Asia, Europe could be hit hardest — corporations across multiple sectors worldwide tightening their belts, cutting workforces

From Asia Times

In a speech that displayed an uncharacteristic level of bearishness, Hong Kong’s richest billionaire tycoon Li Ka-shing has warned of a global economic slowdown in 2019.

Hong Kong’s richest man, who stepped down last year from his sprawling conglomerate with an array of businesses all over the world, said almost every country will see low economic growth this year.

Addressing CK Hutchison Holdings’ annual dinner last Friday, Li said that complex conditions will slow the global economy in 2019. He also told media that Hong Kong home buyers should only buy apartments for their own personal use, not for speculation, as Hong Kong’s property market will become volatile this year.

Li’s view perhaps explains why dark shadows have fallen over global corporations, with many recently calling for corporate restructuring ahead of bad times – despite the global equity market quickly recovering from the worst start it had seen in decades.

Independent mainland website (not connected to Wall Street China) recently published a list of companies worldwide, in sectors from cars to advertising to pharmaceuticals to furniture, that have made public their plans to lay off staff.

Top of the list was Danish ISS, a cleaning company that is taking drastic steps to restructure its business by laying off a whopping 20% of its workforce, or 100,000 employees in 13 countries. Worst affected are their workforces in Asia and Eastern Europe, with the company’s total workforce shrinking to 390,000 after the restructuring.

The automobile manufacturing sector is arguably even worse off, with leading players planning to trim over 10% from their workforce. General Motors said it will cut 14,700 jobs, or 15% of staff. Ford has voiced an even more aggressive stance, with plans to cut about 25,000 jobs from its global workforce of 200,000. Jaguar Land Rover has also said it will let go about 500 workers, or about 10% of its staff.

The media industry is said to be facing equally tough times, with Thomas Reuters planning to lay off 3,200 staff before 2020. WPP, the world’s largest advertising firm, will reportedly reduce its workforce by 3,500.

The cuts are affecting multiple other industries. German’s Bayer will cut 12,000 jobs, and the struggling Deutsche Bank will shed 7,000 staff. Swedish IKEA plans to cut 7,500 jobs in its largest ever restructuring exercise, and Japanese consumer electronics giant Toshiba plans to diminish its workforce by 7,000 over the next five years.

One sector that seems currently immune to labor cutbacks is the Chinese internet industry, which takes in the BAT trio (Baidu, Alibaba and Tencent). But while these giants are not cutting headcounts, they are slowing down the speed of recruitment after a poor year in 2018.


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