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US technology giant Apple has announced that it will impose a recruitment cutback - which has been primarily forced due to weak sales on the company’s iPhone devices in the lucrative Chinese market.
Bloomberg has reported that Apple CEO, Tim Cook, announced the recruitment cutbacks just a day after he sent a letter to Apple investors that warned the company was bracing itself for a year-on-year decline in revenue for its fiscal Q1, which would shave $5bn from its guidance.
In a series of meetings that were held following the disclosure, it was reported that Cook informed some staff that a number of divisions would reduce hiring, but stated that he didn’t think a complete freeze in recruitment would be an appropriate solution to take.
In addition to this, it has been further disclosed that the CEO is also yet to determine which divisions will face hiring cutbacks. However, it is believed that divisions such as Apple’s AI team will not be affected due to the leverage of investment made by the US tech company into the emerging technology.
The move will also not affect plans to open a state-of-the-art new office in Austin, Texas or its expansion plans in Los Angeles, where the company is fleshing out its original video content ambitions.
Bloomberg also pointed out that Apple has hired new staff at a significant rate over the past decade. The company recruited 9,000 workers in its most recent fiscal year, taking the total up to 132,000, while adding 7,000 a year earlier.
In a letter to stockholders ahead of its 2018 Annual Meeting of Stockholders to be held on March 6, Qualcomm highlighted details of a $1 billion strategy which aims to generate “significant value” for investors in the near term, in the wake of Broadcom making moves to acquire Qualcomm, which the company has labeled “opportunistic” and “aggressive”.
“Today we are executing a strategy that we are confident will continue to generate significant value for our stockholders in the near term with additional upside,” said the Qualcomm letter to stockholders. The company said it is committed to a $1 billion cost reduction program, and is also committed to creating value from its acquisition of NXP.
Qualcomm also said it expects to create value from resolving current licensing disputes, namely with Apple. “As is widely known, we are currently in litigation with Apple,” the letter reads. “What many stockholders do not realize is that we have binding long-term license agreements with Apple’s contract manufacturers. But Apple has required its contract manufacturers to cease paying us despite these existing binding contracts.”
Apple now continues to utilize Qualcomm’s intellectual property for its own profit without paying, the letter adds. “In this litigation, Apple is seeking to avoid paying fair value for Qualcomm’s intellectual property, rejecting terms that are well established in the industry. Apple has often used such litigation to try to renegotiate with its suppliers, and Qualcomm has taken legal action to enforce our contracts.”
Qualcomm also highlighted its leadership position in 5G, which is in the early stages of transforming multiple industries, including mobile, IoT, automotive and many others. This is why Broadcom’s acquisition bid was rejected, Qualcomm said, labeling it an “opportunistic” with a “highly uncertain – perhaps impossible – regulatory path to completion.”
The potential transaction would require clearance from at least a dozen antitrust regulators throughout the world, including the U.S., EU, China, Korea, Japan and others, as well as from national security agencies. Regulatory review would likely take at least 18 months to complete, and would likely require meaningful divestitures, ongoing restrictions on the combined entity’s conduct, potentially contradictory and irreconcilable demands from regulators, and the transaction could be blocked outright.
Qualcomm issued a statement on December 4 confirming the receipt of Broadcom’s nomination of a slate of candidates to replace Qualcomm’s existing Board of Directors at the company’s 2018 Annual Meeting of Stockholders. Qualcomm perceived the move as a “blatant attempt to seize control of the Qualcomm Board.”
Broadcom’s proposal was rejected by Qualcomm because it “dramatically undervalues Qualcomm and does not reflect our clear path to near term value,” the letter said. The move would also carry significant regulatory uncertainty, Qualcomm added, as well as giving “no value to the transformative opportunity in 5G.”
Qualcomm urges stakeholders in the letter to block Broadcom’s attempt to “capture, for itself, the value that rightly belongs” to investors. The company touted its position as 12-24 months ahead of its merchant competitors in the 5G space, as a result of “innovation and technological advancements.” A takeover by Broadcom, Qualcomm said, would bring “no value to the transformative 5G value creation opportunity that should play out as 5G is launched globally in 2019.”
Qualcomm’s strong position in 5G, coupled with its strength in connectivity, low power compute and security, has “positioned us for healthy long-term growth in areas such as mobile RF front end, IoT, automotive, computing and networking,” the letter adds. The opportunities, Qualcomm claims, represent a “serviceable addressable market” of $150 billion by 2020.
“We expect growth in these new areas to drive robust value creation for stockholders beyond 2019,” the letter reads. “We are demonstrating success in these areas with more than $3 billion in revenues in 2017, up 75% over the last two years.”
US technology colossus Apple is reportedly renegading on a previous commitment that they made to the Irish government on the construction of $1 billion data center in rural Ireland. Irish Taoiseach Leo Varadkar has publicly disclosed that Apple CEO Tim Cook will no longer commit to the ambitious project.
However, the Taoiseach stressed that Dublin would do everything necessary in order to keep the project alive and facilitate whatever Apple needs to see the data center constructed. Apple initially disclosed its intentions to erect the facility in a rural location in the West of Ireland in February 2015. Its decision to go to a rural location was to take advantage of green energy sources located nearby.
However, the project has been subject to lengthy delays due to a number of planning objections over the last two years, and now Apple is eyeing up other potential location for the construction of its new data center. Varadkar met Apple’s CEO, but admitted that Cook did not commit to the proceeding with the project.
The Taoiseach said, “We didn’t get a start date, or a definite commitment or anything like that, but I did stress to Apple that the government would do anything within our power to facilitate the resumption of the project.”
Ireland’s Prime Minister is currently touring the US meeting potential new investors. Ireland relies heavily on foreign multinational companies like Apple for the creation of one in every 10 jobs created across the economy and sees major investments such as data centers as a means of securing their presence in the country.
Apple declined to commit when pressed on whether they remained committed to the project. A similar Apple center which was announced at the same time in Denmark is set to begin operations later this year, whilst Apple also announced in July that it would build its second EU data center in the Nordic region.
The government has said it is considering amending its planning laws to include data centers as strategic infrastructure, thus allowing them to get through the planning process much more quickly. However, such legislation is expected to be met with opposition by those within parliament.
Ireland has a checkered history when it comes to planning permission and previous governments have been brought down due to shady financial agreements between developers and politicians. A change in legislation to facilitate Apple’s attempts to construct their data center is not likely to be well received by the general public still dismayed at the country’s refusal to accept an EU ruling that Apple owed the state €13 billion in unpaid taxes.
Uber CEO, Travis Kalanick has sensationally resigned as CEO of Uber after coming under increased pressure from investors who raised serious concerns over his leadership. The co-founder of the ride-hailing service which has upended the taxi industry on a global scale has been under intense scrutiny over a series of scandals that have rocked the organization.
However, just last week it was announced following a board meeting that Kalanick had agreed to take a leave of absence for an undetermined period of time in an effort to grieve for his mother who had recently been tragically killed in a boating accident. His father was also seriously injured in the accident, and Kalanick said he needed a break to spend time with his family and work on his leadership skills.
It was expected he would return quietly in a few months when the controversies surrounding the organization blows over. However, it has been announced that Kalanick has now resigned as CEO after a letter from venture capitalist firm Benchmark called for his resignation.
In a statement given to the New York Times, Kalanick said it was imperative that Uber went back to building rather than becoming embroiled in a fight – and that he accepted the investors request. He said, “I love Uber more than anything in the world and at this difficult moment in my personal life I have accepted the investors' request to step aside so that Uber can go back to building rather than be distracted with another fight.”
Uber has been under the spotlight following an investigation into the culture that exists within its workplace and the practices employed by the firm which Kalanick co-founded in 2009. Uber is now the world’s most highly valued start-up business. A growing momentum of voices demanded changes at the helm, and it was the call from Uber’s biggest investors that ultimately forced Kalanick to concede that his position was now untenable.
One of Uber’s largest shareholders Bill Gurley is a partner in Benchmark and he also sits on the board. Other venture capital firms such as First Round Capital, Lowercase Capital, Menlo Ventures and Fidelity Investments, all called for the CEO to step aside. It has been reported that they delivered a letter to Kalanick when he was in Chicago. It is believed that Kalanick will remain on Uber’s board.
Gurley, one of Kalanick's closest confidants, praised the CEO on Twitter, after calling for his resignation. He tweeted, "There will be many pages in the history books devoted to @travisk - very few entrepreneurs have had such a lasting impact on the world.”
An Uber spokesman has expressed his shock and surprise at the decision taken by Kalanick. Some analysts felt that it was inevitable he had to go after an extensive investigation was initiated by former US Attorney General Eric Holder. Uber hired Holder to examine its culture and workplace practices after a former employee accused the company of engaging in brazen sexual harassment. Uber is now valued at $68 billion, which completely shattered the norms for Silicon Valley startups, and many feel the organization embodied many of Kalanick’s aggressive and pugnacious personality traits.
In early September, Telefónica, the Spanish multinational broadband and telecommunications provider, said it was prepping for a public offering for Telxius, its telecoms infrastructure subsidiary. By the end of the month, the company announced that it was cancelling the public offering, after demand from investors proved inadequate.
The Spanish company said in a statement it will continue “to analyze strategic alternatives” for Telxius. The decision to cancel the IPO was agreed upon with the banks that were managing the IPO, the company said. Telefónica and its advisers were said to be struggling to rescue the deal, and considered lowering the price or reducing the size of the deal because of low demand for the stock.
Investors were reportedly taken aback by the asking price of 12 euros to 15 euros a share, and the company and its banks were unable to find a solution, Bloomberg reported. Telefónica is well-known to be financially in-debt, and the cancelled sale leaves it with few options to significantly reduce its 52.6 billion euro debt pile, while sustaining its credit rating and maintaining dividends.
Telefónica is now on the hunt for cash and it is also considering a possible listing of its British unit O2, after the European Commission blocked its sale to Hong Kong group Hutchison over fears of the impact on prices for consumers.
The company had hoped to raise up to 1.5 billion euros from the Telxius listing, which was scheduled for October 3. It had planned to float up to 40 percent of Telxius, which manages Telefonica's infrastructure assets, including over 31,000 kilometers (19,000 miles) of sea-floor fiber-optic cables and 15,000 telecom masts in Spain.