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Losing a Job : Why the Layoffs, Managing finances

My world turned topsy-turvy in just 20 minutes when I was given the pink slip. Even in my wildest dreams, I had not imagined I would be thrown out of my job… I did not know how to react. I looked around and found I was not the only one. Some of my sacked colleagues were reacting angrily, some were crying , some begging with the HR personnel to give them time  ,” said a techie with seven years of work experience. “What do I tell my family? How will I pay my car and housing loans? How will I get  another job”.  The article talks about changing face of IT industry, reactions of people on losing job,how to handle finances on losing job.

About the Layoffs

At least 15,000 techies have lost their jobs in Bengaluru in the 2014. The frequency of layoffs has increased. From IBM, Dell, Cisco, HP to TCS, almost all the big companies have cut jobs. TCS layoffs, made techies hit the streets to protest. TCS layoff caught employees and others in surprise, considering that TCS is known for job security. Employees were given no prior notice they were just asked to leave immediately with two months compensation as part of involuntary attrition.  Most of those who have been given pink slips are highly paid consultants and managers who were in managerial positions and were working on a project.  The case become more curious considering that TCS has plans of hiring 35,000+ freshers for 2014-15.  Talks going around have been that TCS  fired mid-level managers who are drawing fat packages and underperforming and replace them with low-cost freshers and train them. These software engineers are finding themselves in a logjam as they are finding it difficult to get past even job consultants as they carry the tag under-performer,forget landing jobs in other companies,

Why are companies doing layoffs?

As per Companies these lay-offs are part of the clean-up process, they are cutting jobs as part of market expansion and growth strategy which involves getting rid of redundant employee.  Every company does this every two to three years when they ask non-performing employees to leave. It’s not like 2008 . Although this is a common practice in most of the IT services companies, firing 25,000-30,000 employees is certainly not normal.

Is IT Landscape in World and India Changing?

World’s biggest IT companies are not shying away from firing employees. Questions that are being raised are How much dynamic and flexible is IT industry and how much job security can it provide? Shouldn’t companies provide training and motivation to assist their under-performing employees? Quoting Forbes  Layoffs In Tech Now A Permanent Feature

LPG Subsidy and Number of cylinders : Verifying details on Distributor’s Transparency Portal

How many cylinder did you consume say in a year , when did you book your cylinders, what is the amount you paid, what is amount of subsidy you got? Answers to all these questions are provided to consumers through the Transparency portal of Oil company. This article talks about how can one get information about LPG Subsidy, number of cylinders through Transparency portal of Indane, HP Gas and Bharat Gas.

What is Transparency portal ?

The LPG transparency portals features quick search options to find one’s distributor,sort information based on consumer number and consumer name, get complete details of each customer with their consumer numbers, name, address, no. of cylinders supplied, dates of supply as well as the indicative subsidy amount for the cylinders supplied . These details are provided by OMCs also called as Oil Marketing Companies . There are 3 OMCs in India providing  LPG – Indian Oil Corp. Ltd (IOC) providing LPG as Indane, Bharat Petroleum Corp. Ltd (BPCL) owns Bharat Gas and Hindustan Petroleum Corp. Ltd (HPCL) own HP Gas.

Sample of the information that is available on Transparency portal of Bharat Gas is given below. Other Companies information is similar. Information is per distributor and per consumer.  Per distributor the information that one can access (Click on image to enlarge) is  shown below.

Employee Stock Purchase Plan or ESPP

Companies often reward their employees with their stock, either in the form of employee stock option plans (ESOP) or  Restricted Stock Units(RSU) or employee stock purchase plans (ESPP). This article explains in detail about ESPP. What is ESPP?  Terms associated with ESPP, Tax Implications of ESPP, hot to calculate Long term capital gain/short term capital gain?

What is ESPP?

Under the  employee stock purchase plan or ESPP the employee has the choice of purchasing stocks of his company from his salary usually at a discounted price. If employee enrols from ESPP then he will contribute a fixed part of his salary, ,usually between 1 percent and 15 percent, for a fixed period of time. At the end of fixed period the company will use this money to purchase the company’s stock .  Once the shares are bought for you, they are yours. They are treated just like any other shares you have bought. You can hold them for as long as you want, you get to decide when to sell the shares. There are no restrictions. Investment in ESPP is similar to investment in stocks so it suffers from stock market volatility.

Once enrolled in ESPP can one stop it?

The ESPP plans allows flexibility in terms of stopping the plan or modifying the contribution levels during the enrolment period.  Some allow employees to even suspend their enrolment even during the offering period. In such cases usually no further deductions from salary will be made but for amount deducted already it will purchase shares on the share date. Each ESPP plan is unique so please check your plan document for details

Terms associated with ESPP

Typical terms associated with ESPP are as follows:

Enrolment Period : Period during which you can enrol for ESPP. If you miss this then you have to wait till next enrolment period to get enrolled.

Offering Period: A period during which your salary gets deducted and accumulated for purchasing of company’s stock. It’s usually 6 months or multiples of 6 months. During the offering period.

Gold Loans and Flexi Balance Loans

Why does she have to go to pawn broker to give her bangles?  Why doesn’t she go to ATM and draw money?” asked my son. We were trying to introduce our children to classic Indian Movies and had planned Mother India with family friends. “There was no ATM that time”, replied a friend. “These pawn brokers are all greedy people” replied another. “She will never be able to get her bangles back” remarked another. “Even today people do pawn their gold but thankfully there are now banks and NBFC which are not as greedy as money lenders”. Then there were exchange of stories of how their maid,friends,relatives had taken gold loans. A friend explained me about the Flexible Loan which his relative had used for Business Purpose. So I explored about Gold loans and Flexible Loans.

Indians love to own gold  usually in the form of jewellery, coins or bars mostly given during marriage. Gold is not liquidated unless one is in extreme financial need. But, pledging gold ornaments and other gold assets to pawnbrokers and money lenders to avail loans has been prevalent in India for many decades, particularly in rural areas. Now with banks and Non Banking Financial Companies( NBFCs) like Muthoot Finance, the urban people are also availing the gold loans, which has led to growth of the gold loan market in India

Features of Gold Loan

Loan is borrowed against the gold deposited by the applicant. It’s features are

Redeeming Mutual Funds : Check Exit Load,Taxes

Many Mutual funds charge exit loads when you want to redeem or sell your investment before some predefined interval. For example for  HDFC Equity fund Exit Load is 1% for redemption within 365 days. What does exit Load? How is it calculated? What else does not have to take care of before redeeming(selling) Mutual Fund

What is Exit Load in Mutual Funds?

An Exit Load is the fee charged by Mutual Funds if an investor wishes to withdraw his investment in Mutual Fund within a specified period from that fund. This charge is calculated as a percentage of the NAV and not on the amount you invest.  Time period for calculation of exit load is for every purchase or investment.  Many mutual fund schemes which do not charge an exit load.

Does exit Load apply for SIP also?

The same rules govern the Systematic Investment Plan (SIP) model. In SIP, each instalment is taken as a new investment and, hence, you will be charged an exit load for it if you sell  each instalment within the predefined time.

Why are Exit Load charged?

They act as a deterrent to quick withdrawals that could put pressure on fund managers to generate cash to meet the redemption. After the predefined period most equity funds have zero exit load.

How is Exit Load Calculated?

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