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North American Edition
5th July 2022
 
THE HOT STORY
Workers may need to get used to the idea they could be fired virtually
Virtual layoffs may become more standard in the remote and hybrid world because of the new ways of working that the pandemic has precipitated. But experts say cutting jobs and the people who do them can be done more considerately, helping soften the blow for affected staff. Johnny C Taylor, CEO of the U.S.-based Society for Human Resource Management, says company-wide virtual firings rob affected workers of the individual touch. He says remote firings lack dignity, since "you don't have the advantage of the human dynamic, where you can grab the person a tissue box if you see them tear up." Nicholas Bloom, professor of economics at Stanford University, says: "Zoom layoffs are totally reasonable in a world where employees are recruited, trained and working mainly or fully online. Indeed, for fully remote jobs, it would be very odd if the one time you met your manager was for them to fire you."
RISK
Firms face compliance challenges under forced labor law
A strict new U.S. law is prompting companies to examine their supply chains to show they aren’t tainted by forced labor in China’s Xinjiang region. Compliance experts and companies expect a period of painful adjustment as they seek to understand how the law will be enforced in practice.  “A lot of companies are flat-footed right now,” said Brandon Daniels, chief executive of Exiger, a risk and compliance software company. “I don’t think that they appropriately and properly prepared.” Beijing has called the allegations regarding the use of forced labor “vicious lies concocted by anti-China forces,” saying U.S. acts “totally violate market principles and commercial ethics.” Judith Alison Lee, co-chair of the International Trade Practice Group at law firm Gibson Dunn & Crutcher, observes that China-based suppliers are under great pressure not to cooperate with their U.S. customers’ efforts to perform supply chain due diligence. “It’s extremely difficult,” she says. “There’s not an easy answer. It really is a very challenging time for us.”
WORKFORCE
More than half of Americans are living paycheck to paycheck
More than half (58%) of the U.S. population were effectively living paycheck to paycheck in May with varying degrees of comfort or difficulty, according to the latest Paycheck-to-Paycheck report released this month by LendingClub, a peer-to-peer lending platform based in San Francisco. The percentage is slightly lower than the 61% in April, but four percentage points higher than the 54% a year ago. Around 39% of U.S. consumers reported that although they live paycheck to paycheck they still felt comfortable paying expenses, up from 33% who said the same last year. Consumers’ average savings rose from $9,557 in March to $11,274 in May. But for the ones who’ve been struggling to pay their bills, average savings in May were half of what they had saved a year ago.
STRATEGY
EY Canada to bring more legal work in-house
Shara Roy, who took over as chief legal counsel at EY Canada's chief legal counsel from Doris Stamml on July 1st, has said she plans to expand her team with more junior lawyers, while leveraging technology and processes to provide more and broader in-house legal services to the business. “We’re able to bring in the resources, the innovation, the thinking that the business has done and [use] that to help us provide them with better legal services,” she explained. In Canada, EY Law has six offices across the country that offer tax, business and immigration law services. Ms. Roy explained that the offerings of EY Law “complement the services that Ernst & Young” already provides in the areas of accounting, tax, and consulting to make it a “one-stop shop” for clients. They’re not looking to take on the big national law firms, she said, but continue to use “cutting-edge technology to provide terrific service” to their clients.
Franklin Templeton weighs office in Saudi Arabia
California-based Franklin Templeton, which oversees some $1.5 trillion worth of assets, is looking to establish an office in Saudi Arabia. A spokeswoman for the asset manager described Saudi Arabia as “an important market” in the region. “While we have not announced any new office openings, we are currently exploring options to grow our regional footprint and will share details in due course,” she said. Franklin Templeton has been in the Middle East for two decades and has an office in Dubai with around 40 employees. The firm is already active in Saudi Arabia: its funds became “qualified foreign investors” in 2018, allowing them to invest directly in the kingdom’s stock market.
CORPORATE
Megadeals buoy global M&A despite pullback from record 2021
A wave of megadeals carried global mergers and acquisitions volumes to $2tn in the first half of the year, even as inflation, interest rate rises and the Ukraine war have ravaged confidence and caused significant deals to fall through. Twenty-five deals worth over $10bn have been announced in the first half of 2022, up 12% compared with the same period last year, although overall deal volume fell by a fifth, according to figures from Refinitiv. Concern has also arisen that some of the biggest deals that have buoyed the market might fall through or take longer to close than anticipated. Dealmakers in the U.S. are also preparing for a more hostile approach to M&A from officials installed by President Joe Biden in the Department of Justice and the Federal Trade Commission.
CYBERSECURITY
Wegmans settles with New York over data breach
Wegmans is to pay $400,000 and upgrade its security practices following a data breach that exposed the personal data of more than three million consumers nationwide. The supermarket chain was accused of storing customer information in cloud storage containers hosted on Microsoft Azure that were left open because they had been misconfigured, leaving the data vulnerable to hackers. The breach occurred from 2018 until the spring of 2021. "In the 21st century, there's no excuse for companies to have poor cybersecurity systems and practices that hurt consumers," New York Attorney General Letitia James said. "While we do not agree with some of the conclusions drawn by the attorney general, we cooperated fully in the investigation and are glad it has been concluded," Wegmans said in a statement.
HEALTHCARE
Health insurance providers begin publishing medical care prices
Insurers and employers have started publicly posting the prices they pay for healthcare services ranging from doctor visits to lab tests, hugely expanding a federally mandated effort to unveil the rates. The Centers for Medicare and Medicaid Services set a deadline of July 1st for the data to be released, with some big insurers releasing data by the early morning hours Friday, including Elevance Health Inc.’s Anthem, Cigna Corp. and Humana Inc., according to Turquoise Health Co., a company compiling the data. In addition to insurers, employers are required to post prices under the rule, though many of them are expected to outsource the responsibility to insurers and health-plan administrators. The new data is coming in the form of massive, machine-readable digital files, typically in formats not easily accessible to consumers, but newly public prices will become more useful in the marketplace as companies begin adding data to consumer tools, said industry experts. The files will include the prices that the insurer has negotiated with healthcare providers in its network. The data will also include rates for those that are out-of-network, listing the amounts that the provider billed and what the health plan paid.
INTERNATIONAL
Western companies battle to exit Russia
Reuters considers the corporate exodus from Russia by more than a thousand Western companies as they scramble to comply with sanctions and amid threats of retaliation from Moscow. Many Western companies have encountered problems trying to leave, and interviews with executives at companies that have divested assets show the complexity and uncertainty of selling at speed and hefty discounts, and why the process may be taking many so long. "If you haven't started the process already or if you still have doubts about it, then it's going to get harder," said Rolf Ladau, the boss of a Finnish coffee company that was an early mover. "Russia has no interest in letting foreign companies out of the market easily."
German unemployment up after inclusion of Ukrainian refugees
Joblessness in Germany unexpectedly rose in June after 15 straight months of decline as refugees from the war in Ukraine were included in those looking for work. Unemployment increased by 133,000 in June, lifting the jobless rate to 5.3% - the highest since November. Economists had forecast a drop of 5,000. “The labor market as a whole continues to be stable,” Federal Labor Agency chief Detlef Scheele said, adding “These increases are due to the fact that the Ukrainian refugees are now being recorded in the job centers and are therefore visible in the labor market statistics.”
Australian tax incentive threatens NZ gaming industry, association says
New Zealand could lose video game development companies to Australia as studios seek to take advantage of a new tax incentive there, the New Zealand Game Developers Association says. Chelsea Rapp, the association’s chairperson, said New Zealand game studios could be eligible for a 40% tax incentive if they relocate to Australia, and some have already begun this process. She called on New Zealand’s government to act to protect the local gaming industry, which has been growing 34% a year. A New Zealand interactive games poll in December found that more than half of New Zealand's top 12 studios were considering moving to Australia.
OTHER
Singaporeans sup beer made using recycled sewage
A new Singapore blond ale is made with recycled sewage. NEWBrew is a collaboration between the country’s national water agency and local craft brewery Brewerkz. The beer went on sale in supermarkets and at Brewerkz outlets in April. NEWBrew uses NEWater, Singapore’s brand of drinking water recycled from sewage. The country’s national water agency says the new beer is educating Singaporeans on the importance of sustainable water use and recycling. “I seriously couldn’t tell this was made of toilet water,” said Chew Wei Lian, who had purchased his beer from a supermarket, adding “It tastes just like beer, and I like beer.”
 


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