Posts Tagged ‘job cuts’

Elon Musk’s SpaceX to cut 10% of its workforce

January 12, 2019

Tech entrepreneur views launch service as stepping stone in his goal to reach Mars

FILE - A Falcon 9 rocket lifts off from Vandenberg Air Force Base, Calif., March 30, 2018. On Friday, a SpaceX rocket launched 10 more voice and data satellites for Iridium Communications, which is replacing its entire fleet with a new generation of orbiters.

FILE – A Falcon 9 rocket lifts off from Vandenberg Air Force Base, Calif., March 30, 2018. On Friday, January 11, 2019, a SpaceX rocket launched 10 more voice and data satellites for Iridium Communications, which is replacing its entire fleet with a new generation of orbiters.

By Richard Waters in San Francisco

SpaceX, Elon Musk’s private space venture, is cutting 10 per cent of its workforce as it repositions itself for a new set of initiatives.

Image result for SpaceX, Elon Musk pictures

The Los Angeles-based company has expanded to some 6,000 people on the back of a successful private launch service that includes both Nasa and the US Air Force among its customers.

But Mr Musk has always viewed the launch service, which includes sending supplies to the International Space Station and putting commercial satellites into orbit, as a stepping stone to his bigger goal of reaching Mars.

SpaceX said on Friday that the need to focus resources on “developing interplanetary spacecraft” was one of the reasons for the job cuts. Along with its goal of launching a satellite communications network to deliver internet services around the world, this meant it needed to become “a leaner company”, SpaceX said, adding: “Either of these developments, even when attempted separately, have bankrupted other organisations.”

The job cuts come a month after SpaceX raised more than $250m in its latest round of private fundraising. Its valuation has climbed steadily as it has established itself as a reliable, low-cost launch operator, reaching $30bn with the latest round, three times what it was judged to be worth when Google and Fidelity Investments pumped $1bn into the company.

SpaceX carried out 20 launches in 2018, two more than the previous year, when it was bouncing back from a September 2016 launch pad explosion that threatened to disrupt operations. It also completed the first launch of the Falcon Heavy, a heavy-lift rocket designed to carry humans beyond the ISS in low earth orbit.

Facts About SpaceX's Falcon Heavy Rocket

 

A Falcon Heavy rocket takes off from NASA’s Kennedy Space Center on Feb. 6, 2018.  Credit: SpaceX

 

SpaceX names first private passenger to fly to the Moon SpaceX would not comment on the number of job cuts it was planning, though one person familiar with the move put them at 10 per cent. “This action is taken only due to the extraordinarily difficult challenges ahead and would not otherwise be necessary,” the person said.

The first launch of the Falcon Heavy early last year brought huge interest in SpaceX’s progress in developing the capabilities to open up interplanetary travel. That could be matched this year if it succeeds in a plan to launch humans into space for the first time in its Dragon spacecraft — a feat that would mark the first time a private space company has put astronauts into orbit.

Image result for Sir Richard Branson’s Virgin Galactic, pictures

Sir Richard Branson’s Virgin Galactic last month claimed the record of being the first private company to put humans into space, after two test pilots reached a height of more than 50 miles, the point that the US government considers to be the start of space.

https://www.ft.com/content/6dc96494-1606-11e9-a581-4ff78404524e

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GM sees higher 2019 profits on job cuts, solid US, China sales

January 11, 2019

General Motors projected strong 2019 profits Friday, fueled by savings from a deep restructuring including job cuts, and by solid sales in the United States and China.

GM, which has faced criticism from President Donald Trump and other US politicians over the planned layoffs, expects $2-2.5 billion in additional profits this year due to the restructuring, pushing its earnings-per-share forecast well above analyst expectations.

The biggest US automaker forecast 2019 profits of between $6.50 and $7.00 a share, compared to the $5.88 now expected by Wall Street analysts. GM also said it expects 2018 earnings per share to exceed analyst expectations.

GM chief Mary Barra has come under fire for the company's planned layoffs, but now says the restructuring will boost profits this year

GM chief Mary Barra has come under fire for the company’s planned layoffs, but now says the restructuring will boost profits this year GETTY/AFP

“We are focused on strengthening our cash generation and creating efficiencies that will position us to take advantage of opportunities through the cycle,” said Chief Financial Officer Dhivya Suryadevara said in a statement.

Global markets have been shaken in recent weeks amid worries over slowing global growth due in part to weakness in China amid the trade confrontation with Washington, and some forecasts indicating the US will tip into recession in 2020.

But GM offered a solid outlook for the US the China, estimating overall US sales in 2019 in the “low 17-million range,” a good level, and projecting no sales drop in China.

GM Chief Executive Mary Barra was upbeat on the prospects for a US-China trade deal, characterizing this week’s talks between US and Chinese officials as “constructive.”

According to news reports the next round of talks is set for late January in Washington.

Barra told reporters it was a “good sign” that the two governments already had plans for additional negotiations, adding that sales in China also could be boosted by government stimulus spending.

AFP

General Motors to cut thousands of jobs in massive restructuring

November 27, 2018

US auto giant General Motors announced Monday it will cut 15 percent of its workforce and shutter five factories in North America to save $6 billion and adapt to “changing market conditions”.

The moves include shuttering a further two plants outside North America as the company responds to changing customer preferences and focuses on popular trucks and SUVs and increasingly on electric models.

The closures drew sharp criticism from the US and Canadian labor union representing GM workers, which accused the company of shifting production overseas at the expense of North American workers.

The job cuts from GM’s current 180,000-strong work force will be particularly stinging in politically crucial areas of Ohio and Michigan, a region US President Donald Trump has promised to revive.

© Alan Freed, Reuters | A view of the General Motors Lordstown Complex in Warren, Ohio, one of three North American assembly plants GM plans to shut down next year.

“The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future,” GM CEO Mary Barra said in a statement.

General Motors

@GM

Today we announced new actions to accelerate our transformation to help create a , and world. That means making hard decisions now to stay ahead of changing market conditions, positioning us to lead the future. http://s.gm.com/7rspr 

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Trump expressed dismay at the plan and said he was “very tough” with Barra when they discussed the reorganization.

“I spoke with her when I heard they were closing and I said, ‘You know, this country has done a lot for General Motors. You better get back in there soon,'” he told reporters at the White House. “They better put something else in.”

Trump’s aggressive trade policies have been aimed specifically at saving US manufacturing jobs, including the renegotiation of the North American Free Trade Agreement, which took aim at rules governing auto trade to favor the US industry.

Still, GM will shutter three North American auto assembly plants next year: the Oshawa plant in Ontario, Canada; Hamtramck in Detroit, Michigan and Lordstown in Warren, Ohio.

In addition, GM will close two US propulsion plants — which produce batteries and transmissions — in Baltimore, Maryland and Warren, Michigan, as well two unidentified plants outside of North America.

While the company said in its quarterly earnings late last month that it saw costs jump by $400 million due to Trump’s tariffs on steel and aluminum, a spokeswoman said the latest decisions “are not related to any recent trade or tariff decisions”.

‘Corporate greed’

Senator Sherrod Brown, an Ohio Democrat, lambasted GM’s move as “corporate greed at its worst” and also took a swipe at the 2017 tax cut favored by Trump which was touted as a jobs winner.

“The company reaped a massive tax break from last year’s GOP tax bill and failed to invest that money in American jobs,” Brown said on Twitter.

In Canada, Prime Minster Justin Trudeau expressed “deep disappointment” with the plant closure.

Workers at the Ontario plant, which employs 3,000 staff, staged a wildcat strike to protest the closure.

The job cuts will include a 25 percent reduction in executive-level employees to “streamline decision making,” the company said.

GM shares jumped after the announcement, closing up 4.8 percent on the day. Analysts were generally upbeat about the news.

“In contrast to times past, General Motors under CEO Mary Barra is trying to get ahead of a potential crisis by making cuts now,” Michelle Krebs of Autotrader said in a client note.

While GM has been increasing its focus on highly popular trucks and SUVs, the company said it would also prioritize investment in “next-generation battery-electric architectures”.

‘Slap in the face’

UAW, the autoworkers union, blasted GM’s decision, saying the company was just looking for cheaper workers, and vowed to fight back.

“This callous decision by GM to reduce or cease operations in American plants, while opening or increasing production in Mexico and China plants for sales to American consumers, is, in its implementation, profoundly damaging to our American workforce,” said UAW vice president Terry Dittes.

China has become an increasingly important market for the automaker and in the first nine months of 2018, it sold 2.7 million cars in China compared to 2.6 million in all of North America.

However, spokeswoman Julie Huston-Rough denied the charge, telling AFP that “these products will not be manufactured in other locations for the North American market.”

She also said the company remains committed to its facilities in Ohio, despite the closure of the Lordstown plant, with six other locations and 4,000 employees, as well has hundreds of suppliers and dealers.

Jerry Dias, president of Unifor, the Canadian labor union, said he “will vigorously fight again to maintain these good-paying auto jobs.”

(FRANCE 24 with AFP)

Qualcomm confirms it is in the midst of layoffs

April 19, 2018

Qualcomm chip
Photo: Qualcomm

Chipmaker Qualcomm confirmed to Axios it is in the process of job cuts, but declined to say how many employees were being laid off. “As part of the cost reduction plan announced in January, Qualcomm is conducting a reduction of our full-time and temporary workforce,” the company said in a statement.

Why it matters: The company announced plans to cut costs in January as it grappled with a number of factors including a hostile takeover bid from Broadcom, a legal dispute with Apple as well as antitrust issues around the globe.

Qualcomm said it had hoped to avoid layoffs and still make needed cost cuts. “We first evaluated non-headcount expense reductions, but we concluded that a workforce reduction is needed to support long-term growth and success,” it said.

The company filed notice with California authorities that it planned to cut jobs. Such notices are required when 50 or more jobs are being cut in the state. Bloomberg reported earlier Wednesday about the filing.

https://www.axios.com/qualcomm-confirms-layoffs-11404839-5f1b-4c13-ae24-8db80ba70d5c.html

France’s Carrefour revamps operations with job cuts, China deal

January 23, 2018

AFP

PARIS (AFP) – 

 Image result for Carrefour, photos

France’s Carrefour group said Tuesday it is overhauling its business in a transformation plan involving thousands of job cuts, a product revamp and new partnerships in China.

Carrefour, which was the world’s second-biggest retailer at the start of the century after US giant Wal-Mart, has since slipped to ninth position, according to the Deloitte consultancy, having been overtaken by the likes of Amazon and Costco.

Some 2,400 jobs will be cut in Carrefour’s French operations, which currently total 10,500 staff, via voluntary redundancies, the group announced.

The retailer’s product mix is to be redirected towards more organic produce, with a target of increasing sales in that segment almost four-fold by 2022, it said.

“We must revamp our model, by simplifying our organization, opening ourselves up to partnerships, improving our operational efficiency, investing in our growth formats, building an efficient omnichannel model and developing our fresh and organic products offer, notably under the Carrefour brand,” CEO Alexandre Bompard said in a statement.

The group said it will also accelerate its online development, aiming for a 20-percent market share in French online food sales, and open at least 2,000 new neighbourhood outlets in its French home market in coming years.

Carrefour is hoping for 2 billion euros ($2.45 billion) dollars of annual savings from 2020 onwards thanks to the restructuring as it streamlines logistics and overheads.

Separately, Carrefour also said it had signed a deal with Chinese internet giant Tencent and supermarket group Yonghui which will take a minority stake in Carrefour’s Chinese subsidiary.

“The potential investment will leverage Carrefour’s global retail knowledge with Tencent’s technological excellence and Yonghui’s operational knowhow and in particular its deep knowledge of fresh products,” Carrefour said.

Stock market investors took an instant liking to Carrefour’s announcements, pushing the retailer’s shares more than three percent higher at the opening on the Paris bourse.

Siemens to slash 1,700 German jobs in efficiency drive

May 11, 2017

AFP

© AFP | German industrial conglomerate Siemens said the 1,700 job cuts were part of an efficiency drive across a number of different divisions

FRANKFURT AM MAIN (AFP) – 

German industrial conglomerate Siemens on Thursday said it would slash 1,700 jobs in Germany in the coming years as part of a restructuring and efficiency drive.

The sprawling engineering giant also said that it would transfer a further 1,000 jobs to supplier companies or to other units within the group.

Siemens, which manufactures a wide range of products — from gas and wind turbines to trains and medical equipment — said the job cuts were part of an efficiency drive across a number of different divisions.

The group’s IT department would bear the brunt of the the cuts, with 1,350 posts to go over the next three years.

But its “digital factory” and “mobility” divisions would also be affected.

Munich-based Siemens said it would help employees concerned to apply for other positions in the group, which plans to hire around 9,000 people in Germany over the same period.

In its 2016 annual report, Siemens said that it employs around 350,000 people worldwide.

© 2017 AFP

Deutsche Bank shares plunge 6.0% on news of capital hike — Worst performer in the Dax index of leading German companies

March 6, 2017

AFP

Image may contain: one or more people

FRANKFURT AM MAIN (AFP) – 

Shares in Germany’s biggest lender Deutsche Bank fell as much as 6.0 percent as the Frankfurt market opened on Monday, hours after the bank announced it would raise cash by issuing new shares.

The bank’s shares were down 4.89 percent to trade at 18.20 euros ($19.36) just before 0830 GMT, making Deutsche the worst performer in the Dax index of leading German companies, which was down 0.73 percent.

Sunday’s announcement that the banking giant would raise new capital is a turnaround for CEO John Cryan, who until recently insisted no such move was needed.

Deutsche reported a net loss of 1.4 billion euros for 2016, after it agreed with US authorities around $7 billion in fines and compensation over its role in the sub-prime mortgage crisis.

Shares in the bank plunged at several points throughout last year, including when news of the DoJ’s demand became public in September and when several hedge funds later withdrew investments.

Sapped by some 8,000 legal cases worldwide as well as stricter regulation in Europe and historic low interest rates, Cryan has sought to convince investors and observers of the bank’s strength since his installation in 2015.

He had already set in motion a far-reaching restructuring including around 9,000 job cuts in home market Germany.

But the plans announced on Sunday go further, reorganising the bank around three pillars of retail and commercial banking, asset management, and corporate and investment banking.

Deutsche plans to focus more closely on Germany by retaining retail banking subsidiary Postbank and integrating it into its business — giving it a 20 million strong customer base in one of Europe’s most stable economies.

© 2017 AFP

Standard Chartered says its income and profit are unacceptable — Will cut about a tenth of its global corporate and institutional banking work force

November 28, 2016

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A DBS (top) and Standard Chartered bank logo (C) are seen on the building at Marina Bay financial district in Singapore on Jul 21, 2016. (Photo: ROSLAN RAHMAN/AFP)

Reuters

SINGAPORE/HONG KONG: Standard Chartered is set to cut about a tenth of its global corporate and institutional banking headcount, sources with direct knowledge of the matter told Reuters on Monday (Nov 28) as the bank keeps up an aggressive drive to cut costs.

Standard Chartered Chief Executive Bill Winters this month branded the bank’s income and profit unacceptable, as below-forecast third-quarter results underlined the challenges facing his overhaul.

The job cuts will be rolled out beginning this week across all the bank’s major business in Singapore and Hong Kong in Asia, one of the sources told Reuters. All the sources declined to be named as they were not authorised to speak to the media.

“We are making our corporate and institutional banking division more efficient,” a Standard Chartered spokesman said, without revealing how many jobs are to be axed.

“Removing duplication in roles and managing our costs to protect planned investments in technology and people means that a small number of existing roles will be impacted.”

(Reporting by Anshuman Daga and Sumeet Chatterjee; Editing by Denny Thomas and Clarence Fernandez)

European banking stocks plunge, dragged down by Deutsche Bank — Banks in France, Spain, Italy, Britain Hit Hard

September 30, 2016

PARIS (AFP) – 

Banking stocks across Europe plunged Friday, dragged down by a sharp opening fall in shares in Deutsche Bank, Germany’s biggest lender.

Deutsche stock dropped around nine percent in early business amid fears about its viability, pulling down its peers, with Societe Generale in Paris, Barclays in London, Unicredit in Milan and Santander in Madrid losing between four and five percent in response.

But Deutsche shares recouped some of their early losses after the first hour of trading, posting a two-percent loss by 0810 GMT.

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Pressure is building for Germany to show it’s ready to rescue Deutsche Bank

By Jeff Cox
CNBC

German officials could be about to find themselves in an uncomfortable position: Being called on to show they’re ready to rescue a bank in a part of the world where such operations are considered taboo.

Deutsche Bank came under intensified market fire Thursday, the latest salvo being a Bloomberg report that a small number of hedge funds are trimming their sails at the German bank.

In a broad perspective, the move would represent a minor dent in Deutsche’s derivatives clearing business. Barry Bausano, chairman of Deutsche’s hedge fund business, told CNBC on Thursday that while there have been some outflows, there have also been inflows, which he said is “part of the typical ebbs and flows” of the prime brokerage business.

But at a time when investors are fearing what the future holds for the highly leveraged institution, such news is enough to cause ripples. Shares tumbled more than 7 percent in mid-afternoon trading. The plunge took the broader market down as well.

Consequently, market talk intensified that it’s becoming time for the German government step in and assure investors that it will be at the ready to stabilize both Deutsche and the broader system — much along the lines of what U.S. officials had to do during the 2008 financial crisis.

“They’re going to probably have to say that they would be willing to put funds into the bank,” said banking analyst Christopher Whalen, senior managing director and head of research at Kroll Bond Rating Agency. “It’s exactly like what (former Treasury Secretary Henry) Paulson did with Citi … It’s a very analogous situation. Hopefully, the German government will take a page from that particular book and look at how the U.S. responded.”

Deutsche bank clock ticking

Kai Pfaffenbach | Reuter

In a statement, Deutsche Bank pointed out that it is financially stable: “Our trading clients are amongst the world’s most sophisticated investors. We are confident that the vast majority of them have a full understanding of our stable financial position, the current macro-economic environment, the litigation process in the U.S. and the progress we are making with our strategy”

As Citigroup teetered in late-2008 and early-2009, Paulson’s Treasury stepped in with two cash injections to keep the financial contagion from spreading after Lehman Brothers failed on Sept. 15, 2008. The highly unpopular bailouts kept Citi afloat as fear spread about further implosions in the financial system.

However, the European corporate culture is different, particularly when it comes to banking. Bailouts are considered anathema, and German officials in recent days have signaled an unwillingness to step in.

“The Germans have to stop talking about this publicly unless they say, ‘Yep, we got ’em, there is no issue here,'” Whalen said. “The concern is that the statements they did make were not helpful.”

The situation conjured dark images of the 2008 financial crisis — with the important caveat that the overall risks are nowhere near as great now as they were then.

“After being there I am literally sitting here with chills coming down my spine because we’re in a very similar dynamic,” Larry McDonald, head of global strategy at ACG Analytics, said on CNBC’s “Power Lunch.” “Deutsche Bank is not Lehman in terms of the overall global risk, but the political situation is almost identical.”

“The politicians in Germany aren’t in position right now to do anything ahead of the election,” he added. “The beast in the market, the serpent in the market, knows this, and the market will push and push and push until they break the politicians in Germany to come up with public funds.”

In the meantime, market angst builds.

Millennium Partners, Capula Investment Management and Rokos Capital Management are among the 10 hedge funds that have pulled cash and cut positions at Deutsche, according to the Bloomberg report, which noted that most of the 200 firms that conduct derivatives clearing with Deutsche have not altered their positions. Rokos declined comment to CNBC and the other firms did not respond to requests.

Bloomberg cited a company statement in which the bank expressed confidence that most of its clients understand the path Deutsche is taking toward resolving its issues. The bank is in the midst of negotiating a settlement with the U.S. Justice Department over mortgage-backed securities. Reports indicate a figure of $14 billion is on the table, which would hit Deutsche hard.

The bank has about about $16 billion in equity and some $160 billion in debt.

“The thing that people forget is the EU has very, very strict rules on the book. The whole thing is no state assistance,” Kroll’s Whalen said. “The Germans have let this situation with banks fester for years, and unfortunately the guys at Deutsche have waited to settle their outstanding issues. They’ve always been this way.”

—CNBC’s Wilfred Frost and Patrick Allen contributed to this report.

Includes video:

http://www.cnbc.com/2016/09/29/pressure-seen-building-for-germany-to-rescue-deutsche-bank.html

Amid Deepening Economic Worries, Hong Kong Starts Job Cuts

June 2, 2016

By Alun John
South China Morning Post

Hong Kong lender Bank of East Asia Ltd announced Thursday it will reduce the size of it brokerage operations in the city, cutting 180 jobs, or 3.8 per cent of its workforce, as part of a cost cut and operational consolidation, amid a downturn in trading volumes on the local stock exchange.

One economist warned the lay-offs were a symptom of the deepening economic malaise affecting the financial sector, and that more staff cuts were in the offing from other companies in the days ahead.

This is just the beginning. We will see more local banks follow suit,” Citic Ka Wah Bank Chief Economist Liao Qun said. Liao added that the layoffs had been triggered by the weakening economy and the rapid development of financial technology automation, or fintech.

Hong Kong’s economy grew 0.8 per cent in the first quarter on year, its slowest pace of growth in four years, down from 1.93 per cent in the fourth quarter of 2015. Turnover on the Hong Kong stock exchange during the first quarter is down 23 per cent on year.

“The securities brokerage business in Hong Kong is quite challenged today,” said Brett McGonnegal, chairman of Capital Link International, “Volumes are down and the fintech revolution is in full force … the result will be that the industry will no longer be able to support brick and mortar outlets as the costs will overrun profits.”

BEA said the cuts will affect head count at its brokerage business, East Asia Securities. The bank said it conducted a review of its operations in light of falling profit and decided to push increased automation in an effort to contain costs. BEA’s profit last year dropped by 17 per cent.

East Asia Securities will close all of its 22 retail outlets in Hong Kong by July 8, but will continue to provide telephone and internet banking services to customers, which already facilitate over 90 per cent of transactions.

David Li Po Kwok, BEA chairman and chief executive said in a letter to staff that BEA had decided to cancel or remove a number of out-of-date and repetitive procedures and structures, so as to reallocate these resources to more value added areas, according to reports in local media.

BEA has been making a push to become a leading player in digital banking solutions in Hong Kong. It is plans to transform its 90 branches into Hong Kong to a digital model by 2018.

Other banks in the city said they have no plans to cut back on staff.

“At our Investor Update we said we expected an overall reduction in headcount at HSBC Group worldwide, but we do not expect any net headcount reduction in Hong Kong, where we continue to invest and build out our Pearl River Delta business,” said Gareth Hewett, a spokesman for HSBC.

A recent stress test of 13 Hong Kong banks, including BEA, carried out by Fitch Ratings, concluded that Hong Kong banks were well prepared to withstand challenges from a downturn in the credit cycle due to their sound capital positions and earnings buffers.

 http://www.scmp.com/business/banking-finance/article/1962331/are-beas-mass-sackings-just-tip-iceberg-hong-kong