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In this Issue: |
> GENERAL INTEREST
The U.S. unemployment rate hit 10.2% in October, the highest rate since April, 1983. Job losses totaled 190,000 for the month.
Employment in Canada fell by 43,200 jobs in October, according to seasonally adjusted numbers released today by Statistics Canada. Most of the losses were in part-time employment, which fell by 59,700. That more than offset job gains of 16,500 in full-time employment. Canada’s unemployment rate rose to 8.6% from 8.4%. Employment in Ontario fell by 12,000 jobs in October to approximately 6.5 million. The province gained 3,200 full-time jobs but lost 15,200 part-time jobs. Ontario’s unemployment rate edged up to 9.3% in October from 9.2% in September. Saskatchewan posted the lowest unemployment rate among all provinces at 5.3%.
People receiving Canadian Employment Insurance jobless benefits rose 7.1% in September from the previous month to 818,000 with the largest increases in Ontario, Alberta and British Columbia, Statistics Canada reported. The number of people receiving Employment Insurance benefits is up 63.5% from October 2008 when employment was at its peak. However, the number of initial and renewal claims received in September fell 5.0% to 280,700. In Ontario, the number of people receiving Employment Insurance benefits rose by 9.0% in September. The number was up by 25.0% in Alberta. Employment Insurance provides financial help for unemployed workers.
Employee turnover will rise next year, according to a new survey of U.S. workers released by Right Management, the outplacement and consulting division of Manpower Inc. (NYSE: MAN). Workers were asked: “Do you plan to pursue new jobs opportunities as the economy improves in 2010?” In response, 60% of workers said yes. Another 21% said that maybe they would seek a new job and that they have begun networking. Six percent said it’s not likely they will leave, and 13% said they intend to stay. “Employees are clearly expressing their pent up frustration with how they have been treated through the downturn,” said Douglas Matthews, president and chief operating officer at Right Management. “While employers may have taken the necessary steps to streamline operations to remain viable, it appears many employees may have felt neglected in the process.” The survey questioned 904 employees in North America.
Economists raised their estimate of growth in U.S. real gross domestic product for the fourth quarter, but lowered it for the next two, according to the latest Survey of Professional Forecasters. In addition, they said next year’s annual average unemployment rate will be higher than this year’s. GDP will grow at an annual rate of 2.7% in the fourth quarter, up from a previous estimate of 2.2%, according to the survey. However, economists lowered their estimate of first-quarter growth to 2.3% from 2.5% in an earlier forecast. They also lowered the second-quarter GDP growth estimate to 2.4% from 2.8% in the previous estimate. The third-quarter 2010 estimate of 2.6% is unchanged from the previous forecast. Economists also said the unemployment rate will be 10.2% in both the fourth and first quarters. It will start easing in the second quarter, going to 10.1%. However, economists forecast an annual jobless rate of 10.0% for all of 2010, compared with their forecast of 9.3% for 2009. The average annual unemployment rate will go down to 9.2% in 2011, and it will go down further to 8.3% in 2012, according to the estimates. The economists estimated the U.S. won’t start adding jobs until the second quarter of 2010. The U.S. will lose an average of 159,500 jobs per month in the fourth quarter and lose 35,000 per month in the first quarter of 2010, according to the forecast.
The Monster Employment Index Europe published monthly by job board specialist Monster Worldwide Inc., shows a 2% uptick in October this year. The index increased for the first time in eight months as the number of online opportunities rose. The number of job offers is still down 32% year-on-year and the index remains below the 100 baseline level demonstrating significantly muted online worker demand across Europe.
October 29th was arguably the 40th birthday of the Internet. In 1969 two computers at California schools (University of California and Stanford) connected for the first time.
Sanford Wallace, a convicted spammer, was sued by Facebook in February for allegedly obtaining the login credentials for accounts that were then used to send spam. Now Wallace has been ordered to pay Facebook a whopping $711 million in damages.
The number of mass layoffs in October fell 3.5% compared with the same month last year on a seasonally adjusted basis, and related jobless claims fell 5.7%, the U.S. Bureau of Labor Statistics reported.
Large, global companies have eliminated 300,000 IT jobs in 2009, according to the consultancy Hackett Group. Back-office jobs in general fell 630,000 — three times the average annual job loss from 2000 to 2007. The firm doesn’t expect 2010 to see a turnaround for such positions, and instead forecasts an “extended jobless recovery.” Hackett’s figures are based on a survey of 4,000 global companies, all with more than $1 billion in revenue. Back-office jobs include IT, administration, HR, finance, and procurement.
Global PC shipments are projected to rise this year, driven by sales of mobile computers, but consumers’ preference for inexpensive systems in the economic recession pushed industry revenue way down. PC manufacturers will ship 298.9 million units this year, a 2.8% increase from 2008, Gartner reported. Revenue, however, will fall 10.7% to $217 billion.
Notorious spammer Alan M. Ralsky, from West Bloomfield, Mich., was sentenced to more than four years in prison for his involvement in a stock fraud spam scheme. Three of his associates also received prison sentences. Indicted in December 2007, the four men subsequently pleaded guilty to wire fraud, mail fraud, and CAN-SPAM Act violations, among other charges.
Google in October reported that while Q3′09 average spam levels were down 8% from Q2′09, the overall number of spam bytes processed per user has grown, with Q3′09 rates up 123% from Q3′08. In other words, the decline in the number of spam messages has been more than made up for by the increase in the size of spam messages.
> COMPANY NEWS
US software company Adobe Systems is cutting 680 jobs, almost 10% of its workforce. The software firm, best known for Photoshop, Flash and Acrobat, said the cuts were necessary to cut costs. It added it that would be hit with pre-tax restructuring charges of between $65million and $71million as a direct result of the cuts. The lay-offs will not affect employees of web analytics firm Omniture, which was recently taken over by Adobe. More than 7,000 people work for Adobe Systems.
A CRTC ruling has denied Globalive the ability to become a part of the wireless competitive landscape in Canada. The ruling was based upon the ownership structure and a concern about its Canadian content.
Microsoft announced further layoffs of 800 people, adding to the 5,000 the company has already let go this year. The affected people are based around the world and work in various groups.
Intel and Advanced Micro Devices announced that they have settled all antitrust litigation and patent cross-license disputes between the companies. Under terms of the deal, Intel will pay AMD US$1.25 billion, and has agreed to a set of business practice provisions. AMD and Intel also said they have agreed to a new five-year cross-license agreement, and have given up claims of breach of contract from the previous license agreement. On its part, AMD has agreed to drop all regulatory complaints worldwide and all pending legal disputes, including a case in U.S. District Court in Delaware and two cases in Japan.
Rogers announced that 900 jobs will be cut, primarily affecting executive and management staff. The cuts amount to 3% of its total work force of 30,000. The layoffs might be part of preparing for fierce competition when at least three new wireless entrants – DAVE Wireless, Quebecor’s Videotron and Public Mobile – enter the market in the next few months.
> MERGER & ACQUISITION ACTIVITY
Logitech is buying LifeSize Communications, a company that makes HD video communications equipment, for US$405 million in cash. Logitech, whose video business is focused mainly on webcams, hopes the deal will allow it to offer video communications systems for other settings besides the desktop. LifeSize has 9,000 video conferencing customers in 80 countries.
HP is buying 3Com for about US$2.7 billion, pushing forward the giant IT vendor’s strategy for combining computing, storage, services and networking under one roof. 3Com will add to HP’s Ethernet switching portfolio, which is already a growing competitor to Cisco Systems, and add routing products to its lineup. The acquisition will also give HP access to a research and development team and strong sales channels in China, where 3Com operates the H3C subsidiary it originally formed as a joint venture with Huawei Technologies.
Intel Capital, the venture capital arm of the world’s largest chip maker, detailed seven new investments worth around US$25 million in total, in addition to a $50 million investment in U.S. WiMax operator Clearwire. The companies are: Joyent, a cloud-computing vendor; Active Storage, which makes storage products designed for organizations that use Apple hardware; pricing analytics software maker NeuString; Crucialtec, which makes input devices based on optical technology; Gudeng Precision Industrial Co., which makes semiconductor manufacturing equipment; videoconferencing specialist V-Cube; and Chinese Web portal operator Phoenix New Media.
Google continues along the path of shaking up the mobile phone market with its latest acquisition. Since its inception, Google Voice has offered a wide range of features for managing your phone calls, with one glaring exception: calls passing through Google Voice have to be directed to another phone number if you actually want to answer them. This gap may now have been closed with last week’s announcement that Google Inc. is acquiring Gizmo5, also known as the Gizmo Project. As currently implemented, Google Voice in conjunction with Gizmo allows you to place unlimited free calls to the United States and Canada (and cheap rates elsewhere), but requires you to maintain two separate accounts. Launch the Gizmo software on your Mac to log into your Gizmo account, then fire up your browser to log into Google Voice; calls placed in Google Voice can be redirected to ring your Gizmo account before connecting to the person you’re calling. If this sounds unwieldy, it’s simpler in practice–but the Google acquisition could mean that it will shortly become even easier.
Ciena will pay US$769 million for the optical networking and carrier Ethernet assets of Nortel Networks’ Metro Ethernet Networks business. Ciena emerged victorious from an auction, beating Nokia Siemens Networks. In the end Ciena had to pay about $248 million more for the Nortel business unit than its initial bid, made public on Oct. 7. As a part of its bankruptcy proceedings, Nortel has been selling off the company bit by bit. Besides the Ericsson deal, Nortel sold its Enterprise business to Avaya for $900 million and sold software for wireless networks to Hitachi for US$10 million.
Lenovo will buy back the mobile phone unit that it spun off last year, reversing a move it originally made to focus on its core business in PCs. The PC maker will buy Lenovo Mobile for around $200 million US in cash and stock to tap a growing market for mobile Internet devices. Growing similarities between PCs and mobile phones are creating a new device category that Lenovo sees as a key growth opportunity in China and worldwide. Lenovo is buying its handset unit back from a group of investors who bought it for $100 million last year. The group is headed by Hony Capital, the private equity arm of Legend Holdings, which is also Lenovo’s parent company. Lenovo has struggled since the global economic recession began sapping demand for its PCs in developed markets. The company posted its first net profit in a year during its most recent fiscal quarter, after a restructuring brought its focus back to China and other emerging markets.
Microsoft announced the acquisition of Teamprise, a small software company that creates tools that allow developers working in non-Microsoft environments and operating systems, such as Eclipse and Linux, to build apps using Visual Studio.
Google is buying AdMob, a mobile display advertising provider based in San Mateo, Calif., for $750 million. Mobile ad spending is estimated to reach $416 million in 2009, 0.4% of all ad spending. The AdMob acquisition may have some impact on the iPhone developer community, given that AdMob’s network is widely to support iPhone applications.
> PRIMARY SOURCES:
IT World Canada – http://www.itworldcanada.com
Ottawa Business Journal – http://www.ottawabusinessjournal.com
ZDNet – http://www.zdnet.com
Information Week – http://www.informationweek.com
