QBE sends 100 Aussie IT jobs to India; White House Twitter hoax briefly wipes US$136.5bn off US market

Insurer QBE revealed last week that it plans to move 100 IT jobs from Australia to India, following recent disappointing financial results for the company.

The 100 positions make up almost one third of the company’s IT workforce in Australia and include systems analysts, sysadmins, support staff and developers.

The announcement comes after Moody’s cut QBE’s credit rating by one notch from A3 to Baa1.

In February, QBE posted a 2012 profit of $741 million, which fell short of previous estimates. At the time, the company announced that it would move about 700 non-IT roles from Australia, the US and Europe to cheaper countries like the Philippines and India.

The Finance Sector Union (FSU) described the new 100 IT cuts as part of “QBE’s war on Australian workers”.

The FSU said it was working with QBE to help find jobs for or retrain those affected by the recent cuts.

“The ultimate goal for us is to keep these people in work in the finance sector, preferably in QBE,” FSU spokesperson Leanne Shingles said.

The $136 billion tweet

US financial markets plunged last week after a hacker broke into the Associated Press’s (AP) official Twitter account and posted a hoax tweet stating that the White House had been bombed.

The hoax tweet read: “Breaking: Two Explosions in the White House and Barack Obama is injured”.

Both the White House and the AP informed the public within minutes that the report was not true. But within three minutes of the hoax tweet going live, “virtually all U.S. markets took a plunge” with one trader describing it as “pure chaos”, according to Reuters.

“The tweet briefly wiped out $136.5 billion of the S&P 500 index’s value before markets recovered,” Reuters said.

Following the tweet, the S&P 500 Index fell about 1%, while the Dow Jones Industrial Average dropped about 130 points. Both the Dow and the S&P regained their previous levels after it was revealed minutes later that the AP had been hacked.

Some have blamed automatic electronic trading for the financial markets’ sudden drop following the hoax tweet.

“No human believed the story. Only the computers react to something that serious disseminated in such a way,” said Rick Fier, director of equity trading at Conifer Securities in New York.

Jonathan Corpina, a senior managing partner with Meridian Equity Partners, told Bloomberg that algorithmic trading programs that read news headlines may have started the selling.

“And then other [algorithms] jump in to play the snowball effect, and little by little you have the computer trading systems that have cancelled all their orders on the buy side and the sell [algorithms] hit all these bids, and that’s the big dip we saw,” he said.

The Syrian Electronic Army (SEA) claimed responsibility for the hack. The SEA has previously taken credit for web attacks on media targets it sees as sympathetic to Syria’s rebels.

The FBI has opened an investigation into the incident.

The AP’s two Twitter accounts were suspended shortly after the hoax tweet went live. The company later reported that hackers had previously made several attempts to steal the passwords of its journalists.

One cybersecurity lawyer spread blame for the drop across the board, saying AP should have better passwords, Twitter should use two-factor authentication and Wall Street traders shouldn’t trade based on Twitter reports.