Wednesday, May 25, 2016
Greece averts crisis, stares at huge debt; Foxconn replaces '60,000 workers with robots'; Microsoft cuts 1,850 jobs at Nokia
1 Greece averts crisis, stares at huge debt (San Francisco Chronicle) It's all but official: this summer's Greek crisis has been called off. After an 11-hour meeting, European officials agreed to unfreeze more rescue loans and to consider ways to lighten Greece's debt load. That means Greece stands to get 10.3 billion euros ($11.5 billion) from its bailout loan package from European governments and the International Monetary Fund.
The money means Greece can make debt payments coming due in July. There won't be fears of a disastrous default and forced exit from the euro currency, as there were before Greece sealed a similar deal in July, 2015.
The country, however, is still far from safe financially or economically, meaning its crisis could yet flare up and once again cause jitters for the global economy. The IMF says Greece's debt, which is currently 180 percent of GDP, is "unsustainable." It wants European creditors to agree to lower interest rates on past rescue loans they gave Greece, and to push out their repayment dates.
The Europeans agree debt relief is possible. But Wednesday's deal puts off discussion of concrete terms for debt relief until 2018. Germany, the most influential of the governments that loaned Greece money, is reluctant to go to its parliament for approval of more breaks for Greece ahead of national elections in October 2017.
2 Foxconn replaces ’60,000 workers with robots’ (BBC) Apple and Samsung supplier Foxconn has reportedly replaced 60,000 factory workers with robots. One factory has "reduced employee strength from 110,000 to 50,000 thanks to the introduction of robots", a government official told the South China Morning Post.
Xu Yulian, head of publicity for the Kunshan region, added: "More companies are likely to follow suit." China is investing heavily in a robot workforce. Foxconn Technology Group confirmed that it was automating "many of the manufacturing tasks associated with our operations" but denied that it meant long-term job losses.
Since September 2014, 505 factories across Dongguan, in the Guangdong province, have invested 4.2bn yuan (£430m) in robots, aiming to replace thousands of workers. Kunshan, Jiangsu province, is a manufacturing hub for the electronics industry.
Economists have issued dire warnings about how automation will affect the job market, with one report, from consultants Deloitte in partnership with Oxford University, suggesting that 35% of jobs were at risk over the next 20 years.
Former McDonald's chief executive Ed Rensi recently said a minimum-wage increase to $15 an hour would make companies consider robot workers. "It's cheaper to buy a $35,000 robotic arm than it is to hire an employee who is inefficient, making $15 an hour bagging French fries," he said.
3 Microsoft to cut 1,850 jobs at Nokia (The Guardian) Microsoft is cutting up to 1,850 jobs in its smartphone business just two years after it bought handset maker Nokia in an ill-fated attempt to take on market leaders Apple and Samsung.
In a move that clearly puts the stamp of two-year chief executive Satya Nadella on the US company, Microsoft said it would shed the bulk of the jobs in Finland and write down $950m from the business. It did not say how many employees currently work on smartphones in the group as a whole.
Remaking Microsoft, known primarily for its software, into a more device-focused company was a hallmark of previous chief executive Steve Ballmer. In one of his last major acts, Ballmer closed a deal to buy Nokia’s struggling but once-dominant handset business for about $7.2bn in late 2013. The deal closed in April 2014, two months after Nadella became boss.
Since then, Nadella has shaved away at the phone business, starting with a 2015 restructuring that put the devices group, previously a stand-alone unit under the former Nokia chief, Stephen Elop, under the Windows group. Run by Terry Myerson, the Windows division is the company’s biggest.
Global market share of Windows smartphones fell below 1% in the first quarter of 2016, according to research firm Gartner. Last year, Microsoft announced $7.5bn of write-downs and 7,800 job cuts in its phone business. Earlier this month, Microsoft sold its entry-level feature phones business for $350m.
Nokia had around 40% of the world’s mobile phone market in 2008 before it was eclipsed by the rise of touch-screen smartphones. Nokia, now focused on telecom network equipment, just last week said it was cutting around 1,000 jobs in Finland following its acquisition of Franco-American rival Alcatel-Lucent .