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Microsoft, Shell, Nokia, J.P. Morgan set to axe jobs



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Amid the tough economic climate, it is no surprise that business are restructuring to stay agile. Unfortunately for employees, restructuring and redundancy often come hand in hand.

Knowing that tough economic times call for tough decisions, Singapore’s tripartite partners – the Ministry of Manpower (MOM), the Singapore National Employers Federation (SNEF) and the National Trades Union Congress (NTUC), have even issued a revised Tripartite Guidelines on Managing Excess Manpower and Responsible Retrenchment.

Here’s a round-up of the redundancies revealed this week.

Microsoft 

On 25 May, Microsoft Corp. announced plans to streamline the company’s smartphone hardware business.

This streamlining is expected to impact up to 1,850 jobs globally – up to 1,350 jobs at the Microsoft Mobile Oy in Finland as well as another up to 500 jobs in other parts of the world.

It is noted that employees working for Microsoft Oy, a separate Microsoft sales subsidiary based in Espoo, are not in scope for the planned reductions.

“As a result, the company will record an impairment and restructuring charge of approximately $950 million, of which approximately $200 million will relate to severance payments,” the press release stated.

“We are focusing our phone efforts where we have differentiation — with enterprises that value security, manageability and our Continuum capability, and consumers who value the same,” said Satya Nadella, chief executive officer of Microsoft. “We will continue to innovate across devices and on our cloud services across all mobile platforms.”

Royal Dutch Shell

Due to the prolonged low oil prices, yet another round of layoffs has been announced by Shell.

According to reports from BBC, the company is to cut at least another 2,200 jobs with about 475 of those coming from its UK and Ireland oil and gas production business.

“The cuts are mainly due to Shell’s takeover of oil and gas exploration firm BG Group and prolonged low oil prices, it said,” the BBC reported.

The oil and gas firm announced 7,800 job cuts last year and another 2,800 redundancies at the beginning of this year.

This latest wave of layoffs is expected to be implemented by the end of this year, taking the total number of job cuts by Shell from the start of last year to the end of 2016 to at least 12,500.

“Despite the improvements that we have made to our business, current market conditions remain challenging,” said Shell UK and Ireland vice president Paul Goodfellow.

“Our integration with BG provides an opportunity to accelerate our performance in this ‘lower for longer’ environment.

“We need to reduce our cost base, improve production efficiency and have an organisation that best fits our combined portfolio and business plans.”

“Most of the 475 UK job losses will be from Shell’s headquarters in Aberdeen. Some posts offshore and at the energy company’s plant at Mossmorran in Fife will also be affected,” the BBC reported.

While the cuts are small in comparison to the overall workforce of the oil and gas industry, Fortune noted that Shell’s 12,500 job reductions are equal to the entire workforce of social media company Facebook.

A Shell spokesperson could not be reached to comment on the figures at the time of publication.

ALSO READ: UMW Oil & Gas terminates nearly 300 jobs

Nokia

A Finnish union representative has estimated that the total number of job cuts by Nokia is likely to be far more than the company has let on.

According to Reuters, the telcom network equipment maker is likely to cut 10,000 to 15,000 jobs globally after its acquisition of Franco-American rival Alcatel-Lucent (ALUA.PA).

Earlier this year, Nokia released a statement announcing that it is it is beginning actions to reduce company personnel globally as part of its synergy and transformation program.

The statement said: “The headcount reductions are expected to take place between now and the end of 2018, consistent with the company’s synergy target timeline.  Reductions will come largely in areas where there are overlaps, such as research and development, regional and sales organisations as well as corporate functions”

“These actions are designed to ensure that Nokia remains a strong industry leader,” said Nokia president and CEO Rajeev Suri. “When we announced the acquisition of Alcatel-Lucent we made a commitment to deliver EUR 900 million in synergies – and that commitment has not changed.”

“We also know that our actions will have real human consequences and, given this, we will proceed in a way that that is consistent with our company values and provide transition and other support to the impacted employees,” Suri added.

“The company has announced plans for around 2,400 job cuts in Finland and Germany as part of a cost-cutting program but has not so far given a global figure,” Reuters wrote.

The scale of redundancies the union estimated would represent as much as 14% of Nokia’s worldwide work force of 104,000.

“We haven’t heard any official numbers, but based on the information from our union contacts, I would estimate the global impact of this round would likely be around 10,000 to 15,000 jobs,” said Risto Lehtilahti, a trade union shop steward at Nokia’s Oulu site.

Once the current round of job cuts are finished, analysts and union representatives estimate that the company will likely follow up with a new round of cuts.

“Nokia and Alcatel have lots of overlaps, so the numbers will go up and the range could be something like that (10,000-15,000),” said Hannu Rauhala, analyst at OP Equities.

“The integration takes place at a very hectic stage in the network industry. The market is falling, technology is changing and the environment is turbulent, so it is difficult to see that they would make it (the company) ready in one go,” he said.

With regards to whether the job cuts will affect those in Singapore or Malaysia, a Nokia spokesperson told Human Resources: “we are in the process of assessing the impact of the transformation plan for our business with careful consideration of our business as well as organisational efficiency.”

READ MORE: IBM confirms another round of layoffs

UBS

In recent weeks, a handful of private bankers were laid off by UBS Group AG. According to Reuters, two people familiar with the matter said that the layoffs included a senior catering for the super rich in Southeast Asia.

It is said that as part of ‘normal adjustments’, one of the bankers who has left include Joseph Poon, head of UBS Wealth Management’s ultra-high net worth for Southeast Asia. It is understood that Poon’s role has also been cut, the person said. Reuters could not reach Poon for comment.

“UBS sought to reassure investors with details of cost and job cuts earlier this month after reporting weaker earnings and capital though inflows at its private banking businesses were robust,” Reuters reported.

Nevertheless, as the biggest wealth manager by assets in Asia, UBS remains a ‘net hirer’ in the region and has been adding people strategically depending on business needs.

Human Resources reached out to a UBS spokesperson, who declined to comment.

J.P. Morgan

As the bank restructures its private banking arm to handle a smaller pool of higher-net-worth individuals, J.P. Morgan’s private bank is reportedly cutting about 100 jobs.

According to Fortune, “the cuts will affect employees in several locations and departments, the Wall Street Journal reported, citing people familiar with the matter.”

The private bank, which boasts a host of wealthy clients, also recently cut 5% of its headcount in the Asia region, affecting 30 employees in the Singapore and Hong Kong offices. In the past few months, the division also made cuts of over 100 employees in New York, London, Washington, and Boston.

READ MORE: Nomura cuts 30 jobs in Asia ex-Japan

Foxconn

In the age of technology, it is unsurprising that companies are starting to replace workers with robots. In fact, this phenomenon can already be seen in Kunshan, in China’s Jiangsu province.

According to the South China Morning Post, in an effort to reinvent its growth strategy, the county is accelerating growth by replacing humans with robots and encouraging start-ups.

“Thirty-five Taiwanese companies, including Apple’s supplier Foxconn, spent a total of 4 billion yuan (HK$4.74 billion) on artificial intelligence last year, according to the Kunshan government’s publicity department,” the South China Morning post wrote.

One such company is Foxconn, having already reduced its headcount by about half after introducing robots.

“The Foxconn factory has reduced its employee strength from 110,000 to 50,000, thanks to the introduction of robots. It has tasted success in reduction of labour costs,” Xu Yulian, Kunshan government’s publicity department’s head told South China Morning Post.

Xu added that more companies are likely to follow in Foxconn’s footsteps with a government survey found that as many as 600 major companies in Kunshan have similar plans.

A Foxconn spokesperson could not be reached to comment on the figures at the time of publication.

Image: Shutterstock

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