Nokia Siemens cuts 17,000 jobs

Nokia Siemens Networks, the unprofitable telephone-equipment venture of Nokia Oyj and Siemens AG, will eliminate 17,000 jobs worldwide in its biggest cull to narrow the gap with market leader Ericsson AB. The reduction, equivalent to about 23 per cent of its workforce, will be completed by the end of 2013, when Nokia Siemens aims to cut 1 billion euros ($1.3 billion) in annual operating expenses and production costs. Nokia Siemens will focus on mobile broadband and services, and aims to divest or "manage for value" units that aren't central to its plans, Espoo, Finland-based Nokia said. Nokia Siemens received a cash injection of 1 billion euros from its parent companies in September as Jesper Ovesen, the former chief financial officer of TDC A/S, was named to oversee the restructuring as executive chairman. The venture, set up in April 2007 to compete against Ericsson and Chinese rivals such as Huawei Technologies Co, has fallen behind and has been unprofitable in all but one quarter. "If you look at the last two to three years, it's become clear that Ericsson and Huawei are quite a long way ahead of the competition," said Mark Newman, chief research officer at London-based Informa Telecoms & Media. "NSN has struggled to remain competitive. It's gone through periods of being extremely aggressive in terms of pitching for new business because it realized it needed to win new contracts." Lost revenue Siemens fell 1.7 per cent to 68 euros in Frankfurt trading. Nokia fell 2.3 per cent to 4.09 euros in Helsinki. "I think this will be enough," Sami Sarkamies, a Helsinki-based analyst with Nordea Bank, said in an interview. "It was probably more than people expected. The big question is how much will be divestments versus cost savings, which affects how much revenue they are going to lose. With these efforts they should be able to get above 5 per cent margins for earnings before interest and taxes by late 2012 or 2013." Siemens and Nokia abandoned talks with private-equity companies in July after the buyout firms failed to come up with a compelling offer. The companies said in September that Nokia Siemens would "become a more independent entity." Motorola units Nokia Siemens had a 13.2 per cent market share in 2010, tied with Alcatel-Lucent for third place in the mobile infrastructure market, according to researcher Gartner Inc. Ericsson was first with 34.1 per cent and Huawei second at 15.6 per cent. The company is "a very strong number two" in managed services, Frankfurt- based Gartner analyst Bettina Tratz-Ryan said in an interview. "They have a 'me-too' strategy and they need to provide more in order to become successful," Tratz-Ryan said. Nokia Siemens employed almost 75,000 people as of September 30. The company generated sales of about $254,000 per employee last year, 19 per cent less than larger rival Ericsson, based on numbers from the companies' financial reports. The figure for both manufacturers is sinking as prices for equipment such as base stations and packet-switching networks decline. Nokia Siemens said it plans to simplify its organization, consolidate sites and functions, and strip out more jobs from the integration of Motorola Solutions Inc units acquired this year. 'Takeover candidate' The company announced in August that it planned to cut as many as 1,500 positions from the Motorola units, which added workers in Arlington Heights, Illinois. The company also has large units in Espoo, Finland, and Munich, Germany. It makes equipment at locations including Shanghai, Beijing and Suzhou in China; Bruchsal, Germany; Chennai, India; and Oulu, Finland, according to a Nokia filing. "They are turning themselves into a takeover candidate," Georg Nassauer, head of the German works council at Nokia Siemens, said by telephone. "NSN needs new management. They have proved they aren't up to the job." Nokia Siemens hasn't decided how many jobs will be cut per country, spokeswoman Jozefa Terloo said from Munich. Negotiations with worker representatives will start immediately, she said. In Germany, the venture has about 10,000 employees. "We need to take the necessary steps to maintain long-term competitiveness and improve profitability in a challenging telecommunications market," Chief Executive Officer Rajeev Suri said in a statement. Assets that are peripheral to the new strategy include "a lot of wireline areas" as well as a unit that sells IPTV services to carriers, Suri said in an interview, adding that he doesn't anticipate announcements on a possible share sale or change of ownership in the near future. "We got a billion euros of equity committed by parents in September to support new strategy," Suri said. "We have a new executive chairman that sort of paves the way for independence. Apart from that, nothing else is on the horizon."

Indian IT: Freshers number up, salary stagnant

Right in the middle of the placement season in 2010, at one of the popular Tier 2 engineering colleges in Mumbai, Rohith, 21, decided not to sit for any placement tests. In 2008, when his sister passed out of the same college, she was recruited by one of the top IT services companies and was offered an annual package of Rs 3 lakh. Three years down the line, Rohith and other aspiring software engineers of his batch were offered the same package to be part of what they considered the most exciting industry. India's IT firms recruits an increasing number of fresh graduates every year and is one of the largest white-collar employers. But the packages offered to campus hires at most Tier 2 engineering colleges have remained unchanged since the 2008-09 downturn, stagnating between Rs 3 and Rs 3.5 lakh. While the demand for IT and IT-enabled jobs remain high, placement coordinators and students say more Indian IT firms have refused to hike fresher salaries. And the clear reason for this: growing availability of good talent and a spurt in engineering colleges in the past three years. India has the largest technical and scientific manpower globally and total graduate outturn - the number coming out of colleges - across sectors has doubled over the last decade enabling greater scalability for customers. The outturn of technical graduates and post graduates increased to over 7 lakh in FY11 compared to a little over 5.5 lakh in FY10, says Nasscom in a report earlier in the year. Enrolment in technology colleges in the same period increased sharply from 12 lakh to 16 lakh. "Being able to work for one of the top 5 IT companies is a big thing among students. The entry-level salary in most of the IT companies such as Infosys, Wipro , TCS and Cognizant have remained between Rs 3 lakh and Rs 3.25 lakh since 2008. Even if they offer the same package in future, demand for these jobs is not going to come down" , says Varkey Philip, who heads the placements committee at the Rajagiri Institute of Engineering and Technology at Kochi. He says IT is still the most preferred for most engineering graduates. At RV College of Engineering in Bangalore too, entry-level salaries are stagnant at the pre-2008 recession level. While companies like Oracle and Microsoft offer between Rs 6 lakh and Rs 8 lakh to freshers, Indian IT companies, which recruit more, offer Rs 3.5 lakh on an average. NS Narasimhan, director of placements and training at RV College, says colleges are only worried about getting all the students placed, and not about the level of their salaries. "Most of the graduates work for a year or two and make the most out of your new job and experience. Colleges are only worried about getting them the job. Companies are not going to witness a supply shortage and hence they are not compelled to raise salary packages", he said. Low entry level salaries are the biggest leverage for Indian IT firms to keep costs low. Most maintain a 60:40 ratio of freshers versus laterals. Most Indian IT firms also have to invest significant amount in training freshers to get them job ready. At Infosys for one, freshers go through an average of 3-6 months of training before becoming billable. Nasscom pegs training spends per employee in IT-BPO among the highest in the organised services sector. At iGate, which would offer annual packages of between Rs 3.1 and 3.25 lakh to campus recruits this year, salaries have gone up marginally over the past three years. Srinivas Kandula, Head of HR operations, says that the entry-level salary remains stagnant because companies cannot afford to increase the cost. "It is a cost to the company. We invest on the freshers," he said. "In fact, fresher salaries have gone up marginally, probably by 5%. Companies invest heavily on training and upgrading talent. Raising entry-level salary can have a cascading effect. Unless there's a significant change in demand-supply, this trend is likely to continue," says P Thiruvengadam senior director at Deloitte India. There has also been an increase in supply of good quality talent cited as major concern by IT firms for over a decade. Three years back, Anna University in Chennai was the only place where IT firms made 1,000-plus offers every year. But now, there are at least six such universities where companies have made offers to over 1,000 students in a year. TCS at Sastra University, Cognizant at VIT and Amrita University, Infosys at Amrita University and Accenture at Amity are top examples. "In the last few years, the quality of engineering graduates passing out of premier institutions across India has gone up significantly. We believe that this is because of a variety of reasons: stronger industry-academia linkage programmes, greater student connect with their predecessors through social networks, increased number of seats in reputable institutions, increase in the number of colleges especially those run by corporate houses, and so on," Shankar Srinivasan, Chief People Officer of Cognizant said. HR experts say Indian IT has lost the power to increase prices as costs have risen and the industry has matured. This too is causing salaries to stay flat.

IBM opens three new offices in India

IBM has announced the opening of three regional offices in India as part of the company's on-going geographic expansion in the country. The new offices in Dehradun, Guwahati and Raipur provide IBM with a footprint of 18 branch offices across India to date. IBM is currently focused on increasing its presence in smaller, rapidly developing Indian cities as part of its plan to establish a presence in 40 Indian cities by 2013. The company is witnessing demand for information management, security, cloud computing and business analytics solutions as businesses and government organizations turn to IT to reduce costs and gain competitive advantage. The company is also investing in the education system in these regions with a number of partnerships and academic initiatives especially to support the growth of Open Source technologies. IBM has partnered with Indian Institute of Technology ( IIT) in Guwahati. "These are dynamic times for Indian regional development and there is tremendous market potential in these cities that we are expanding into," said Nipun Mehrotra, Vice President, General Business, Geographic Expansion, IBM India/South Asia.

Cognizant deploys merchandise platform for Dubai firm

Nasdaq-listed IT firm Cognizant today announced the deployment of a comprehensive merchandise planning platform for the Redtag Group, a Dubai-based chain of value fashion and home stores. The platform will help Redtag respond faster and more efficiently to the dynamic fashion retail market by making better informed purchase and pricing decisions based on detailed and executable merchandise plans, Cognizant said in a press release here. By leveraging sophisticated analytical capabilities to deliver accurate forecasts linking market events and sales results, the platform would enable Redtag to eliminate plan discrepancies, optimise inventories, reduce markdowns and drive process consistency across its 77 value fashion and home stores, it said. "As we expand our geographical footprint, this platform will foster rapid decision-making aligned closely with our aggressive growth targets, enhance operational agility in a highly competitive and fast-moving market, optimise capital and operational costs and scale easily to effectively meet customer needs," Redtag Group CEO Ernest Hosking said. "We are pleased to have successfully deployed an advanced planning platform for Redtag to create informed estimates of future business opportunities, infuse inventory movement decisions with customer insight and realise optimal returns on inventory investment," R Chandrasekaran, President and Managing Director for Global Delivery at Cognizant, said.

Omnia invests Rs 7 crore in early-stage education firms

Bangalore: Omnia Investments, the venture fund set up by the promoters of Spice Mobility, has made its maiden investment in two earlystage startups. The fund has invested Rs 7 crore in candidate assessment venture Single Stop and in higher education firm Sunstone for a significant minority stake. Omnia Investments was launched less than a year ago by Dilip Modi, Managing Director of the $2-billion (Rs 10,000 crore) mobility product and retail conglomerate Spice Mobility, with an initial corpus of Rs 20 crore. The fund will focus on education and technology. It is not part of the Spice Mobility group. "Corporates have long viewed education through the corporate social responsibility lens," said Modi, who is also the president of industry body Assocham. "But education provides a large business opportunity as well." India's rapidly growing education sector has attracted considerable risk capital in recent months. The education market in the country is projected to cross $50 billion (Rs 2.5 lakh crore) by 2015, said a study by Assocham. Last month, CLSA Capital invested over $20 million in test preparation company Resonance Eduventures. Venture fund Helion Advisors made a $3.5 million investment in affordable education provider Vienova Education in September. The same month, two other venture investments were made in education firms: Online education start-up Eduora Technologies got funding from early-stage fund Seeders and learning technology startup Sparsha raised money from Blume Ventures and Tempus Capital. A recent KPMG report said the test assessment market is poised for rapid growth. Govind Wakhlu and Prashant Pitti, founders of six-month old Single Stop, believe that companies will increasingly outsource the initial candidate assessment process to third-party vendors. Single Stop provides assessment tests for fresh graduates who are targeting entrylevel jobs in sales, backend operations and other support functions. The firm administers the Common Job Test, which is a standardised exam to understand a candidate's areas of strength, and sends out the scores to partner companies. "There is a huge gap in the entry-level job segment. Companies are not getting the right candidate and job seekers are not getting the right jobs," said Wakhlu, an Illinois Technology Institute graduate who returned to India in 2010. The test was launched last month and around 300 candidates have taken it so far. Omnia's other investment, Sunstone, provides a one-year MBA programme solely for techies. It was launched last year by Rajul Garg, the former co-founder of offshore R&D venture GlobalLogic. "With the growth of the IT industry, we need leaders who have a background in IT to run companies," said Garg. "Our aim is to create tech CEOs." The course is for working professionals and the first batch started five months ago. Spice Mobility's Modi said they expect to close more investments in two months. Modi has also launched a social fund, Ek Soch Mission, which will provide grants to entrepreneurs who want to set up ventures in mobile value-added services (VAS), education and clean energy.

Ashok Leyland, US company John Deere enter into joint venture to retail construction equipment

Chennai: Hinduja Group flagship Ashok Leyland has entered the construction equipment business, along with American company John Deere, with the launch of the 435 backhoe loader. Priced at Rs 23.5 lakh (ex-Tamil Nadu), the backhoe loader is the first product to roll out of the 50:50 joint venture, Ashok Leyland John Deere Construction Equipment Company. “The joint venture marks a marriage of experience with expertise, global vision with local relevance. The backhoe loader has been designed for the Indian market conditions and the requirements of Indian customers,” said Dr V. Sumantran, Chairman of the joint venture company. Around Rs 200 crore has been invested in the first phase of the 435 backhoe loader. Branding The product will be sold under the ‘Leyland Deere' branding and manufactured at a Greenfield facility in Gummidipoondi, near Chennai. It addresses the critical considerations of lower operating cost, fuel economy and low maintenance and repair costs, said Mr Douglas Meyer, Director – Construction and Engineering, John Deere. The 435 is powered by an Ashok Leyland engine from the H-series platform and promises features such as power shift transmission, large cabin space, higher visibility, higher breakout forces and greater dig depths. The product will be initially launched in the southern states, before being rolled out nationally. The company has tied up with partners such as TVS Logistics for distribution. “For now we will focus only on the domestic market,” said Dr Sumantran. Two more products are being developed by the joint venture company. The second product from the joint venture – a wheel loader – will be rolled out in 2013. Mr P. Ravi Shankar, CEO, Ashok Leyland John Deere Construction Equipment Company said the company is looking at a capacity of 10,000 units by 2016-17, across the three product categories – the backhoe will account for 8800 units. The backhoe category in the country is at 20,000 units a year, growing at 30-35 per cent. JCB is the market leader in this segment with a 75 per cent share.

Mobile device sales to grow 8.5% next year: Gartner

Mumbai: The sale of mobile devices in India will grow 8.5 per cent in 2012 to 231 million units from 213 million units last year, according to a research report from Gartner. The research firm says that the Indian mobile handset market is expected to show steady growth through 2015 when end-user sales will surpass 322 million units. The Indian mobile device market is very competitive with more than 150 manufacturers. “The big global brands will continue to face competition from local and Chinese brands as some of these brands are building capabilities to compete at a larger level, covering broader consumer segments,” said Mr Anshul Gupta, principal research analyst at Gartner. Moreover, mobile manufacturers are also competing against many brands in the black markets that are being sold without invoices, according to a press statement from Gartner. Smartphone sales in India made up 6 per cent of device sales in the first three quarters of 2011, and this share is expected to increase to 8 per cent in 2012. The Indian mobile device market is driven by the lowest call rates in the world and dominated by low-cost devices, which account for 75 per cent of sales in India in 2011, the statement said.

Canon to open 300 outlets across India

Japanese imaging major Canon's Indian arm aims to triple its business to Rs 4,500 crore ($1 billion) in four years by opening 300 exclusive outlets, many of them in tier-III and IV cities, the head of its operations here says. "We hope to close this year at Rs 1,600 crore. By 2015, we hope to take this to Rs 4,500 crore. In the process, we will be increasing our exclusive retail brand stores from 95 by the end of this year to 300," Canon India president and CEO Kensaku Konishi told IANS in an interivew. "We are growing not only in the big cities but in the tier II and III cities too. Presently, if you live in these towns, you would have to go to a big city. Now, we are going to our customers with exactly the same kind of exclusive retail outlet that you would find in a big city," he said. Toward this end, the company already opened 38 outlets in tier-II and III cities. Incorporated in 1997, Canon India Pvt Ltd is a 100 per cent subsidiary of Canon Singapore Pte Ltd. Canon today has offices spread across seven cities in India with an employee strength of over 840 people and markets a comprehensive range of 160 sophisticated and contemporary digital imaging products in the country. These include digital copiers, multi-functional peripherals, fax-machines, inkjet and laser printers, scanners, all-in-ones, digital cameras, digital camcorders, dye sub photo printers, card printers & cable ID printers. Apart from the Canon Image Square exclusive outlets, the company also has around 380 primary channel partners, 13 national retail chain partners, seven level-IV Master Service Centres, over 100 authorized service centres, over 4,000 secondary retail points, including 270 national retail chain store partners and 33 Canon Care Centers. Canon products are made available in over 400 towns in India and overall, Konishi said, the company's products are available at over 5,000 outlets. "We had acquired a customer base of over three million by the end of 2010. We hope to double this to six million by 2015," Konishi said. And, considering that 60 percent of its India revenues come from products other than cameras, Canon has opened a Business Solution Lounge in Mumbai, Bangalore and Gurgaon for B2B customers "to showcase business applications with seminar rooms for business workshops", the official said. That's not all. "As part of our promise to enhance digital experience for consumers, a Canon Image Lounge each has been launched in Gurgaon, Mumbai and Bangalore for customers to get a touch and feel of Canon products. "Entry is by invitation only. The lounges provide a comprehensive display of Canon's vast range of offerings and display over 101 consumer imaging products for consumers to simply look, feel and experience without the compulsion on buying," Konishi said. Special photography workshops and other customer engagement programmes are being held in these lounges, he added. Speaking about Canon's green initiatives, Konishi said it "takes pride in not only bringing quality products to the market but also contributes to minimising environmental burden through effective application of environmental technologies". "Canon focusses on the development of resource-conserving products that are smaller, lighter and easy to recycle. In India, Canon takes responsibility to dispose of end of life Canon products and other e-waste by sending such waste to government approved recycling agency," Konishi added

Sabeer Bhatia launches free SMS app Jaxtr

Sabeer Bhatia, the founder of Hotmail.com, on Tuesday launched JaxtrSMS, a mobile application that lets users send unlimited free text messages to any other phone anywhere in the world. He claimed JaxtrSMS is the world's first mobile-based application for sending SMS that is completely open as the recipients do not need to have the app installed It is already available as a free download for all major mobile operating systems - iOS, Android, Blackberry and J2ME. In fact, users in 197 countries have already downloaded the app within a few weeks since the soft launch, said Bhatia, who is CEO & co-founded Jaxtr with Yogesh Patel in US. JaxtrSMS is unique in that a mobile user can send a text SMS to any mobile phone in the world without requiring the receiver to have the JaxtrSMS application installed on her phone. This "open" facet of JaxtrSMS distinguishes it from other free mobile messaging applications such as Whatsapp where messages can only be sent within a closed network to people who also have the same app installed. JaxtrSMS retains the number of the user and no new number is required while signing up for the JaxtrSMS service. "15 years ago, we gave you Hotmail.com, the world's first webmail service that freed up e-mail from the confines of the desktop and aided the creation of a global communications network which was completely open and free for users. Today, we present JaxtrSMS which does to SMS what Hotmail did for e-mail. Now, mobile users can leverage our free and open application to send messages to their contacts anywhere across the world without having to pay anything," said Bhatia. "JaxtrSMS was completely developed in India. I am proud to showcase this as an example of Indian innovation and ingenuity," said Yogesh Patel, president & co-founder

Gujarat govt approves $2 billion theme park in Surat

Ahmedabad: Mumbai-based Atlanta Infrastructure Development and Real Estate has received in principle approval from Gujarat government to set up a $ 2 billion theme park in Gujarat. The Gujarat Industrial Development Board and Gujarat Tourism Board has already cleared the project and state cabinet is expected to give a final nod in a few weeks, official sources associated with the project told ET. Development of various components has been envisaged in the four phases. The first phase of the project will start in April 2012. The project will be spread across 13 square kilo-meters, the proposed leisure and one stop entertainment city near Surat. The site identified at Suvali Beach, which has a 3.3 km stretch along the Arabian Sea coast, is located around 20 km from Surat will have five theme parks like nature park, amusement park, water park, beach park, ice skating and skiing dome, restaurants, hotels, studios, forest villas, beach villas, studio lagoon and apartments and villas among others. The initial investment in the theme park will be about $2-billion, which comprises of land development cost, building facilities, transport, technologies, design and planning. The project cost also includes interest during construction. Market research and financial model is being done by Ernst & Young. The conceptual plan is done by Morphogenesis. The project will be financed by a mix of equity and debt. The fund would be constituted by infusion from promoters and debt from financial institutions, advances and deposits received from franchises of hotels, commercials, residential, food plazas and revenues from villas and apartments.