Professions Jobs Experts


The big banks are likely to scrap 7000 jobs over the next two years as lenders cut costs that account for 58 per cent of expenses to offset the weakest credit growth since World War II, according to UBS.

Lenders will reduce total staff numbers by 3.9 per cent to 172,000 from 179,000, UBS analysts said in a note to clients. Those figures don’t include ANZ’s Asian staff, they said.

The focus on employment costs at banks mirror the challenge faced around the world by lenders battling slower revenue growth amid weak household and business confidence. ANZ is preparing to cut as many as 900 jobs in coming months, the union that represents bank workers said last week.

‘‘We expect the banks to be heavily focused on their cost bases,’’ the UBS analysts said. ‘‘Solid reductions in headcount and discretionary costs are anticipated as banks react to the lower growth environment.’’

UBS continues ‘‘to be cautious on the outlook for credit growth’’ and doesn’t expect a ‘‘significant pickup in the housing market’’, the note said.

To help spur borrowing, the central bank lowered the benchmark rate by a quarter percentage point on November 1 and December 6 as Europe’s debt crisis dimmed prospects for global growth.

UBS estimates housing credit grew from 1977 to 2010 at a 14 per cent annual pace, and is currently expanding at 5.7 per cent, the weakest rate since World War II.

‘‘We anticipate housing credit growth to continue to remain subdued, probably staying in the 4 to 6 percent range for some time,’’ the analysts said.

Lowest profit per employee

Australia’s banks in recent years became ‘‘more lax’’ in managing staff numbers as they invested to meet expanding demand for lending, after reducing headcount to 141,000 in 2002 from 166,000 in 1996, according to UBS.

Among the big four lenders, ANZ employees individually delivered the least profit, according to data compiled by Bloomberg and company reports. ANZ Bank made $109,424 in net income from each employee in the year ended September 2011. That compared with $138,819 at Commonwealth Bank, $185,379 at Westpac, and $116,900 at National Australia, the data show.

Still, Australia’s banks were among the best-performing lenders in the world last year. While shares of banks in the US fell 13 per cent, Japan’s lenders lost 23 per cent and Europe’s slumped 34 per cent, Australian banks fell 7 per cent, according to UBS. Only Canadian lenders fared better, limiting their 2011 decline to 3 per cent.

Reducing headcount to 172,000 ‘‘should help absorb underlying wage increases keeping total staff expenditure growth to around 1 per cent per annum,’’ the UBS analysts wrote.

Commonwealth Bank said in a statement that it has ‘‘no target or short-term plan for major staff reductions’’. The bank may make redundancies ‘‘from time to time in some areas, while in other areas more staff may be needed’’, it said.

Westpac ‘‘expects there will be a decrease in staff numbers this year, but we have no specific targets,’’ the bank’s spokeswoman Supreet Gosal said.

National Australia Bank expects staff numbers to ‘‘fluctuate in various parts of the business’’ as it completes and outsources some projects and continues to ‘‘focus on efficiency,’’ spokesman Brian Walsh said in a statement.

Kevin Foley, an ANZ Bank spokesman in Sydney, said that ‘‘there is some belt tightening going on in response to difficult market conditions’’.


Sourced & published by Henry Sapiecha

Google names Larry Page

new CEO in shake-up

as it announces

its fourth-quarter earnings

January 21, 2011 – 8:56AM

Google co-founder Larry Page is taking over as CEO in an unexpected shake-up that upstaged the internet search leader’s fourth-quarter earnings.

Page, 37, is reclaiming the top job from Eric Schmidt, who had been brought in as CEO a decade ago because Google’s investors believed the company needed a more mature leader.

Schmidt, 55, will remain an adviser to Page and Google’s other co-founder, Sergey Brin, as Google’s executive chairman.

Advertisement: Story continues below
Google co-founder and now CEO, Larry Page, talks to reporters as former Google CEO Eric Schmidt (right) watches at the Sun Valley Inn in Sun Valley, Idaho in this July 9, 2009 file photo.Google co-founder and now CEO, Larry Page, talks to reporters as former Google CEO Eric Schmidt (right) watches at the Sun Valley Inn in Sun Valley, Idaho in this July 9, 2009 file photo. Photo: Reuters

The changes will be effective April 4.

“In my clear opinion, Larry is ready to lead and I’m excited about working with both him and Sergey for a long time to come,” Schmidt said.

Page praised Schmidt, too. “There is no other CEO in the world that could have kept such headstrong founders so deeply involved and still run the business so brilliantly,” Page said.

“Eric is a tremendous leader and I have learned innumerable lessons from him”

The change in command overshadowed Google’s fourth-quarter earnings, which soared past analysts’ estimates as the company cranked up its internet marketing machine during the holiday shopping season.

Net income rose 29 per cent to $US2.54 billion, or $US7.81 a share, from $US1.97 billion, or $US6.13, a year earlier, Google said on its website. Profit excluding some items was $US8.75 a share, exceeding the $US8.08 average of estimates compiled by Bloomberg.

Google benefited from its core search-engine business as advertisers stepped up efforts to reach consumers through the internet. Spending on search-based ads rose 23 per cent in the US during the quarter, with gains in retail and travel, according to Efficient Frontier, which manages more than $US1 billion annually in online advertising.

“The media buyers are more positive on the economy moving forward – and they want to participate,” said Mike Hickey, an analyst at Janco Partners in Greenwood Village, Colorado. He recommends buying the stock and doesn’t own it. “The dollars are going to the internet.”

Sales, excluding revenue passed on to partner sites, were $US6.37 billion, topping the $US6.06 billion average of estimates.

Android growth

Google, which gets most of its revenue by selling ads in its search business, is also gaining ground in the mobile-device market with its Android smartphone software.

Android topped Apple’s iPhone in US smartphone subscribers for the first time in November, accounting for 26 per cent of the market, compared with 25 per cent for Apple, according to ComScore BlackBerry maker Research In Motion had the top spot with 33.5 per cent.

While Google doesn’t charge for Android, it’s helping the company expand mobile-advertising sales. Google was projected to grab 59 per cent of the US mobile-ad market last year, according to research firm IDC. Google benefitted from its May 2010 acquisition of AdMob, which had 8.4 per cent of the market in 2009.

In October the company said it expects to exceed $US1 billion in annual mobile-ad sales and $US2.5 billion in display-ad revenue. The company noted there could be overlap between the businesses’ sales.

Google is maintaining its leadership in the search-engine business even as it faces a stronger challenge from rivals Yahoo! and Microsoft. In August, Yahoo! began using Microsoft’s Bing technology to provide online search results.

Google grabbed 66.6 per cent of searches in the US in December, up from 66.2 per cent in the previous month. Combined, Microsoft and Yahoo had 28 per cent, down from 28.2 per cent, according to ComScore.

Sourced & published by Henry Sapiecha

Next Page »