Global Roundup: Microsoft cuts forecast, Musk’s new rule for Tesla employees + more

Afeez Odunoye
Global Roundup: *Microsoft cuts forecast | *Musk’s new rule for Tesla employees | *Microsoft is changing its stock ticker | *Britain is proposing a safety net for failing cryptocurrencies
Microsoft services down globally due to networking outage
Microsoft cuts forecast

What apps will you be spending your weekend with? Or what new software will you spend your time learning? We assume streaming platforms will take precedence. But, that’s just us.

However you want to spend it, we think it’s important to share the Global Roundup of news items with you. These are exciting updates across the globe that you missed during the week.

At Microsoft, there’s been a change to the multinational tech company’s fourth-quarter forecast. This is happening in the face of currency fluctuations and inflation. Elon Musk has asked Tesla employees to return to the office or leave. Workers in the electric vehicle business are opposing the new rule.

Let’s get to the full updates in Global Roundup for this week:

Microsoft cuts forecast

Microsoft Corp Thursday, cut its fourth-quarter forecast for profit and revenue, making it the latest U.S. company to warn of a hit from a stronger greenback.

A hawkish Federal Reserve and heightened geopolitical tensions have driven a 14% gain in the dollar against a basket of currencies over the last year, forcing companies such as Coca-Cola Co. and Procter & Gamble to temper expectations for the rest of the year. 

Global Roundup: Microsoft cut its fourth quarter forecast on Thursday. MSMEAfrica

Microsoft, which gets about half its revenue from outside the United States, lowered its revenue forecast for three segments including Windows products, cloud services and personal computing.

Corporate hedging activity has increased as more companies try to guard their profits against the impact of currency fluctuations amid surging inflation. 

It is common for companies to protect themselves from unexpected forex moves, but the urgency comes after years of muted forex volatility, during which currency fluctuations had a limited impact on earnings.  

The tech giant expects revenue for the quarter to be between $51.94 billion and $52.74 billion, down from its prior range of $52.40 billion to $53.20 billion. 

It cut the profit view to between $2.24 and $2.32 per share from a prior expectation of between $2.28 and $2.35 per share.

Analysts are forecasting earnings of $2.33 per share on revenue of $52.87 billion, according to Refinitiv data.

Musk’s new rule for Tesla employees

Tesla Inc Chief Executive Elon Musk has asked employees to return to the office or leave the company, according to an email sent to employees and seen by Reuters.

“Everyone at Tesla is required to spend a minimum of 40 hours in the office per week,” Musk wrote in the email sent on Tuesday night.

“If you don’t show up, we will assume you have resigned.” 

“The more senior you are, the more visible must be your presence,” Musk wrote. “That is why I lived in the factory so much — so that those on the line could see me working alongside them. If I had not done that, Tesla would long ago have gone bankrupt.” 

Global Roundup: Musk’s new work rule for Tesla employees has been criticised in the US and Germany. Fox Business

Two sources confirmed the authenticity of the email reviewed by Reuters.

Major tech firms in Silicon Valley do not require workers to return to the office full-time, in the face of resistance from some workers and a resurgence of coronavirus cases in California. 

Some Tesla workers expressed displeasure over Musk’s latest comments in posts they placed on the anonymous app Blind, which requires users to sign up using company email as proof of employment at firms.

“If there’s a mass exodus, how would Tesla finish projects? I don’t think investors would be happy about that,” one Tesla employee wrote.

A California-based workers’ advocacy group assailed Musk’s return to office plan.

“Employers including the state government are finding that mandating a return of all employees is a recipe for outbreaks,” Stephen Knight, executive director at Worksafe, wrote in an emailed statement to Reuters.

“Unfortunately Tesla’s disregard for worker safety is well documented, including their flouting of the county public health department at the start of the pandemic,” he wrote. 

In Germany, Elon Musk’s demand that Tesla staff stop “phoning it in” and get back to the office got short shrift from the country’s largest trade union on Thursday.

The IG Metall union in Berlin-Brandenburg-Sachsen, where Tesla’s plant is located, said it would support any employee who opposed Musk’s ultimatum. Tesla employs around 4,000 people in Germany and plans to expand the workforce to 12,000.

“Whoever does not agree with such one-sided demands and wants to stand against them has the power of unions behind them in Germany, as per law,” Birgit Dietze, the district leader for IG Metall in Berlin-Brandenburg-Sachsen, said.

While some big employers have embraced voluntary work-from-home policies permanently, others, including Alphabet Inc’s Google, are asking employees to return to the office gradually.

Alphabet has required employees to be in offices at least three days a week starting in early April, but many employees have been approved for fully remote work.

Also, Twitter CEO, Parag Agrawal tweeted in March that Twitter offices would be reopening but employees could still work from home if they preferred.

Meta is changing its stock ticker from FB to META

Meta is about to shed the last of its old corporate name.

The Facebook-parent company announced Tuesday that it will change its stock ticker symbol to “META” prior to the market opening on June 9.

Meta rebranded from Facebook in October, saying it was part of its ambitions beyond social media. CEO Mark Zuckerberg has specifically been interested in building out the metaverse, a sci-fi term that entails working and playing in a virtual world. 

Global Roundup: Meta is changing its stock ticker from FB to META. PYMNTS

At the time, Meta said it would change its stock ticker to “MVRS,” effective Dec. 1. In late November, the company said it was delaying the change to the first quarter of 2022. 

Since then, Roundhill Investments, which used the “META” ticker for its Roundhill Ball Metaverse ETF, announced it would relinquish that ticker symbol. That apparently freed it up for Meta to grab.

CNBC reports that no action is required from the company’s shareholders with respect to the ticker symbol change.

Britain is proposing a safety net for failing cryptocurrencies

Britain’s finance ministry set out plans on Tuesday for adapting existing rules to deal for any major stablecoin collapses, such as with TerraUSD this month.

It is the latest sign of how regulators are trying to catch up with fast-moving developments in crypto markets which straddle national borders.

“Since the initial commitment to regulate certain types of stablecoins, events in cryptoasset markets have further highlighted the need for appropriate regulation to help mitigate consumer, market integrity and financial stability risks,” the ministry said.

Global Roundup: Britain is proposing a safety net for failing cryptocurrencies. The Guardian

Banks, insurers and mainstream payment companies must comply with rules which ensure their deposit accounts, policies or services can be transferred quickly to another provider if they go bust, to help avoid panic and contagion in markets.

Stablecoins, which play a pivotal role in crypto markets, are digital tokens pegged to the value of traditional assets, such as the U.S. dollar, and are seen as having a bigger role in payments.

The collapse of TerraUSD, a popular stablecoin which was the 10th largest cryptocurrency, triggered central bank concerns in a little-regulated sector.

“The failure of a systemic digital settlement asset firm could have a wide range of financial stability as well as consumer protection impacts,” the ministry said in a consultation paper.

“This could be both in terms of continuity of services critical to the operation of the economy and access of individuals to their funds or assets.”

While work continues on whether bespoke rules were needed for winding down failed stablecoins, existing rules for handling payment firm failures should be adapted, the ministry said.

It proposed amending the Financial Market Infrastructure Special Administration Regime, which would give the Bank of England powers to ensure continuity in stablecoin payment services during a crisis.

Hope you enjoyed every bit of the update in this edition of the Global Roundup?

Enjoy your weekend!

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