IN THE PAPERS
In The Papers 31 October
31-10-2008
by Sylvia Leatham
Fears over Flextronics jobs | Dell cuts temporary staff
The Irish Times reports that Babcock & Brown Capital (BCM), the Australian investment fund that controls Eircom, has claimed a takeover approach for its business from Isle of Man investment firm LIT did not merit serious consideration by its board. Read more on this story on ENN.
The paper also says that Ireland's success in fostering collaborative research between academics and industry will demonstrate our success in achieving a knowledge economy, according to Tanaiste Mary Coughlan. Building these links is "hugely important" to the country's economic future, she said. Coughlan was speaking at the Royal Irish Academy in Dublin at the formal launch of Ireland's most powerful computer, the IBM Blue Gene supercomputer. The installation of the supercomputer, a collaboration involving IBM, the Government and third-level institutions, would open the way to important scientific discoveries, she said.
The paper also says that ten third-level institutions are to pool their knowledge and resources in a new collaboration for the study of nanoscience. Some EUR31.6 million has been allocated by the Higher Education Authority to Inspire (Integrated nanoscience platform for Ireland). Read more on this story on ENN.
The paper also notes that Northern Irish firm Northgate Information Solutions has won a STG29 million contract with Kent county council to improve ICT in schools. The investment, which will include 11 schools initially and 25 more in phase two of the project, is part of the Kent Building Schools for the Future (BSF) programme, worth STG1.8 billion. Northgate will provide students with access to "N-able", an online learning environment that provides personalised learning areas and is accessible from any location via the internet. Students can use N-able to store work and access e-mail, while teachers can use resources to assess a student's work through a digital toolbox.
The same paper reports that warnings have been issued about an e-mail scam that targets Irish credit union members. The phishing e-mail, purporting to be from the Irish League of Credit Unions account review department, comes with the heading "security alert" or "unauthorised access to your account".
The Irish Independent says that there are fears for the future of around 100 jobs at Flextronics in Limerick as the company seeks to lower its cost base. The company, which employs 290 people in the city, provides warehousing and logistics services for a large number of companies in the region, including Dell. Talks between unions and management are ongoing, with a decision on the number of job losses expected to be announced next week.
Separately, the paper reports that Dell is to axe at least 400 temporary workers this weekend. The PC maker confirmed that "several hundred temporary employees" are to be let go from their Limerick base. Fears are now growing for the 3,000 full-time Dell employees at the Raheen manufacturing facility in Limerick and the 1,400 workers in the Dublin facility. However, the company insisted this round of job losses will have no impact on the future of Dell's full-time workforce. Workers were informed that they may be re-employed on a temporary basis if production demand should require it, and Dell claimed there was "nothing unusual" in the lay-offs. "Temporary workers usually finish up at the end of the quarter so that is what it is. It is standard practice."
According to the Financial Times, BT has issued a profit warning and made changes to its senior management because of problems at the unit serving the telecoms and IT needs of multinationals. The UK fixed-line phone company said the group's earnings before interest, tax, depreciation and amortisation were expected to decline in 2008-2009 compared to 2007-2008. BT Global Services had an EBITDA margin of 11.2 percent in 2007-2008, but BT said it was expected to be 7 to 8 percent in 2008-2009. It blamed the disappointing performance on stalling efforts to improve the profitability of BT Global Services. Francois Barrault, head of BT Global Services, resigned on Thursday, and has been replaced by Hanif Lalani, BT's finance director.
The paper also says that Motorola is cutting 3,000 jobs and delaying the spin-off of its loss-making mobile phone business after suffering a USD397 million loss in the third quarter. The troubled mobile handset maker had agreed this year to the demands of investor Carl Icahn to split off the handset unit, but it said Thursday that "macroeconomic conditions" would prevent it from completing the move by the third quarter of 2009, although it intended to proceed with the spin-off at a later date. The company said fourth-quarter profits would be USD0.02 to USD0.04 a share, excluding costs associated with the job cuts, while analysts had expected USD0.07.
The Wall Street Journal reports that the prospects for an online advertising partnership between Google and Yahoo have dimmed, with both sides considering walking away from the deal as early as next week, according to sources. The two companies met Thursday with the US Justice Department. While the parties may agree to continue the talks -- or they could reach a resolution -- there are signs they are unwilling to make compromises to address the Justice Department's objections. Google spokesman Adam Kovacevich said his company continues to have "cooperative discussions with the Department of Justice about this arrangement." He added, "We are confident that the arrangement is beneficial to competition, but we are not going to discuss the details of the process." Yahoo spokeswoman Tracy Schmaler said discussions with the Justice Department are "ongoing," adding, "we believe strongly that this agreement will strengthen Yahoo's competitive position."
The paper also notes that PC makers are recalling 100,000 laptop battery packs made by Sony after 40 reports of overheating. The voluntary recall applies to certain Sony 2.15Ah lithium-ion cell batteries made in Japan and sold around the world in laptops made by HP, Dell and Toshiba. Some incidents involved smoke or flames, according to Sony.
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