Hitachi to cut up to 7,000 jobs

Hitachi is to cut up to 7,000 jobs, as it warned it expects to make an annual loss of 700bn yen ($7.8bn; £5.5bn) because of a big fall in global sales.

Hitachi said the job cuts would be made globally across its car equipment and electronics divisions.

The Japanese electronics and engineering group had previously predicted it would make a net profit of 15bn yen in the year to 31 March 2009.

Hitachi is the latest Japanese firm to be hit by the global economic slowdown.

'Quick slowdown'

Japanese exporters have been hurt by the strong value of the yen, which recently soared to a 13-year high against the dollar.

Hitachi said it was aiming to achieve 200bn yen of cost cutting.

"Revenue for the 2009 financial year is expected to fall greatly due to the quick slowdown of demand for automobiles, semiconductors and industrial machinery," it said.

The firm also said it would reduce the number of its subsidiaries to 700 from 910 by March 2010.

Obama slams Wall Street bonuses

President Barack Obama says that multi-billion dollar bonuses taken by Wall Street bankers are "shameful" while taxpayers bail out their industry.

The president said their actions "were the height of irresponsibility".

He said his administration would tell bankers they needed to show some discipline and restraint.

Mr Obama was responding to reports that employees at financial companies in New York collected an estimated $18.4bn (£12.9bn) in bonuses last year.

"It is shameful, and part of what we are going to need is for the folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility," he added.

"The American people understand that we have got a big hole we have got to dig ourselves out of but they don't like the idea that people are digging a bigger hole."

Earlier this week, US bank Citigroup cancelled an order for a new corporate jet after President Obama questioned the wisdom of the purchase.

The White House asked whether buying the jet was the "best use of money at this point" for a bank that took $45bn (£31.6bn) of public money last autumn.

Amazon profits from festive sales

Profit at online retailer Amazon rose 9% in the final three months of last year, as the company enjoyed a robust holiday shopping season.

It said net profit totalled $225m in the fourth quarter, up from $207m a year ago.

Unlike many retailers, Amazon has not yet been hit hard by the cutback in spending by many consumers.

Amazon said it would continue to offer low prices and free shipping deals to lure budget-conscious shoppers.

Revenue increased 18% to $6.7bn, beating analysts estimates and Amazon it expected sales to rise in the first three months of 2009.

AMAZON 2008 UK BESTSELLERS Mamma Mia! (DVD) The Tales of Beedle the Bard by JK Rowling (Books) The Dark Knight (DVD) Nintendo Wii Console (Video games) Mario Kart with Wii Wheel (Video games) Source: Amazon

"It looks like they took a lot of market share and made substantial gains," said Jeffrey Lindsay of Sanford C Bernstein.

"The good thing is that Amazon hasn't had to discount to the extent that people feared to achieve this."

Chief executive Jeff Bezos said Kindle, the electronic-reading device it introduced in 2007 to encourage book, magazine and newspaper downloads, had boosted sales.

Once a bookseller, Amazon now sells products in more than three dozen categories ranging from hairdryers to jewellery.

In the UK, it launched a music download site last year.

Big slump in Japan factory output

Japan's industrial output declined 9.6% in December - the biggest contraction since records began - as exports slumped due to the global downturn.

Japan's Economics Minister Kaoru Yosano said the situation was unprecedented and that the drop in factory output "was likely to continue".

The unemployment rate also rose in December to 4.4%, a three-year high.

Official figures showed that 2.7 million people in Japan were without work, 400,000 more than a year ago.

'Bold steps'

Japan's economy slipped into its first recession in seven years in the third quarter of last year.

We must watch if a worsening of the economy pushes Japan into a deflationary spiral Tatsushi Shikano, Mitsubishi UFJ Securities Hitachi cutting 7,000 jobs

Exports have dropped as worldwide demand for Japanese products, such as cars and electrical equipment, has fallen sharply.

Prime Minister Taro Aso has told parliament he will take bold steps to ensure Japan is the first country to emerge from the global crisis.

The slump in industrial output knocked confidence among Japanese investors, and the country's main Nikkei index ended Friday down 3% or 257 points at 7,994.

Deflation fears

Official data also showed a big drop in the rate of inflation, increasing the likelihood of deflation.

Honda is just one of a growing number of Japanese firms to see falling sales

Japan's annual core consumer inflation slowed to 0.2% in December from 1% in November.

Economists fear falling prices will deter consumers from making major purchases, ultimately worsening the recession.

The Bank of Japan has already warned that deflation will be a risk until 2011 and has cut interest rates to just above zero.

"Weakness in the overall economy will persist in January-March, and the degree of worsening depends much on how exports turn out," said Tatsushi Shikano, senior economist at Mitsubishi UFJ Securities.

"It is already a consensus view that core consumer inflation will turn negative soon, but we must watch if a worsening of the economy pushes Japan into a deflationary spiral even though the Bank of Japan sees no signs of that happening right now."

Big losses

The gloomy official economic data came as three more Japanese companies reported poor financial figures.

Honda, the country's second-largest carmaker, said profit plunged 89% in the third quarter as global sales slowed sharply.

The company made a net profit of 20.24bn yen ($226m; £158m) in the three months to the end of December, compared with 200bn yen a year earlier.

Meanwhile, electronics and engineering group Hitachi warned that it now expects to make a loss of 700bn yen for the financial year to 31 March.

All Nippon Airways, the country's second-largest carrier, said it expects to report its first annual loss in six years.

Their reports came a day after both Sony and Toshiba warned that they would make an annual loss, while Nintendo cut its profit forecast.