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European Edition
21st January 2025
 
THE HOT STORY
Commerzbank employees are worried about job cuts report
Reports that Germany's Commerzbank is considering cutting thousands of jobs as it contends with an unwanted advance from Italy's UniCredit have unsettled staff, a senior trade union official has said. Frederik Werning, a Verdi trade union official and a member of the supervisory board at Germany's second-largest lender, said rumoured redundancies reported in the Financial Times on Saturday, citing two sources familiar with the matter, had caused "uncertainty among employees." The union's "absolute priority" was to "consistently represent and defend employees," Werning said.
HEALTH & WELLBEING
Four-day week is an 'impossible dream' for many UK workers
A survey by recruitment firm Reed suggests the much-heralded four-day working week is an “impossible dream” for British workers, with many reporting that their workload is pushing them closer to working six days a week. Ian Nicholas, global managing director at Reed, suggested that the extra hours could be workers' attempts to demonstrate their value to avoid redundancy amid business cutbacks, or simply striving to keep operations running while companies struggle financially. The survey of 5,000 adults  indicated that fewer than a third of those working beyond their contracted hours were in receipt of overtime pay.
STRATEGY
Starbucks to cut jobs
Starbucks has announced that it anticipates cutting jobs as part of a larger initiative to operate more effectively. Chief Executive Brian Niccol said that the job cuts will be disclosed by early March and won't impact in-store workers. Niccol explained that the corporation is to cut down on silos and duplications of effort because having too many managers and coordinators may be slowing the running of the chain. However, he did not specify how many cutbacks would be made. The action is a component of the "Back to Starbucks" plan, which Niccol has promoted as a means of bolstering the business in the face of declining sales.
Schroders to cut 3% of workforce
Schroders, Britain's largest standalone fund manager, is planning to lay off about 3% of its workforce in a bid to revive growth. The London-based firm is cutting about 200 jobs that are mostly in technology, according to a source. “Our priority is to reposition the business at pace, as we transition to growth,” a spokesperson for Schroders said.
PURPOSE
Has corporate purpose lost its purpose?
Writing for the FT, Stefan Stern considers ongoing research which suggests that following a drive to articulate company-wide purpose, employee engagement may go up, but actual staff retention does not.
LEGAL
Worker caught watching porn on work phone wins case
A security guard in Spain has been reinstated and awarded €7,500 in compensation after being dismissed for watching pornography at work. The High Court of Justice of Catalonia ruled that the dismissal was unfair, saying: “On its own, viewing sexual content during working hours on some occasions cannot be held to constitute a serious breach of contractual good faith.” The court also highlighted that the company violated the worker's right to privacy by monitoring his phone without consent.
CORPORATE
Lufthansa seals ITA Airways deal
Lufthansa Group has successfully completed its acquisition of ITA Airways, marking the end of uncertainty for Italy's former flagship airline. The €325m deal grants Lufthansa an initial 41% stake in ITA, with plans for full control by 2033 through a total investment of €829m. The European Commission approved the acquisition after a thorough investigation, imposing conditions to ensure competition, particularly on routes from Rome and Milan to North America. Carsten Spohr, Chief Executive Officer of Deutsche Lufthansa, said: “With our investment, we will now strengthen the Italian and European aviation market and the position of the Lufthansa Group as number one in Europe.” The deal is expected to enhance offerings and connections for passengers starting this summer.
INTERNATIONAL
Israeli tech firms battle with flight suspensions and staff shortages
A fifth of Israeli tech firms have relocated part of their operations and personnel overseas in recent months after foreign airlines' decision to halt local services amid the war in Gaza made it difficult for them to do business and raise capital, according to a survey of 664 tech executives by the Israel Innovation Authority. Meanwhile, at least 50% of respondents say they may run out of funds in less than six months. “We see companies struggling not only with capital raising and meeting development and sales targets but also with their very ability to operate in an environment deeply affected by the security situation, massive military reserve call-ups, and flight restrictions that complicate the management of global relationships,” observed Israel Innovation Authority CEO Dror Bin. “The entire ecosystem – government, investors, and companies – must come together to ensure the future of this industry, which is not only a critical growth engine but also a symbol of Israel's innovation and leadership on the international stage.”
China boosts skilled worker training
China is set to enhance its policy support for companies to develop skilled workers, aiming to cultivate over 15,000 leading talents and 5m highly skilled workers within three years. The initiative, announced by eight government departments, including the Ministry of Human Resources and Social Security, seeks to address a structural imbalance in the workforce, where over 200m skilled workers represent more than 26% of the total workforce. An official observed: "China's evolving industrial landscape requires a higher calibre of skilled labour." The policy encourages enterprises to invest in talent development, with plans to establish over 400 national skilled talent training bases by 2025, covering various sectors. Incentives for highly skilled workers will include profit sharing and special government allowances.
The Body Shop to close all its branches in Thailand
British skincare brand The Body Shop is to close all of its shops in Thailand on January 31 following operational difficulties in other markets after the brand was acquired by German private equity firm Aurelius for $266m in November 2023. The Body Shop now operates 113 stores in the UK. UK company headquarters are to be relocated to Brighton this month from offices in London and Littlehampton, West Sussex. In Thailand, the brand took the opportunity to cite a quote from late founder, Dame Anita Roddick: "If you think you're too small to have an impact, try going to bed with a mosquito."
Paw-sitive change: pet care leave on the rise
In Singapore, pet care leave is an emerging trend among local companies, Straits Times reports. Public relations and marketing agency Brave Communications is leading the way by offering eight days of leave for employees to care for their pets. Trisha Lim, a public relations manager, expressed her gratitude, saying: “We are glad that there are bosses out there who are supportive and understanding about the stress and anxiety that pet owners go through.” Emilyn Ang, the founder of Brave Communications, introduced the policy after experiencing the challenges of caring for her own pet. Although pet care leave is still rare, firms including Mars and TBWA are beginning to adopt similar policies as they recognise the importance of supporting employees' mental health and well-being.
OTHER
Champagne sales bubble bursts
French champagne shipments experienced a significant decline of 9.2% in 2024, totalling 271.4m bottles, as economic and political uncertainties dampened consumer enthusiasm, particularly in key markets like France and the United States. Maxime Toubart, president of the Syndicat General des Vignerons, remarked: "Champagne is a real barometer of the state of mind of consumers." The French market alone saw a 7.2% decrease, attributed to prevailing "gloom" in the country. Exports also fell by 10.8%, with only 153.2m bottles shipped. The 2024 harvest faced challenges due to adverse weather conditions, further complicating the situation for producers.
 


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