Flybe: 300 Jobs Cut Amid Outsource Plan

Regional airline Flybe is to cut 10% of its workforce in an attempt to save £35m and return to profit.

The Exeter-based carrier has announced plans to cut 300 jobs from its 3,000-strong UK workforce and is considering outsourcing further support functions, including ground handling and onboard catering.

Support and production roles such as human resources and IT will be affected by the staff cull, while around a fifth of its management team is being cut.

The group, which flies from airports including Bristol, Cardiff, Doncaster, Edinburgh and East Midlands, is also putting its network of 13 UK bases under review and will give further details in the summer.

Flybe, which outsourced its call centre last month in a move impacting 55 jobs, slumped into the red by £1.3m in the six months to September 30 against profits of £14.3m a year earlier.

It blamed the loss on high fuel costs and falling numbers of fliers.

Its latest quarterly figures revealed a 1.7% improvement in the number of passengers flown to 1.8 million in the three months to December 31, but passenger revenues fell 1.2% to £136.9m and costs increased by an equivalent of 0.8% per seat.

Andrew Knuckey, chief financial officer of Flybe, said wider economic pressures and the impact of air passenger duty hikes in recent years meant it "had no choice" but to cut jobs to bring costs down.

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Google Sees Its Annual Revenue Top $50bn

Search giant Google has hit a new annual revenue high and an increase in profit, despite ploughing more money into developing smartphone and tablet technology.

"We ended 2012 with a strong quarter," Google co-founder and chief executive Larry Page said.

"We hit $50bn (£31bn) in revenues for the first time last year; not a bad achievement in just a decade and a half."

The fourth quarter profit was up 6.7% from a year earlier at $2.89bn (£1.8bn), and for the full year it grew 10% to $10.74bn (£6.8bn).

Revenue in the quarter that ended December 31 was up 36% from the same period a year earlier at $14.4bn (£9bn). For the year revenues grew to $50.2bn.

Google shares jumped more than 5% to $738.20 (£466) in after-market trading following the release of the earnings figures, which topped most Wall Street estimates.

Google dominates the US online advertising market, which grew 14.9% to $10.58bn in the final three months of last year, according to eMarketer.

The market tracker estimated that Google takes than 41% of digital ad revenue in the US and "holds more share than any other company" when it comes to online, display and mobile advertising.

Google has sought to spread the use of its Android technology

However, cost-per-click prices were down 6% from the fourth quarter of 2011, and up 2% on the third quarter of 2012.

In a conference call with financial analysts, Google executives stressed how the company is connecting with people on smartphones and tablets, and cautioned that it would take time to get newly-acquired Motorola Mobility on course.

Mr Page said he was excited about progress Google has made in handling search queries spoken to mobile devices and described the online Play shop for music, books, applications and other digital content as "on fire."

Google's mapping service programme tailored for Apple gadgets running on the iOS platform have been a hit, Mr Page said, adding that its search and email programmes are also popular on Apple devices.

"We now live in a multi-screen world - in fact, we feel naked without our smartphones," Mr Page said.

"Devices have been one of our biggest bets in the last few years, along with the software that goes with these devices."

In an indirect shot at the Apple iPad Mini launched late last year, Mr Page said Google's Nexus 7 "continues to define the seven-inch tablet category."

Google has been shedding unwanted Motorola Mobility assets since it completed its $12.5bn takeover of the company last year.

The move was seen as a grab for patents to protect Google's Android mobile operating system from legal attacks.

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TweetDeck: Twitter Bosses Sent Closure Letter

By Pete Norman, Sky News Online

Sky News has obtained a letter sent to one of Twitter's UK companies by the business regulator, giving it written warning of impending closure.

Cardiff-based Companies House sent the letter to the two American directors of TweetDeck, at their registered London address.

The letter, dated January 22, stated: "The Registrar of Companies gives notice that, unless cause is shown to the contrary, at the expiration of 3 months from the above date the name of TweetDeck Ltd will be struck off the register and the company will be dissolved."

The letter sent by Companies House on January 22

The two directors are also top executives of the social media giant's San Francisco-based parent firm, Twitter Inc.

Dick Costolo is the social media giant's chief executive and Alex Macgillivray is general counsel and head of trust and policy.

TweetDeck is a platform used by 'power users' of Twitter and helps integrate the programme with other social media platforms, but has repeatedly failed to file compulsory accounts.

It was bought from British founder Iain Dodsworth in May 2011 for a reported £25m, but has not filed any accounts to Companies House since that time.

TweetDeck missed account filing deadlines last September and again last month.

In December Sky News revealed that both of the social media giant's British firms, TweetDeck and Twitter UK Ltd, had been fined £375 each by Companies House for separate filing oversight.

Twitter UK, which is controlled through a Dublin-based parent firm, subsequently filed its abbreviated accounts for 2011, revealing a profit of £16,500.

Twitter CEO Dick Costolo (l) and general counsel Alex Macgillivray

But TweetDeck has still not delivered accounts and has now been fined £750 and is now at heightened risk of closure and legal action.

According to Companies House, more than 2.7 million firms are actively registered and 99.1% are up to date in their filings.

Approached by Sky News, Twitter Inc declined to address the issue of continued regulatory filing problems in Britain.

Asked if it had plans to wind-down its UK subsidiary, a Twitter spokesperson said in a statement: "TweetDeck gives the Twitter experience more flexibility and allows advanced users to gain valuable insight into what's happening at this moment on Twitter.

"The TweetDeck team has been steadily innovating and improving the product, and we expect to see much more of that to come."

Last week Companies House informed the London Gazette of "a proposal to strike off" TweetDeck from the register.

TweetDeck has failed to file its compulsory accounts

The London Gazette is the official Government journal of record and allows officials at HM Revenue and Customs, along with creditors, to see firms at risk of being dissolved.

There is no suggestion TweetDeck has any outstanding tax liability.

Corporate solicitor Maung Aye, of Mackrell Turner Garrett, told Sky News: "Global companies usually have procedures in place to prevent problems like this arising in the first place. There should be clear lines of communication between the directors of the company and its professional advisors who would liaise with the directors to ensure the company's accounts are filed on time.

"At this stage it is unclear why the company has not filed its accounts. One possibility is that the company is in financial difficulty and is therefore not opposing the striking off action."

Mr Aye added: "I would however, expect the directors of the company to be advised that they should respond to the letters from the Registrar, in order to avoid any potential criminal liability and the company being fined."

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Zombie Fund Phoenix Rebuffs £400m Ignis Bids

By Mark Kleinman, City Editor

Phoenix Group, the 'zombie' life assurance company, has rebuffed a string of takeover approaches for its fund management arm as it approaches a crucial phase of efforts to replace billions of pounds of debt.

I understand that Phoenix, a FTSE-250 company set up to consolidate Britain's fragmented life assurance market, recently turned down several proposals to acquire Ignis Asset Management, which manages more than £73bn on behalf of clients.

Some of the approaches are understood to have been made as recently as the end of last year, according to people close to the company, who said that Aberdeen Asset Management had also indicated an interest in buying Ignis earlier in 2012.

Aberdeen's interest in Ignis is not currently live, according to people close to both companies.

Phoenix's board is understood to have rejected the approaches, which valued Ignis at approximately £400m, telling suitors that the business was not for sale, insiders said.

Phoenix manages so-called 'zombie' life assurance funds - investments that were made to back old insurance policies - rather than writing new business. The life assurance arm has around six million customers, according to the company.

Phoenix, which entered into ultimately fruitless talks to sell itself to rival Resolution and private equity group CVC Capital Partners in 2011, is in the middle of important refinancing talks with its lenders.

It has more than £2.5bn of debt, a large chunk of which is due to mature next year.

Phoenix is chaired by Sir Howard Davies, the City grandee who is leading a review of London's airport capacity for David Cameron, the Prime Minister. The company's chief executive is Clive Bannister, a former insurance executive at HSBC.

A Phoenix spokesman declined to comment.

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Unemployment: UK Jobless Total Down 37,000

Unemployment fell by 37,000 in the three months to the end of November, with the total figure of those out of work standing at 2.49 million.

The number of people claiming jobseeker's allowance last month also fell by 12,100 to 1.56 million, the Office for National Statistics (ONS) said.

Average earnings increased by 1.5% in the year to November, but were 0.3% down on the previous month, according to the ONS.

Almost 30 million adults were in a job in the quarter to last November, up by more than 500,000 on the previous year.

The figure, giving an employment rate of 71%, is the highest since records began in 1971. The unemployment level is also at its lowest since spring 2011.

It was the 10th consecutive fall and was coupled with another cut in the number of people claiming jobseeker's allowance, which was down by 12,100 last month to 1.56 million - the lowest since June 2011.

The number of people classed as economically inactive, including those looking after a relative or who have given up looking for a job, fell by 13,000 to just over nine million.

Part-time employment fell by 23,000, but this was offset by a 113,000 increase in the numbers employed full-time in the three months to November.

Data from the ONS also showed a 26,000 increase in the number of women out of work for up to six months, to reach 571,000, which may reflect changes to the benefits system resulting in more single mothers looking for work.

The number of job vacancies in the economy increased by 10,000 to almost half a million at the end of last year, the highest number for four years.

Other figures revealed that the number of self-employed workers has increased by 7,000 to 4.2 million, while unpaid family workers fell by 1,000 to 111,000.

Long-term unemployment has also fallen, down by 10,000 for those out of work for more than two years, to 434,000, and by 5,000 for people unemployed for at least a year, to 892,000.

But the number of 16 to 24-year-olds out of work increased by 1,000 to 957,000, the first rise since last summer, although youth employment showed an increase of 12,000 as more students seek work.

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JP Morgan Boss Says Sorry For 'London Whale'

The boss of JP Morgan has apologised for the $6bn (£3.8bn) loss caused to the investmet bank by the so-called London Whale trades.

JPMorgan Chase & Co chief executive Jamie Dimon said sorry to shareholders, calling it a "terrible mistake," but said the bank has moved on and is still highly profitable.

"If you're a shareholder of mine, I apologise deeply," Mr Dimon said at a presentation at the World Economic Forum in Davos, Switzerland.

"But we had record results and life goes on."

Despite the losses totalling $6.2bn from the bad trades last year, the bank still managed to earn a record $21.3bn (£13.4bn) in 2012.

The complex but legitimate derivatives trades were incurred by its chief investment office in London, overseen from a New York executive.

The losing trades were made in JP Morgan's London office

JP Morgan said its 2012 writedown was mostly felt in the first half, although there was a continuing "modest loss" from the trades in its third quarter.

While revenue from its fixed income trading revenue rose, helped by the Federal Reserve programme to buy mortgage debt, revenue from mortgage lending rose 36% as the US housing market continued its recovery.

The bank's trading hit came as the London team took bets that were designed to protect it by hedging against its other investments, but the strategy dramatically backfired.

The revelation hit banking shares across the world in May and heightened calls for more regulation in the UK.          

JPMorgan Chase still remains the largest US bank, with $2.36trn (£1.5trn) in assets as the end of last year.

Its chief investment office has since been restructured and traders and executives involved with the bad trade - referred to as the "whale" trade after the nickname of a London-based trader involved - were dismissed.

After an internal review, Mr Dimon's bonus for 2012 was cut in half from $22m (£14m) to $11m.

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Lloyds Confirms 940 More Banking Job Cuts

Lloyds Bank has confirmed it is to axe another 940 jobs, taking job loss announcements at the firm to 1,300 in the past few days.

Sky News has confirmed the cuts will occur in the group operations, insurance, retail, wealth and international and commercial divisions.

In a statement, the bank said: "Lloyds Banking Group is committed to working through these changes with employees in a careful and sensitive way.

"All affected employees have been briefed by their line manager today.

"The Group's recognised unions Accord, Unite and LTU were consulted prior to this announcement and will continue to be consulted."

But unions have reacted with anger to the job cuts.

Unite said  25% of Lloyds' workforce has now been cut since 2009, while the Accord union said almost 200 posts were being moved offshore to India.

Unite national officer Dominic Hook said: "Since 2009 Lloyds have slashed a quarter of the workforce.

"It is a complete disgrace that the bank, which is 41%-owned by the taxpayer, continues to cut jobs in such a cavalier manner.

"In the middle of an economic crisis, a bank part-owned by the public should be keeping jobs in the UK, not exporting them abroad."

Mr Hook added: "Unite has warned Lloyds Banking Group that if they are looking for a period of stability and growth to return it to profitability, this cannot and will not be achieved by continuous and damaging job loss announcements.

"Unite opposes these cuts and will be doing everything possible to stop compulsory redundancies."

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UK Economy: IMF Cuts Growth Forecast

By Ed Conway, Economics Editor

The International Monetary Fund has cut its forecast for UK growth this year and the next, in the latest economic blow for Chancellor George Osborne.

The IMF cut its forecast for Britain's expansion next year by more than any other major economy apart from Japan, dealing a blow to those hoping for a quick rebound from the recent double-dip.

The news comes days ahead of the release of official gross domestic product (GDP) figures for the final quarter of last year, which analysts expect will show the UK slipping back into economic contraction.

The IMF said that Britain would grow by 1% this year - 0.1 percentage points lower than in its October forecast, and by 1.9% next year - a 0.3 percentage point cut compared with October.

The changes came in the IMF's update to its World Economic Outlook.

The IMF is now more pessimistic on UK growth than the official forecasts delivered by the Office for Budget Responsibility (OBR), which expects growth of 1.2% this year and 2% in 2014.

Although it cut its forecasts for most countries around the world by 0.1% this year and the next, it said that it was cautiously positive about the global economy's prospects.

It predicted that world GDP growth would be 3.5% this year and 4.1% next year.

But added that "global growth is projected to increase during 2013, as the factors underlying soft global activity are expected to subside".

It said that unless the eurozone crisis returned, or the United States faced a crisis associated with its debt ceiling, "global growth could be stronger than projected".

However, it added that policymakers "must urgently address these risks".

It said that it expects the US to grow by 2% this year and by 3% in 2014.

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David Cameron Promises 'In-Out' EU Referendum

Mixed Reaction To Cameron Speech

Updated: 2:06pm UK, Wednesday 23 January 2013

David Cameron's key speech on Europe has sparked a predictably mixed reaction from within Britain and beyond. Here are the key quotes.

Deputy Prime Minister Nick Clegg

"It's entirely for the Prime Minister, as leader of the Conservative Party, to set out what he wants to put in the Conservative Party manifesto and what he wants to do if there was a Conservative majority government.

"My priority remains, and will always remain: yes, reform in Europe; yes, a referendum where the circumstances are right, as we've set out in law; but above and beyond anything else, promoting growth and jobs and building a stronger economy in a fairer society."

Labour leader Ed Miliband

Mr Miliband said that his party "do not want an in/out referendum".

"He is going to put Britain through years of uncertainty and take a huge gamble with our economy. He has been driven to it not by the national interest, he has been dragged to it by his party...

"He is running scared of Ukip and has given in to his party and he can't deliver for Britain."

Mayor of London Boris Johnson

"David Cameron is bang on. What most sensible people want is to belong to the single market but to lop off the irritating excrescences of the European Union.

"We now have a chance to get a great new deal for Britain - that will put the UK at the heart of European trade but that will also allow us to think globally."

Tony Blair

"Europe does need Britain and Britain needs Europe, which is why the sensible thing to do is to argue the case for reform in Europe.

"But the issue for me is why put that other question, why say we are actually going to put on the agenda the prospect of leaving altogether?

"Why would we do that? Why would we do that now when we don't know either what we are proposing, what the rest of Europe's proposing or what the outcome of these negotiations is going to be?"

Labour peer Lord Mandelson

Claims Mr Cameron has conceded "game, set and match to the hardliners in his party".

"It is not a search together in unity with our partners in Europe. Effectively, it's an ultimatum to them with a deadline.

"In my view, what he is doing is treating the European Union like a cafeteria service at which you arrive with your own tray and try to leave with what you want.

"Whether you believe that Mr Cameron's European gamble is a sincere attempt to reform and improve the European Union or a cynical ploy to head off opposition to his leadership in his own party, there is no mistaking he is playing for very high stakes indeed and I do not believe he is going to get what he wants by attempting to put a pistol to the heads of his fellow member states."

UKIP leader Nigel Farage

"Winning this referendum, if and when it comes, is not going to be an easy thing but I feel that UKIP's real job starts today.

"For the first time, a British prime minister is at least discussing the fact that leaving is an option. I remember many long, very lonely years in UKIP when, without a friend in the world, we were advocating this point of view.

"What today means is that in terms of the overall debate, the genie is out of the bottle and from now on the European debate will be taking place on terms that UKIP wants."

Shadow business secretary Chuka Umunna

"After this speech, we know that global companies looking to situate European headquarters are probably going to shy away from the UK, which will cost growth and cost jobs."

Former Lib Dem leader Sir Menzies Campbell

"This is more about Ukip than it is about the UK. The Prime Minister's efforts to reconcile his own position with that of his eurosceptic backbenchers leads logically to the position that if he could not get what he wanted out of Europe, he would be willing for the UK to leave.

"This will hardly commend his approach to those in the EU whose co-operation he requires."

Tory MP Dominic Raab

The Tory hailed a "moderate, statesman-like approach ... rightly focused on a fundamental change in strategic direction rather than tactics". "The ball is now in the EU's court," he said.

CBI director general John Cridland

"The EU single market is fundamental to Britain's future economic success, but the closer union of the eurozone is not for us.

"The Prime Minister rightly recognises the benefits of retaining membership of what must be a reformed EU and the CBI will work closely with Government to get the best deal for Britain."

Tory donor Lord Ashcroft

"Tories must remember that we can only get what we want once we win an election. The more we talk about changing our relationship with Europe, the less likely it is to happen.

"The new policy will be in the manifesto. The only question is whether we will get a chance to implement it - and that depends on whether we get a majority at the next election.

"And that depends on how voters think we are doing on the economy, jobs, public services, welfare, crime, immigration: whether we are on their side and understand their priorities.

"It is time for Tory Eurosceptics to declare victory and talk about something else."

Fiona Hall, leader of the Liberal Democrat delegation in the European Parliament

"David Cameron spoke not as Prime Minister but as a Tory Party leader backed into a corner by his outspoken tea-party backbenchers.

"Cameron has failed to reassure our European partners over the UK's commitment to push for EU-wide reform rather than unilateral repatriation and cherry-picking.

"As a result, the UK will lose further influence in Europe as other member states anticipate a 'Brexit' and discount the UK's views altogether."

Simon Walker, director general of the Institute of Directors

"A future referendum to decide the workings of our relationship is the best way to affirm Britain's participation in a free-market Europe which is competitive and deregulated.

"It is far better to deal with these issues than to shy away from them. British business is resilient. It is flexible and it can cope with change - or uncertainty. The eurozone crisis is the source of far more uncertainty than a referendum."

UKIP MEP and ex-European Commission chief accountant Marta Andreasen

"Mr Cameron fundamentally fails to understand the federal EU freight train. Whilst flexibility sounds great and was probably dreamed up by the Prime Minister whilst sitting in his slippers in Chequers, there is a different reality in Brussels.

"I can assure the Prime Minister that there is no such thing as flexibility when it comes to the EU's objective: a deeper federal Europe where member states' sovereignty becomes an anachronism.

"His speech, therefore, was naive. The train is on a one-way track."

Daniel Hannan Eurosceptic MEP

"This is David Cameron's finest speech."

French foreign minister Laurent Fabius

"We are like a football club, and if you want to join the football club, you can't then say you want to play rugby."

Martin Schulz, president of the European Parliament

Mr Schulz accused Mr Cameron of "playing a dangerous game for tactical, domestic reasons".

"The Prime Minister increasingly resembles the sorcerer's apprentice, who cannot tame the forces that he has conjured - forces that want to leave the EU for ideological reasons, to the detriment of the British people.

"Attempting to revisit major parts of the Acquis Communautaire and picking and choosing the bits of which the UK approves, sets a dangerous precedent.

"Indeed, it could lead to piecemeal legislation, disintegration and potentially the breakup of the Union.

"In a globalised world, it is not in the UK's interest to seek to downgrade to some kind of 'second class' EU membership and so choose to weaken its own influence on European and global affairs.

"We need a UK as a fully fledged member, not harbouring in the port of Dover."

German Chancellor Angela Merkel

"Germany, and I personally, want Britain to be an important part and an active member of the European Union.

"We are prepared to talk about British wishes but we must always bear in mind that other countries have different wishes and we must find a fair compromise.

"We will talk intensively with Britain about its individual ideas but that is some time over the months ahead."

Guido Westerwelle, German foreign minister

"Germany wants the United Kingdom to remain an active and constructive part of the European Union."

However, he insisted EU membership was an all-or-nothing proposition, saying: "Cherry-picking is not an option."

Ex-Belgian prime minister and Liberal Democrat leader in the European Parliament, Guy Verhofstadt

"By holding out the prospect of renegotiating the terms of Britain's membership of the EU and subjecting it to a referendum, David Cameron is playing with fire.

"He can control neither the timing nor the outcome of the negotiations and in so doing is raising false expectations that can never be met.

"There can be no question of individual renegotiation or opt-out by a single member state from agreed policies.

"To do so would precipitate the unravelling of the internal market as other countries sought their own concessions in return.

"Mr Cameron will not succeed if he attempts to hold his European partners to ransom."

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Iceland's Leader Slams Gordon Brown Over Crisis

By Ed Conway, Economics Editor, in Davos

The President of Iceland has launched an extraordinary verbal attack on Gordon Brown on the fringes of the World Economic Forum in Davos.

Olafur Ragnar Grimsson, the country's longest-serving president, told Sky News that his country would "never forget" its treatment during the financial crisis at the hands of the former British prime minister.

During the financial crisis, following the collapse of Icelandic bank Icesave and Iceland's refusal to refund UK deposits, Britain took the rare step of imposing financial sanctions on the country.

Mr Grimsson told Sky News: "The Gordon Brown government decided, to its eternal shame, to put the Icelandic government on a list of terrorist states and terrorist phenomena. We were there together with al Qaeda and the Taliban on that list.

We have not forgotten that in Iceland."

The Icesave website was used by British bank account holders

"Gordon Brown will be long remembered in my country for centuries to come, long after he has been completely forgotten in Britain."

Mr Brown is also in Davos to speak on panels about development and youth activism.

Mr Grimsson said that the estate of the bank had managed to recover enough assets to "pay back to those who have deposits and the British authorities everything which can be reasonably required".

An EFTA court is due on Monday to give a legal verdict as to whether Iceland's actions were appropriate, however Mr Grimsson said that this will only be advisory, and that "it will not lead to any financial obligations or transactions of any sort".

The president also signalled that his country may soon abandon its plans to join the European Union.

Iceland started formal negotiations towards becoming an EU member in 2009, but this week suspended it for what was expected to be a number of months.

However, when asked whether he could foresee his country joining the EU in his term, which still has three and a half years to run, Mr Grimsson said: "If you want me to take a bet, I would definitely say no."

Icesave protesters in Iceland demonstrated outside the country's parliament

He added: "It's quite clear both in my country and other parts of northern Europe that there is a growing scepticism about the way the European Union is moving forward.

"In the last three years the eurozone has revealed itself to be a different kind of animal.

"We have decided to take a pause, not to move forward at all in the coming months, and then to revisit the issue sometime later.

"We don't want to drag the process on for long. Later this year we will face the decision of whether we call the discussions off altogether ... or whether we prolong the talks which have now been created.

"There is no strong political force in my country arguing that we need to finish the negotiations quickly because we want to join the European Union."

Coming on the back of David Cameron's announcement of plans for a prospective in-out referendum on Britain's membership, the comments represent a further blow for the EU.

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