current target. Mr. Suri also pledged to double down on its mobile broadband businesses, promising to divest other noncore businesses or manage them for value.
"While we plan to reduce our work force significantly, we will not make simple across-the-board reductions. We will focus on doing what we do best," Mr. Suri said in a conference call Wednesday. He declined to specify which regions would be affected.
Up until earlier this year, Nokia and Siemens had hoped they could unload a controlling stake in the unprofitable venture onto a consortium that included private-equity firms Gores Group LLC and Platinum Equity LLC, but the talks fell through. Previous talks with private-equity firms Kohlberg Kravis Roberts & Co. and TPG Capital also fell through.
Instead, in September, Nokia and Siemens injected €1 billion into the struggling joint venture, which recorded a €114 million operating loss in the three months to Sept. 30 despite a 16% rise in revenue to €3.41 billion. They also appointed Jesper Ovesen, the former chief financial officer of Danish operator TDC A/S, as the company's new chairman.
The level of job cuts was surprising, but necessary as Nokia Siemens works to position the venture to go public, said Swedbank analyst Jari Honko. "The present chairman of the board has a task to prepare Nokia Siemens for an initial public offering. The company can't really continue with the current setup. It's not that profitable," Mr. Honko said.
Nokia in September listed an IPO as one option for Nokia Siemens, as it works to be more of a "stand-alone" entity. In a statement, Mr. Suri on Wednesday said that as Nokia Siemens looks toward an "independent future," it needs to take action now to improve its profitability and cash generation. The joint venture is scheduled to come to an end in 2013. Of the last five consecutive quarters of revenue growth Nokia Siemens has recorded, only one was operationally profitable. The venture has been hurt by stiff competition from rivals, such as Telefon AB L.M. Ericsson, the market leader by sales in wireless gear.
Nokia and Siemens each own half of the venture, but Nokia has four of its seven board seats and consolidates the venture's results in its financial statements.
Nokia Siemens Networks Wednesday said it will focus its strategy on mobile network infrastructure and services, with a particular emphasis on mobile broadband.
The planned cost-cutting measures include site consolidation, cost synergies from the integration of Motorola's wireless assets and efficiencies in service operations, it said. Nokia Siemens acquired Motorola's wireless network equipment unit for $1.2 billion in July.
Cost cuts will largely come from shedding jobs but also from general cost cuts and selling of real estate.
via online.wsj.com
Tuesday, November 22, 2011
MF Global Trustee Says Shortfall Could Exceed $1.2 Billion
David Goldman for The New York TimesJon S. Corzine on the trading floor of MF Global last year.
6:35 a.m. | Updated
The amount of customer money missing from the collapsed trading firm MF Global may be more than $1.2 billion — double previous estimates — the trustee dismantling the firm’s brokerage unit said on Monday.
But the surprise finding, which caught regulators off guard, may be overstated, according to a person briefed on the investigation. Some regulators say they believe that the trustee double-counted $220 million that had been transferred between units of MF Global, this person said.
Still, the much higher number highlights the disarray of MF Global’s records and raises significantly the hurdle for tens of thousands of customers seeking to get their money back. The trustee’s estimate represents a significant portion of customer funds held by MF Global.
Regulators suspect that as investors and customers fled MF Global in the last week of October, the firm used some of the customer money for its own needs — violating Wall Street rules that customers’ money be kept separate from the firm’s funds. Much of that money may never return.
Now the challenge has grown for investigators trying to determine exactly what happened in those last frantic days. Just days ago, investigators believed that they were closing in on what they thought was about $600 million in missing customer funds, according to people briefed on the matter. Regulators were relying on estimates from the firm and the CME Group, the exchange where MF Global did most of its business.
But after weeks of reconstructing MF Global’s books, forensic accountants from Deloitte and Ernst & Young working for the trustee concluded that the account shortfall was much greater than originally estimated. Regulators have yet to verify the new numbers. While they are expected to raise their estimate above $600 million, it is unlikely to reach the trustee’s $1.2 billion figure.
Kent Jarrell, a spokesman for the trustee’s office, stood by that figure, but he noted that it was preliminary.It is unclear what was behind MF Global’s original lower estimates. Some authorities chalk up the inaccuracies to the firm’s sloppy bookkeeping, and only slowly discovered additional holes in customer funds over the last three weeks.
The search for MF Global’s missing money has consumed a growing number of authorities, including the Federal Bureau of Investigation and federal prosecutors in New York and Chicago.
These inquiries have increasingly homed in on the theory that much of the customer money had left the firm, the people briefed on the matter said.
Regulators currently suspect that MF Global — at the time run by Jon S. Corzine, the former Democratic governor of New Jersey — improperly used customer money for its own purposes in the days before filing for Chapter 11 protection on Oct. 31.
Investigators are considering two possible situations. One is that MF Global used the money to meet trading partners’ demands for extra cash, which could come back. The other is that it was used to cover trading losses, which would mean that the money cannot be recovered.
MF Global’s management, however, has maintained that some of the money is still sitting at clearinghouses and banks, according to a person close to the company. Though they have not disputed that some of the money is gone, these executives think that other funds were trapped after the firm rapidly unwound more than half of its trading book as it was collapsing.
No one at MF Global, including its former chief executive, Mr. Corzine, has been accused of wrongdoing.
Representatives for MF Global, the CME and the Commodity Futures Trading Commission declined to comment.
The trustee, James W. Giddens, held a four-hour conference call on Sunday evening with staff members in New York City andChicago to discuss the latest shortfall numbers, according to Mr. Jarrell.
Ultimately, Mr. Giddens — under pressure from customers demanding the return of their money — decided to provide his fullest update yet on the progress of his investigation.
“He felt duty-bound to say” that more money was missing, Mr. Jarrell said.
In Monday’s announcement, the trustee said that his office controlled about $1.6 billion in customer funds, but most of that wasalready earmarked to be paid out. The trustee said he was close to exhausting those funds. But the person briefed on the investigation said that the trustee would soon be able to tap more than $1 billion in customer money that is trapped in Harris Bank.Beyond the shortfall in customer accounts, Mr. Giddens’s office said it did not have access to money that was held in foreign subsidiaries of MF Global, which are under the control of trustees in those countries.
“While the trustee will pursue them vigorously, it has been his experience that recovery of these foreign assets may take more time,” the office said.
In a separate move on Monday, MF Global’s estate requested court permission to appoint a trustee to oversee the winding down of the firm’s parent company. Such an authority would replace the company’s existing board. The trustee would be responsible for coordinating responses to regulators, among other duties.
MF Global is still running on about $8 million in remaining cash, and has yet to secure additional financing to support it through what will be a long bankruptcy case, lawyers for the estate said on Monday.
The fallout from the collapse of MF Global has renewed calls for tougher regulation of the futures industry, which has long relied on the principle that customer money is always safe.
While brokerages can use customer funds, they must put up sufficient collateral. Days before its Chapter 11 filing, however, MFGlobal was taking what amounted to free loans from its clients.
If federal prosecutors determine that MF Global intentionally tapped the customer funds, they could file criminal charges. But in a speech on Monday, David Meister, the C.F.T.C.’s enforcement chief, said that his agency need not show intent.
“You should know the commission takes the laws on segregated funds very seriously,” Mr. Meister said.
Monday, November 21, 2011
Branson's blueprint to revive British economy - UK Politics - UK - The Independent
The Virgin tycoon, who writes overleaf, is calling for a three-point blueprint for growth to create more jobs – particularly for the young – and fund new businesses. His wish list includes making it easier for companies to employ workers on a part-time and flexible basis, cutting the time spent at university in half and the creation of a new government body to underwrite micro-finance for people who want to start their own businesses, modelled on the Student Loan Company.
The businessman, whose Virgin Money bought the taxpayer-owned Northern Rock for £1bn last week, will set out his blueprint in a letter this week to Mr Osborne, before the Autumn Statement on 29 November.
The Chancellor is under pressure to come up with radical ideas for stimulating growth when he addresses the Commons. In a parallel move, Nick Clegg, the Deputy Prime Minister, has told Mr Osborne he must use any additional funding in the growth review to tackle youth unemployment after the tally rose above one million last week. Aides say the issue has become "toxic" for the coalition.
A wide-ranging panel of economic experts today sets out suggestions for a much-needed "Plan B" for growth, amid criticism the Chancellor is refusing to acknowledge that Britain's precarious economic position is not solely due to the eurozone crisis.
Talking exclusively to The Independent on Sunday, Sir Richard said: "We've got to stop this high youth unemployment – there's a great danger of creating a lost generation who've never known work. If you want to take people off the dole then we must make it cheaper for companies to be more flexible. The Government should help companies by offsetting some of these costs. It could transfer money spent on welfare benefits to help companies employ more people."
Unemployment now tops 2.6 million and, according to last week's figures, more than one million young people – aged 16 to 24 – are out of work while the number of long-term unemployed is also rising. But Sir Richard said: "If the Government were clever, there would be no need for anyone ever to be out of work on a voluntary basis. It needs to get the nuts and bolts right and move quickly; everyone needs a purpose to life."
His own research, he says, shows that at least 20 per cent of the working population would like to work part-time, or be more flexible, but are often not given the option because of the cost to the employer and worries over productivity. "It might be that people want to have Fridays free, whatever. Offering staff flexible options is expensive because of National Insurance, the time invested in training and other investments."
University degree courses should be sliced in half to 18 months because, for most students, there is too much time wasted, he claims. "Most students are twiddling their thumbs. Many only get one lecture a week. This is nonsense, particularly with tuition fees so high."
Sir Richard, who left school at 16 to start his first business, added: "I've already told David Cameron that he should look at this."
Third, the Virgin boss said it's crucial to find ways to allow people – especially the young – access to small amounts of money so they can start their own businesses.
The IoS understands that the Deputy Prime Minister has pinpointed unemployed 18- and 19-year-olds as those most in need of help. "If you leave school and go straight on to the scrapheap, your entire work life is affected," a senior Lib Dem source said. "You end up going into lower-paid jobs later in life. So we want to come up with a package for them."
Mr Osborne will prioritise more than 40 major infrastructure projects, including the roll-out of high-speed broadband, the electrification of the Great Western railway line and traffic-blighted sections of the M25. Other ideas include extending the National Insurance holiday for new firms that take on staff from the first year of trading to three years, as well as credit easing to increase the flow of loans to small businesses.
A ComRes poll for The IoS today shows that public confidence in the economy has plummeted: only 23 per cent expect the economy to start showing signs of improvement soon, compared with 67 per cent in June 2009.
In a speech to the Confederation of British Industry tomorrow, David Cameron will unveil plans to open up £50bn of government business to some of the smallest companies in the country.
Cabinet Office minister Francis Maude said yesterday that billions of pounds of government tenders will be accessible online and pledged that departments will be ordered to speed up their dealings with business.
Subscribe to:
Posts (Atom)