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Tag: restructuring

  • Founders of Google announce a major corporate restructuring

    Founders of Google announce a major corporate restructuring

    Today, Larry Page and Sergey Brin, the co-founders of Google, announced that they would step down from their respective roles in Alphabet Inc., the parent company of the world’s largest search engine. Continuing forward, current Google CEO Sundar Pichai will take the chief executive officer position at Alphabet while retaining his role at Google.

    This change comes after four years after Google first announced the new public holding company Alphabet, as well as its own transition from a standalone to a subsidiary of that company. When the change occurred, Page and Brin took the positions of CEO and president at Alphabet, Inc, respectively, while Pichai took the reins at Google.

    This new transition reflects Google’s growth in the scale and variety of its ventures and offered services. Page and Brin write, “Today, in 2019, if [Google] was a person, it would be a young adult of 21 and it would be time to leave the roost. While it has been a tremendous privilege to be deeply involved in the day-to-day management of the company for so long, we believe it’s time to assume the role of proud parents,” in a founder’s letter posted.

    This doesn’t mean the co-founders are leaving the company entirely, however. They continue to write, “We are deeply committed to Google and Alphabet for the long term, and will remain actively involved as Board members, shareholders and co-founders. In addition, we plan to continue talking with Sundar regularly, especially on topics we’re passionate about!”

    With this change taking place, newly-appointed Alphabet CEO Sundar Pichai’s responsibilities will now include managing Nest, Waymo, Wing, and other subsidiaries that were related to but not directly affiliated with Google.

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  • UBS to Restructure Investment Bank

    UBS to Restructure Investment Bank

    UBS is going to revamp its investment banking unit along the lines of a wealth management business. The goal is to make the unit leaner and more global.

    Piero Novelli and Rob Karofsky are about to unveil their plans for a revamp of the investment banking business at UBS, according to media reports. The two managers have been in charge of the business for a little less than a year.

    The co-heads are planning to merge certain divisions within the bank in a bid to make the management structure leaner. The advisory service to companies for mergers, acquisitions and IPOs will become the responsibility of Javier Oficialdegui and Ros Stephenson. Currently, the business is led by three regional heads.

    The same brush will be applied to the equity and fixed-income trading, which has been kept separate so far. George Athanasopoulos and Jason Barron will be appointed as co-heads.

    The merger of the units will lead to duplications among managers and hence likely to a reduction of the respective headcount.

    Sergio Ermotti, the CEO of UBS, in 2018 merged North America with the rest of the world in wealth management, a move that helped the bank save $200 million a year, according to an interview with Chairman Axel Weber. By 2021, the sum will reach $600 million. And still, the business hasn’t performed according to expectations.

    Novelli and Karofsky obviously hope to cut costs and boost revenues with the help of a leaner and more efficient structure. Details of their plan will follow later today at an internal event, according to the reports.

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  • Coles partners with Accenture to cut costs

    Coles partners with Accenture to cut costs

    Coles is powering ahead with plans for a more digitally-focused future by signing a long-term agreement with global technology services company Accenture.

    The partnership is part of Coles’ Smarter Selling initiative which is hoped will cut costs to the tune of $1 billion over the next four years through the rollout of new technology.

    As part of the strategy, the supermarket plans to increase automation of manual tasks and use artificial intelligence for quicker and more accurate stock ordering.

    The supermarket giant has amped up its technology since its demerger from Wesfarmers last year, having recently announced a strategic partnership with Microsoft to transform its shopping experience and improve productivity.

    Accenture has a global strategic relationship with Microsoft and will work alongside the tech giant to help Coles deliver “simpler, more efficient, and robust operations”.

    Accenture will also support the modernization of Coles’ supply chain with online grocery leader Ocado, which Coles partnered with in March.

    “We have committed to being technology-led in our stores and throughout our supply chain to reduce costs while delivering an even better shopping experience for customers and making life easier for our team members,” Coles chief executive Steven Cain said.

    “The partnership with Accenture will enable us to deliver the efficiencies we need for long-term sustainability, and provide the agility to respond to rapidly-evolving consumer needs. This is a vital part of Coles winning in its second century,” Cain said.

    As part of the expanded relationship with Accenture, the companies will invest in a joint innovation fund set up to explore new technology applications within Coles.

    “The evolution of the relationship with Accenture reflects the company’s strategy to win together through genuine partnerships with suppliers,” Coles chief information and digital officer Roger Sniezek said.

    “Accenture is a global leader in the digital space and in working together over the past years across a wide range of areas of Coles Group, we have each come to understand each other’s businesses, strengths, and ways of working,” he added.

    “By leveraging this enhanced relationship, we will work together to build Coles’ technological capability, so we have the tools we need to inspire our customers and make life easier for our team members.”

    Accenture will also support the implementation of SAP solutions across procurement, human resources, and finance at Coles.

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  • Toys R Us calls in restructuring advisors

    Toys R Us calls in restructuring advisors

    Toys R Us has appointed restructuring advisors as it struggles under a debt burden, suggesting it may be about to trim its store network.

    Neil Saunders says while the decision is not necessarily a sign of imminent bankruptcy, it is an indication the company is in “a very uncomfortable financial position”.

    “For a robust retailer, debt payments can be challenging. For a retailer struggling to generate sales growth while, at the same time, trying to invest to remain relevant – it can be the difference between success and failure.”

    Saunders says Toys R Us faces a pincer movement.

    “Firstly, it suffers competition from online and physical generalists who happily discount toys to drive customer traffic and sales for stores and websites. Toys R Us has little choice but to price match on some items but has no other categories with which it can balance out eroded margins. Where it fails to price match, it loses sales.

    “Secondly, Toys R Us has lost out in the digital space. Although recent digital investments have been made, the website and general e-commerce proposition are still below par. By our calculations, Toys R Us continues to lose online market share in toys.”

    A further complication for the toy giant is that it operates large and expensive stores.

    “These are increasingly unsuited to what consumers want and expect, and they are steadily becoming less productive and efficient,” says Saunders.

    “Against this backdrop, Toys R Us has to contend with the debt it accumulated as part of the leveraged buyout. In our view, this is an example of private equity damaging retailers by not running them as commercial trading entities but as ATMs.”

    Toys R Us in Asia is operated as a joint venture between the US parent and Fung Retailing. In April, it consolidated its operations in the region by merging the 160-strong Toys R Us Japan chain into the JV, which is 85 per cent owned by Toys R Us.

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  • Coca-Cola to restructure company and cut costs

    Coca-Cola to restructure company and cut costs

    Coca-Cola’s sales declined in the first quarter as it restructured its business, and the world’s biggest beverage maker said it will cut 1,200 jobs starting later this year as it deepens its cost-cutting.

    The maker of Fanta, Sprite and Smartwater said the job cuts will come from its corporate staff around the world. That would represent about a 22-per-cent reduction of its corporate staff of about 5,500, or a 1-per-cent reduction in its total workforce of 100,300 employees, according to FactSet.

    Coca-Cola Co. said the cuts would help it find another $800 million (U.S.) in annualized savings, in addition to the $3 billion the company previously said it is trimming. Most those savings are expected to be realized in 2018 and 2019, it said.

    The cuts are part of a comprehensive review and won’t be concentrated in any one place, the company said.

    The company has also been reshaping its business by selling back its bottling and distribution operations to independent bottlers. That means Coke is becoming more focused on selling concentrates to bottlers and marketing for its brands as its No. 2 executive, James Quincey, prepares to officially take over as CEO next week.

    Quincey has said he plans to focus on making Coke a “total beverage company,” meaning it will more aggressively seek growth in promising drinks other than soda to better reflect changing tastes. The efforts have included putting more marketing behind options like Smartwater, including a carbonated variety of the bottled water.

    When excluding the impact of refranchising, a negative impact from foreign currency exchanges and other structural changes, Coke said its revenue was flat.

    On a global basis, the Atlanta-based company said total sales volume was flat. That reflected a 1-per-cent decline in sodas, and a 3-per-cent increase for the category including water, enhanced water and sports drinks. Volume rose 2 per cent in the category including tea and coffee.

    For the first three months of the year, the company earned $1.18 billion, or 27 cents per share. Excluding one-time gains and costs, it said it earned 43 cents per share, a penny less than analysts expected, according to Zacks Investment Research.

    Total revenue was $9.12 billion in the period, topping analyst forecasts for $8.96 billion.

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  • Nokia announces major restructuring

    Nokia announces major restructuring

    Nokia has announced a restructuring of its mobile unit into two groups, focused on mobile networks and services respectively, in response to the planned departure of the company’s current mobile networks chief.

    The company said it will establish two units called Mobile Networks and Global Services respectively.

    The company’s current chief innovation and operating officer Mark Rouanne will lead up the mobile networks business group, which will be focused on areas including 4G, 5G, cloud core and small cells.

    The Global Services division will meanwhile be led by Igor Leprince, the current executive vice president of global services.

    These executives are taking over from current head of mobile networks Samih Elhage, who is leaving the company on April 1 but will stay on as an advisor until May 31. In a statement, Nokia CEO Rajeev Suri said Elhage has decided to leave now that the integration with Alcatel-Lucent is mostly complete.

    “From helping lead the transformation at Nokia Siemens Networks and creating a disciplined operating model that remains a competitive advantage, to being one of the driving forces behind the acquisition of Alcatel-Lucent and its fast and successful integration, Samih’s contributions to Nokia have been remarkable,” Suri said.

    “He has been a close friend and advisor through times both good and bad, and I fully support his desire for a change.”

    As part of the restructuring, the position of chief innovation and operating officer (CIOO) will be dissolved and the duties split. Responsibility for operations will be transferred to the newly-created position of group chief operating officer (COO), innovation will be taken over by Nokia’s chief technology officer (CTO) and incubation will be assumed by Nokia’s chief strategy officer.

    The group COO position is going to Monika Maurer, currently the company’s COO for fixed networks, while Marcus Weldon will retain the post of CTO and Kathrin Buvac will remain chief strategy officer.

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