By Supantha Mukherjee and Anna Ringstrom
STOCKHOLM (Reuters) - Swedish telecom operator Telia Company on Thursday reported fourth-quarter core profit slightly below estimates, proposed a lower dividend and said it would cut 1,500 jobs this year, more than previously planned.
The logo of Microsoft is seen outside their offices in Herzliya, near Tel Aviv, Israel, Dec 27, 2022. REUTERS/Rami Amichay
18 Jan 2023 10:22PM (Updated: 19 Jan 2023 10:09AM)
DAVOS, Switzerland: Microsoft Corp on Wednesday (Jan 18) said it would eliminate 10,000 jobs and take a US$1.2 billion charge to earnings, as its cloud-computing customers reassess their spending and the company braces for potential recession.
The layoffs add to the tens of thousands announced in recent months across the technology sector, which has downshifted following a strong growth period during the pandemic.
The news comes even as the software maker is set to ramp up spending in generative artificial intelligence that the industry sees as the new bright spot.
In a note to employees, CEO Satya Nadella attempted to address the divergent outlook for different parts of the business.
Customers wanted to "optimize their digital spend to do more with less" and "exercise caution as some parts of the world are in a recession and other parts are anticipating one," he said. "At the same time, the next major wave of computing is being born with advances in AI."
Nadella said the layoffs, affecting less than 5 per cent of Microsoft's workforce, would conclude by the end of March, with notifications beginning Wednesday.
However, Microsoft would keep hiring in "strategic areas," he said. AI is likely to be one of those areas. Nadella this week touted AI to world leaders gathered in Davos, Switzerland, claiming the technology would transform its products and touch people around the globe.
Microsoft has looked at adding to its US$1-billion stake in OpenAI, the startup behind the Silicon Valley chatbot sensation known as ChatGPT, which Microsoft plans to soon market through its cloud service.
Shares of the Redmond, Washington-based company ended 2 per cent lower on Wednesday.
The announcement corresponds with the start of layoffs at its retail and cloud-computing rival Amazon.com Inc, which started notifying employees Wednesday of its own 18,000-person job cuts.
In an internal memo seen by Reuters, Amazon said that affected workers in the United States, Canada and Costa Rica would be informed by the end of the day. Employees in China will be notified after the Chinese New Year.
Facebook parent Meta Platforms Inc has announced cuts of 11,000 jobs, while cloud-based software company Salesforce Inc said it would cut 10 per cent of its 80,000-member workforce.
Overall, in 2022, more than 97,000 job cuts in tech were announced, the highest for the sector since 2002, when 131,000 cuts were announced, according to outplacement firm Challenger, Gray & Christmas.
NEW YORK • Hewlett Packard Enterprise (HPE) in a statement on Thursday reported declining sales and announced it would cut jobs and reduce executive pay, saying the coronavirus pandemic has disrupted supply chains for data centre hardware.
The company, which has its regional headquarters in Singapore, said it was putting in place a plan to cut costs, with a goal of US$1 billion (S$1.4 billion) in savings by the end of fiscal 2022. Measures will including simplifying its product portfolio and supply chain as well as changing customer support, marketing efforts and real estate strategies, HPE said in the statement.
"It definitely was a tough quarter by every measure and I'm disappointed in the performance, but I don't see this as an indication of our capabilities," chief executive Antonio Neri said in an interview.
"This was clearly driven by supply chain disruptions because of coronavirus", including a shortage of chip components from China, disrupted logistics and social distancing guidelines in some regions, he added.
When contacted by The Straits Times, HPE said it has about 1,300 staff in Singapore. The company said there have not been any country-specific announcements regarding its cost-cutting plan. It did not comment on whether there will be any job cuts in Singapore.
Mr Neri said he expected HPE's sales to "recover sequentially", with the third quarter posting better results than the second and the fourth improving further. Still, he said, it is unknown just how bad the economic downturn will be.
Revenue fell 16 per cent to US$6 billion in the period ended April 30, HPE said. Analysts, on average, expected US$6.19 billion, according to data compiled by Bloomberg.
Profit, excluding some items, was 22 cents a share, compared with an average estimate of 28 cents.
The company withdrew its annual profit forecast last month, citing uncertainty from the Covid-19 pandemic. HPE shares dropped about 5 per cent in extended trading after closing at US$10.36 in New York. The stock has dropped 35 per cent this year.
Mr Neri has struggled to spark sales growth at the computing and networking company, which has seen year-on-year revenue declines in all but one quarter since the company split from HP Inc in 2015. Competing with larger hardware rival Dell Technologies and dominant cloud computing companies such as Amazon.com and Microsoft, HPE has hitched its future to edge computing, which distributes data-processing capacity closer to customers rather than at centralised data centres. More immediately, the company has sought to support sales by offering US$2 billion of financing for clients trying to preserve cash in the pandemic.
Under the company's three-year plan to reduce expenses, senior executives including Mr Neri will take 20 to 25 per cent cuts to their base salaries, and the board reduced each director's cash retainer by 25 per cent from July to the end of the fiscal year.
The hardware maker will consolidate offices where possible, Mr Neri said. He expects more than half of HPE's employees will not return to the office full time, dropping in for meetings and collaboration when necessary.
The number of employees who may lose their jobs under the cost-cutting plan has not been determined, Mr Neri said. The company will spend the next few months working out the details and evaluating how much it can save in other areas. HPE has instituted some temporary pay cuts and frozen employee pay rises and promotions, executives said on a conference call after the results were announced.
Revenue fell 16 per cent to US$6 billion in the period ended April 30, HPE said. Analysts, on average, expected US$6.19 billion, according to data compiled by Bloomberg.
In the fiscal second quarter, revenue declined in all of HPE's business segments. Server sales dropped 20 per cent to US$2.64 billion and storage hardware fell 18 per cent. HPE's integration of supercomputer maker Cray is on track and should yield synergies by next year, executives said.
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TOKYO • Nissan Motor is planning to cut more than 20,000 jobs across the world, as it grapples with closed factories and showrooms amid the coronavirus pandemic, Kyodo News reported.
TOKYO • Nissan Motor is planning to cut more than 20,000 jobs across the world, as it grapples with closed factories and showrooms amid the coronavirus pandemic, Kyodo News reported.
The outbreak is forcing the Japanese carmaker to cut back on production, and it is also considering restructuring measures in the country, the news agency reported.
The job reductions are part of a mid-term reorganisation plan that Nissan is due to unveil next Thursday, Kyodo said.
The reduction is much larger than the 12,500 staff cuts Nissan announced in the middle of last year. Nissan has been in turmoil since the November 2018 arrest of former chairman Carlos Ghosn, with an ageing car line-up and management paralysis denting its outlook.
The automaker warned last month that it expects to post a loss for the latest fiscal year through March, as the pandemic shuttered dealerships in major markets and the economic fallout hurt consumer demand for new cars.
A representative for Nissan declined to comment on the report.
Nissan plans to cut about 300 billion yen (S$4 billion) in annual fixed costs and book restructuring charges as the pandemic further depresses its sales, a person with knowledge of the measures said last week.
The automaker will phase out the Datsun brand, shut down one production line in addition to the recently closed operation in Indonesia, and reach the reduced spending target this year by cutting marketing, research and other costs, the person said.
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Standard Chartered's new chief executive has told staff he plans to cut a quarter of its most senior management positions in a drastic drive to cut costs at the emerging market lender.
Bill Winters' plan to cut 1,000 of StanChart's 4,000 top managers underlines the scale of the overhaul being drawn up to turn round the bank's deteriorating performance.
The cuts at StanChart add to the widespread bloodletting in the European banking sector, where many large lenders are shedding thousands of jobs to improve sluggish performance, including Deutsche Bank, HSBC, Royal Bank of Scotland and Barclays.
Concerns about how hard StanChart will be hit by a slowdown in emerging markets and a slump in commodity prices — two of its core areas of business — have dragged down its shares recently.
But when Mr Winters' latest memo to staff was leaked on Friday it sent shares in the bank up 5 per cent, extending a rebound that started this week.
The memo told staff that a quarter of managers ranked in its seniority bands one to four would be informed that they are losing their jobs by the end of November. It also said the bank would sell assets and exit underperforming areas of business.
StanChart is preparing for the Bank of England to announce in early December the results of its stress tests on UK lenders to examine how they would fare in an emerging markets crisis.
Analysts at Goldman Sachs this week forecast that StanChart would be judged to have a $4bn capital shortfall in the stress test.
But Goldman estimated it could raise this money from asset sales and by exiting underperforming businesses, without needing to do a rights issue. It already cut its dividend in half in July.
StanChart said: "Bill's note to staff is an update on what we said we were going to do. In it he has made it clear that kick-starting performance is a priority and we are not standing still.
"We have a clear sense of our direction of travel and the key areas of focus — superior execution, targeted investments, divestment where we are not advantaged and innovation in our product and process design."
It added: "On headcount, we said previously (when we announced the management team and organisational changes in July) that there would be further personnel changes to come, as we simplify our organisational structure. We have already acted to reduce management layers and as a result will have up to 25 per cent fewer senior staff."
Mr Winters announced plans in July to shrink the bank's structure from eight to four regional units and appointed new chiefs to each of the expanded new divisions who will report directly to him.
The London-listed bank, which focuses on Asia, the Middle East and Africa, emerged relatively unscathed from the financial crisis.
But a long streak of double-digit profit growth was broken three years ago as its share price was dented by a series of profit warnings and scrapes with US regulators.
Several senior executives have left the bank recently, including Viswanathan Shankar, head of Europe, Middle East, Africa and the Americas; and Jaspal Bindra, head of Asia.
Bill Winters
StanChart is recruiting externally to fill a number of positions including head of the corporate and institutional bank, chief risk officer and head of compliance.
The bank, which employs almost 90,000 people mostly in Asia, is also searching for a successor to Sir John Peace, who is due to step down as chairman next year.
Mr Winters, a former JPMorgan executive, has warned investors that they should not expect a quick fix to the problems of the past couple of years. He aims to announce his strategic plan by the end of the year, most likely after it reports third-quarter results in early November.
Hong Kong: Standard Chartered chief executive Peter Sands moved aggressively on Thursday to reverse the Asia-focused lender's fortunes by closing the bulk of its global equities business and announcing 4,000 job losses in retail banking.
The bank said in a statement that it is dismantling its stock broking, equity research, and equity listing desks worldwide, leading to 200 job cuts as it exits an unprofitable business in which it had failed to build scale.
In its retail banking division, Standard Chartered said it has cut or announced the cutting of 2,000 jobs in the last 3 months, and plans to axe a further 2,000 over the course of this year.
The move forms part of a cost-cutting plan the bank announced last October that is targeting $400 million in savings this year, as it tries to bounce back after seeing its share price slump more than 40 per cent over the past two years.
The bank said the retail job cuts should save $200 million in costs this year, while the closure of the equities business should result in $100 million of savings in 2016.
Standard Chartered shares in Hong Kong were up 2.15 per cent at 04:23 GMT, reflecting expectations the cost-cutting move would help to boost profit.
Yet, some analysts said more action may be needed to get the bank back on track.
"It's a logical step. But laying off staff is not enough to address the situation, said James Antos, a banking analyst at Mizuho Securities Asia in Hong Kong.
The cuts come less than two months after rating agency Standard & Poor's hit the London-based bank with its first ever downgrade following three profit warnings in less than 12 months and rising losses from bad loans.
Sands, who turned 53 on Thursday, had achieved a decade of record profits up until 2013 with big bets on growing the bank's loan book in Asia and a push into commodities.
But after eight years at the helm, Sands is increasingly coming under pressure from shareholders to revamp the bank, with some investors urging the bank to plan his successor.
Its biggest shareholders include Singapore state investor Temasek and asset managers Aberdeen Asset Management and BlackRock.
Standard Chartered said in October that operating profit for the July-September quarter fell 16 per cent to $1.5 billion in the same period a year ago.
LOCKED OUT
Standard Chartered launched its equities business in November 2008 when it acquired brokerage Cazenove from JPMorgan.
The division includes cash equities, research and underwriting, all of which the bank said are unprofitable.
It failed to rank among the top ten banks globally for research or trading at the end of 2013, according to a survey by Greenwich Associates, and ranked just 23rd last year in equity underwriting in Asia Pacific according to Thomson Reuters data.
Equity capital markets head A Rajagopal, previously a banker with UBS India, had been leading that business since 2012, trying to build presence in a division that was traditionally not Standard Chartered's strongest suit.
"Management is continuing with their rationalization process and no unprofitable sacred cows have been left untouched," said Christopher Wong, a senior investment manager at Aberdeen Asset Management Asia.
Bankers in Standard Chartered's equities division in Hong Kong arrived on Thursday to find they were locked out of the office, while some in Singapore were escorted from their workplaces.
"We came in this morning and were told the equity business was being shut down," a woman who identified herself as an ex-employee at the bank's offices in Singapore told Reuters, saying she had worked in research.
The decision to exit equities marks a reversal in strategy for the bank, which had been hiring staff in the division as recently as October last year.
Standard Chartered would be one of the first global banks to completely exit the equity capital markets business, which involves underwriting stock offerings for companies.
The move comes despite a boom in equity underwritings in Asia that saw fees for the industry rise 74 per cent in 2014 after a three-year decline.
Standard Chartered said it would though retain its equity derivatives business as well as its convertible bond and macro-economic research units.
Royal Dutch Shell is cutting more than 6,500 jobs globally as it prepares for an ongoing "oil price downturn that could last for several years," said CEO Ben van Beurden on Thursday.
Oct. 10, 2013, 11:30 p.m. EDT
By Anna Driver
HOUSTON (Reuters) - Chesapeake Energy Corp has slashed its workforce by 1,200 jobs this year, the country's second-largest natural gas producer said on Tuesday, and the cutting has accelerated under new chief executive Doug Lawler.
http://news.yahoo.com/chesapeake-cut-10-percent-workforce-205515035--finance.html
"Do you have patience to wait till your mud settles and the water is clear? Can you remain unmoving till the right action arises by itself?" - 老子 - Laozi
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