Current Scenario

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Current Scenario
HITTING EVERY CORNER OF THE WORLD
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Contents

• What exactly Global crisis Cost-cutting is?
• Reasons behind the Turbulence/Turmoil/Global
  crisis
• Impacts on Banking Financial sector
• Appropriate Cost-cutting measures
• Quotes from Experts

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Global Crisis

• A crisis which demolished human peace in
  Corporate sector as well as Personal sector in
  terms of Financial performance across the
  Globe..

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Cost-cutting

• An action takes place when Profitability doesnt
  reach expectations or needs
• Cost-cutting exists when there is a poor
  financial stage

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Reasons behind the Global Financial Crisis

• Loose Monetary policies As a result of low
  real interest rates in the developed economies,
  especially in USA, during the period 2001 2005,
  investors initiated leveraged transactions and
  used risky instruments in order to gain high
  yields.
• Problems in the Housing Sector Decline in
  house prices in USA that began in the first
  quarter of 2006 adversely affected household
  consumption demand and brought about increase in
  the mortgage foreclosure rate.
• Creation of complex financial instruments in
  search of higher profitability

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Global Losses

• As of October total losses that the international
  financial system has suffered reached 659 billion
  US Dollars.
• IMF revised its global loss forecast from 945
  billion US Dollars to 1.4 trillion US Dollars.
• During the same period banks were able to raise
  up equity by 638 billion US Dollars.
• Due to the financial turmoil banks faced
  significant losses and hence they tightened the
  credit standards significantly.

World
USA
Europe
Europe
USA
Asia
Source Bloomberg
Source FED, ECB
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Cost-cutting Measures

• Every corporate is trying to reduce their
  Operating Costs striving to control
  expenditures, which are not at all necessary for
  them by seeing the current Scenario. Operating
  costs such as saving Electricity, limited
  house-keeping services, optimum use of
  Stationeries, etc., Miscellaneous expenses like
  celebrating some of the occasions/festivals,
  often Outings to different places etc., should be
  stopped for time-being to protect the future.
• Making best use of Employees with limited
  Headcounts
• Some of the Corporate Planning's
• Bangalore Indias top two IT companies are
  employing cost cutting measures on the HR front.
  In an internal communication sent to employees,
  Infosys CEO Kris Gopalakrishnan has urged the
  employees as the stake holders in the company to
  help in cutting the operating cost and
  controlling expenditure.
• The company has set up a portal which invites
  employees to send in ideas which could range from
  ensuring all computers and lights are switched
  off at the end of the day to bigger business
  ideas which could be incubated.

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• So far the company has apparently received
  over 1000 such ideas from employees which are in
  the process of evaluating. It also says there
  could be more such measures in the near future.
• Wipro on the other hand has asked the
  employees hired for the tech services arm to join
  the BPO arm instead. This, it insists is a way to
  overcome delays in joining dates. This is being
  offered in Kolkata so far and Wipro says that
  such an option could also be made available in
  Orissa and Hyderabad as well.
• We are giving time bound offers which could
  extend anywhere between 12 to 18 months and they
  would be then able to join tech services again,
  says VP Talent Acquisition Wipro Tech Pradeep
  Bahirwani.
• The company insists there is going to be no
  change in salary structure for such employees.
  Employees who don't wish to take up such an offer
  will face a delay in on boarding by six months.
  It also says it will meet all 13,500 offers made
  for the year.

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Quotes by Experts

• Lea Strickland,
• President - F.O.C.U.S. Resources
• Before your organization is faced with a
  cost-cutting situation, build the capability to
  understand the activities and performance of the
  organization.
• Make the connection between cause and effect.
  Measure performance and monitor what is happening
  in your organization
• Prioritize projects and activities
• Understand the time requirements for restoring
  capacity

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• What Obama says?
• - U.S. President Barack Obama
• "We came into office facing a budget deficit of
  1.3 trillion for this year alone, and the cost
  of confronting our economic crisis is high. But
  we cannot settle for a future of rising deficits
  and debts that our children cannot pay."

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• Warren Buffetts A business man
• advice for 2009 to understand implement in
  life to face financial crisis
• Tips to become Financially wiser by adopting
  below Financial wisdoms
• Hardwork All hard work bring a profit, but
  mere talk leads only to poverty.
• Laziness A sleeping lobster is carried
  away by the water current.
• Earning Never depend on a single source
  of income.(At least make
• your Investments get
  you second earning)
• Spending If you buy things you dont need,
  youll soon sell things you need.
• Savings Dont save what is left after
  spending Spend what is left after saving.
• Borrowings The borrower becomes the lenders
  slave.

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• Implement these Tips
• -Warren Buffett
• And Let us become wiser and lead a happy,
• healthy, prosperous and peaceful life.

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Thank You