Palm reduces labour force to face economic trouble

As Palm loses its market share to Apple Inc. and Research in Motion (RIM). The goal is to cut costs and refocus their efforts to fight the current economic conditions and compete against the intense innovative rivalry in the electronic hand held and smart- phone product market. Palm, which employs 1 050 workers, makes the Centro and Treo smartphones. The company's market share has been shrinking, with RIM's BlackBerry becoming the device of choice for the business set and Apple's iPhone, a consumer phenomenon.[1] In order to turn the company around, the organization will have to raise substantial capital to have a healthier cash flow, which is always useful in this hard economic period.

Apple Inc. and Blackberry continue to dominate the smart-phone market with much success. These highly innovative companies have staved off competition through means of product differentiation and diversification, something which Palm may be at a disadvantage with. Unlike Palm, Apple Inc. and Blackberry show more versatility with healthy inflated cash flows that allow for flexibility in times of financial crisis. Dynamic companies can adapt to more dynamic times easier.

In order to catch up with Apple and RIM, Palm has hired former Apple supervisors John Rubenstein and Mike Bell, but still has a great deal to conquer. A recent study found that only 5 percent of companies would purchase a Palm-based smartphone over the quarter, down from 10 percent in the year ago quarter, while 78 percent sought BlackBerries, and 22 percent wanting iPhones. Palm is also struggling to deal with an imminent looming cash shortage, according to a Morgan Keegan forecaster. The company is allegedly investigating several routes to stay away from additional monetary predicaments.[2]

Sun Microsystems to reduce jobs

In the midst of a predicted prolonged economic gloom, Sun Microsystems has announced that it plans to cut up to 18% of its workforce; that is 5,000 to 6,000 employees.

The move comes as business and orders weaken due to the global financial crisis. Hewlett-Packard, Yahoo, eBay, Applied Materials and SanDisk are amongst other technology companies to declare profound job slashes in recent weeks, and bellwether firms Intel and Cisco have pronounced a decrease in demand and sales slowdowns.

Many start-up companies have also slashed jobs as the economic crash that began in housing and infected the financial sector destabilizes technology niches from chips to peripherals to computing.

The objective again is to remain flexible and competitive while reducing costs across the board in order to ride out the financial storm. The cutting of costs will save anywhere between $700 and $800 million annually for the company, helping with much needed cash flow. Indirectly, it has been hit by the slowdown in the housing market and the problems of risky mortgages.

Their clients are going out of business because they cannot afford their business mortgages and hence Sun Microsystems contracts have been cut short and their orders stagnant. It is all linked, like a domino effect, one major market tumbles and the trickle down effect happens affecting the livelihood of banks, businesses, jobs and people in general. Realigning and restructuring their operations is imperative for Sun Microsystems at this point in time. The quicker it can act, the better its resolve.
Sun's restructuring is expected to reduce expenses by about $US700 million to $US800 million annually. It expects total restructuring charges in the range of $US500 million to $US600 million over the next 12 months.

Woolworth seeking to be rescued

The list of struggling companies worldwide just gets longer and longer. Everyday you expect to hear financial meltdown across various industries. With over £300 million in debts, the company is finding it very hard to operate its 800 retail shops in light of the credit crunch. Even the sale of the company has been brought to the table.

American Hilco, the reorganization experts are looking into buying the company straight out and assuming its debt. If a deal is not reached soon, 30,000 jobs are on the line. This is a time of caution and damage control for Woolworths seeking to survive in the present financial crisis. The aim of Woolworth’s is to be bought out or seek help in cutting down operations strategically and becoming leaner.

The fierce ever growing competition in the market and the rise of Internet commerce over the past 15 years or so has put Woolworths, over the years, in an awkward financial situation. With a narrower focus on family and home entertainment, it can be argued that Woolwoths has lagged due to its traditional habits and not being quick to compete or diversify its product range vis-à-vis the competition. Companies like HMV, ZAAVI, Arogos, Asda, Tesco and Primark have contributed to the demise of Woolworths, and now it is left far behind with a poor selection of products and quality, as well as bad pricing strategies. I never knew they had 800 shops; maybe I’ve been blind all these years. I’m just used to seeing the occasional odd shop in the occasional odd and run down area.

Chasing the rich in Monaco

Allistair Darling tightens screw on wealthy Britons and their Riviera refuge

The chancellor started his battle against Britain’s super-rich by pressing for sanctions against Monaco, the Mediterranean tax haven.


Under one proposal, to be discussed by Alistair Darling with European finance ministers on Tuesday, there will be a levy on any money transferred to a Monaco account from anywhere in Europe.

Precise policies will be discussed the following week at a meeting of Europe’s tax authorities in Berlin.


The threat of sanctions marks an escalation in the battle between European governments and the continent’s three remaining tax havens: Liechtenstein, Andorra and Monaco.


“So far the attention has been on Liechtenstein, but Monaco is the goldmine,” said a Whitehall official. “Germany has got the bit between its teeth now and Monaco is where they want to go next – and we’re right with them.”

How will it affect monaco?

Los Angeles based bank seized by U.S. Financial regulators

Security Pacific bank of Los Angles has become the nineteenth victim of the U.S. financial banking crisis. The story is familiar. Déjà vu. Bad mortgages all over again have paralyzed the southern California bank to the fringes of catastrophic collapse. Crippled by bad loans to Inland Empire (Southern California) developers and home builders, Security Pacific Bank of West Los Angeles was shut down Friday by the Federal Deposit Insurance Corporation (FDIC) and financial regulators, who said L.A.-based Pacific Western Bank would take over its four branches.[1]

Pacific Western Bank has now agreed to assume all the responsibility for the banks $450 million in deposits and purchase approximately $52 million of the banks assets. Is it a good time for other banks to assume responsibility for another banks bad debt? We have almost become de-synthesized hearing this news everyday. It has become the norm and more and more people, everyday, are losing faith and confidence in America’s bankers nationwide.

All branches of Security Pacific Bank will soon reopen, on Monday the 24th of November, 2008 with no disruption of services. Over the weekend, however, depositors of Security Pacific Bank can access their funds by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed as normal. Loan customers should continue to make their monthly payments as usual.[2]

Fear and uncertainty have gripped the financial markets and banks in this world crisis and the psychological impact has become such a heavy burden, almost very infectious.

Canary Wharf’s value plummets

The value of development at the Docklands, Canary Wharf has fallen dramatically fallen by 40% in light of the credit crisis and hardly hit tenants such as the Lehman Brothers, Citigroup and other major leaseholders. British Land Co. Plc, London's prevalent office landlord, cut the value of its venture in Canary Wharf by 40 percent as the credit disaster trapped tenants there including the infamous Lehman Brothers.

The U.K.'s second biggest real estate investment trust owns an 11 percent interest in Canary Wharf through its stake in Songbird Estates Plc. British Land said the value of that stake as of Sept. 30 was 112 million pounds ($168 million), according to a statement yesterday. Shares of both companies have fallen today, November 20th, 2008.[1]

However, the news is not all that bad for Canary Wharf, as JP Morgan has just become Canary Wharf’s largest tenant. The US banking giants have conserved the deal on a £247m land acquired to build their own 1.9m square foot organization space development in London’s Docklands. JP Morgan has signed a 999-year lease for Canary Wharf’s Riverside South site, which will be home to the company’s new European Head office.

[2]

This great deal will boost canary wharf and in real terms save it from becoming a ghost town. It will provide a real boost to the UK commercial property market as concerns grow that the financial crisis will cause financial services group to downsize their business space in London as profits plunge and jobs are axed.[3]

Downey Savings fails

The Federal Deposit Insurance Corporation (FDIC) in the United States is said to have seized three banks including Downey Saving of Minneapolis, U.S. It is the third largest bank to fail this year due to the financial crisis. Allowing borrowers to borrow more money than they can afford to pay back is the culprit. Borrowers are unable to pay back there mortgages and credit card debts, leaving the bank in complete disarray.

The company was sold of to U.S. Bancorp after losing over £675 billion on mortgages in just over a year. The move by federal regulators aimed at having U.S. Bancorp re-modifying over bad 30,000 mortgages. Downey Savings was the 10th largest bank in Silicon Valley, with 13 branches and $1.26 billion in deposits.[1]

Its stock has lost over 99% of their value. But during this crisis there will be many losers and the stocks of all banks have gone down in this sharp economic downturn. It seems no one is shielded from the credit crunch and the list of failures just gets bigger and longer. Everyday there is more and more news of corporations on the brink of collapse.

Up to 22 banks have collapsed just this year in the United States alone. The decomposing real estate market has dampened bank balance sheets drastically. There are no signs of improvement and look like it will be getting worse than better in the short run. It is time for these banks to ‘grow up’, time to buckle up and assume responsibility.

Fortis fighting for survival

Worth £10billion of banking and insurance assets Fortis, a partner of Royal Bank of Scotland in last year's £50billion takeover of ABN Amro last year, fights for its survival.

Jean Paul Votron, Sir Fred Goodwin.

After seeing its share hit a historic low last sunday, the belgo-dutch company faced bancruptcy. Yet another Giant financial institution was about to fall.

First consequence was the highly mediatise departure of its director Maurice lippens.
The company was then facing a bailout, before the dutch, belgian and luxemburgish decided to operate a nationalisation of the firm, by investing into it.
The share is now stabalised at 5.35 euros, but the company is not saved yet, and it already caused large accident, in the belgian economy

Regional U.S. bank hard hit

In a move by financial regulators to safeguard bank deposits, the Federal Deposit Insurance Corporation (FDIC) is closely monitoring the financial situation in the United States of America. Exposed to the weakening California real estate market, Franklin Bank, a regional Texas bank in Houston has also failed. It was acquired by another Houston bank called Prosperity Bank, acquiring $850 million of the banks less riskier 5.1 billion assets. It also secured $3.7 billion of the banks deposits.

Ravaged by sub-prime mortgages and the inability of borrowers to pay back the money they were lent on mortgages, the bank became paralyzed. In 2007 Franklin Bank had lost more than 75% of its value. With 16% of its sub-prime mortgages in California, the bank is hard hit. It was dabbling with risky deals and assets have made it pay a very big price now.

More and more collapses are expected on the way among the nation’s 8,400 banks. The US mortgage crisis, which has seen more than three million homes foreclosed since the crisis began in late 2006, has crimped shut credit flow world-wide and prompted unprecedented global government interventions in the private sector.[1] It is not surprising that banks are going through a rough period. This was a crisis waiting to happen and was in the making with banks exercising greediness and being too lenient lending too much money in risky assets over the past 15 years. It is time the banks learnt a lesson and I hope do not repeat their mistakes.

Washington Mutual Inc. will eliminate 1,600 jobs in the San Francisco area

After hitting rock bottom, extreme failure and then being bought out by JP Morgan, Washington Mutual Bank (WAMU) in the United States has cut jobs by 13%. It will eliminate 1,600 jobs with layoffs in the San Francisco area and Seattle. Again, the mortgage market in which Washington Mutual was a big player has contributed to the downfall of the corporation. Employees have feared the repercussions for weeks and finally their fears have materialized. Thousands will be laid off for sure. It is not a good time for Washington Mutual and it may even get worse for the bank.

At the point in time when JP Morgan Chase took over the bank, Washington Mutual had 43,000 employees nationwide, more than 4,300 employees in the Seattle area and 5,800 in the state of Washington. The mass of the slashes are most likely to come in administrative, support and back office functions that duplicate jobs and facilities that JP Morgan already has in its ranks. That suggests the brunt of the cuts in jobs will come in places like Seattle, where WAMU had its corporate headquarters.[1] JP Morgan will do what is necessary in its capacity to manage the company’s meltdown. The sub-prime mortgage market has suffocated the major player beyond belief. If it means getting rid of a few jobs, than why not. As long as survival is dependent on that, then it provides a short tem solution for the company to cope with the crisis situation facing the banks and financial institutions.