1 HSBC to axe 25,000 jobs (Jill Treanor in The
Guardian) HSBC is to cut up to 25,000 jobs around the world – including as many
as 8,000 in the UK – as its chief executive, Stuart Gulliver, embarks on a
fresh strategy to reduce costs and bolster returns to shareholders.
Gulliver – who took the helm in 2011 – has already
cut the total head count to 257,000 from 296,000 but has signalled another wave
of reductions as he turns the bank’s focus towards Asian markets. Branches will
be closed in seven major markets including the UK, where the bank employs
48,000 in total.
Unions in Britain reacted angrily as the news broke.
In a detailed presentation to shareholders Gulliver is also setting out the
criteria the bank will use to decide whether to keep its headquarters in the
UK, where it has been based since 1992 when it moved from Hong Kong to
facilitate the takeover of Midland bank.
The job cuts are not part of that review, which will
kick-start a debate about the government’s tax policy and attitude to financial
services companies – two of the 11 factors HSBC will use to determine whether
to stay based in London. The UK bank levy costs HSBC £700m a year.
Gulliver has already pulled back from a presence in
87 countries or territories to 73. Gulliver, who has spent his career at HSBC,
in 2011 introduced the motto of “courageous integrity” before the bank was
slapped with a £1.2bn fine the following year by authorities in the US for
laundering money for Mexican drug barons. Since then it has been embroiled in
the Libor rigging debacle and more recently a tax avoidance scandal.
2 How disruptive startups coexist with derivative
startups (Sohin Shah in San Francisco Chronicle) When a startup succeeds in
creating a new market or industry, there’s often a ‘gold rush’ phenomenon of
others trying to grab a piece. But not all of these spin-offs are copycats.
Once the space is saturated, hustling entrepreneurs
identify the need to offer support services, and that’s how derivative startups
are born. Typically, startups have one or more needs that are unmet internally.
For example, most startups can’t afford a full-time attorney to perform legal
and compliance work. This creates an opportunity for another startup to serve
as outsourced compliance and due-diligence professionals. Other new companies
might spring up to help with logistics, infrastructure, payment mechanisms,
data aggregation or customer service.
Just as fungi help plants thrive (and vice versa),
derivative businesses form a symbiotic relationship with disruptors. As the
second wave of innovation, they allow emerging sectors to flourish. Disruptors
arise to meet an unmet need, but they often generate their own gap in the
market. Derivative startups can provide the missing puzzle piece.
For example, when Airbnb disrupted the hotel
industry, its business created an unmet need for property management services.
After their experience as hosts for Airbnb, Guesty’s founders developed a
system to fill this need and take the pain out of the sharing economy for
hundreds of thousands of hosts.
Consider ride-sharing services such as Lyft and
Uber. They revolutionized the transportation services industry, but the limited
number of car owners hampered their potential to scale up. Derivative startups
Breeze and HyreCar arose and began leasing vehicles to Uber and Lyft drivers
throughout the US, thereby solving the new industry’s bottleneck.
Disruptive startup leaders should encourage this
growth rather than look at disruptors as challengers. By nurturing support
services companies, a disruptor can foster his own company’s growth and allow
his industry to mature and evolve.
3 What it means to miss an IMF payment (Robert
Peston on BBC) If you had asked me even a few months ago what event could cause
devastating shock waves to roll over financial markets, and seriously set back
the global economic rival, well Greece missing a payment to the IMF would have
been one of them. But here we are: Greece has announced it is missing its payment,
and the world feels pretty much as it did before.
So why is Greece's refusal to stump up 300m euros an
apparent non-event? Well the first thing to say is that it is not a non-event. The
symbolism of Greece's request to defer the payment - the first such deferral
since the 1980s and probably the first ever deferral by a developed economy -
is incredibly powerful.
Whether they like it or not, it represents a massive
humiliation both for Greece's Syriza government and for its creditors, eurozone
governments, the European Central Bank and the IMF itself - in the sense that
they have been working day and night to avoid this impasse, and they have
failed. Greece has asked to defer the payment, and indeed a series of payments
due during the course of this month, into a single sum of 1.5bn euros, to be
handed over to the IMF at the end of June.
There are three things to say. First is that even if
there is a deal, that may not be the happy-ever-after - because Tsipras may be
obliged to put the deal to the Greek people, either in a referendum or a
general election, given that it would be a million miles from the platform of
no-more-austerity on which he was elected.
Second, if there is no deal that inevitably means
the imposition of painful capital controls in Greece, to prevent every last
euro in the country being taken offshore by panicked investors. As a minimum,
that would tip the country into yet another deep and dark recession, because
all access to credit would vanish.
Third, Greece in default would not necessarily mean
Greece leaving the euro. There would be a possibility of its debt being
reconstructed, and of its banks being recapitalised by imposing hideous losses
on their creditors, as a precursor to some kind of financial rehabilitation while
remaining inside the euro. The prospect of default and Grexit are two sides of
the same coin - namely Greece's madly excessive debts.
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