HSBC to axe 1,400 UK jobs
London: Global banking group HSBC has said that i will cut 1,400 jobs in the UK to keep a tight rein on costs because of a subdued economic environment, but hoped to avoid compulsory redundancies. "We hope the majority of job losses will be achieved by natural turnover, or on a voluntary basis," Bill Dalton, head of HSBC Bank Plc, the British banking arm, said in a statement. Nevertheless, finance union Unifi said it was concerned the number of jobs being cut could require compulsory redundancies "if the bank stick rigidly to their proposed time scale". HSBC, which owns one of the four major retail banks in Britain, said the cutbacks would affect its London head office and regional offices, which include Southampton, Birmingham and Sheffield. HSBC's British branches will not face cuts. "This is a painful decision for any business, but one we have to make to ensure our future competitiveness," Dalton said. The bank, which also has significant operations in Asia, the Americas and the Middle East, said increased costs had also played a part in the decision to reduce staffing levels.
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AOL Time Warner to sell 64% stake in China TV unit
Hong Kong: US media titan AOL Time Warner is selling a 64-per cent stake in its China TV unit to a firm backed by Asia's richest man Li Ka-shing for $37 million, Li's tom.com said on Wednesday. AOL's decision to sell its controlling stake in China Entertainment Television (CETV) continues a pullback from China by the media giant, which held out big hopes for the market when it won the right to broadcast in the province of Guangdong. It was seen as a beachhead for an expansion to reach China’s estimated one billion-plus viewers. As part of the deal, tom.com said it will issue HK$53 million ($ 6.8 million) in new shares, consisting of 21 million shares priced at HK$2.535 each. The company’s shares gained 4.26 per cent to close at HK$2.45 on Wednesday. Tom.com also said it will provide all of the funding needs for CETV, up to $ 30 million, for the next 30 months. The deal values CETV at about $ 55 million. Tom.com said AOL will continue as a stakeholder in CETV with the remaining 36 per cent.
It said AOL will also retain the right to buy back tom.com’s stake from 2007 at market value, or at tom’s original investment cost plus a 50 per cent internal rate of return, whichever is higher.
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LG stresses on on high-tech home appliances
Seoul: LG, which competes with Samsung Electronics in producing mobile phones, TVs and refrigerators, aims to beef up its brand by focusing on sales of high-tech home appliances that are also more profitable. LG's glossy Internet-equipped refrigerator will display a mouth-watering dish with a recipe. An automatic inventory will show what's inside without opening the door. It's a fridge with a brain that can place orders to the nearest grocery store when you are running low on tomato sauce. Not only that. Its 15-inch flat door-mounted screen can turn into a television, a stereo or even a digital camera. Once known as a peddler of cheap home appliances, South Korea's LG Electronics Inc is reinventing itself to come up with consumer electronics that dazzle even the pickiest customers."It's improving product quality and brand image and investing more," said Oh Sung-sik, chief investment officer at Franklin Templeton Investment Trust Management, which holds LG shares. "Their market share is also growing." LG's strategy has paid off. It had record earnings last year and its shares are at one-year highs after they were relisted in April 2002 as a unit of holding company LG. The upturn in LG's mainstay appliance business -- which made up 32 percent of revenues but 59 percent of profits last year-- comes at an auspicious time. LG's other businesses -- digital TV, computer monitors and mobile phones -- are facing increased competition and falling prices.
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American Airlines asks 3,100 employees to go home
Dallas: American Airlines started laying off more than 3,100 flight attendants after a federal judge turned aside a union's bid to block the job losses. More than half the workers who lost their jobs had worked for Trans World Airlines (TWA) before American's parent company bought TWA out of bankruptcy in 2001.In St. Louis, the longtime home of TWA, and other bases around the country, flight attendants finishing their last day of work were turning in uniforms, identification badges and keys. The 3,123 layoffs were sealed in May when American and its employees agreed to USD 1.8 billion in annual labor cost reductions to keep the company out of bankruptcy. The concessions, including sharp pay cuts, were approved in contentious voting by unions representing flight attendants, pilots and ground workers.A spokesman for American said service would not be affected by the layoffs. About 900 flight attendants were being transferred to St. Louis to replace the laid-off TWA workers, he said.
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Ernst & Young to pay $15 million on tax shelters
New York: Ernst & Young will pay $15 million as part of a deal to end a probe of the accounting firm's marketing of tax shelters, the US Internal Revenue Service said. Under the agreement with the IRS, Ernst & Young will also start a "quality and integrity" programme aimed at ensuring compliance with the regulations. The agency also will be able to review Ernst's compliance and review documents prepared under the programme. The IRS examination, which focused on Ernst's compliance with requirements for registering and maintaining lists from its marketing of tax shelters, is among more than 90 investigations of professional service firms that the agency has opened. In recent months, accounting firms have had to grapple with scrutiny from an IRS crackdown on aggressive tax shelter and potential liability stemming from tax advice and shelters they promoted or sold to clients. Ernst & Young came under the spotlight earlier this year after the disclosure that it set up questionable tax shelters that led to the departure of telephone company Sprint Corp.'s top two executives. Former clients have also sued Ernst and rival KPMG, claiming they advised them to enter into illegal tax shelters.
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