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Category Archives: post GFC job losses

May 16, 2009 11:30pm

ABOUT 1000 workers at a Lockleys call centre have been asked by employer EDS to take a pay cut and have no guarantee their jobs are safe.

The data services provider’s parent company, computer giant Hewlett Packard, is embarking on a global plan to cut wages by up to 20 per cent in response to the global economic recession.

But Adelaide EDS staff have been told not to assume their jobs are secure, even if they agree to the cut.

Under the proposal, staff would give up 2.5 per cent of their pay and any salary-related benefits from June 1.

The Finance Sector Union has urged EDS employees to reject the offer, claiming it is illegal under present wage agreements.

Hewlett Packard, which bought EDS last year, announced in February it would slash salaries globally after first quarter profits fell 13 per ent to $2.5 billion. In an email sent to Lockleys staff – who process mortgages for Westpac – EDS said “cost actions” were needed in the face of the “current challenges”.

“We greatly appreciate your understanding and support in this difficult and challenging time, and trust that your efforts to co-operate with company policies will yield positive results for the operations of the company,” the company said in the email, titled “salary reduction letter”, a copy of which was obtained by the Sunday Mail.

“Please note that your acceptance of this request does not constitute a guarantee of ongoing employment.”

EDS does not comment on how many staff work at the Lockleys centre, but the FSU estimates the number to be about 1000. The union’s SA/NT secretary, Debbie Black, said employees could lose up to $1000 a year.

“We believe what they are asking staff to do is not entirely legal in the current industrial relations climate,” she said.

EDS Asia Pacific and Japan executive relations manager Tamara Plakalo said the pay cuts would allow it to emerge from the recession in a “powerful position”.

Michelle Grattan and Tim Colebatch
May 12, 2009

The second Rudd Government budget will predict a huge $58 billion deficit.

TONIGHT’S second Rudd Government budget will predict a huge $58 billion deficit in the new financial year — a record 4.9 per cent of GDP, higher than in any post-war recession.

It will also estimate almost a million people will be unemployed, with the unemployment rate rising from 5.4 per cent to 8.5 per cent.

Costello: Swan ‘desperate’
Peter Costello accuses Wayne Swan of desperation over the looming budget deficit but fails to answer whether he would run a deficit himself.

The budget will cut into so-called middle-class welfare, and slice spending in other areas, but the collapse of revenue and the cost of the earlier stimulus packages will bring a string of red numbers.

The deficit is an $80 billion turnaround since the forecasts in last year’s budget.

The leak of the figure last night prompted the Opposition to declare that “the Australian Labor Party has lost control of the nation’s finances”.

The Government will today seek to rush through a bill to allow it to keep $365 million in revenue collected from its defeated alcopop tax. It has also signalled that it will try again to get the tax hike through the Senate.

Its fate will depend on a change of heart by Family First senator Steve Fielding, who voted against it last time. There is agreement to validate the $365 million already collected.

Treasury now forecasts that the economy’s collapse will lift unemployment to record levels. While the unemployment rate is expected to peak at 8.5 per cent, well below its 10.9 per cent peak in the last recession, the total numbers out of work would rise even above the 933,000 unemployed in December 1992.

Prime Minister Kevin Rudd, preparing to justify the unprecedented deficit, said Treasury advice to be published in the budget was that if the Government had not brought in its earlier stimulus measures, unemployment would have reached 10 per cent.

The budget would “support the jobs of today by investing in the infrastructure we need for tomorrow”, Mr Rudd said yesterday.

Treasury’s advice was “the final nail in the coffin for those who argue that governments should do nothing to support jobs during a global recession”.

“We are in the worst recession, the worst global recession since the Great Depression,” Mr Rudd said.

Meanwhile former NSW Labor treasurer Michael Costa launched a sharp attack on the Government, saying he had always taken the view “the Prime Minister and his Treasurer don’t know what they are doing”. The stimulus had been a “disaster”, Mr Costa said.

“The issue comes down to how many jobs did you actually save for that level of spending and the cost-benefit of the stimulus becomes an issue.”

A pension rise of about $30 a week, a go-ahead for major infrastructure programs and the promised parental leave scheme will be among the budget’s good news, but many people will be hit in the hip pocket by losing their private health insurance rebate and superannuation concessions.

Shadow treasurer Joe Hockey said the Rudd Government was “a reckless spender”. “Every man, every woman and every child will have a burden of $2600 just for next year’s budget.”

But he refused to say what would be an appropriate level of debt. Mr Hockey said it was “inconceivable that we could have such a deterioration of unemployment in such a short time. We left the Labor Party with unemployment levels at 4 per cent, with a $22 billion surplus, with no debt.”

Mr Rudd said every government worldwide was “engaged in temporary borrowing”.

The Government has the added problem of a hostile Senate, which puts at risk some of its savings measures.

The Opposition is reserving its positions on measures such as the means test on the private health insurance rebate, which has been criticised by Senator Fielding and independent senator Nick Xenophon.

Opposition Leader Malcolm Turnbull said this was “unquestionably a broken election promise. “There was no election promise that was made more repeatedly or more emphatically by Mr Rudd than that there would be no change to the private health insurance rebate.”

Attempting to apply heat to the Coalition, Treasurer Wayne Swan said: “The Opposition on the one hand can’t be out there saying they’ll support a pension increase, then knock back the savings that make that pension increase sustainable for the long term. They can’t have it both ways.”

Mr Swan said the budget was complex. “We have to stimulate the economy now to support employment. We have to make room for vital investments and also for pensions.

“But also, we’ve got to make those longer-term savings that bring the budget back to sustainability over time given the new global circumstances.”

Business confidence has picked up — the NAB confidence index held on to most of its gains in April to come in at a near six-month high of minus 14 points, well above the minus 32 points recorded in January.


30 April 2009 8:19am

Australian HR departments are struggling to meet the challenges created by recession-driven cost-cutting with fewer resources and less control over decision-making, a new study confirms.

Two in five HR directors feel they have less autonomy than a year ago – almost 10 times the number reporting an increase in control, the survey by Kelly Services has found.

“More control, more information requests, and more centralised decision-making” summarises the responses of many HR directors to the survey, which asked 56 members of the International HR Directors Forum about cost-containment measures and the GFC’s impact on the HR function itself.

One HR director notes that these demands make HR “much more reactive: you can’t be proactive when you are constrained by centralised control”.

The greater scrutiny has also led to a “speeding up of operating rhythms” – from quarterly to monthly reporting, and monthly to weekly – which inevitably leads to a greater workload.

Parent companies’ expectations of their Australian operations are “overly influenced” by what is happening in their home market, the report says, with the parent – in most cases – having a more severe view than local management about the cost-reduction measures needed.

Cost-cutting measures
Virtually all respondents to the survey have already implemented cost-cutting measures, with the most common being reduced use of contractors (74%), hiring freezes (70%) and headcount reductions (66%).

Australian subsidiaries have been required to take steps even where the GFC hasn’t yet had a noticeable impact on local operations. This is despite the report noting that, “given the state of the key US and European markets, Australian revenues (typically around 2-5% of global revenues) are hardly likely to be a decisive consideration in global cost reduction decisions”.

Reducing accrued annual leave entitlements is another strategy being employed by many of the respondents, with one director pointing out that pressure to reduce this liability on the balance sheet is “inevitable” and another saying, “it’s not just a financial issue, it’s a wellbeing issue. It’s not healthy for people not to be taking adequate leave breaks, so we are pushing this angle in our discussions with affected employees.”

Almost half (43%) of the respondents have reduced their training expenditures, but some companies have made a firm decision to keep investing in this area.

One director acknowledges the need to continue to upskill and invest in employees in order to meet business objectives, adding that in circumstances where bonuses and pay rises are out of the question, “we can at least educate and develop our people”.

Only “an exceptional company indeed” would have considered salary reductions 18 months ago, the report says, but now almost one in five employers (17%) is considering this move in the next six-to-twelve months.

This is arguably one of the most unpopular cost reduction measures and, given the need for employees to agree, the most difficult to achieve, the report says.

Added pressures
Among the added pressures HR directors report being subject to are:
more scrutiny of new hires – there are “more hoops” to go through to get new staff on board. In other cases, HR’s involvement in recruitment has been eliminated in favour of line managers contacting agencies directly, leading to a higher risk of hiring employees with poor cultural fit;

falling morale and engagement – nearly 60 per cent of HR respondents have noticed their company’s responses to the GFC having a moderate or significant effect in this area. HR is now faced with a “changed organisational psyche”, when employees realise for the first time that their company faces the same hard realities as everyone else; and workers who no longer feel in control of their careers, creating a “prison mentality” where employees who aren’t happy don’t feel confident to leave;

diminishing returns on the communications investment – communication (almost to the extent of over-communication) has become a more important task to resource, and HR has identified a need to “communicate the same message in many media: some like email, others prefer face-to-face, and others like to have opportunities for discussion”. The drain on HR’s already limited resources is proving problematic, the report says;

employees in need of support – the HR role is now more about providing reassurance and support for employees, with respondents noticing more cases of personal trauma such as financial problems, stress and relationship breakdowns; and

reduced resources – some 60 per cent of companies are attempting to meet these challenges with less HR resources than they had a year ago. Only one company reported an increase in HR funding.

April 29, 2009 12:01am
SANTOS will lay off more than 50 staff because of the global financial crisis and low oil prices.

Another 90 or so contractors would also lose their jobs.

An email sent to staff yesterday by chief executive David Knox said the company had recently completed a review of the business, leading to the elimination of some roles.

“We have tried to minimise the impact on our employees by reducing both external recruitment activity and the size of our contractor base,” Mr Knox writes in the email, obtained by The Advertiser.

“We have also initiated a redundancy program today that will affect less than 60 employees.

“This process is now underway and I expect that most of those affected will have had conversations with their leaders by tomorrow afternoon.”

“I also want to reassure you that, while we must always continue to review our operations, what we have done to date has been thorough and extensive and I hope sufficient to position Santos to weather this economic storm.”

In addition to the redundancies, 70 staff were offered alternative roles, including several at the company’s Gladstone liquefied natural gas (GLNG) project in Queensland.

Santos employs about 2000 people across its operations in South Australia, Queensland, and Indonesia.

Santos spokesman Matthew Doman said yesterday the redundancies were across all levels and operations.

Santos made a net profit of $1.7 billion in 2008, however almost $1.2 billion of that came from the sale of a 40 per cent stake in its GLNG project.

April 29, 2009 12:01am

UP TO 40 service and mechanical jobs will be created as a result of MTU Detroit Diesel Australia’s relocation to a new, green facility at Edinburgh Parks.

Premier Mike Rann yesterday opened the new state-of-the-art facility with Transport Minister Patrick Conlon and MTU Detroit Diesel Australia president Doug Seneshen.

MTU Detroit supplies high-powered engines to the defence sector for patrol boats, frigates and armoured vehicles.

The Edinburgh location will help the company grow its business.

MTU is a world leader in low-emission diesel technology and alternative fuel, including commercial fuel cells for power generators. It also services the mining, construction, power, agriculture and transport sectors.

“The move to Edinburgh Parks has offered a major upgrade for all of our Adelaide customers and employees,” Mr Seneshen said. “As a leader in high-performance and high-technology engines in Australia, it is essential we invest in world-class facilities.”

The new Adelaide facility is an indication of the company’s

April 28, 2009 09:30pm

HUGE job losses in health, the closure of some TAFE sites and increased class sizes are looming because of the state’s critical financial position.

Senior public service sources say up to 400 jobs are set to go as part of a major savings review in the Health Department – and that does not include country areas.

Sources also say up to 127 full-time equivalent jobs will go in Further Education while up to 30 will go in the Courts Administration Authority.

Warnings of the cuts are contained in two internal memos seen by The Advertiser and evidence given to a parliamentary committee.

Health Department chief executive Tony Sherbon has written to staff saying Ernst & Young has been commissioned to undertake a core business review of the department which will take four weeks.

He says while frontline health services will be protected, the intention is to reduce the size of the overall workforce but with “no forced redundancies”.

No numbers are given but senior public sector sources said they had been briefed about 400 full-time equivalent positions likely to go.

The state is facing a huge $1.5 billion black hole in the Budget and Treasurer Kevin Foley has warned the axe will fall on the Government’s expenditure.

The Courts Administration Authority says it has a range of savings planned which will affect “a significant number of employees”.

These include merging some services in the Fines Call Centre, specialists courts such as the Drug Court and also reducing staff in the Coroner’s Court.

Registry offices in Kadina, Coober Pedy, Ceduna and Naracoorte will be open only when the local court is sitting.

Further Education Department chief executive Ray Garrand has told Parliament’s Budget and Finance Committee that 95 jobs will go in 2009-10, and 16 each in 2010-11 and 2011-12. He says that equates to savings of about $9.7 million.,22606,25395862-2682,00.html

Chris Zappone
April 28, 2009 – 9:26AM

Jobs at Holden’s Elizabeth factory are safe for now after parent company General Motors said overnight it would scrap the Pontiac brand as it staves off bankruptcy.

Holden said GM’s decision had “direct implications” for the Australian carmaker, which produced 36,500 Pontiacs for export in 2008, out of a total of 119,000 cars built.

The local company said it was “disappointed” with the decision, however, “we don’t envisage there will be any job losses at Elizabeth as a result of this decision.”

Earlier this month, Holden switched from two shifts to one in order to lower its production level to meet the reduced global demand.

Sources close to the company said paring back its shifts when the global demand fell at the end of last year helped Holden avoid announcing more lay-offs from GM’s decision overnight.

However, a slump in demand in world markets may ultimately cost it more jobs in Australia.

”Job cuts are inevitable if you look at global sales figures,” said ANZ economist Julie Toth.

Global car sales have dropped by double digits since the acceleration of the global financial crisis last year. Also, consumers in developed markets such as the US and Australia have shifted demand toward smaller, more economical vehicles, a segment where GM and Holden are historically underrepresented.

”It’s not just about changing models now, it’s that people have just stopped buying cars,” Ms Toth.

Locally, the total number of new cars, four-wheel-drives and trucks sold in Australia in the year to March plummeted 22.6%, seasonally adjusted, according the Australian Bureau of Statistics, the biggest fall since 1991.–for-now-20090428-akzx.html

Anne Davies, Washington
April 28, 2009 – 6:50AM

Holden Australia has been dealt a blow with parent General Motors confirming that it will scrap the Pontiac brand including the Pontiac G8 which is built in the Elizabeth plant near Adelaide.

Sold as the VE Commodore in Australia, Holden arm had planned to export 30,000 of the high performance cars to the US.

The move, part of sweeping cuts contained in GM’s second viability plan, will mean the loss of nearly $1 billion in exports for Holden, which had invested $77 million to gear up for the shipments.

The cuts are the latest bid by GM to avoid bankruptcy as the car maker struggles to cope with a drop of almost half in its US sales, and other markets retreat. It has already received $US15.4 billion ($21.4 billion) in loans from the US Government.

GM’s plan, the result of pressure from the Obama Administration to further trim GM’s operations, will mean another 7000 to 8,000 jobs to go on top of the 23,000 already announced.

GM also plans to close 43% of its dealerships by 2010 and shutter another 13 of its existing 47 plants which will have a big impact across American towns .

The plan also involves converting lenders’ interests into equity, which could result in the US Government owning as much as 50% of the company and the United Auto Workers union holding 39%.

The bond holders have been offered 22 cents in the dollar to convert their GM debt into equity, but it is uncertain whether they will accept the offer. If not, bankruptcy is still an option and a filing with the Securities and Exchange Commission outlined plans for this eventuality.

Speaking to reporters, GM chief executive, Fritz Henderson expressed sadness in the demise of the 90-year old Pontiac brand by no later than 2010.

”This is a brand which has a considerable heritage in our company, and this is an intensely personal decision in many ways,” he said.

There had been talk that Holden’s G8/VE Commodore may be sold as a stand-alone Pontiac performance model at other GM dealerships to keep the division’s name alive but that idea did not survive the latest round of pruning.

Thursday, 23 April 2009

Fresh approaches to national skills training are urgently needed in order to meet the challenges of the economic downturn and to position Australia for a return to growth and prosperity, according to a consortium of peak industry, trade union and youth advocacy bodies.

A report released today by the National Skills Policy Collaboration (NSPC) – comprising the Australian Industry Group, Australian Council of Trade Unions, Group Training Australia, Australian Education Union and Dusseldorp Skills Forum – recommends a new wave of training reform to take advantage of opportunities beyond the current economic crisis.

The report Investing Wisely sets out a framework to elevate skills development and to entrench a culture of learning across the workforce.

Heather Ridout, Chief Executive, Australian Industry Group said the importance of skills cannot be taken for granted.

“Despite rising unemployment, we cannot afford to take our foot off the pedal in addressing the skills gap in Australia. As soon as labour market conditions improve skill shortages will re-emerge with a vengeance, especially given our ageing workforce. It will bring with it all the familiar pressures on our ability to have the skills we need to sustain investment and growth. Indeed, we need to avoid the mistakes of past downturns where training was seriously neglected and businesses need to be positioned to emerge with the skilled workers they need to take advantage of the recovery,” Mrs Ridout said.

Sharan Burrow, President of the ACTU said: “Increased productivity flowing from enhanced skills and training will be vital if we are to emerge from the economic slowdown with a more skilled workforce that is able to compete globally.

“There is always a risk that in the current economic climate, the focus on skills will take a backseat to other more immediate concerns. That would be a big mistake,” Ms Burrow said.

The report stresses that skills development needs to keep pace with the demands of the new economy, and that there must be a focus on quality, not just quantity.

The consortium says improvement is needed in four key areas:

Accurate information about skill needs, and mechanisms that shape public policy and funding decisions;

A prevailing industry culture that values investment in skills development and makes the most of the skills at its disposal;

A focus on people and the skills and opportunities they need to participate in society and the economy; and

Government funding which supports the development and use of the right skills.

“The shortcomings identified are not new and they will not be fixed merely by more funding or more training places,” Jim Barron, Chief Executive Officer, Group Training Australia said. “Action is required to maximise the value of investments in skills, and achieve a more strategic use of public funds”.

AEU President Angelo Gavrielatos said: “The report highlights the need to place a well resourced public TAFE system at the heart of any strategy to increase participation and equity in Australian workplaces and society.”

The report makes five key recommendations:

Work closely with industries and employers. A significant funding investment should be made in encouraging industries and enterprises to pursue high-skill strategies;

Develop a culture of learning across all levels of the workforce. Key personnel should be developed and supported to engage workers across all sectors in learning. Managers should play a critical role in this process;

Make public funding mechanisms more flexible and responsive to demand. This does not necessarily mean responding to the demands of individuals and individual firms; rather, responding to broader industry and social objectives;

Ensure sufficient investment is made in the public training system. A legacy of government funding cuts must be reversed; and

Ensure sufficient investment is made in the development of essential skills. There is a good case for maximising the public and employer contribution, and minimising the individual contribution, to this end.

Media contacts
Australian Industry Group, Tony Melville: (02) 6233 0700
Australian Council of Trade Unions, Mark Phillips: (03) 8676 7266 or 0422 009 011
Group Training Australia, Bob Bowden: (02) 9241 2811 or 0412 753 298
Australian Education Union, Angelo Gavrielatos: 0488 012 045

More information
Download a copy of Investing Wisely here.
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By Megan Byrne
The Sydney Morning Herald

Jobs in the sustainable economy are booming and there are plenty of ways to plant yourself in the middle of it.

We walk through it every day and yet many of us barely give it a moment’s thought. It is the air we breathe, the water we drink, the ground we stand on and the weather at our backs. It is our environment and it determines our very livelihood – but not just physically. An increasing number of Australians are forging environment-focused – or “green-collar” – careers for themselves, boosting their financial subsistence and job satisfaction while playing a part in securing our planet’s future.

While some people feel that the green revolution is recent – a response to the effects of droughts, floods and fires, and films such as An Inconvenient Truth – Mark Lister, the group manager of corporate affairs at sustainable business solutions organisation Szencorp, says his company has promoted environmentally sustainable business and economic practices since 1983.

“There are several cost-saving and productivity benefits of changing the way we do things so they reduce the impact on the environment,” he says. “We work on the theory that sustainable practices can’t be adjunct to business. They should be a fundamental part of the business model. Leaders are now recognising that the model we have can’t continue.”

The profile of sustainability has taken off in the past two or three years, Lister says. Australia’s ratification of the Kyoto Protocol in 2007 boosted green practices and businesses in Australia, and in February,

US President Barack Obama said his $US787billion ($1.08trillion) economic stimulus package was “laying the groundwork for a new, green energy economy that can create countless well-paying jobs”.

The Australian Conservation Foundation and the Australian Council of Trade Unions agree that the rapidly growing green economy has the potential to expand employment opportunities but say there is a significant skills shortage. However, the wide range of courses and training programs available means that anyone – regardless of age, profession or experience – can take advantage of the booming green economy.

Completing an environmental degree can provide the necessary skills for a green career. Monash University graduate Genevieve Ackland began a job as a carbon research assistant at Greening Australia just months after completing honours in environmental science. Ackland, whose honours project investigated carbon stocks in South-East Asian tropical forests, says she wouldn’t have got the job without honours.

“Completing my thesis gave me the experience I needed for this job,” she says. “I thought I’d end up in environmental consulting – I didn’t even know there were jobs in this area, or that you could earn a good living working for a not-for-profit organisation.” She says she finds her work – which involves data collection and modelling from various forests and plantations around the country – extremely fulfilling.

“My job substantiates my work and financial requirements but it also meets my own personal conservation goals working for an organisation that has made a difference and has got clients interested in investing in the future has boosted my morale.”

But you don’t need a degree for green-collar careers – there is room for apprentices and trainees. WPC Group brings together employers and people interested in jobs in renewable energy, energy and water efficiency and water management, through its Greenskills apprenticeship and traineeship program. Its chief executive, Nick Wyman, says green has gone mainstream.

“We’ve received a lot of interest from employers and prospective employees and have set up panels of employers in Victoria and NSW who are getting people into jobs within the green economy,” Wyman says. “We have everything from building and construction companies that are retrofitting office buildings to large multinational corporates with in-house sustainability programs.”

Wyman says the demographic applying for the program is quite different from what was originally expected. “When you think of apprentices, you think of 17- to 24-year-olds. But we’ve been overrun with people from all different backgrounds and age groups looking for an opportunity, like people in their 30s looking for a career change,” he says.

Even tradies are making their presence felt in the green economy. The Master Plumbers and Mechanical Services Association of Australia has been running a green plumbers’ program since 2001, teaching them about solar hot-water systems, water-efficient technology and natural wastewater treatment systems.

More than 10,000 plumbers worldwide have now completed the program. One of them, Tim Dickinson, says more people are asking whether plumbers are green.

“There’s real opportunities when you can promote yourself as being environmentally aware,” Dickinson says. “I get a lot of satisfaction from advising my clients on sustainable options that meet their needs.”

It is clear that jobs in the green economy are sustainable for both the environment and the employees – making a difference. And the awareness of it leaves people with a deep satisfaction that boosts morale and work ethic. Perhaps communing with nature is not such a hippie notion after all.


Published: 18 April 2009