Redundancy and a wiser management of labor is what Sierra Wireless has announced as it intends to run down the expenses in a worsening economy. With the new expense reduction program that Sierra Wireless is planning, reducing labor costs by approximately $5.5 million on an annualized run rate basis may be the key ingredient for better business operations.
The program includes the elimination of approximately 56 positions, representing 10% of the company’s workforce. The positions eliminated will impact all levels and functions of the company. These actions are expected to be largely completed during the first quarter of 2009. The company expects to incur a pre-tax charge of approximately $1.3 million in the first quarter for severance and other costs related to this program.
“We have experienced strong revenue growth over the past three years and have significantly expanded our team size. We also believe that our product portfolio and channel position in key markets remains strong. However, based on the expectation that economic uncertainty will continue for the foreseeable future, we felt it was prudent to reduce our cost structure now, in order to mitigate the potential impact of this uncertainty on our business” said Jason Cohenour, President and Chief Executive Officer.
(Source) Press
Many were expecting an interest rate cut of 0.5% but actually got something better from the Federal Reserve led by chairman Ben Bernanke. The Federal Reserve actually cut the rates in the vicinity of 0 to 0.25% just to avert this crisis and hopefully limit the length or recession that is upon us now.
We have seen the effects of recession. Companies going bankrupt, people losing their jobs and severe budget cuts made by people themselves. We cannot avert the impending crisis but we can manage and manage hard. Extreme sacrifices are sure to be needed as all sectors of the world from business to real estate are experiencing the hard effects of the credit crunch.
“The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability,” the Fed said.
Brace yourselves for the worst economic catastrophe since the 1930s. It is not going to be pretty.
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As expected, the government is exhausting all means to extend financial aid towards the embattled car manufacturing giants of Detroit, General Motors and Chrysler. While the first auto bailout plan did not pass the grade for refusal of the labor unions to take a significant salary adjustment that can be compared with the salary structure of Japan’s own line of car manufacturers, the new auto bailout plan hopes to put all these to rest and save the two car manufacturing giants from officially filing chapter 11 or bankruptcy
The alternative? The Troubled Asset Relief Program or TARP. The TARP is actually the $700 billion bailout approved by Congress in October.
The Bush administration said Friday it might use taxpayer dollars set aside to bail out banks and Wall Street firms to keep troubled U.S. automakers out of bankruptcy.
The move could provide an 11th-hour short-term lifeline to General Motors and Chrysler LLC, which have warned they are within weeks of running out of the cash they need to continue to operate.
With this development, the government is reversing the initial round of talks where the Senate all but killed the initial funding for the auto bailout plan which has amounted to $14 billion. Will this resolve the problem the U.S. economy is facing? Everyone is hoping that it does while some sectors are holding out other opinions.
Republican critics of a bailout have argued that the automakers should use bankruptcy to shed debt and onerous labor obligations. They point to the success of companies in other troubled industries, such as airlines and steelmaking, to use bankruptcy to reorganize.
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