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APAC Edition
22nd March 2024
 
THE HOT STORY
Samsung workers vote on strike over pay raises
Unionised workers at Samsung Electronics are voting on whether to strike for the first time in the company's history after failing to reach an agreement on pay raises. The National Samsung Electronics Union (NSEU) was granted the right to initiate a strike after negotiations with the company fell through. The union members are conducting a vote, with a deadline set for April 5. If the majority of the union's members vote in favour, collective action will commence. The average annual salary among employees at chip rival SK hynix was higher than that of Samsung's last year.
WORKFORCE
Malaysian vegetable farmers warn of 40% supply slump due to labour shortage
Malaysian vegetable farmers warn that the country's vegetable supply could fall by 40% next month due to a labour shortage caused by the annual Ramadan exit of Muslim foreign workers. The shortage is further exacerbated by a government deadline for new migrant workers to enter the country. Farmers are concerned that the seasonal shortfall of workers will cause a slump in vegetable production in April, which will be compounded by the government's plan to limit the flow of migrant workers the following month. This could result in higher prices for leafy greens such as spinach and bok choy. The Malaysian Federation of Vegetable Farmers Association estimates that around one-fifth of the foreign workers hired by its members will return to their home countries during Ramadan, leading to a significant decrease in output. The government's move to cap foreign labour hiring by the end of May will coincide with the lowest point of employment across the year.
China's youth unemployment rate rises in February
China's youth unemployment rate rose to 15.3% in February, higher than the two previous months. The revised statistic reflects the challenges faced by recent graduates in finding jobs in China's economy. The new methodology excludes students and provides a more accurate picture of unemployment. The rise in the jobless rate may be due to seasonal factors around the Lunar New Year holiday. The youth jobless rate has been climbing in recent years, exacerbating the structural mismatch between job seekers and available positions. The government has expressed its focus on stabilising employment and has pledged support for groups including college graduates.
STRATEGY
Dutch high tech firm to build semiconductor factory in Vietnam
Dutch high tech firm VDL will build a new factory in Vietnam to manufacture semiconductor components. The move comes as Vietnam becomes an important hub for chip assembly and packaging, attracting interest from chipmakers looking to diversify their operations amid US-China trade tensions. VDL's decision is in line with the "China Plus One" strategy adopted by many of its customers. The investment, involving millions of euros, will employ 60 workers. VDL is a key supplier to ASML, Europe's largest tech company, but the Vietnam factory will not supply ASML. The decision follows visits by Dutch companies to the region and was announced during a visit by Dutch Infrastructure Minister Mark Harbers to Hanoi.
Ikea invests in automation and robotics to lower costs in China
Ikea is investing in automation, robotics and other technologies to lower operational costs and reduce product prices in China. The company plans to add more convenience-centric stores in urban centres and inject new vitality into the local market. Ikea is also investing in professional home solutions, personalised services, and omni-channel approaches in China. The company aims to increase its presence in key cities by introducing newer and smaller store formats and will open its first Plan & Order Point in Shenzhen to enhance offline convenience. The company sees China as a leader in digitalisation and aims to learn from the country's emerging technologies.
HIRING
Changes in UK immigration rules cause concern among Indian students
Recent changes in UK immigration rules are causing concern among Indian students studying in the UK, The Times of India reports.  The changes include an increase in the minimum salary for a skilled worker visa, a reduction in the number of jobs on the shortage occupation list, and an increase in the minimum income required for a spouse/partner visa. Additionally, the graduate visa route, which allows international students to stay in the UK for at least two years after graduation, is also being reviewed. The graduate route has provided many opportunities for Indian students, but the review is causing uncertainty. Despite these challenges, Indian students are still securing roles in the UK job market, although the distribution of job opportunities has shifted.
Australia approves agriculture visa for Southeast Asian workers
Australia's Department of Foreign Affairs and Trade has approved the agriculture visa subclass 403, allowing workers from Vietnam, Thailand, Indonesia, and the Philippines to work in Australia for up to four years. The visa holders can be employed in various agriculture sectors and skill levels, including horticulture, animal husbandry, and harvesting. The visa aims to address the labour shortage in Australia's agriculture, forestry, and fishery industries. The Australian Department of Agriculture, Fishery, and Forestry estimates a shortage of 30,000 workers annually in horticulture alone. Vietnam and Australia have also signed a plan to support Vietnamese workers to work in the agricultural industry in Australia under the Pacific Australia Labor Mobility (PALM) scheme in 2024.
Fusion CX to recruit 500 employees for new Chennai facility
Fusion CX, a BPM and CX solutions company, is set to recruit 500 additional employees for its new facility in Chennai. The company has already hired 150 regional employees and plans to hire 500 more by mid-June, expanding its overall workforce in India beyond 10,000 employees. The new facility offers a range of services across various industries and is equipped with advanced technology. Amitabh Vartak, EVP and Head of Asia Pacific region operations, believes Chennai's talent pool will be pivotal in customer delivery. Kishore Saraogi, Director & Co-founder of Fusion, stated that the company will continue to invest and strengthen its footprint in India.
CORPORATE
PwC refuses to share tax leaks report with Australian parliament
PwC's global chairman, Bob Moritz, has refused to comply with a request from the Australian parliament to share a copy of an investigation used to contain the tax leaks scandal to Australia. The international firm has cited legal professional privilege over a report by law firm Linklaters, but provided more information about the scope of the investigation and the conduct of those it mentions. The decision will likely set up another showdown with Australian politicians who have strongly criticised the firm for not sharing the report, and frustrate government departments that believe it should be shared. "The investigation by Linklaters and counsel in multiple jurisdictions included forensic searches for documents as well as interviews," PwC told a senate inquiry into the consultancy industry. "Linklaters analysed the evidence across territories, made additional inquiries where necessary and provided legal advice to PwC International."
MANAGEMENT
EY New Zealand chairman resigns
The chairman of EY New Zealand, Braden Dickson, has resigned from his position following a “historical behavioural matter” that was raised to the company. The specific nature of the departure has not been disclosed, but EY Oceania has confirmed that Dickson is no longer with the firm. It comes after EY faced controversy and allegations of bullying and racism following the death of an employee in 2022. An independent review found that many workers had experienced racism, sexual harassment, and overworking.
RISK
European firms in China 'are overly focused on risk management'
The European Chamber of Commerce says European firms in China have an excessive focus on risk management at the expense of increasing market share. The business lobby group's de-risking report highlights that companies are disproportionately skewed towards risk management and building resilience due to various factors such as the COVID pandemic, the global economic slowdown, the Ukraine war, and US-China geopolitical competition. This approach is impacting efficiency, innovation, and consumer costs, it says. The report also reveals that about 21% of the chamber's members have increased production in China, while 12% have moved production out. The group's president, Jens Eskelund, warns that the current situation puts the workable commercial relationship between China and Europe at risk. He calls for more dialogue with Chinese authorities to address concerns and avoid potential trade measures. The report comes amid the EU Commission's anti-subsidy investigation into Chinese electric vehicles and rising concerns about the politicisation of China's business environment.
INTERNATIONAL
Microsoft to pay Inflection AI $650m after hiring most of its staff
Microsoft has agreed to pay Inflection AI $650m to license its AI software and has hired the startup's co-founders and most of its employees. The deal, resembling a so-called "acqui-hire," but without an acquisition, could raise antitrust concerns with U.S. regulators. With a much smaller headcount, Inflection is now trying to offload some of its compute capacity, or access to computing power that can be used for tasks including training AI models, according to people familiar with the matter. The company is also said to be pursuing a partial refund from its cloud computing partner CoreWeave in a move that could reduce costs related to building AI models as Inflection pivots to an enterprise rather than consumer business model. Reid Hoffman, a Microsoft board member, will stay on at Inflection as a director and co-founder. The new CEO will be Sean White, a board member who was previously the chief research and development officer at Mozilla.
Ban on Palestinian workers brings Israel’s construction sector to a halt
A ban on Palestinian workers has left building sites idle across Israel, and no end is in sight. Israeli builders are seeking labour overseas in a shift in the workforce that industry forecasts suggest will take a year, at best, to complete. More than two-thirds of Palestinians employed in Israel before the war worked in the construction sector.  A construction downturn is “like a millstone on the economy that can cost Israel some 1.5 to 2% of its GDP in the coming year or longer,” said Adi Brender, the central bank’s head of research. Eli Cohen, chief executive officer of Termokir, a factory that supplies the local construction industry, believes the change is probably here to stay. “This is a real breaking point . . . Things will not go back to the way they were soon and even if some restrictions are lifted, it will be a very limited process.”
OTHER
Carabao criticises Thai alcohol control bill
Carabao Group chief executive Sathien Sathientham has warned that a new alcohol control bill in Thailand could hinder new players in the beer market. The pandemic has negatively impacted consumer purchasing power, leading to a flat beer market this year. Sathien has criticised the strict laws on alcoholic beverage ads, calling for relaxation to promote competition and opportunities for newcomers. Carabao Group aims to achieve a 10% market share and become a top three player in the beer market. However, limited points of sale and stricter alcohol laws pose challenges. The company has launched five beer variants under the Carabao and Tawandang brands, targeting a wide range of consumers.
 


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