Written by Regina William
GEORGE TOWN: Dell Malaysia is offering a voluntary separation scheme (VSS) across the board to all 5,000-odd employees in Malaysia in line with efforts to reduce its global workforce by 10% or 8,800 jobs.
Late last month, Dell Inc announced a 48% decline in net income to US$351 million (RM1.3 billion) for the fourth quarter of its financial year 2009 (4QFY09) from US$679 million a year earlier.
Sources told The Edge Financial Daily that employees had been informed of the decision and had until the end of the month to make their decisions on whether to take up the offer.
When contacted, Dell Malaysia confirmed that under the Malaysian initiative, the VSS had been offered to all the 5,000 Malaysian staff on Penang island, Bukit Tengah in the mainland and Cyberjaya. However, the actual number of staff that Dell Malaysia targeted to let go is not known.
The Penang Manpower Department also confirmed that it had been informed by Dell of the VSS.
A Dell Malaysia spokesperson said the move was part of its efforts to reduce its global workforce. “This is part of Dell’s ongoing initiative to remain competitive by enhancing our efficiency and underlying cost structure. This action is a prudent and deliberate part of Dell’s ongoing focus on competitiveness.
“We recognise the impact that this action will have on employees, and are working to minimise consequences. Affected employees will be offered competitive severance packages, including career counselling and outplacement services. All actions will be consistent with applicable local laws and practices.”
Dell will, however, continue to hire people with specifically required skills and invest in areas that provide value to customers and enhance its capabilities, the spokesperson said.
“We are continuously reviewing our business model and taking actions that enhance our efficiency and underlying cost structure. We will adjust accordingly and prudently to remain competitive during and after the current challenging economic environment,” the spokesperson added.
During a conference call with Asia- Pacific journalists at the end of last month, Steve Felice, president of Dell’s small and medium business, said that the job cuts in Asia would be “minor” in the overall scheme of Dell’s global operations.
With a 16% decline in revenue for its fourth quarter ended Jan 30, rumours had been rife that Dell would close its facility in Penang or sell its operations to contract manufacturers. Dell is also said to have outsourced 70% to 80% of its operations in Penang.
Felice had said then that there would be no plant closures besides the two which were being closed in Ireland, shedding 1,900 jobs from April and another 800 to 900 jobs in Austin in the US.
However, on March 11, it was reported that an assembly plant in North Carolina would be next on Dell’s cost cutting moves resulting in more layoffs.
Meanwhile, apart from the planned layoffs, it’s business as usual for Dell.
In a statement yesterday, Dell introduced the new Adamo (derived from the Latin word meaning to fall in love) brand, with the launch of the world’s thinnest laptop, priced from RM7,399. It is available for pre-order at www.adamobydell.com with shipping to start March 26.
Thursday, March 19, 2009
Monday, March 16, 2009
Creditworthiness may be linked to looks: study
By Rebekah Kebede
NEW YORK (Reuters) - A credit score can tell a lender a lot about a prospective borrower, but so can the borrower's looks, a new study says.
People who are perceived to be trustworthy are more likely to have a higher credit score and pay lower interest rates on loans, and are less likely to default, according to the study by Rice University in Houston, Texas.
Even when hard facts such as credit scores are available, people rely on an assessment of trustworthiness to decide whether to make a loan.
"It turns out that if you look trustworthy, you're more likely to get a loan," said Jefferson Duarte, a professor of real estate finance at Rice University, one of the study's authors.
Duarte and co-authors Stephan Siegel and Lance Young, of the University of Washington in Seattle, studied members of Prosper.com, an online lending site where people looking for loans are matched up with individual lenders.
Each Prosper.com loan applicant submitted a profile which included credit and work history, education level, income and an optional photograph of themselves for lender review.
More than 6,800 loan applications, 2,579 loans and 12,200 photographs from Prosper.com were used in the study.
Duarte hired a team of 25 people to rate the applicants' trustworthiness on a scale of one to five using only the photographs of the borrowers. The team also judged the probability that the borrowers would repay a $100 loan.
Those judged to be trustworthy by the team were more likely to get a loan from Prosper.com lenders and tended to have a credit score about 20 points higher than those determined to be untrustworthy, the researchers found.
"Untrustworthy" borrowers were seven percent more likely to default on their loan than a perceived trustworthy borrower with the same credit score.
"There is an array of information that you can get out of the pictures," Duarte said, adding that Prosper.com borrowers use photographs ranging from family portraits to snapshots of their pets.
"The pictures are revealing something about the behavior of these people that is not taken into account in the credit score model," Duarte said.
To make sure that the evaluators' prejudices did not skew the results, the researchers controlled for race, age, gender, obesity, attractiveness and education, as well as financial factors like employment status, income and homeownership.
Understanding what determines trustworthiness may be relevant to the current economic crisis and be the key in restoring trust in the markets, Duarte said.
"People don't trust the markets right now. The people don't trust the banks, the banks don't trust themselves ... trustworthiness seems to be really important in every single transaction and we need to pay attention to this concept," he said.
NEW YORK (Reuters) - A credit score can tell a lender a lot about a prospective borrower, but so can the borrower's looks, a new study says.
People who are perceived to be trustworthy are more likely to have a higher credit score and pay lower interest rates on loans, and are less likely to default, according to the study by Rice University in Houston, Texas.
Even when hard facts such as credit scores are available, people rely on an assessment of trustworthiness to decide whether to make a loan.
"It turns out that if you look trustworthy, you're more likely to get a loan," said Jefferson Duarte, a professor of real estate finance at Rice University, one of the study's authors.
Duarte and co-authors Stephan Siegel and Lance Young, of the University of Washington in Seattle, studied members of Prosper.com, an online lending site where people looking for loans are matched up with individual lenders.
Each Prosper.com loan applicant submitted a profile which included credit and work history, education level, income and an optional photograph of themselves for lender review.
More than 6,800 loan applications, 2,579 loans and 12,200 photographs from Prosper.com were used in the study.
Duarte hired a team of 25 people to rate the applicants' trustworthiness on a scale of one to five using only the photographs of the borrowers. The team also judged the probability that the borrowers would repay a $100 loan.
Those judged to be trustworthy by the team were more likely to get a loan from Prosper.com lenders and tended to have a credit score about 20 points higher than those determined to be untrustworthy, the researchers found.
"Untrustworthy" borrowers were seven percent more likely to default on their loan than a perceived trustworthy borrower with the same credit score.
"There is an array of information that you can get out of the pictures," Duarte said, adding that Prosper.com borrowers use photographs ranging from family portraits to snapshots of their pets.
"The pictures are revealing something about the behavior of these people that is not taken into account in the credit score model," Duarte said.
To make sure that the evaluators' prejudices did not skew the results, the researchers controlled for race, age, gender, obesity, attractiveness and education, as well as financial factors like employment status, income and homeownership.
Understanding what determines trustworthiness may be relevant to the current economic crisis and be the key in restoring trust in the markets, Duarte said.
"People don't trust the markets right now. The people don't trust the banks, the banks don't trust themselves ... trustworthiness seems to be really important in every single transaction and we need to pay attention to this concept," he said.
The IKEA Sale is back
Written by Wong King Wai
PETALING JAYA: Did you know that a poll taken by IKEA found that 33% of home owners in Malaysia have not bought any furniture or home accessory for over 12 months? If you’re one of those who fall into that category, you may be glad to know that the very popular IKEA Sale is now on. From Feb 26 to March 22, loads of items are marked down to make way for new arrivals.
To help maximise your shopping time, shopping hours have been extended with the doors open from 9.30am to 10.00pm from Mondays to Thursdays and from 9.30am to 11.00pm from Fridays through Sundays.
For large ticket items which can’t fit into you car, they can be sent to your home for only RM50 per trip within the Klang Valley via IKEA’s Express Home Delivery Service. The normal price is RM65! Be sure to make the payment before 3pm at the Home Delivery Counter.
Furthermore, save 10% off IKEA’s sewing services when you purchase their fabrics. Found beyond the exit hall, the centre’s seamstresses will take your requests and before long, you’ll return home with curtains, blinds, sofa and cushion covers, and upholstery. They do alterations as well.
Lastly, IKEA Friends credit cardmembers enjoy a 0% installment payment plan for purchases as low as RM500 over six months. For purchases over RM1,000 you have the option to spread out the repayments across 6, 9, 12 or 24 months.
PETALING JAYA: Did you know that a poll taken by IKEA found that 33% of home owners in Malaysia have not bought any furniture or home accessory for over 12 months? If you’re one of those who fall into that category, you may be glad to know that the very popular IKEA Sale is now on. From Feb 26 to March 22, loads of items are marked down to make way for new arrivals.
To help maximise your shopping time, shopping hours have been extended with the doors open from 9.30am to 10.00pm from Mondays to Thursdays and from 9.30am to 11.00pm from Fridays through Sundays.
For large ticket items which can’t fit into you car, they can be sent to your home for only RM50 per trip within the Klang Valley via IKEA’s Express Home Delivery Service. The normal price is RM65! Be sure to make the payment before 3pm at the Home Delivery Counter.
Furthermore, save 10% off IKEA’s sewing services when you purchase their fabrics. Found beyond the exit hall, the centre’s seamstresses will take your requests and before long, you’ll return home with curtains, blinds, sofa and cushion covers, and upholstery. They do alterations as well.
Lastly, IKEA Friends credit cardmembers enjoy a 0% installment payment plan for purchases as low as RM500 over six months. For purchases over RM1,000 you have the option to spread out the repayments across 6, 9, 12 or 24 months.
EPF declares 4.5% dividend for 2008
Written by Joe Chin
Monday, 16 March 2009 19:16
KUALA LUMPUR: The Employees Provident Fund (EPF) Board had on March 16 declared a dividend rate of 4.50% for 2008, but this was lower from 2007 due to higher investment provisioning resulting from the sharp fall in global equity prices. In 2007, the dividend was 5.8%.
“Despite the financial meltdown, the EPF recorded the highest ever earnings of RM20 billion in gross income for 2008. This represented an increase of 9.36% over the previous year’s gross income of RM18.29 billion,” said a Bernama report.
EPF chairman Tan Sri Samsudin Osman said EPF’s investment portfolio for the year performed better at the gross income level compared to 2007.
“However, due to the sharp decline in the equity markets, a large provision had to be made resulting in a marked reduction in net income,” he said.
Net income for 2008 was RM14.26 billion, after deducting allowances for diminution in value of equities and doubtful debts, dividends for withdrawals, investment expenses, operational expenses, and death and incapacitation benefit payments.
This represented a decrease of 15.47% over 2007 net income of RM16.87 billion.
Equities accounted for 34.82 per cent of the EPF’s total gross investment income. The EPF earned RM6.67 billion from equities which was the second largest contributor to income in 2008 compared to RM5.37 billion in 2007.
“Up until September last year, the EPF was doing well in equities. However, following the effect of the global financial meltdown, our performance in equity investments recorded a drop of less than 20%, which impacted our dividend payout.
“This, however, compares better with that of the KLCI which was down approximately 40% from end of December 2007 to December 2008,” said Samsudin.
As a result of the sharp fall in global equity prices and following a conservative provisioning policy in accordance with accounting best practices, the EPF made allowances of RM4.69 billion for diminution in value of both overseas and local equities, compared to only RM520 million in 2007.
Out of the 2008 provision, RM3.20 billion was allocated for overseas equities.
“The fundamentals of the companies we have invested in remain strong and we are confident that this provision will be written back once recovery takes place,” he said.
Monday, 16 March 2009 19:16
KUALA LUMPUR: The Employees Provident Fund (EPF) Board had on March 16 declared a dividend rate of 4.50% for 2008, but this was lower from 2007 due to higher investment provisioning resulting from the sharp fall in global equity prices. In 2007, the dividend was 5.8%.
“Despite the financial meltdown, the EPF recorded the highest ever earnings of RM20 billion in gross income for 2008. This represented an increase of 9.36% over the previous year’s gross income of RM18.29 billion,” said a Bernama report.
EPF chairman Tan Sri Samsudin Osman said EPF’s investment portfolio for the year performed better at the gross income level compared to 2007.
“However, due to the sharp decline in the equity markets, a large provision had to be made resulting in a marked reduction in net income,” he said.
Net income for 2008 was RM14.26 billion, after deducting allowances for diminution in value of equities and doubtful debts, dividends for withdrawals, investment expenses, operational expenses, and death and incapacitation benefit payments.
This represented a decrease of 15.47% over 2007 net income of RM16.87 billion.
Equities accounted for 34.82 per cent of the EPF’s total gross investment income. The EPF earned RM6.67 billion from equities which was the second largest contributor to income in 2008 compared to RM5.37 billion in 2007.
“Up until September last year, the EPF was doing well in equities. However, following the effect of the global financial meltdown, our performance in equity investments recorded a drop of less than 20%, which impacted our dividend payout.
“This, however, compares better with that of the KLCI which was down approximately 40% from end of December 2007 to December 2008,” said Samsudin.
As a result of the sharp fall in global equity prices and following a conservative provisioning policy in accordance with accounting best practices, the EPF made allowances of RM4.69 billion for diminution in value of both overseas and local equities, compared to only RM520 million in 2007.
Out of the 2008 provision, RM3.20 billion was allocated for overseas equities.
“The fundamentals of the companies we have invested in remain strong and we are confident that this provision will be written back once recovery takes place,” he said.
Tuesday, March 03, 2009
Dell's net income dips 48 pct; may cut jobs
New Delhi: IT giant Dell reported an 48 per cent decline in net income and said it could cut jobs in the Asia-Pacific region as its plans to save USD four billion to tide over the economic slowdown.
The US-based firm's net income dipped 48 per cent to USD 351 million for the quarter ended January 31, 2009, against USD 679 million in the same period last year.
Without specifying the quantum of job cuts and the geography, Dell President (Small and Medium Business) Steve Felice said in a teleconference, "The job cuts were minor in South Asia as this region has a professional talented pool and going ahead though I can't comment on the exact number, I anticipate it to be minimal."
Asked if the company was looking at cutting workforce at its Bangalore facility, Felice said, "I cant comment on the specifics. The Bangalore facility has the second largest population (headcount) globally."
The company's revenue stood at USD 13.42 billion in the quarter ended January 31, 2009 as against USD 15.98 billion during the same period a year ago, a decline of 16 per cent.
The US-based firm's net income dipped 48 per cent to USD 351 million for the quarter ended January 31, 2009, against USD 679 million in the same period last year.
Without specifying the quantum of job cuts and the geography, Dell President (Small and Medium Business) Steve Felice said in a teleconference, "The job cuts were minor in South Asia as this region has a professional talented pool and going ahead though I can't comment on the exact number, I anticipate it to be minimal."
Asked if the company was looking at cutting workforce at its Bangalore facility, Felice said, "I cant comment on the specifics. The Bangalore facility has the second largest population (headcount) globally."
The company's revenue stood at USD 13.42 billion in the quarter ended January 31, 2009 as against USD 15.98 billion during the same period a year ago, a decline of 16 per cent.
HSBC's profit slumps 70%, 6,100 US jobs cut
LONDON - Asian and European banking titan HSBC revealed on Monday that it needs nearly 18 billion dollars of new capital to withstand the financial crisis and announced 6,100 US job cuts after a profits collapse.
The bank reported a 70-percent plunge in annual net profits last year and said it hoped to raise 12.5 billion pounds (17.8 billion dollars, 14.2 billion euros) in a record British rights issue.
HSBC, based in London, had been regarded as one of the more robust global banks as crisis devastated many top lenders around the world, and has refused British government financial assistance in contrast to some of its rivals.
"The world today faces exceptionally challenging economic circumstances," HSBC chief executive Michael Geoghegan said in the earnings statement.
"2008 was a very difficult year for the financial sector, and 2009 will be no less so, as the global downturn intensifies."
The bank also said that its bad debts surged to almost 25 billion dollars (20 billion euros) last year, mainly as a result of the collapse of the US subprime housing market. HSBC added and that it would shut most of its HFC and Beneficial branches in the United States.
Global markets have been in the doldrums for more than a year on worries about access to credit, stemming from the dire state of the US housing market and unwise lending.
HSBC was one of the first banks to warn of the problems among products linked to the subprime or high-risk US mortgage sector. Last September, it scrapped a six billion dollar deal to buy a major South Korean bank after the financial crisis cut asset values worldwide.
On Monday, HSBC said net profits tumbled to 5.728 billion dollars in 2008 compared to 19.133 billion dollars in 2007 as the global financial crisis took its toll.
HSBC added that it was slashing its annual dividend by 29 percent to 64 US cents per share.
The group's share price plunged 12.2 percent to 431.25 pence in London morning trade, mainly on news that the bank had to go cap-in-hand to raise fresh capital from shareholders.
"After talk of the need for raising cash was dismissed as recently as December last year this is a rather large slice of humble pie, and investors will wonder why such a supposedly well-capitalised bank is slashing the dividend and choosing to raise more cash of record-breaking proportions," said Martin Slaney, head of derivatives at GFT in London.
"If nothing else this serves to underline just how severe the global economic contraction is."
HSBC said it would offer investors five new shares at a heavily-discounted 254 pence each for every 12 they already owned.
"In this difficult environment, we missed our profitability targets," HSBC chairman Stephen Green said on Monday.
"The coming 12 months will be difficult. We expect parts of Asia, the Middle East and Latin America to continue to outperform Western economies, but to be constrained by the global downturn."
HSBC's difficult past year was largely a result of losses totalling 15.5 billion dollars at the group's American personal finance unit.
"The significant deterioration in US employment and economic outlook in the fourth quarter of 2008 were the primary factors in causing us to write off all the remaining goodwill carried on our balance sheet in respect of our Personal Financial Services business in North America," it said.
"It is now clear that models of direct personal lending that depend on wholesale markets for funding are no longer viable.
"In light of this, we have taken the difficult decision that, with the exception of credit cards, we will write no further consumer finance business through the HFC and Beneficial brands in the US and close the majority of the network," added HSBC.
- AFP/ir
The bank reported a 70-percent plunge in annual net profits last year and said it hoped to raise 12.5 billion pounds (17.8 billion dollars, 14.2 billion euros) in a record British rights issue.
HSBC, based in London, had been regarded as one of the more robust global banks as crisis devastated many top lenders around the world, and has refused British government financial assistance in contrast to some of its rivals.
"The world today faces exceptionally challenging economic circumstances," HSBC chief executive Michael Geoghegan said in the earnings statement.
"2008 was a very difficult year for the financial sector, and 2009 will be no less so, as the global downturn intensifies."
The bank also said that its bad debts surged to almost 25 billion dollars (20 billion euros) last year, mainly as a result of the collapse of the US subprime housing market. HSBC added and that it would shut most of its HFC and Beneficial branches in the United States.
Global markets have been in the doldrums for more than a year on worries about access to credit, stemming from the dire state of the US housing market and unwise lending.
HSBC was one of the first banks to warn of the problems among products linked to the subprime or high-risk US mortgage sector. Last September, it scrapped a six billion dollar deal to buy a major South Korean bank after the financial crisis cut asset values worldwide.
On Monday, HSBC said net profits tumbled to 5.728 billion dollars in 2008 compared to 19.133 billion dollars in 2007 as the global financial crisis took its toll.
HSBC added that it was slashing its annual dividend by 29 percent to 64 US cents per share.
The group's share price plunged 12.2 percent to 431.25 pence in London morning trade, mainly on news that the bank had to go cap-in-hand to raise fresh capital from shareholders.
"After talk of the need for raising cash was dismissed as recently as December last year this is a rather large slice of humble pie, and investors will wonder why such a supposedly well-capitalised bank is slashing the dividend and choosing to raise more cash of record-breaking proportions," said Martin Slaney, head of derivatives at GFT in London.
"If nothing else this serves to underline just how severe the global economic contraction is."
HSBC said it would offer investors five new shares at a heavily-discounted 254 pence each for every 12 they already owned.
"In this difficult environment, we missed our profitability targets," HSBC chairman Stephen Green said on Monday.
"The coming 12 months will be difficult. We expect parts of Asia, the Middle East and Latin America to continue to outperform Western economies, but to be constrained by the global downturn."
HSBC's difficult past year was largely a result of losses totalling 15.5 billion dollars at the group's American personal finance unit.
"The significant deterioration in US employment and economic outlook in the fourth quarter of 2008 were the primary factors in causing us to write off all the remaining goodwill carried on our balance sheet in respect of our Personal Financial Services business in North America," it said.
"It is now clear that models of direct personal lending that depend on wholesale markets for funding are no longer viable.
"In light of this, we have taken the difficult decision that, with the exception of credit cards, we will write no further consumer finance business through the HFC and Beneficial brands in the US and close the majority of the network," added HSBC.
- AFP/ir
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