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APAC Edition
3rd December 2024
 
THE HOT STORY
Staff are being turned into robots, union warns
Australia's United Workers Union has warned against what it says is the "illegitimate" use of an algorithm to dictate how Woolworths workers carry out their jobs. "They're outsourcing management to an algorithm and letting it decide how workers work," Tim Kennedy, the union's national secretary, said. The union is in a dispute with the supermarket chain over pay and conditions. Woolworths has said it will continue to negotiate, and has requested that the union allows "safe passage for our team wishing to return to work" at its Dandenong South distribution centre in Melbourne's south-east.
HIRING
Chinese county struggles to lure talent
South China Morning Post reports on how Feng county in Xuzhou, in eastern China, is grappling with how to lure and reward workers for difficult, low-level jobs. A report by the Social Work Department of the Communist Party committee attributed the shortage of talent in grass-roots government organisations to unattractive remuneration packages and a heavy workload, and urged more financial support. “A large number of contract or temporary staff members form the backbone of daily operations at the grass-roots level. Without formal positions, they are not only prone to unfair treatment but also suffer negative impacts to their professional dignity and work motivation, which can easily prompt them to quit,” the report said.
STRATEGY
Starbucks provides coffee and a window into the North to South Koreans
Starbucks has opened a store in Gimpo, South Korea, near the Demilitarised Zone (DMZ), allowing customers to see the heavily militarised border into North Korea. The outlet, which is located in a lesser-known area, is situated near a river designated as "neutral waters" and offers a glimpse of North Korean villagers through its telescopes. Despite recent tensions between the two Koreas, the DMZ has become an unlikely tourist destination. It is said the store could change the border area's "dark and depressing" image, and could become an important tourist destination for security and peace. Starbucks is ubiquitous across South Korea, with 1,980 stores as of the third quarter of 2024.
SolarEdge to cut 12% of jobs, mainly in South Korea
Israel-headquartered SolarEdge Technologies is to shut its energy-storage unit and cut its workforce by about 12% amid weak demand for residential solar in Europe due to a decline in electricity prices and competition from China. In the US, SolarEdge faces tough competition with companies such as Enphase Energy and Tesla. SolarEdge said the job cuts will affect nearly 500 employees, mainly in manufacturing roles in South Korea. The company laid off around 1,300 employees earlier this year.
New EY Global Chief Innovation Officer named
The EY organisation has announced the appointment of Joe Depa as its new EY Global Chief Innovation Officer. Raj Sharma, EY Global Managing Partner of Growth and Innovation, commented: "At this time of constant disruption, success would require a forward-thinking approach and willingness to make bold decisions, which are at the heart of an innovative mindset. We're thrilled to have Joe's deep experience and knowledge around artificial intelligence and data to lead on our strategic approach to innovation so that EY teams can help clients shape their future more confidently."
LEGAL
Adani vows compliance amid fraud charges
Gautam Adani, the Indian tycoon and head of the Adani Group, has publicly reaffirmed his conglomerate's commitment to “world-class regulatory compliance” following his indictment in the US on fraud and bribery charges. The allegations involve a scheme worth approximately $265m, where Adani and his associates are accused of paying bribes to secure contracts and financing.
CORPORATE
Meituan revenue beats estimates
Chinese meal delivery company Meituan has reported that revenue in the September quarter grew by a better-than-expected 22%, in an indication of a gradual recovery in online commerce and travel in the wake of stimulus measures that Beijing hopes will revive the world’s second largest economy. The sector leader reported sales of 93.6bn yuan ($12.9bn) in the quarter, versus the 92bn yuan average projection. Net income tripled to 12.9bn yuan. Bloomberg notes that the Beijing-based company is exploring overseas markets. Meituan’s international businesses are for now centred on the fledgling Keeta food delivery app, which started a trial in Saudi Arabia in September, the first expansion beyond the Greater China region. 
INTERNATIONAL
Performance improvement plans are having a moment
The share of US workers who are subject to performance actions, including performance improvement plan (PIPs), is on the increase. In 2020, 33.4 people for every 1,000 workers had documented performance issues, according to software firm HR Acuity. In 2023, its annual poll showed 43.6 workers out of every 1,000 were involved in formal performance procedures, including PIPs and performance counseling, among other measures. One reason PIPs are becoming more common is that chief executives are tightening budgets and seeking efficiencies. In the age of artificial intelligence, there is growing pressure to demonstrate that the humans who remain in roles are exceptional. Meanwhile, lawyers say PIPs can protect a company from wrongful termination lawsuits. “Employment lawsuits are now the most commonly filed lawsuit in California, so there’s a significant incentive for employers to make sure they’re dotting their i’s and crossing their t’s,” observes Christian Keeney, a California-based attorney with law firm Jackson Lewis. But human resources executive Anna Tavis says a PIP is “An oxymoron . . . I spent 15 good years on Wall Street and other places. It’s a cover up. It’s window dressing. None of these performance improvement plans lead to improving performance.”
Volkswagen workers strike over job cuts
Thousands of Volkswagen workers are striking in response to the company's plans to cut costs and potentially close factories. The IG Metall Union, represented by negotiator Thorsten Groeger, announced that warning strikes were to begin Monday in all plants after Volkswagen rejected proposals aimed at job protection. "If necessary, this will be the toughest wage dispute Volkswagen has ever seen," Groeger warned, saying that "Volkswagen has set fire to our collective bargaining agreements" and that the company board is now "throwing open petrol drums into it . . . What follows now is the conflict that Volkswagen brought about - we did not want it, but we will conduct it as committedly as necessary!"  Volkswagen said it "respects workers' rights" and believes in "constructive dialogue" in a bid to reach "a lasting solution that is collectively supported." The carmaker, facing a 64% drop in third-quarter profits, is struggling with high manufacturing costs and competition in China. The company has said it respects workers' rights and seeks a "lasting solution that is collectively supported." The strikes come amid broader challenges in the European auto industry amid weakening demand and a slow transition to electric vehicles.
Iraq tries to stem influx of illegal foreign workers
Authorities in Iraq, which is emerging from decades of conflict as an unexpected destination for many seeking employment opportunities, are trying to regulate the number of foreign workers. The labour ministry says the influx of hundreds of thousands of foreigners working without permits is mainly from Syria, Pakistan and Bangladesh. Current Iraqi law caps the number of foreign workers a company can employ at 50%, but the authorities now want to lower this to 30%. "Today we allow in only qualified workers for jobs requiring skills" that are not currently available, labour ministry spokesman Nijm al-Aqabi told AFP. 
Heineken plan large-scale brewery in Dubai
Sirocco, a joint venture of Heineken and Dubai-based Maritime and Mercantile International, plans the Gulf’s first large-scale brewery in Dubai, in a move that is indicative of a loosening of conservative rules locally. The joint venture has secured all necessary permits and will start building the brewery late next year, with construction set for completion in 2027. The brewery will produce brands including Heineken, Kingfisher, Amstel and Birra Moretti. Heineken plans to expand its workforce to 190 full time employees from 60 currently. Dubai first allowed alcohol consumption and sale over two decades ago.
OTHER
Chinese consumers embrace purpose-driven spending
Chinese consumers are transitioning from cautious spending to purpose-driven consumption, focusing on meaningful purchases and income enhancement, according to a new report. While 34% of consumers feel their finances have improved compared to last year, this marks a 16% decline year-on-year. The report highlights a growing trend of "earn more, spend less," with 72% of respondents seeking additional income and 47% limiting purchases to essentials. Value-conscious consumers have increased from 30% to 39%, prioritising value and quality. Additionally, the rise of artificial intelligence is reshaping consumption patterns, with technological innovation and sustainable lifestyles expected to drive future trends.
 


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