SAP to cut 3,000 jobs
SAP, the world leader in professional software, said yesterday it will cut more than 3,000 jobs this year to save up to 350 million euros (US$460 million) as demand slumps. The German company said the job cuts would allow it to “adjust to difficult market conditions.” SAP employs 51,000 people, according to its Web site. It said it would not be making forecasts for this year because of “the limited visibility” in the business. The company said its net profit for last year fell 2 percent to US$1.88 billion as sales rose 14 percent to 8.46 billion euros.
Novartis profits rise 25%
Novartis yesterday reported a 25 percent jump in profits last year to US$8.16 billion and forecast a record year for this year. Boosted by vaccines, diagnostics and consumer health products, the Swiss company said sales increased by 9 percent to US$41.6 billion last year. The company appears to have so far largely escaped the global financial crisis, although sales grew just 1 percent in the final quarter of last year. “Thanks to successful innovation and a leading market position of our healthcare business portfolio, Novartis achieved a strong performance in 2008,” Novartis CEO Daniel Vasella said in a statement.
Toshiba shuttering plants
Japan’s No. 1 chipmaker, Toshiba Corp, will shut down several semiconductor plants at home to cope with a plunge in global demand for electronics goods, the Asahi Shimbun said yesterday. Toshiba will also likely incur an operating loss of ¥200 billion (US$2.2 billion) in the fiscal year ending in March, the Asahi said, citing no sources. Toshiba spokeswoman Hiroko Mochida declined to confirm the report, but said the company had earlier forecast an operating profit of ¥150 billion. Toshiba runs 10 semiconductor plants in Japan and one each in China, Malaysia and Thailand. Mochida said Toshiba plans to boost overseas production due to cheaper labor costs.
SIA cuts NYC, LA flights
Singapore Airlines (SIA) is reducing its all-business class service to New York and Los Angeles in the face of the global economic downturn, the carrier said yesterday. The 14 weekly Airbus A345 flights will be cut to 10, the airline said, adding the change will initially take effect between Feb. 17 and March 25. The non-stop all-business service to New York began last May, followed by Los Angeles in August. Earlier this month, SIA and travel agents said the carrier was cutting more than 200 flights to Europe, Australia, China, and India in response to falling passenger numbers amid the global slowdown.
UK to aid auto industry
Britain on Tuesday unveiled a £2.3 billion (US$3.2 billion) support package for its ailing auto industry. But Business Secretary Lord Peter Mandelson said the plan did not amount to a “blank check.” “This industry is not a lame duck, and this not a bailout,” Mandelson told the House of Lords. “Britain needs an economy with less financial engineering and more real engineering.” He said the sector was “vital” to Britain and the government had to take action “to prevent an irreversible loss of capacity, skills and technology.” The government will offer guarantees to unlock loans of up to £1.3 billion from the European Investment Bank, and will offer guarantees on a further £1 billion of loans.
Toyota issues global recall
Toyota Motor Corp said yesterday it was recalling more than 1.35 million cars worldwide because of seatbelt and exhaust defects. The world’s biggest automaker is recalling 525,000 Vitz, Belta and Ractis vehicles in Japan made between January 2005 and last April. About 830,000 Vitz and Belta vehicles sold in North America, Europe and other markets are also subject to the recall, a Toyota spokeswoman said. The cars are called the Yaris Hatchback and Sedan in some markets. The recalls are mostly due to problems linked to the seatbelt tensioner that may cause a fire in the case of a collision, the company said.
STMicro cutting 4,500 jobs
French-Italian semiconductor maker STMicroelectronics said yesterday it would cut 4,500 jobs, one-tenth of its workforce, and predicted the global chip market will slide by at least 25 percent this year. STMicro, ranked fifth among global chipmakers, registered a loss last year of US$786 million as sales fell 1.6 percent to US$9.84 billion. The company said sales fell 17 percent in the final quarter of last year to US$2.28 billion and that with the sharp decline in demand, its factories would likely be operating at around 50 percent of their capacity in the first three months of this year.
Rio Tinto considers options
Global miner Rio Tinto, facing persistent rumors it might need to sell shares to help pay off US$39 billion in debt, conceded an equity raising was one option being considered. Rio Tinto announced sweeping plans last month to cut jobs, slash capital spending and expand asset sales aiming to cut debt by US$10 billion this year, after bigger rival BHP Billiton scrapped a US$66 billion takeover bid, blaming Rio’s debt levels and sliding metals prices. “In order to preserve maximum flexibility for the Group, the Boards do not rule out the potential to issue equity as one of the options it has available,” the company said in a statement. Media reports have speculated the group might raise as much as US$7 billion through a rights issue.
LG Display buys Cree chips
LG Display Co, the world’s second-largest maker of liquid-crystal displays, agreed to buy chips from Cree Inc to make backlights used in flat-panel screens. LG Display signed an agreement this month to order the so-called light-emitting diode (LED) chips, the company said in a statement yesterday, without providing financial terms. Cree, a Durham, North Carolina-based maker of semiconductors for energy-saving lights, will supply the LED chips to LG Display and provide technological support, the statement said. The South Korean display maker plans to expand the share of panels using LED backlights to 50 percent of its total notebook LCD-screen production, the company said.
Total wants UTS Energy
French oil giant Total said on Tuesday it had offered C$617 million (US$504 million) in cash for Canada’s UTS Energy Corp. The unsolicited offer of C$1.30 per share represents a 51 percent premium over the weighted average trading price UTS Energy shares at the Toronto Stock Exchange for the last 30 days, Total said in a statement.
The takeover bid made by Total’s Canadian affiliate will be open for at least 60 days and would have to be accepted by at least two-thirds of UTS shareholders.