Tag: jobs

By Anneken Tappe for CNN Business

Machines are expected to displace about 20 million manufacturing jobs across the world over the next decade, according to a report released Wednesday by Oxford Economics, a global forecasting and quantitative analysis firm.
That means about 8.5% of the global manufacturing workforce could be displaced by robots.

The report also notes that the move to robots tends to generate new jobs as fast as it automates them, however it could contribute to income inequality.

The use of robots is on the rise: At this point, every new robot that is installed displaces 1.6 manufacturing workers on average, according to the Oxford Economics model.

Automation isn’t a new trend in manufacturing, of course. The automotive industry, for example, used 43% of the robots in the world in 2016.

But robots are becoming cheaper than many human workers, in part because of the falling costs of machines. The average unit price per robot has dropped 11% between 2011 and 2016, according to Oxford Economics. And they are increasingly capable of functioning in more sophisticated processes and varied contexts. On top of that, the demand for manufactured goods is rising.

China presents a big opportunity for growth in automation. That country already accounts for a fifth of the world’s industrial robots, with every third new one being installed there. Beijing “is investing in robots to position itself as the global manufacturing leader,” Oxford Economics said. By 2030, some 14 million robots could be working in China, “dwarfing” the rest of the world, according to Oxford.

The effect on economic output could be tremendous. Oxford Economics estimates that boosting robot installations to 30% above the current growth forecast by 2030 would lead that year to a 5.3% increase in global GDP, or $4.9 trillion. That’s more than the projected size of Germany’s GDP for that year.
So what’s not to love? Robots will boost productivity and economic growth, as well as spur industries that don’t even exist yet. But Oxford Economics also warns that they will be seriously disruptive.

How automation could lead to inequality
One potential downside to the robot revolution: Automation could increase income inequality.
“This great displacement will not be evenly distributed around the world, or within countries,” according to the report. “Our research shows that the negative effects of robotization are disproportionately felt in the lower-income regions compared with higher-income regions of the same country.”

The workers who drive knowledge and innovation within the manufacturing industry tend to be concentrated in larger cities, and those skills are harder to automate. That’s why urban areas will deal better with the increased automation, according to the report.

On the whole, the increased use of automation will likely create new jobs at a pace comparable to the jobs that will be lost, which nullifies fears about permanent job destruction, according to the Oxford study. That said, the poorer regions that are expected to lose the most jobs will probably not benefit equally from this new job creation due to a gap in skills. That will lead to increased income inequality between cities and rural areas, as well as between regions.
“Automation will continue to drive regional polarization in many of the world’s advanced economies, unevenly distributing the benefits and costs across the population,” the report said.

For policy makers, this means they will have to think about how the increased efficiency will hold up against the effect on income inequality. Some have already worked automation into their political platforms. Vermont Senator Bernie Sanders, who is running for the Democratic nomination for president, recently said he was worried about what artificial intelligence and robotics “will mean to working people in this country,” for example.

“We need to have a long discussion to make certain that millions of workers are not thrown out on the street because of robotics,” he said during a CNN town hall in February.

In the United States, Oregon, Louisiana, Texas, Indiana and North Carolina are the most vulnerable states, according to Oxford Economics. That’s because those states are reliant on manufacturing jobs that could disappear because of robots.

In Oregon, for example, “high dependence on manufacturing … and the state’s exposure to globally competitive sectors, means its workers are vulnerable to rapid technological progress”, according to the Oxford study.

On the opposite end of the spectrum, Hawaii, DC, Nevada, Florida and Vermont will see the least impact from increased robotization. Manufacturing plays a smaller role in those places.

By Jewel Stolarchuk for The Independent 

18 000 jobs in Deutsche Bank are set to be cut as the German national lender embarks on mass retrenchment exercise. Whole teams at the bank’s Asia-Pacific offices have reportedly been let go, as the lender seeks to transform itself from an investment bank that used to compete with the lenders in Wall Street, after struggling in the aftermath of the financial crisis.

Deutsche Bank employs about 4,700 employees in its Asia-Pacific offices in Singapore, Sydney, Tokyo and Hong Kong. The investment banking team in the region consists about 300 staff members and it is expected that 10 to 15 per cent of these employees and almost all the employees in the equity capital markets division will be retrenched.

According to Reuters, the restructuring plan will ultimately cost 7.4 billion euros (SGD $11.31 billion) and will see the bank cut back on its fixed income operations and axe its global equities business altogether.

Most of those retrenched are working in the bank’s offices in Europe and the United States but some offices from Sydney to Hong Kong were also affected. Retrenched workers are due to sign redundancy packages.

One Deutsche bank employee, an equities trader based in the Hong Kong office who declined to be named, told Reuters that staff were called individually to meetings and that the mood was “pretty gloomy” as the job cuts began. He said: “(There are a) couple of rounds of chats with HR and then they give you this packet and you are out of the building.”

While a Deutsche Bank spokeswoman declined to comment on specific departures, an insider who is familiar with the bank’s Australian operations told Reuters that most of the mergers and acquisitions staff would not be immediately affected but the teams in the four-strong equity capital markets were being retrenched.

The Deutsche bank spokeswoman assured the press that the bank would be directly in touch with employees. She added: “We understand these changes affect people’s lives profoundly and we will do whatever we can to be as responsible and sensitive as possible implementing these changes.”

Deutsche Bank’s Chief Executive Officer Christian Sewing called the retrenchment exercise part of a “restart.” In a letter to employees, he wrote: “We are creating a bank that will be more profitable, leaner, more innovative and more resilient.”

This “restart” comes on the heels of Deutsche Bank’s failure to merge with its rival Commerzbank. In May, Mr Sewing hinted at extensive restructuring as he promised shareholders that he will implement “tough cutbacks” to the investment bank.

How it will impact South Africa

According to an article by Business Insider, the Sandton headquarters employ approximately 70 staff.

  • The equity trading desk will be closed completely, with the loss of around 12 jobs
  • The fixed income team, which trade bonds, will remain largely unchanged in South Africa

The bank suffered a pre-tax loss of €16-million (R251,5-million) on its South African activities last year, according to the Deutsche Bank annual report.

Standard Bank has announced that it will close 104 of its branches by June 2019. This comes after an announcement by the bank in March that it planned to close more than 91 branches.

The bank’s efforts to digitise its retail and business bank is expected to impact more than 1 200 jobs, as staff members are retrenched to make way for self-service offerings.

Standard Bank has published the full list of branches which will be closing across the country on its website. It also outlined the branches where customers affected by the closures can go instead.

By Luyolo Mkentane for Business Day

The unemployment rate rose to a near 15-year high in the first quarter of 2019, highlighting the enormity of President Cyril Ramaphosa’s plans to recover the country’s economy.

Ramaphosa said he wants to lead the country out of “nine wasted years”, a tacit reference to his predecessor Jacob Zuma’s term in office, which was marked by increasingly brazen corruption and state capture. Under Zuma’s watch unemployment soared and economic growth faltered, while confidence in the SA economy fell to new lows.

Read the full article here: https://www.businesslive.co.za/bd/economy/2019-05-14-soaring-joblessness-weighs-on-ramaphosa-presidency/

Source: IOL

Embattled Tiso Blackstar has announced that it intends to close its Sunday World tabloid as revenue plummets and workers continue to strike.

Managing director Andy Gill yesterday sent out an internal communication to staff informing them that Sunday World employees had been notified about the company’s intentions.

Tiso Blackstar owns the Sunday Times, Financial Mail, Sowetan and Business Day, among other titles.

The company also shut down the print edition of The Times in 2017.

Gill said the company was “proposing a broad restructuring of its editorial operations as a result of the economic headwinds facing the business”.

He blamed looming job cuts and possible closure of the Sunday World on poor revenue.

Tiso Blackstar has also issued Section 189a notices to the editorial staff of the Sowetan, Daily Dispatch and The Herald, and editorial production staff in the business media stream.

“We are aware that the current situation is difficult, especially for those affected by restructuring, but it is important to consider the alternative future if we do not act now – one in which further title closures and widespread job losses become inevitable,” Gill said.

SA National Editors’ Forum chairperson Mahlatse Mahlase expressed concern over the looming job losses.

“The retrenchments come at a time when the industry has been shedding jobs at an alarming rate, which is very concerning.

“Newsrooms are becoming smaller, and that will always have an impact on the quality of journalism and diversity in the media,” she said.

The announcement comes at a time when some employees were on a strike which started last week after negotiations over pay, lack of bonuses and working conditions for journalists collapsed.

Yesterday, the employees picketed outside the group’s offices at The Hill on Empire Road in Johannesburg.

3M to cut 2 000 jobs

By Nathaniel Meyersohn for CNN

3M, which makes Post-It notes and Scotch tape, is cutting 2 000 jobs around the world.

The industrial manufacturer made the announcement Thursday as it reported weak sales during its most recent quarter and darkened its outlook for the year ahead.

Sales slid 5% to $7.9 billion last quarter compared to the same time period a year ago. Although sales ticked up in the United States, 3M’s largest region, sales dropped more than 9% in Europe, the Middle East and Africa. Those areas make up 3M’s second largest region. Sales in Asia also fell more than 7% compared to a year ago.

“The first quarter was a disappointing start to the year for 3M,” said Mike Roman, 3M chief executive officer, in a statement. “We continued to face slowing conditions in key end markets.”

In addition, 3M slashed its full-year guidance.

3M said the job cuts, which represent around 2% of its global workforce, will save the company up to $250 million annually. 3M will spread out the cuts across different business divisions and geographies “with emphasis on corporate structure and underperforming areas.”

The stock sank more than 10% in early trading Thursday, which drove down the Dow.

E-commerce could create 3m jobs in Africa

Source: Fin24

Online marketplaces establishing themselves across Africa could create around 3-million new jobs by 2025.

These digital platforms, which match buyers and providers of goods and services, could also raise incomes and boost inclusive economic growth with minimal disruption to existing businesses and workforce norms.

These are among the findings of a new report, How Online Marketplaces Can Power Employment in Africa, released by Boston Consulting Group (BCG).

Generating employment is an urgent priority across the continent. The African Development Bank estimates that one-third of the 420 million Africans aged 15 through 35 were unemployed as of 2015.

Around 58% of the new jobs—created directly, indirectly, and through the additional economic activity generated by online marketplaces—will be in the consumer goods sector, 18% will be in mobility services, and 9% in the travel and hospitality sector, according to the report.

For online marketplaces to reach their full potential, however, the public and private sectors must work together to build the right digital environment from the outset, the report notes.

Obstacles to industry expansion include underdeveloped infrastructure, a lack of regulatory clarity and limited market access.

The economic and social benefits of online marketplaces

“Online marketplaces are a good illustration of how the digital revolution can create economic opportunity and improve social welfare in Africa,” says Jan Gildemeister, BCG partner and managing director based in Johannesburg.

“Because Africa currently lacks an efficient distribution infrastructure, online marketplaces could create millions of jobs.”

Concerns that growth in online marketplaces will merely cannibalise the sales of brick-and-mortar retailers are misplaced in the case of Africa, according to the report.

There were only 15 stores per one million inhabitants in Africa in 2018, compared with 568 per million in Europe and 930 in the US. This extremely low penetration suggests that there’s minimal risk that e-commerce will displace existing retailers and that much of the population is underserved.

The report also details the ways in which economic activity generated by online marketplaces boosts employment and incomes.

These businesses create demand for personnel in new fields, such as platform development, as well as for merchants, marketers, craftspeople, drivers, logistics clerks, and hospitality staff.

Some also offer skills-development programs and help small enterprises raise capital to expand their businesses.

Online marketplaces also boost demand for goods and services in areas currently beyond the reach of conventional retail networks and bring new people—such as women and youth who may be currently excluded from labour markets—into the workforce.

The report recommends that the online marketplace community and African governments collaborate to address the challenges that hinder the online marketplaces’ ability to grow.

140 000 jobs at risk as Edcon flounders

Source: Business Live

A few weeks ago, the FM reported that Edcon, an iconic SA retail brand that began life in 1929, was facing an imminent cash crunch. This weekend, news emerged that Edcon had written to its landlords, asking for a two-year “rent holiday” of 41% for all its 1 350 stores.

The reality may be less dramatic than the “Edcon crashes” headlines suggested, partly because its stores are still open and trading. But there’s no denying that these are dire times for SA’s largest clothing retailer.

That’s not surprising. Last month, CEO Grant Pattison admitted to the FM that new funding was needed. “The current process we’re under is looking for shareholders, new and old, to inject new capital into the business,” he said.

Now, a letter dated December 11 and sent to Edcon’s landlords spells out details of how this new “restructuring plan” will work.

What is apparently on the table is that the retailer’s existing funders would convert R9bn of their debt into equity, while injecting another R700m. Then, the Public Investment Corp will inject another R1.2bn into Edcon.

For this to happen, the lenders have stipulated that Edcon’s 31 key landlords (like Hyprop and Growthpoint) must agree to the two-year “rent holiday”. This would equate to R1.2bn worth of support, for which Edcon plans to give the landlords a 5% stake.

It’s a tough call for the landlords, especially since Edcon plans to shut a number of stores until 2022. But if they reject this deal, Edcon could end up defaulting on leases anyway.

The bigger issue is whether bailing out Edcon will create a stronger retailer able to compete, or whether it will be akin to an SAA bailout — where the money vanishes up a chimney, with no value created. It’s a tough call, since Edcon has been shrinking every year. Since 2012, it has lost 22% of its clothing and footwear market share; it once held more than 50% of the sector.

Disturbingly, there aren’t too many specifics on the turnaround plan. There are promises to close some stores and improve trading densities (sales per metre), get more stock through its tills, expand its financial services side (credit and insurance, primarily) and reduce IT costs.

There’s nothing ingenious in that, though. And it’s one thing to put those goals on a PowerPoint presentation, another to make it happen.

Still, the letter to landlords contains some interesting revelations.

First, it says that since March, advisory firm Rothschild & Co has been trying to sell Edcon, but has found no takers. It adds that unless there is a further “intervention”, liquidation is “highly likely”. Fortunately, Pattison seems to have a plan, likely to be announced in the next few days, to prevent that. Which is just as well, considering the 40,000 employees who would be affected.

Of course, Pattison hasn’t helped himself by repeatedly bungling the communications around Edcon.

He denounces the reports as “misleading”, without saying exactly what was wrong. At the same time, he admits that when asked to comment by the Sunday Times, he declined.

There has been a consistent pattern of refusing to comment, then blaming the media for publishing what happened, when greater introspection might have been the wiser approach.

Unfortunately, it goes hand in hand with Edcon’s years of displaying a profound lack of respect for customers and, it seems, staff.

Hopefully, a much stronger Edcon will emerge from the ashes, one that can restore the principles and market position it once held, selling things that people actually want to buy.

Job cuts loom at DStv

By Chris Forrester for Advanced Television

According to a report in South Africa’s Sunday Times newspaper, pay-TV operator DStv is laying off up to 200 staffers in a move to save cash amidst increased competition.

A DStv spokesperson said the move was in order to create a leaner and more agile business. Existing staff are being asked to reapply for their jobs, says the newspaper.

DStv’s parent, MultiChoice has lost some 41,000 Premium top-tier subscribers in the year to March 31st.

MultiChoice has made no secret of its annoyance that rivals such as Netflix and Amazon Prime are eating away at its core subscribers and yet operate without having to fulfil the licensing obligations faced by MultiChoice.

MultiChoice CEO Calvo Mawela has called for a change in regulations to cover the new OTT entrants.

By Tehillah Niselow for Fin24

The official unemployment rate increased by 0.5% to 27.2% in the second quarter of 2018, up from 26.7% in the first three months of the year.

Statistician-General Risenga Maluleke released the Quarterly Labour Force Survey for April, May and June in Pretoria on Tuesday.

The increase in the unemployment rate was due to a decline of 90 000 people in employment, as well as an increase of 102 000 people who became unemployed. Additionally, the number of discouraged job seekers rose to 2.9 million people, between the first and second quarters of 2018.

Manufacturing has lost 55 000 jobs year-on-year, and Maluleke said that basic metals and food production were the main drivers of the employment losses in the sector.

The industry hardest hit by job losses was manufacturing, with 105 000 people becoming unemployed in that sector in the second quarter. Community, social and services recorded a 93 000 jobs contraction, and 57 000 employment positions were cut in trade.

The transport sector accounted for the largest increase in jobs, with 54 000 new positions in the second quarter, while mining added 38 000, private households 22 000 and utilities increased by 18 000.

Of the 20.2 million South Africans aged 15 to 34 years, the number of young people not in employment, education and training (NEET) increased by 0.4% in the second quarter year-on-year.

This rate increased for black African males and white males. The female rates of NEET was recorded at over 40% among black African females aged 15 to 34 years old.

“Black women are the most vulnerable when it comes to unemployment,” Maluleke said.

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