The data behind the biggest business stories of the week, from mass corporate layoffs to the Bank of England’s battle with inflation – and more.
By guest authors Rohan Banerjee and Clara Murray from the Raconteur.
Musk shames home-working
Working from home has become a new front for the culture wars. UK chancellor Jeremy Hunt told the BCC conference this week that the office should be the “default” for employees and that he fears a “loss of creativity” if home-working is made permanent.
Typically, Elon Musk went a step further, suggesting that the practice is “morally wrong”. The issue runs deeper than a pure debate on productivity, he said during an interview with CNBC. The owner of Twitter and Tesla criticised what he perceived to be a hypocrisy among employees in the technology sector. Musk said those in tech often wrongly expect those in manual, lower-paid jobs to go to work, while they have the privilege of doing their jobs remotely.
Musk is correct that access to remote and hybrid work is divided along income lines. In the UK, those in higher-earning professions are more likely to work from home on a regular basis, while three-quarters of those in the lowest income bracket do not have any opportunity to do so.
Britain faces wage-price spiral, says Bank of England chief
Andrew Bailey, the governor of the Bank of England, has claimed that Britain is dealing with a wage-price spiral. The term refers to the idea that increasing workers’ wages to match the rising cost of living will also lead to companies raising the prices of their products and services, locking in inflation for a longer time. Threadneedle Street, Bailey also told attendees of the BCC conference this week, will lift interest rates as high “as necessary” to meet its target of 2 % inflation.
His statements are unlikely to land well with Britain’s workers, many of whom are still striking over pay increase demands. While private sector pay in Britain has risen by nearly 6 % over the past year, soaring consumer price inflation means it has actually fallen 3 % in real terms.
Mass layoffs at Vodafone and BT
The trend of huge corporate layoffs continues this week, with two FTSE 100 companies announcing dramatic downsizing strategies. Vodafone is set to cut 11000 jobs from its global workforce over the next three years, while fellow telecoms firm BT is shedding 55000 jobs by 2033.
Vodafone’s cuts will span its entire operations, starting with its group functions based in the UK, Germany and Italy, which is the company’s largest yet worst performing market. Up to a fifth of the roles lost at BT, meanwhile, are expected to be replaced by artificial intelligence technologies. It’s a sign that the run of redundancies that have hit the tech industry over recent months are starting to impact the wider economy, too.
JD Sports Fashion is set to hit the GBP 1 billion mark for pre-tax profits for the first time, with GBP 1.03 billion projected for the 12 months to February 3, 2024. The sportswear group, which is headquartered in Bury, Greater Manchester, trades from 3,400 stores in 32 countries, as well as online.
Régis Schultz, JD’s chief executive, said its core audience of 16- to 24-year-olds had more opportunities to get work because of low unemployment levels in all of its key market areas. “Whenever they [gen Z] get a job, they can buy the gear they love,” he told The Times. Shultz suggested athletic clothes and trainers represent an “affordable luxury”, adding that once a customer embraces the fashionable, as well as functional, aspect of trainers they “don’t move back. They want to have the latest ones.”