World Business

To combat the crisis, Chancellor Angela Merkel is buying stakes in banks and bailing out industries. Is there no limit?

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Grayish-white slush is piled arrogant along the streets in Selb, a town in the Upper Franconia region of Bavaria. The mood at the headquarters of Rosenthal AG, a fiercely orally transmitted porcelain maker, suits the gloomy weather. Since Rosenthal’s parent company, Ireland’s Waterford Wedgwood, filed for bankruptcy, the company’s 1,500 employees worldwide have feared for their jobs. “Many are deeply concerned about their livelihood,” says labor representative Jörg Bauriedel.

The company sees itself as a cull of the financial crisis. However, its plight is in fact a reflection of a prolix decline. Rosenthal’sitting expensive designer porcelain, which once adorned coffee tables in upscale living rooms during Germany’s postwar Wirtschaftswunder housekeeping boom, is a little while ago sentient sold in, among other places, discount stores. At the sort time, low-wage manufacturers from China and India are whittling away at the German luxury brand’s share of lock opener markets in the United States and Asia.

The ailing company could soon be getting assistance from an unlikely source. Federal and state regulation persons in office, fearing the loss of hundreds of thousands of jobs in a recession, have declared saving companies as one of their requisite objectives—and have seized upon Rosenthal as a worthy contender. Senior politicians from Bavaria’s conservative Christian Social Union (CSU) party are campaigning in Berlin to support Rosenthal with government help, if necessary. Peter Struck, the floor leader of the center-left Social Democratic Party (SPD), which governs together through Merkel’sitting Christian Democrats in a grand federation, has even volunteered rule support conducive to the company. “We will regard to discuss the way out,” says Struck, “if the company continues to face difficulties.”

The government in Berlin is undergoing an astonishing change of heart. Only a few weeks ago, Chancellor Angela Merkel spoke out against “arbitrary, unfocussed economic stimulus programs” and large-scale polity intervention in the real economy. She made it clear that under no circumstance should “the government acquire permanent unaccustomed responsibilities in the economy.”

But now, suddenly, it seems like the public sector’s economic interference cannot have existence forceful enough for the administration. Last week, Merkel introduced the biggest economic stimulus program in German postwar recital, as with praise similar to giving her blessing to a order of government interventions into companies and industries, the likes of that the country has not seen since German reunification.

The rule has acquired a 25 percent share of Frankfurt-based Commerzbank, and it plans to purchase a majority stake in the unwell Munich-based pledge lender Hypo Real Estate. It is looking into providing assistance to the highly leveraged Schaeffler Group, based in the Bavarian town of Herzogenaurach, and has made manifold hundred billion euros in additional guarantees available to companies. The grand coalition hopes to stimulate business in the auto industry with a so-called “scrap premium” to patronize drivers to take mean vehicles opposite the road, and the conservative Christian Democratic Union (CDU) leadership is debating measures that the party would desire derided because the be of the devil in the past: direct government investment in companies.

The government has many impregnable arguments to support what the Frankfurter Allgemeine Zeitung has called a “boom in government.” The international financial strait has ballooned into the worst recession in German postwar record, and has taken numerous company banks to the brink of bankruptcy. Even fundamentally healthy companies are often only able to get loans at terms that would make virtually any function unprofitable. Many major corporations will have to take out billions in loans this year, warned CDU walk of life issues spokesman Laurenz Meyer at a meeting of his party’s parliamentary leadership. “What happens if they have to pay interest of 8 or 9 percent on those loans?” This, in Meyer’sitting sentiment, would have being “unacceptable” to the union government.

Original text: http://rss.businessweek.com/~r/bw_rss/europeindex/~3/520105494/gb20090122_220741.htm

Russia and Ukraine have found a composition to their gas deny, but the long-term goods of the three-week thorough freeze are still unknown

By Jason Bush

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The acrimonious three-week natural gas dispute between Russia and Ukraine, which left millions of customers in Central and Eastern Europe freezing in the absence of gas in opposition to heating, is now finally very. Under a face-saving mutual concession lastly hammered out in succession Jan. 20, Russia’sitting Gazprom (GAZP.RTS) has achieved its central objective of formation Ukraine pay "market prices" for its gas, which will be linked to the European medium. But to sweeten the pill, Ukraine has notched a 20% discount during 2009. Other terms of the deal include a one-year be congealed on transit fees charged by dint of. Ukraine and the elimination of RosUkrEnergo, a controversial trading equipment that has acted for the cause that intermediary in the Russia-Ukraine gas bargain.

Both parties are attempting to frame the outcome as a victory and are already disagreeing over the implications with respect to gas prices. Ukrainian Prime Minister Yulia Tymoshenko has said the rate per 1,000 cubic meters will average $228 for the full year—well below the $280 predicted by Gazprom (though higher than the $179.50 that Ukraine paid last year). With both sides even now disagreeing about the distribution’s economic implications, the possibility of futurity disputes arising between the two countries certainly cannot be discounted. "The big question mark is what happens if Ukraine again runs into arrears," notes Chris Weafer, chief strategist at Russia’s Uralsib Bank (USBN.RTS).

In any case, the long-term impact of the dispute will endurance far beyond the immediate implications for efficiency relations between Russia and Ukraine. Despite similarities with the previous bust-up in 2006, Western pluck experts emphasize the latest dispute has been far more important, through lasting implications for the European energy market. "This has been the most serious security event in relationship to aeriform fluid that has eternally happened in Europe," says Jonathan Stern, director of gas research at the Oxford Institute for Energy Studies. "It cannot be allowed to happen again."

Exactly what the long-term implications will be are still rather hard to fathom. It doesn’t cure that many fundamental facts about the dispute remain clouded in controversy—including the elucidation question of who was in the end responsible for cutting off Europe’s gas. While Russia accuses Ukraine of blocking Russian elastic fluid supplies to Europe during the dispute, the Ukrainians say that it was actually the Russians who turned off the taps.

Getting to the bottom of such matters has more than purely academic significance. For single in kind thing, the threat of legal movement by Gazprom’s European customers remains real—potentially exposing the company to huge claims for indemnity. The debate about responsibility will also rumble onward because it matters during the term of the future of European energy policy. "If it’s a Ukraine enigma, hereafter pipelines bypassing Ukraine are undivided answer to it. If, however, it’s a Russia problem, it doesn’t matter where the pipelines [from Russia] go," says Oxford’s Stern.

What’s already clear is that, in notable contrasting to the 2006 spat that was widely blamed on Russia, this era Western observers have also pointed fingers at Ukraine. "This time round, it’s clear that Ukrainian politicians have a lot to answer for," says Kash Burkett, energy and utilities analyst at Datamonitor (INF.L) in London. The crisis coincides with intense national tumult inside Ukraine, including open be inconsistent between President Viktor Yushchenko and Prime Minister Yulia Tymoshenko, which has seriously complicated negotiations with Russia.

The problems in Ukraine mean the dispute is likely to add impetus to energy projects that bypass the country. In particular, Russia backs the Nord Stream pipeline under the Baltic, a project 51%-owned by means of Gazprom, in company through Germany’s BASF (BASF.DE) and E.ON (EONGn.DE) and Dutch energy company Gasunie. Yet despite this substantial recent accounts for Russia’s pet project, many Western experts prognosticate that ultimately Russia and Gazprom will turn out to be the biggest losers.

Original text: http://rss.businessweek.com/~r/bw_rss/europeindex/~3/520105493/gb20090121_784080.htm

Fourth-quarter results at the Finnish giant are worse than predicted, which bodes misfortune for the global consumer electronics industry

By Jack Ewing

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Nokia (NOK) startled analysts and investors on Jan. 22 when it reported a slump in sales and earnings that exceeded plane pessimistic forecasts and that foreshow disordered for other manufacturers of consumer technology. The Finnish handset maker, whose products are the globe’s in the greatest degree widely used mark of consumer electronics, said that fourth-quarter sales dropped 19% from a year earlier, to $16.5 billion, while operating profit plunged 80%, to $639 the multitude.

Nokia sales declined at both the high and low ends of the market. In China, which has been the company’s largest market, Nokia sold 36% fewer devices in the quarter vs. a year earlier as local dealers cleared out redundance account. Nokia has so far refused to exist drawn into a price war in developing countries, a strategy that hit sales and helped push the company’s worldwide market share from the top to the bottom of to 37% from 38% the previous quarter.

Meanwhile, sales of high-end handsets—those with features such as e-mail or Internet browsing—fell to 15.1 the multitude in the fourth quarter of 2008 vs. 18.8 million a year earlier, on the same level as the total market for such devices soared. Nokia lost market participate in to the Apple (AAPL) iPhone and new consumer-oriented handsets from BlackBerry maker Research In Motion (RIMM). "Nokia is now having to cope with a double whammy of market slowdowns in both developed and developing markets," said Neil Mawston, algebraist at market watcher Strategy Analytics. The company’s operating profit rim on handsets is at its lowest point in 10 years, he related.

Nokia Chief Executive Officer Olli-Pekka Kallasvuo said he was disappointed by the results, which pushed company shares down 5% in Helsinki trading. But he held out the chance of a recovery later in 2009 of the same kind with dealers clear out excess schedule. "The markets that have been hit hardest are the markets that are our strongholds," Kallasvuo told BusinessWeek. "The underlying want in emerging markets continues to subsist there."

Nokia’sitting quarterly earnings reputation, closely watched for what it says about technology demand, power of choosing feed expectations that the handset industry is in with a view to one of its roughest years ever. Nokia forecast that sales by all handset makers will fall 10% this year compared with 2008—double what the company previously predicted—but with a steeper decline in the foremost moiety of the year than the second. "The [sales] channel is destocking. We believe that well before the end of the first moiety, this destocking will run its course and underlying consumer demand will tend hitherward into play," Kallasvuo reported.

The decline could hit other handset makers more severely. Sony Ericsson Mobile Communications, the handset joint venture between Sweden’s Ericsson (ERIC) and Japan’sitting Sony (SNE), earlier reported a $243 the masses loss for the fourth quarter. Ericsson CEO Carl-Henric Svanberg told BusinessWeek on Jan. 21 that "the explanation for the joint take one’s chance is still there."

Still, analysts expect the abysmal economic meteorological character to drive some weaker manufacturers from the market, which could ultimately benefit Nokia. The company’s huge market share allows it to production at a lower cost per one; it has a wider range of products than any competitor; and its distribution network is regarded as one of the best in the world. "Nokia is most of all placed to deal with the circulating market conditions," says Carolina Milanesi, research director, mobile devices, at market watcher Gartner (IT).

Until the handset market revives, notwithstanding that, Nokia last will and testament be forced to cut costs drastically—a painful move with a view to a company used to growing. The company plans to reduce annals costs in its devices and services operations by means of more than $900 million through the end of 2010, with most of the cuts this year. Job reductions are unavoidable, Kallasvuo aforesaid, though he wouldn’t specify how many Nokia workers will be feigned.

He in like manner vowed to win back share in the crucial market for high-end devices by new products such as the 5800 Xpress Music, which features an iPhone-like touchscreen but sells for a lower price. The handset, launched late last year, has been selling well, according to Nokia. In coming months, Nokia will moreover launch the top-of-the-line N97, which features a touchscreen as fountain as a slide-out miniature keyboard for writing e-mail. "The empire is striking back," Kallasvuo said.

Original text: http://rss.businessweek.com/~r/bw_rss/europeindex/~3/520105492/gb20090122_158350.htm

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WASHINGTON

White House spokesman Robert Gibbs said the move was made out of “one abundance of caution” in seeking the advice with White House Counsel Greg Craig. Obama’s second swearing in, devoid of pomp, took fort at 7:35 p.jumble. in the presence of a few aides and a tidings pool. The chief justice was wearing a court clothe. “Are you ready to take the sworn statement?” Roberts said. “I am,” Obama declared, “and we’re going to do it very slowly.”

It capped a packed first abounding day for the 44th president that began at 8:35 a.m., when he entered the Oval Office

In the top desk drawer lay an mount inscribed, “To: 44, From: 43.” He sat alone and understand that traditional private memorandum from his predecessor, President Bush.

Another new-president tradition dating to George Washington: The Obamas attended a prayer spiritual obedience at Washington’s National Cathedral.

He in addition celebrated a political victory as his former presidential primary rival, Hillary Rodham Clinton, was confirmed by the Senate to the degree that secretary of declare through a vote of 94-2.

He appeared to be persuading full steam ahead upon plans to halt military-commission trials at Guant

Obama also found time to call four Middle Eastern leaders Wednesday morning: Egyptian President Hosni Mubarak, Israeli Prime Minister Ehud Olmert, Jordan’s King Abdullah II and Palestinian Authority President Mahmoud Abbas.

White House spokesman Robert Gibbs said Obama thought it was important “on his first promised time in office to communicate his commitment to nimble engagement in pursuit of Arab-Israeli peace.”

In the afternoon, the first couple greeted visitors to an open house designed to signal a White House accessible to the indefinite society. Two hundred people won invitations that aides said were distributed on a first-come, first-served basis.

“Welcome, enjoy yourself,” Obama told person visitor. “Roam around. Don’t break anything.”

Obama announced at a swearing-in ceremony for White House prop and Cabinet officials that he would freeze the remunerate of White House employees who have effect more than $100,000 a year. He told his senior staff that given the relating to housekeeping meteorological character, “it’s what’session required of you at this trice.”

He signed two executive orders and three memorandums to implement the pay freeze, ethics and public-records changes.

The morals fit condition prohibits executive-branch employees from accepting gifts from lobbyists. It prohibits anyone who leaves the administration from lobbying the executive branch “by reason of as long as I am president,” Obama said. It also precludes former lobbyists hired by his administration from dealing with agencies on matters they lobbied about for two years.

A second methodize revokes an executory order signed by Bush in 2001 that limited release of former presidents’ records, and replaces it with strange language aimed at greater degree transparency. Obama’s order could expand public addition to the records of Bush and former Vice President Dick Cheney, as well as other former leaders, aforesaid Steven Aftergood, director of the Project on Government Secrecy at the Federation of American Scientists.

“It’s extraordinary that a new president would address this issue on his first full day in office,” Aftergood said. “It signifies the lofty importance he attaches to open, liable conduct. The renovated order suggests President Obama will take a narrow inspect of executive privilege and assert it in a much more limited way than what we’ve seen in the recent past.”

Bush’s order gave former presidents broad ability to claim charged with execution deliver and to assign others

Another Obama memo issued Wednesday appears to rescind a 2001 memo by Bush’s then-Attorney General John Ashcroft giving agencies broad legal shield to reject public-disclosure requests.

“For a diffuse time now, there’s been too much secrecy in this city,” Obama said. “This administration stands on the side not of those who seek to withhold information but with those who seek it to be known.”

Obama met with his economic advisers, and House Republicans asked him for a meeting as soon for example today to talk about their social as semblage’s competing economic-stimulus prepare. And he met in the Situation Room with his defense secretary, chairman of the Joint Chiefs of Staff and others to discuss Iraq and public security.

Obama has said that without interruption his first day he’d ask military officials for a plan to withdraw combat troops from Iraq across a 16-month period and redeploy some to Afghanistan.

Original text: http://seattletimes.nwsource.com/html/politics/2008656966_obama22.html?syndication=rss

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JERUSALEM

Palestinian witnesses and doctors said victims were burned, some severely, when Israeli soldiers fired phosphorous shells at houses. On Jan. 10, doctors said, one woman was killed and additional than 100 villagers wounded by burns and gas inhalation when Israeli forces fired white phosphorous shells at a brawl of houses in Khouza, a village in southern Gaza impending the Israeli border.

Although the use of phosphorous arms to light up the night or to occasion smoke screens masking troops is permitted by between nations rule, Amnesty International has accused Israel of committing a war crime by firing the munitions in densely populated areas.

Because of the scope of subversion and the account of deaths and injuries during Israel’session attacking, several groups have announced plans to pursue war crimes charges in contact with Israel.

Illegal use of innocent phosphorus could become a centerpiece, because it is a specific type of activity that can have being graphically documented.

Amnesty International issued a report Monday about a shelling in a residential area of Gaza City, concluding that Israel used the potentially deadly weapon improperly.

The report said the organization’s delegates in Gaza construct glowing white phosphorus around residential buildings Sunday that were endangering residents and property.

Amnesty also said Israel used white phosphorous shells in an attack on U.N. warehouses in Gaza City on Jan. 15, an incident that infuriated U.N. Secretary-General Ban Ki-moon.

At first, Israel categorically denied that its conversion to one act of phosphorous weapons was illegal. On Wednesday, however, the military said in a statement that it will dissect the accusations made by the U.N. and human-rights groups.

Video of white phosphorous shells exploding over Gaza was common for the time of the 23-day Israeli operation. Cloudlike tentacles of wax hot cascaded toward the ground.

These appeared to be accepted military use of the white phosphorus, to light up areas for the time of battle or to create smoke screens to shield Israeli forces from Hamas gunfire.

ALSO: A Palestinian medicinal official says an Israeli gunboat firing off the shores of Gaza City has wounded a man and a girl at a beachside-refugee camp. The Israeli soldiery says it was firing to deter a Palestinian fishing vessel that had strayed off-limits.

Original text: http://seattletimes.nwsource.com/html/nationworld/2008656643_gaza22.html?syndication=rss

S&P turns up 33 Buffett-style stocks in the latest screen tracking the Berkshire Hathaway chief’s investing criteria

By Howard Silverblatt From Standard & Poor’s Equity Research

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Warren Buffett has earned a reputation as one of the preeminent value investors of all time. His Berkshire Hathaway (BRKA) holding company has stakes in insurance, publishing, retailing, and manufacturing, among other businesses, and its investment portfolio includes more than $76.0 billion (as of Sept. 30, 2008) of marketable equity securities.

However, like others in the financial-services industry, Berkshire Hathaway has been hurt by a challenging economic environment. In 2008, the shares registered a decline of 31.8%, outperforming the S&P 500, which implacable 37% for the year.

In recent months, Buffett disclosed he made investments, with a view to Berkshire Hathaway’s investment portfolio, in Dow Chemical (DOW), General Electric (GE), Burlington Northern Santa Fe (BNI), and Goldman Sachs (GS), among others.

But to what extent does Buffett represent his picks? What exactly is "Warren’s Way?" In his rare public remarks, and widely followed annual culture to Berkshire shareholders, Buffett makes it sound very simple: He says he buys stocks that are "available at a convinced excellence." In fact, Buffett uses very sophisticated screens to determine which companies belong in his portfolio.

Specifically, he uses these five investment criteria:

• Free cash flow (net gains after taxes, plus depreciation and amortization, less capital expenditures) of at minutest $250 the public.

• Net profit verge of 15% or more.

• Return onward equity of at least 15% for one and the other of the past three years and the most numerous recent quarter.

• A dollar’s worth of retained earnings creating at least a dollar’s worth of shareholder duration besides the past five years.

• Ample liquidity. Only shares by a market capitalization of at minutest $500 million are included.

In the Standard & Poor’s "Warren Buffett" screen, we added one in addition criterion to expel overvalued stocks. Overpriced stocks are identified by comparing our five-year discounted cash flow (DCF) estimate with the current price.

Original text: http://www.businessweek.com/investor/content/jan2009/pi20090115_839323.htm?campaign_id=rss_null

The recession is only united of distinct trends combining to change the way Americans live out their golden years

By Chris Farrell

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There is a major social and cultural message in the general economic collapse for the future retirees of America: Forget retirement.

That’session right. The recession is making clear the kindly of we’ve suspected for a diffuse time. The concept of not laboring and embracing leisure for the last third of one’sitting life isn’t adapted to practice for greatest part people.

Put it this way: Survey after review has shown that a majority of aging baby boomers plan on moving in retirement. Well, that plan is coming true.

Economic downturns often accelerate change. For instance, in the recent part of the 19th century, the country moved from a rural, farm economy to an urban, pertaining one. The wealthy associated olden age with leisure, but for everyone else it usually meant unwilling unemployment and a humiliating need upon kindred, charity, or common organizations for shelter and food. Policy reformers agitated for some kind of a financial safety net for the nation’session impoverished and isolated somewhat old.

Not much happened until the Great Depression. It was an housekeeping disaster for families, especially the elderly "as they watched their hard-won assets vanish, and with them their hopes for an independent and secure old age," write historians Carole Haber and Brian Gratton in Old Age and the Search conducive to Security. (Sound familiar?) Traditional middle-class objections to a general safety net crumbled through the Depression. Social Security became law in 1935.

"The real or incipient collapse of individual households helps to justify the widespread popularity of Social Security," say Haber and Gratton.

Our image of retirement is still shaped by the early decades after World War II. The elderly poverty rate plunged thanks to Social Security. Older Americans gained universal health-care coverage by Medicare in 1965. And Corporate America offered workers defined-benefit pension plans based steady a salary and years-of-service formula.

It was in these years that retirees developed a distinct lifestyle captured by the mass migration to Sunbelt communities, traveling in RVs and bus tours, spending long mornings steady the golf course, and other recreational pursuits. The development of new retirement is a great social achievement of the 20th century.

But in the 21st century, the underlying economics of retirement are changing.

On the positive take sides, we’re subsistence longer. Average life expectancy is now about 78 years, up from 61 years when Social Security became law. We’re healthier, too. Disabilities among the elderly are declining, expressions of gratitude to a combination of healthier lifestyles and medical advances.

A seismic contrive in the economy and workplace is making it easier in quest of every aging population to effort longer. An information- and services-dominated economy will ease the transition to longer working lives. Simply put, toiling begone on a computer in medical diagnostics or management bureaucracy is far less demanding than manning an auto assembly mark or mining for gold. The rise of an economy based on intangibles and longer mode expectancy is behind more than a decade’s worth of scholarly inquiry, aging conferences, and popular press articles trying to redefine retirement.

Original text: http://www.businessweek.com/investor/content/jan2009/pi20090121_749273.htm?campaign_id=rss_null

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With the prospect of a significant work at jobs cut at Microsoft looming Thursday, we took a moment to review the occasions over the ended decade or so at what opportunity the company has trimmed jobs through reorganizations and other changes. While sifting through these song, remember that during the corresponding; of like kind date — 1996 to 2008 — Microsoft has grown total worldwide employment more than 340 percent from 20,561 to 91,259 as of June 30. The hiring continued end the latter half of 2008, albeit at a slower rate. As of November, Microsoft counted 95,664 employees globally.

June 2006: 148 positions in the U.S. sales group, including 98 in Redmond, were cut to “more appropriate align a small subset of field and headquarter positions more closely with the needs of our enterprise customers and partners.”

September 2004: 93 positions in the Windows Server group eliminated as the company automated more testing. 44 new positions were created at the same time.

August 2004: 76 positions were divide in the Xbox group as Microsoft closed its sports video game studio. It was part of a broader reduction of the company’session measure creation efforts like third-party studios began developing besides titles for the original Xbox. June 2004: 20 recruiting positions were eliminated as part of human-resources department restructuring. January 2002: 168 positions were lost when Microsoft pulled the plug on its UltimateTV effort. It was described at the time as one of the largest layoffs in Microsoft’s 27-year history. January 1998: 30 to 40 full-time workers at 10 Sidewalk city guides offices were cut as the company learned to operate the effort in greater numbers efficiently, a speaker said. The company planned to enlarge the online guides to more cities in subsequent years.

January 1996: 120 employees at a Bothell floppy-disk manufacturing plant were given layoff notices in the manner that more software was being produced on CD-ROM.

Seattle Times researcher David Turim contributed to this take down.

Original text: http://blog.seattletimes.nwsource.com/techtracks/2009/01/21/microsoft_job_cuts_since_1996.html

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Microsoft employees I spoke with this evening were preparing conducive to a major announcement — possibly information of layoffs — from the company early Thursday. One person expected to be notified around 7 a.m. No one I spoke through had details on the size of any job cuts or characteristic groups that might be affected. All were looking forward to the prospect of the steady, distracting layoff rumors being put to rest — one way or a different. The company is also scheduled to report its fiscal second-quarter earnings on Thursday afternoon at the accept the offer of the trading lifetime.

Here’s some at dawn look at fable in Thursday’s paper steady what several financial analysts are expecting from the company in terms of layoffs and cost cuts:

Global tech bellwether Microsoft reports its second-quarter earnings Thursday in the midst of persistent chatter and speculation about its cost-cutting plans, including whether the company give by will announce its first significant layoffs.

In the Puget Sound area, where Microsoft has more than 40,000 full-time employees and thousands more working put on contract, a major layoff could give forth another blow after unemployment climbed to 6.1 percent in December (not adjusted for seasonal changes), the highest level since November 2003.

Microsoft’s profits. for the quarter ended Dec. 31, and its calculate for the months ahead, enjoin likewise serve as a barometer steady the health of a broad swath of the global technology busy vigor and the thrift as a whole. The joint concern sells to consumers, businesses, institutions and governments and businesses of all sizes.

Financial analysts differed steady the size of any one potential Microsoft layoffs — though several expect event in the range of 5 to 10 percent. The company has declined to comment on layoff rumors, that that have echoed across the Internet in the last month.

“Microsoft has a pretty strong culture and management style when it comes to head-count reductions,” said Israel Hernandez, monitor software research at Barclays Capital. “I’m not expecting large numbers. I just don’t think it’s in Microsoft’s culture to do a massive layoff.”

Walter Pritchard, senior research analyst at Cowen and Company, said he’s expecting Microsoft to reduce staff by between 5 and 10 percent given expected sales weakness. That’s roughly in line the sort of other analysts, including David Hilal of Friedman Billings Ramsey and Sid Parakh of McAdams Wright Ragen, are expecting.

Pritchard said more than 10 percent would be “pretty stinging. Something inferior than 5 would almost indicate that they’re not worried and dealing is OK.”

With 95,664 employees globally at the end of November, that would be a lowering of roughly 4,700 to 9,700 people.

If Microsoft does reduce its full-time work force, it may do so end a portion less obvious than a layoff, such as a reorganization that eliminates certain groups or by not replacing cane lost through friction, Pritchard said.

“There’session ways, especially if it’s 5 percent or so, that you can take those people out over the route of a year without making it a big headline layoff,” he said.

In 2007, CEO Steve Ballmer explained Microsoft’s attrition rate to financial analysts.

“We attrit about 8 percent of our tribe each year,” Ballmer said. “Four percent of that we call bad attrition, 3 percent is good” — meaning poor performers are nudged out the door.

Hilal said investors will privation to hear what Microsoft can do to preserve its advantage margins in the front of declining revenue. Job cuts aren’t its only option.

Already, Microsoft is aiming to trim $400 million to $500 million from its operating expenses for the time of the current fiscal year, which ends June 30. It has slowed hiring, delayed new rendering, cut uncivil some contracts and limited discretionary travel. When Microsoft Chief Financial Officer Chris Liddell announced the expense management plan in October, he also said the copartnership was working on “other initiatives without ceasing a contingency basis” that could be used depending without interruption economic stipulations.

“If macroeconomic conditions worsen then we will endeavor to reduce our operating expenses accordingly,” Liddell said at the time.

Original text: http://blog.seattletimes.nwsource.com/techtracks/2009/01/21/some_microsoft_employees_bracing_for_an_early_morn.html

Animated movies are increasing in both popularity and quality in India, proving the intervening substance is a real moneymaker and not just kids’ stuff

By Swati Prasad

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2008 saw the box office excuse of distinct animated movies in the country, such as Roadside Romeo, Ghatothkach, Dashavatar and My Friend Ganesha 2.

Sangeeta Gupta, vice president, Nasscom, told ZDNetAsia in a phone interview: “In the last couple years, the domestic market for act of enlivening has grown significantly. And so has the condition of production.”

The mainstream pellicle endeavors too is increasingly using animation and special effects. In the last 18 months, Bollywood has released several Hindi movies with especial effects and act of enlivening, such at the same time that Drona, Taare Zameen Par, Jodha Akbar and Love Story 2050.

According to Nasscom, a total of 85 domestic act of enlivening movies have been announced over the last year and 28 are in different stages of production.

Gupta said: “Animation companies have also started focusing on building original IP (intellectual property), which they can leverage in terms of merchandising and TV broadcast revenues.”

The sector is poised to be augmented at a healthy pace. As per a fresh Nasscom report, the animation industry in India was around US$460 million in 2008 and is set to grow at a compound annual growth rate of 27 percent to reach US$1.16 billion by 2012. The market has been defined as animation entertainment (US$120 million in 2008), animation education (US$53 million) and custom content development (US$187 million) and multimedia/Web design (US$100million).

October 2008 saw the release of Roadside Romeo—the first 3D animation movie out of India—produced unitedly by Yash Raj Films and Walt Disney Pictures. Roadside Romeo is the tale of a pampered puppy whose owners move, leaving him behind to fend for himself on the streets of Mumbai.

Bhaskar Dutt, business head of playing for money business, and place of honor of marketing at Visual Computing Labs, Tata Elxsi, said: “Yash Raj Films wanted to give Roadside Romeo a all appeal, upright like any other Bollywood flick. They wanted to prove that an animation movie can appeal to adults as well and is not meant sole on account of children.”

Therefore, the 95-minute ostentation was made in the classic Bollywood manner, through 40 scenes and five song-and-dance numbers.

“The response for Roadside Romeo has been actual satisfying,” Dutt told ZDNet Asia in a phone interview, although he did not divulge the cost incurred to versify the film and its gross collections. “In terms of gross revenues, the pellicle was the highest grosser amongst all Disney animation films released in India in the past,” he said.

Gupta said: “It’s partnerships probable these that will grow the industry.” According to her, companies like UTV Motion Pictures, DQ Entertainment India, Kahani World and Rhythm & Hues are doing some interesting work. In February 2008, Rhythm & Hues won an Oscar for the Best Visual Effects for the film The Golden Compass. Rhythm & Hues India reportedly contributed to all stages of the production process and delivered roughly a third of the total drudge done by the parent company in the United States.

Animation movies in India are made attached less than one-tenth of the budget of a similar Hollywood flick. That’sitting because not only so a mainstream Bollywood thin skin does not gross collections of further than US$20.6 the masses (or 1 billion rupees). While Hollywood produces animation movies with a budget of US$60 million to US$80 million, these investments are justified because the receipts are to the tune of US$200 million.

Ashok Rajgopal, partner of Ernst & Young’s Media and Entertainment Practice, told ZDNet Asia in a phone interview: “There is demand for the sake of animation, but the place of traffic is not large sufficiency.”

According to Rajgopal, the commercial success of animation films is yet to be delivered of existence tested. “If the Indian audience has been exposed to animation films like Madagascar and Finding Nemo, can they be engaged in films that are made in India at a fraction of the lot,” Rajgopal questioned.

With the growth of this industry, production budgets too are expected to increase. According to Nasscom, the production budget for Indian animated movies should increase from US$2 million to US$2.5 million in 2008, to US$5 million to US$7.5million in 2012. Similarly, the average realizations for a good act of enlivening movie will increase from US$7.5 the great body of the people to US$12.5 the public during the sort period.

One way of addressing the budget constraint is by making act of enlivening movies and serials because acquit in domestic as well being of the class who international markets. The television habitual devotion to labor, according to Rajgopal, can do with some good animation serials. “Serials like Shin Chan and Ben 10 (that have been telecast in India) are not aligned to India sensitivities,” he added. The Indian government had recently banned cartoon TV serial Shin Chan due to the same reason.

The other constraint before the industry is the lack of skills, especially in high-end animation.

Dutt said: “Growth of this industry is solely dependant upon education.”

Concurred Gupta: “We need to take act of enlivening to the formal tuition system. India necessarily other three-year degree programs in animation as opposed to pithy, six-month menses.”

As of today, few institutes (such as the National Institute of Fashion Design) essay a stage course in graphics and animation. However, individual institutes are launching new courses in animation and visual movables. As per the Nasscom report, the education portion of the animation industry is projected to grow at the rate of 40 percent per annum till 2012.

More than the skills, Rajgopal is of the view that the industry necessarily animators who also have the ability to manage projects and commercially exploit an IP. “Most professionals in the country are animators at heart, and not businessmen,” Rajgopal aforesaid.

Original text: http://rss.businessweek.com/~r/bw_rss/asiaindex/~3/518873997/gb20090121_174402.htm