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European Edition
25th January 2023
 
THE HOT STORY
Delivery Hero's Glovo fined a further $62m over hiring
Barcelona-based Glovo, the Spanish unit of Germany's Delivery Hero, has been fined another €56.7m ($62m) by Spain’s labour ministry for allegedly violating laws on hiring riders, according to a source with knowledge of the matter. Glovo said it would appeal the penalty and said the inspected period was prior to the activation of legislation passed in 2021, which mandated food delivery platforms to give riders formal employment contracts. The ministry fined Glovo €79m in September last year for  alleged violations covering other riders. Glovo is also appealing that penalty. "The sanction proposal refers to an operating model that no longer exists in Spain," Glovo said in a statement, without confirming the latest penalty amount, adding "There has yet to be a report from the labour inspectorate or any judicial pronouncement on the new unpublished model currently available in Spain."
LEGAL
Fire and rehire should be ‘absolute last resort,’ UK warns
Employers should use “fire and rehire” tactics only as an “absolute last resort” when they change staff contracts, the UK government has said, as it published a draft code of practice intended to strengthen workers’ rights.  The new statutory code is intended to prevent a repeat of what happened last year at P&O Ferries. The company deliberately sought to evade the law by sacking 786 seafarers without due consultation. Plans for a new statutory code will give courts the power to apply a 25% uplift to an employee’s compensation in certain circumstances if an employer doesn’t follow the new Code. Business Secretary Grant Shapps said: “Our new code will crack down on firms mistreating employees and set out how they should behave when changing an employee’s contract.” But TUC general secretary, Paul Nowak, said the rules don't go far enough. Mr Nowak said: "This is a reheated, repeated announcement. A statutory code of practice is not going to stop another P&O-style scandal from happening, and it won't deter bad bosses from treating staff like disposable labour. If the government really cared about workers' rights it wouldn't have abandoned its much-touted employment bill."
REMOTE WORKING
Remote work saves global commuters 72 minutes a day, study finds
Remote work saves commuters around the world 72 minutes a day, according to a new study from the National Bureau of Economic Research. Working from home is saving the most time in China, freeing up 102 minutes a day. Workers in Serbia saw the smallest savings of 51 minutes; those in the US had a comparatively low 55 minutes spared. UK workers saved 73 minutes; workers in Germany saved 65 minutes. The study nevertheless shows that businesses are the biggest beneficiaries of the travel time savings, with workers devoting 40% of their saved time toward primary and secondary jobs. About a third of saved time was directed toward leisure activities and 11% went to caregiving, the study found.
WORKFORCE
Amazon workers in UK take strike action for the first time
Amazon workers in Britain are striking for the first time. Nearly 300 members of the GMB union, out of the 1,000 who work in the company's warehouse in Coventry, are walking out in a dispute over pay. The union is asking workers to be paid as much as their colleagues in the United States, who receive $18 an hour, or £14.65, rather than the 50p-an-hour pay rise that Amazon proposed in an August pay review, which would take the lowest-paid employee to £10.50 an hour. The GMB noted that this would mean workers were paid less than employees at Asda, Disney and Primark, which also operate warehouses in the area. Stuart Richards, GMB senior organiser, said: "Today, Amazon workers in Coventry will make history. They've defied the odds to become the first ever Amazon workers in the UK to go on strike. They're taking on one of the world's biggest companies to fight for a decent standard of living."
Millionaires continue to leave post-Brexit Britain
A new report from the citizenship advisory firm Henley & Partners found there was a net outflow of 1,400 people with a wealth of $1m or more from the UK in 2022. That compares to 2,200 high-net-worth individuals (HNWI) leaving in 2019, 2,800 in 2018 and 4,200 in 2017. Before the Brexit vote, the UK recorded net inflows, according to Henley.
STRATEGY
3M to cut 2,500 manufacturing jobs as consumer demand slows
Industrial giant 3M has announced plans to cut 2,500 manufacturing jobs worldwide as it predicts last year’s fourth quarter slowdown will persist through the first half of this year. The company, which has been battling with higher labour and energy costs, said it would continue to adjust its manufacturing levels and maintain spending discipline until sales volumes bounce back following slowing demand for consumer and electronic items.
Swappie’s operational overhaul could hit Finnish jobs
A proposal by Finnish refurbished smartphone retailer Swappie to move production outside Finland – possibly to Estonia or Germany - could lead to the loss of hundreds of jobs at its refurbishment centre in Kalasatama, Helsinki. Swappie CEO Sami Marttinen has stated in a company blog post that consultative negotiations designed to improve efficiency and achieve undisclosed cost savings could lead to changes in the employment relationship of up to 290 employees. “We will now focus on supporting our talented employees through this process and for this reason we won't be giving further statements on the topic for the time being,” wrote Marttinen.
Redundancies often leave companies worse off
Writing for Bloomberg, Sarah Green Carmichael considers how job cuts often leave companies worse off, alienating customers and sapping the morale of those employees who are left to pick up the slack. An organisation which finds that it is slightly overstaffed should consider what to do with that capacity rather than letting go people they have worked hard to hire, say management experts. “The research has been incredibly consistent that layoffs are not good,” warns Angie Kamath, dean of the New York University School of Professional Studies.
HEALTH & WELLBEING
'Menopause leave' trial is rejected by UK ministers
UK government ministers have rejected a proposal to introduce "menopause leave" pilots in England, arguing it could be "counterproductive," and have also dismissed a recommendation to make menopause a protected characteristic under the Equality Act. In July 2022, the Women and Equalities Committee published a report which warned that the impact of menopause was causing the UK economy to "haemorrhage talent," and said a lack of support was pushing women out of work. In its response to the report, the government rejected outright five of the committee's 12 proposals, including a recommendation for the government to work with a large public sector employer to "develop and pilot a specific menopause leave policy." Conservative MP Caroline Nokes criticized the government response to the Women and Equalities Committee, which she chairs.  “This is a missed opportunity,” said Nokes in a letter to the Minister for Women Maria Caulfield. “The evidence to our inquiry was crystal clear that urgent action was needed across healthcare and work settings to properly address women's needs, yet government progress has been glacial and its response complacent.”
TECHNOLOGY
Microsoft to invest billions in ChatGPT maker OpenAI
Microsoft has announced a multibillion dollar investment in artificial intelligence (AI) as it extends its partnership with OpenAI, the creator of popular image generation tool Dall-E and the chatbot ChatGPT. In 2019, Microsoft invested $1bn in the company. “We formed our partnership with OpenAI around a shared ambition to responsibly advance cutting-edge AI research,” Microsoft CEO Satya Nadella wrote in a blog post. “In this next phase of our partnership, developers and organisations across industries will have access to the best AI infrastructure, models and toolchain with Azure to build and run their applications,” he added. OpenAI works closely with Microsoft’s cloud service Azure. Microsoft’s 2019 investment made it the “exclusive” provider of cloud computing services to OpenAI. Microsoft said Azure will continue to serve as OpenAI’s exclusive provider.
REMUNERATION
Deutsche Bank slashes investment banker bonuses but rewards traders
Deutsche Bank is cutting the bonus pool for its investment banking division by just under 10%, according to reports. Following a slump in deal-making, bankers working on M&A origination and advisory will face around a 40% drop in their bonuses, while traders in the bank’s fixed income and currencies business will see their bonuses rise significantly. The significant reduction in the advisory bonus pool is in line with Goldman Sachs but more substantial than JPMorgan Chase, Citigroup and Bank of America, which the FT has reported are set to cut their investment banking bonus pools by about 30%.
TAX
Joseph Stiglitz calls for 70% tax to tackle inequality
Nobel prize-winning economist Joseph Stiglitz has called for the super-rich to be subjected to income taxes as high as 70% to help tackle widening inequality. “People at the top might work a little bit less if you tax them more. But on the other hand, our society gains in having a more egalitarian, cohesive society,” the former World Bank chief economist, 79, told Oxfam’s Equals podcast. Stiglitz also wants inherited wealth heavily taxed. He described proposals by the US senator Elizabeth Warren for a 2% tax on people with assets of more than $50m and 3% on those with more than $1bn as “very reasonable” and said they “would really go a long way to raising revenues that could alleviate some of our country’s problems.”
CULTURE
How to manage rapid expansion while retaining the company culture
The FT’s Andrew Hill speaks with Alan Ryder, the founder and chief executive of UK-based engineering and environmental consultancy RSK, on how to retain a strong corporate culture amid rapid expansion.
INTERNATIONAL
Blizzard manager departs after refusing to give employee lower evaluation
A manager at Irvine, Calif., headquartered video game developer Blizzard Entertainment said he was ousted after refusing to give a low evaluation to an employee who he felt didn't deserve it in order to fill a quota. Brian Birmingham, the former co-lead of World of Warcraft Classic, sent an email to staff last week in which he detailed his frustration with Blizzard and the way in which he was forced to lower an employee from the average “successful” rating to “developing” in order to achieve the quota mandated by the company. “When team leads asked why we had to do this, World of Warcraft directors explained that while they did not agree, the reasons given by executive leadership were that it was important to squeeze the bottom-most performers as a way to make sure everybody continues to grow,” Birmingham wrote in the email. “This sort of policy encourages competition between employees, sabotages one another’s work, a desire for people to find low-performing teams that they can be the best-performing worker on, and ultimately erodes trust and destroys creativity.” A Blizzard spokesperson said the company's employee evaluation process was designed to facilitate "excellence in performance" and "ensure employees who don't meet performance expectations receive more honest feedback, differentiated compensation, and a plan on how best to improve their own performance." The spokesperson added that the evaluation process involves conversations with multiple managers "and sometimes ratings move up or down based on those discussions."
Australian Treasury threatens to stop briefing tax multinationals after leak
Australian Assistant Treasurer Stephen Jones has threatened to end confidential briefings with the country's largest consulting firms after a former PwC partner was banned by the Tax Practitioners Board for leaking confidential government tax plans - including new rules to stop multinationals avoiding tax - to other staff and partners at the firm. “The tax advice profession is now on notice,” Jones said, adding “When the integrity of that process is breached, we may need to rethink our approach.” Peter-John Collins, the former head of international tax at PwC Australia, was deregistered by the Tax Practitioners Board for leaking confidential government information and banned from the profession for two years. The Treasury had briefed Mr Collins in confidence on measures to prevent multinationals avoiding tax by shifting profits from Australia to tax and secrecy havens. But a probe found Mr Collins leaked the confidential information to PwC partners and staff.
OTHER
Swatch expects bumper sales as China emerges from COVID restrictions
Swiss watchmaker Swatch is anticipating record sales this year as China reopens after exiting its zero COVID policy and tourism resumes. Net sales rose 4.6% to SFr7.5bn ($8bn) last year at constant exchange rates, compared with a year earlier. Operating profit increased 13% to SFr1.16bn, missing analysts’ forecasts of SFr1.19bn. “After the end of Covid-19 measures, consumption quickly recovered, not only in China, but also in the surrounding markets of Hong Kong SAR and Macau,” Swatch said in a statement. The easing of travel restrictions in China will “revitalise sales in tourist destinations,” it added, saying that January’s sales growth in China “reinforces the group’s expectation to aim for a record year in 2023.”
 


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