Chinese giant LeEco scales back US operations

LeEco, Inc., a Chinese technology conglomerate that produces various products such as smartphones, streaming video, and electric cars has missed its projected 2016 sales in the US and is planning to scale back its operations there.

It will eliminate 175 jobs out of its total staff of 300 people. Currently, their US operations only sell TVs, smartphones, and some accessories.

Earlier this week, LeEco also announced that it was abandoning its quest to purchase US TV maker Vizio Inc. for $2 billion. The reason cited for the decision was regulatory hurdles. Instead, the two companies will look to collaborate. The two companies, in a joint statement said, “Under the new agreement, LeEco and VIZIO will continue to explore opportunities to incorporate the Le app and content within the VIZIO connected CE platform, and engage in a collaborative partnership to leverage LeEco’s EUI (Ecosystem User Interface) platform, along with the brand’s exclusive content and distribution channels, to bring VIZIO products to the China market.”

The regulatory hurdles include the Chinese government restriction of overseas investments and acquisitions to control the sum of money flowing out the Chinese economy. One of the tycoons of China was unable to purchase the producer of the Golden Globes.

Others are skeptical that regulatory hurdles are the reason for LeEco’s backing out of the Vizio deal. Paul Haswell, a partner at international law firm Pinsent Masons, said, “I’m not sure I buy LeEco’s story. LeEco has a history of securing considerable funding without any difficulty in China even as a number of its companies seem to have problems paying staff and suppliers. Its acquisition of Vizio was unlikely to have been investigated or blocked by a regulator…even in the current US political climate. So I have to conclude LeEco is facing challenges that have forced the company to curtail its US ambitions.”

Also, LeEco’s CEO, Jia Yueting, has lowered his annual salary in acknowledgment that LeEco is now low on cash.

In the past months, LeEco has faced diseconomies of scale. Its various businesses were growing too fast. In a staff letter, Jia Yueting said that the company was facing a “big company disease.”

Kitty Fok, managing director at IDC China, said, “This is not the first that a Chinese company has had to abandon an acquisition, either because of capital controls or foreign government policy. With the financial challenges faced by LeEco since last year, refocusing in China to build products and strengthen its business strategy is the right thing to do for the company.”

Last month, LeEco got a $2.2 billion financing from investors that includes Sunac China Holdings Ltd., a property developer. The financing went to Leshi Zhikin which is LeEco’s smart internet TV subsidiary and Le Vision Pictures, its film production subsidiary.

For the first quarter of this year, Leshi Internet Information & Technology Corp Beijing, a listed unit of LeEco forecasted their first quarter profit for this year to be between 103 million to 132 million yuan.


Amazon to hire 30,000 part-time workers

Online retailing giant Amazon has announced that it intends to hire 30,000 part-time workers in America in 2018.

There will be 5,000 jobs in Virtual Customer Service, which is a work-from-home arrangement. In this department, employees working at home will answer calls and chat with patrons. Tom Weiland, Amazon’s VP for worldwide customer service

Tom Weiland, vice-president for world-wide customer service for Amazon, said that the company’s rapid growth of customer base is why their U.S. virtual customer service program is rapidly growing as well.

The other 25,000 jobs will be at Amazon warehouses.

Part time workers who clock in 20 hours or more weekly are eligible to get benefits. One of the benefits will be a program that will pay for a big chunk of their tuition for selected courses that are considered to be “high-demand fields”. Other benefits include dental and vision insurance, life and disability insurance as well as cash incentives to help pay for medical expenses or to purchase medical insurance.

Weiland said, “There are lots of people who want or need a flexible job- whether they’re a military spouse, a college student, or a parent, and we’re happy to empower these talented people no matter where they happen to live.”

Early this year, the company announced that it will add 100,000 full-time workers in America, complete with full benefits, for the next one and a half year. Analysts think that the announcement to go on a massive hiring spree was part of an effort to repair Amazon’s contentious relationship with Donald Trump.

During the U.S. presidential campaign, Trump accused Bezos of purchasing the Washington Post to be able to influence politics. A few weeks before the election date, Bezos said that Trump’s behavior “erodes democracy around the edges”.

Fulfillment centers will be where most positions will be at while there are also opportunities in areas such as cloud technology and machine learning.

Amazon has been boosting its workforce for several years already. In 2011, it created more than 56,000 jobs, and by the end of last year, the number has grown to more than 341,000. This is the result of Amazon building dozens of warehouses so that they will be closer to customers. This cuts down on shipping costs and boosts delivery number.

Currently, Amazon has almost 40,000 part-time employees throughout America.

Weiland said, “Our work-from-home program, just like our customer-service program generally, continues to grow because the Amazon business continues to grow so fast. We just need to keep up with the pace.”

President Trump’s negative stance on immigration led to tech giants, including Amazon to rally against Trump’s executive order that disallowed entry of nationals from seven countries into America. Amazon was supportive of the suit filed by the attorney general of Washington State.

Amazon started on July 5, 1994, and is based in Seattle, Washington. It is the biggest internet retailer globally regarding market capitalization and total sales.

According to a recent report, Amazon accounts for 1 in every eight jobs in America.


U.S. car demand falls

The U.S. automaker industry has lost steam. Sales figures for March were below market expectations. Estimates from Auto industry publication WardsAuto show the seasonally-adjusted annualized rate (SAAR) for light vehicle sales to be 16.53 million units while Industry consultant Autodata pegs it at 16.62 million units for the month of March. Auto Industry analysts that were polled by Reuters expected 17.3 million units.

Jessica Caldwell, executive director of industry analysis for Edmunds.com, a car buying website, said, “Trucks and SUVs, although they did well, it’s still hard to make up the lack of car sales. You can’t have the other side of the industry completely not performing well.” 39% of total industry sales were cars and sales for cars were down almost 11%.

Ford Vice President of Sales Mark La Neve said that buyers were enthusiastic about trucks that had premium options which increased Ford’s average sale prices by $2,500. LaNeve said, “Sport Utilities and trucks are very positive in terms of our economics. If you think about it, it means revenue is up.”

The reason for the popularity of SUVs are the cheap gasoline, and they now have more efficient engines. According to Edmunds.com, an industry research firm, incentives needed to sell SUVs are lower than for cars. SUVs can be sold with 8.8% discount compared to cars which need around 11% discounts.

This slowdown in car demand shows that the car industry might have reached their peak considering they had seven years of increasing sales as well as two consecutive banner years of record sales.

Mark LaNeve, Ford’s vice president of U.S. and marketing, said, “Certainly, we are not seeing huge growth in the market, but…overall industry and pricing levels, I’d say are good.”

Ford’s sales fell 7%, Fiat Chrysler Automobiles sales fell 5%, Kia sales fell by 15.2% and Hyundai sales fell by 8%. General Motors bucked the trend with an increase of 1.6% as well as BMW whose sales rose 3.6%.

Judy Wheeler, vice president of U.S. sales at Nissan Motor Co. Ltd, said, “March was a tough, tough, tough market. It is going to be an aggressive year and I think everybody realizes that.”

Car inventories are on the rise but Mark Scarpelli, the owner of various car dealers in Chicago, thinks it is nothing to be concerned about as it is just part of the typical business cycle.

Caldwell believes that it is unlikely that the U.S. car industry will match last year’s level as interest rates are increasing. Caldwell says, “Last year it seemed like ‘Oh, there’s still probably room for it to grow, all the other metrics look good,”’ But this month it seems like things are pointing to a slowdown.”

Profits are likely to fall for automakers as they are inclined to cut production. Mark Wakefield, head of automotive practice at consulting firm Alix Partners, said, “You’re not going to see the U.S. get new plants. The market went from pull to push nine months ago. We don’t see it going upward from here.”


Home sales ring in stronger than ever

home prices

According to a recent article in the Denver Post, home sales are stronger than ever. In fact, in May, real estate buyers in the US snapped up properties almost as soon as the homes were listed. That type of response marks the strongest sales rate in nearly 10 years. As a result, sales of existing homes climbed 1.8% in May 2016 to an adjusted yearly rate of approximately 5.5 million – the highest it has been since February 2007. That news is good for the National Association of Realtors, which reported the rise in the sales rate.

According to the news, people remain committed to purchasing homes, despite the fact that the inventory is low, which also has caused prices to rise. The increased demand seemingly stems from lower mortgage rates and a relative healthy unemployment rate (4.7%).

Statistics further underscore the increased real estate demand in May as well. Homes during the month sold only after 32 days on the market – the fastest they have ever sold since industry insiders began monitoring the figure in 2011. Just a year ago, homes stayed on the market an average of 40 days. While sales increased in the West, South and Northeast in the US, they fell in the Midwest where the real estate is normally considered more affordable.

One report by the Denver Metro Association of Realtors showed that the median sales price for a single-family house in May was $398,000. That is a whopping 10.7% increase from only a year earlier. The median sales price nationally was $239,700 in the month of April – a 4.7% increase over the past year.

However, even with these gains, current homeowners are not motivated to list their real estate. Many people are still getting over the equity they lost during the crash. For those individuals, a sale would not generate enough of a profit to cover the cost of purchasing a new home. As a result, listings have fallen about 5.7% over the year, which means home buyers now have fewer choices.


Employers may start offering payday loans to employees

presenteeism

Usually, companies of all sizes – big and small – are concerned about absenteeism. But what about presenteeism? Presenteeism can be just as dangerous because a worker is bringing their own problems to the workforce, whether it’s their illness, their mental health issues or their personal issues at home. And this could hurt the overall productivity in the business.

According to a 2014 report from Bensinger, DuPont & Associates, 47 percent of workers say the problems in their personal lives sometimes affect their own work performance. Some of these problems do include pecuniary difficulties, not having enough money to pay the rent, cover the lighting bill or giving a child money for a school trip.

They then tend to turn to stores that offer direct payday advance loans to borrow some much needed funds for a short period of time. But as the media reports suggest, consumers can enter into a downward spiral of debt and get themselves even more into trouble. Everything just snowballs at once.

When these matters arise at home, employees bring them to the office, and they think about it all the time. Employers are starting to see if they can offer some sort of assistance. One way they’re attempting to achieve this is by offering their own types of payday loans.

It has often been discussed about the benefits and drawbacks of an employer extending a payday loan – it’s a modern update of an advance on your salary or paycheck. But employers want to experiment with a wide range of ideas, anything to boost morale and increase productivity.

Over the last few years, an array of companies have helped their workers pay off student loans, consolidate or refinance existing debt and even offered low-interest lines of credit as an alternative to payday loans. All of these tools are meant to cover emergency costs, pay down other debt or to remove personal headaches that may have seeped into one’s cubicle, and perhaps compete for the best and brightest crop of workers in the labor market.

Business owners and managers concede that they can’t have their workers concentrating on financial matters and looking for part-time work because then it hurts their company.

“I can’t have an effective employee if they are stressed and thinking about waiting tables on the side to make ends meet,” Erik Dochtermann, CEO of New York creative media agency MODCo Media, which has 33 full-time workers, told the Wall Street Journal.

Americans take out approximately 12 million payday loans every single year. These loans, whether they’re $100 or $1,000, carry exorbitant interest rates and other charges and have a small window of repayment. Sometimes, borrowers can have a hard time paying the funds back.

Although many companies are apprehensive about offering such a loan, they may have no other alternative because their staffers are going to get a loan no matter what. So why not have the private firm extend such a product or a choice to those workers?

“Not offering a low-cost loan option is not going to prevent people from getting a loan. By not offering, we are going to force them to do something worse,” said Pam Dimitro, controller at JNET Communications.

Just six percent of U.S. businesses maintain this kind of practice, notes a 2015 study by the Society for Human Resource Management. But that number may grow in the next few years, especially as wages stagnate, the cost of living goes up and workers enter into a life of financial destitute.

It seems perhaps the benefits a company offers are far more important than salary.


Study shows public tired of crowd funding ventures

crowd funding

Over the decades there have been a number of different methods available for people to consider if they needed to raise money for a venture or a good cause. In recent years, one method of raising money that has become increasingly popular is crowd funding. The popularity of this method has surged because we spend more and more of our time interacting with people online and this has enabled people to put out requests to the masses simply with a few clicks of the mouse and via the various crowd funding websites and companies that have been set up.

However, while crowd funding may have seemed like a good idea when it first emerged there are many people who are now becoming fed up of constant requests for funding. Some people have said that they receive requests not just for good causes or ventures that could help to improve the world but for people who simply want help towards paying off debt, going on holiday, and who want to splash out on other luxuries for themselves.

People should work for their money

One editor from New York explained that he used to give donations to good causes but soon found himself being bombarded with requests for donations from people who wanted the money to splash out on themselves. People who have Facebook and email accounts often find themselves in familiar situations with everyone from friends and family members to complete strangers requesting donations.

One Alaskan basketball player, Damen Bell-Holter, said that before crowd funding became so popular, people worked for their money in order to splash out on luxuries. However, these days many were simply sitting at their computers, going online and asking others to simply give them the money they want. He said he realized that in some cases donation requests were legitimate and for good causes but in other cases it was just a case of sheer laziness on the part of the person requesting donations.

The crowd funding industry is now worth $34 billion according to reports, and a number of companies have emerged to help people to raise the money they need such as GoFundMe and Indiegogo amongst others. They have helped many people to raise huge amounts of cash but in some cases the cash has been used for nothing more than personal gain by those requesting it. Even celebrities have become involved with the girl band TLC having raised nearly half a million dollars from fans to bring out a new album – and then not releasing one.