Global Dispatches

State Farm Terminates Pact With Satyam

HYDERABAD, India -- Satyam Computer Services Ltd. last week confirmed that State Farm Insurance Co. in Bloomington, Ill., has terminated its outsourcing contract with the company.

Analysts had expected that the outsourcer, based here, would lose customers after founder B. Ramalinga Raju's disclosure earlier this month that the company had inflated profits for several years.

Satyam received some good news a day after the State Farm announcement, when General Electric Co. said it plans to continue outsourcing work to the vendor for the time being. "We will continue to work Satyam at this point," said a GE India spokeswoman.

— John Ribeiro, IDG News Service

Ericsson Plans to Cut 5,000 Jobs

STOCKHOLM -- LM Ericsson Telephone Co. last week announced that it is laying off 5,000 workers in a continuing effort to reduce costs. The job cuts were disclosed after the firm reported that its fourth-quarter profits declined to 3.9 billion Swedish kronor ($469 million U.S.) from 5.6 billion kronor ($674 million U.S.) in the same period last year.

Ericsson projected that the layoffs will cut costs by 10 billion kronor ($1.2 billion U.S.) during the second half of 2009.

CEO Carl-Henric Svanberg said that although the company's core infrastructure business performed well during the fourth quarter, it faces problems because of consumer cutbacks in spending on telecommunications services.

— Mikael Ricknäs, IDG News Service

Briefly Noted

IBM has agreed to buy the e-mail service of Hong Kong-based application service provider Outblaze Ltd. IBM said the it plans to use the Outblaze service to beef up its Bluehouse social networking and collaboration platform now being beta-tested. Terms of the deal were not disclosed.

— Chris Kanaracus, IDG News Service

Copyright © 2009 IDG Communications, Inc.

  
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