bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

More lay-offs loom for Asia's information technology sector, but they will be less severe than the carnage in the United States.

This assessment was made by Rajeev Gupta, executive director for Asia-Pacific investment research at Goldman Sachs, following yesterday's announcement on Wall Street by major IT companies that they would retrench 31,000 employees worldwide.

He said job cuts in the IT market were expected to continue in the third quarter.

Although these staff reductions will hurt the region's IT job market, large domestic high-technology companies and regional branches of multinational IT firms will not be affected as much as their US counterparts because they have been more prudent in managing growth.

'A lot of these companies, [Pacific Century CyberWorks] and chinadotcom in Hong Kong, for example, have already laid off a lot of people,' Mr Gupta said.

Based on Goldman Sachs' estimates, hi-tech companies will start re-investing in manpower requirements by the fourth quarter of this year or in the first half of next.

Mr Gupta said infrastructure development in Asia required plenty of IT investment.

Robin Sears, managing director at Korn/Ferry International, the largest executive search firm, said a services-led economy such as Hong Kong's demanded more IT manpower than other Asian markets because of its growing number of projects to Internet-enable applications in major sectors such as financial services, transport and telecommunications.

Research firm International Data Corp predicted worldwide IT spending growth this year would hover around 9 per cent.

Total IT spending growth for hardware, software, services and manpower in the Asia-Pacific would be a relatively subdued 8 per cent.

Stephen Minton, manager for IDC's worldwide IT markets and strategies programme, said: 'As the US remains the single largest portion of the worldwide IT market, the continued impact of a slowing economy will make itself felt on the total worldwide market.'

That impact was reflected in the staggering number of worldwide job cuts made by many high-profile technology companies.

Analysts indicated the lay-offs announced in the first half of this year were more than the jobs lost when the dotcom bubble burst in the US last year.

Cisco Systems showed just how painful the effects of the dotcom crash and the economic downturn had been on telecoms networking equipment vendors when it cut 8,000 jobs worldwide in March.

Networking equipment maker Lucent Technologies recently announced 20,000 job cuts worldwide because of continued lethargic demand for its equipment and write-offs on costly vendor-financing deals with failed service providers.

Before announcing its most recent revenue results, in which it took a hit from slumping demand and the PC price wars, Compaq Computer said it was slashing 8,500 positions worldwide.

The Asian-Pacific division of Hewlett-Packard also will feel the pain as the computer and printer maker chops about 6,000 jobs worldwide, or 6.5 per cent of its workforce.

The company employs about 14,000 people in the region, but regional spokesman Cecilia Pang could not say how many jobs would be lost or when a lay-off decision would be made.

She said: 'Right now, we are working with the management teams across businesses in every country to determine what is required in workforce reduction. It's really premature for us to give any numbers.'

Most of the lay-offs will fall in the company's fourth quarter.

'We only have the target on a worldwide basis,' Ms Pang said.

The lay-off announcement, in response to the economic weakness in all major regions, came on the heels of a warning on Thursday that HP sales in this quarter would be much lower than the year-earlier period.

This year, HP plans to cut about 1,700 marketing positions and 3,000 of its 14,000 management jobs.

The company, which has its regional headquarters in Singapore, is among the top 10 private employers there.

However, Ms Pang could not say how many jobs would be lost in Singapore.

French telecoms company Alcatel, which has about 110,000 employees, announced cuts of about 14,000 worldwide for this month.

Public relations director Lam Kin-Wai, from regional headquarters in Shanghai, said of those positions, about 1,000 from Asia-Pacific had left, mostly due to staff turnover.

'I think some of them have been replaced,' he added.

Alcatel employs about 5,000 in the region.

Communications software and systems maker Avaya, a Lucent spin-off, this month said it had eliminated about 5,000 jobs last month - but few in Asia-Pacific, according to a regional spokesman in Singapore.

'Most of the restructuring has been done in the US,' the spokesman said, adding that the company did not give employment statistics for the region.

On June 30, Avaya had about 30,000 employees worldwide.

Graphic: job28gbz



Asia cuts impact of slowdown as operations prudent in managing growth