COMPANY NEWS IN BRIEF

Disney to lay off 28 000 employees

Walt Disney Co said it will lay off roughly 28 000 employees, mostly at its US theme parks, where attendance has been crushed by the coronavirus pandemic, especially in California where Disneyland remains closed. About two-thirds of the laid-off employees will be part-time workers, the company said in a statement.

Disney shut its theme parks worldwide when the novel coronavirus began spreading this year. All but Disneyland nicknamed the Happiest Place on Earth reopened, though the company was forced to limit the number of visitors to allow for physical distancing.

“We have made the very difficult decision to begin the process of reducing our workforce at our Parks, Experiences and Products segment at all levels,” Josh D’Amaro, chairman of the park’s unit, said in a statement.

He cited the parks’ limited capacity and uncertainty about the pandemic’s duration, which he said was “exacerbated in California by the state’s unwillingness to lift restrictions that would allow Disneyland to reopen.”

In a letter to employees, D’Amaro called the move “heart-breaking.” He said management had tried to avoid layoffs by cutting expenses, suspending projects and streamlining operations. -Nampa/Reuters

General Atlantic to invest millions

India’s Reliance Industries Ltd said private equity firm General Atlantic will invest 36.75 billion rupees (US$498.31 million) for a 0.84% stake in its retail arm, sending shares of the country’s most valuable company up as much as 1%.

The deal underscores growing investor interest in the Mukesh Ambani-led company’s expansion plans as it diversifies from its mainstay oil-and-gas business. Reliance is being seen as a formidable rival to Amazon.com Inc and Walmart Inc’s Flipkart as they battle for market dominance in India.

Wednesday’s investment gives Reliance Retail a pre-money valuation of 4.29 trillion rupees (US$58.17 billion), the company said. Reliance, which in May launched an online grocery service, also operates around 12 000 brick and mortar stores.

Chairman Mukesh Ambani said Reliance would leverage General Atlantic’s “extensive expertise at the intersection of technology and consumer businesses” to expand its new commerce venture, tying neighbourhood stores for online deliveries of groceries, apparel and electronics.

With the latest investment from General Atlantic which has also invested in Airbnb, Slack and Uber Reliance has now raised around US$2.3 billion for its retail arm. -Nampa/Reuters

Alibaba cloud division to be profitable

Chinese tech giant Alibaba’s cloud unit expects to be profitable within 2021, a senior executive said on Wednesday. Maggie Wu, chief financial officer of Alibaba, made the remarks at a livestreamed investor day event.

The company, a dominant player in China’s cloud market, is fending off challenge from domestic rival Tencent which is also trying to capture cloud business opportunities.

Alibaba has said it would invest 200 billion yuan (US$29.36 billion) in its cloud infrastructure over three years.

In the June quarter, Alibaba’s cloud computing revenue grew 59% from a year earlier to 12 345 million yuan on higher revenue contribution from its public cloud and hybrid cloud businesses.

Cainiao, Alibaba’s logistics unit, will likely see operating cash flow turn positive in fiscal year 2021, Wu added. – Nampa/Reuters

Uber minimum pay rate approved

The Seattle City Council passed a minimum pay standard for drivers for companies like Uber Technologies Inc and Lyft Inc.

Under the ordinance, effective January, the drivers will now earn at least US$16.39 per hour - the minimum wage in Seattle for companies with more than 500 employees.

Seattle’s law, modelled after a similar regulation in New York City, aims to reduce the amount of time drivers spend “cruising” without a passenger by paying drivers more during those times.

City officials argue this should prevent Uber and Lyft from oversaturating the market at drivers’ expense, but the companies say it would effectively force them to block some drivers access to the app. Both Uber and Lyft have locked out drivers in response to the NYC law.

“The City’s plan is deeply flawed and will actually destroy jobs for thousands of people as many as 4 000 drivers on Lyft alone and drive rideshare companies out of Seattle,” Lyft said in a statement. Uber did not immediately respond to request for comment. – Nampa/Reuters

Pfizer to buy 9.9% of CStone

CStone Pharmaceuticals said on Wednesday a unit of Pfizer Inc PFE.N had agreed to buy a 9.9% stake for HK$1.55 billion (US$200 million), as the Hong Kong-listed biopharmaceutical firm seeks to improve the commercialisation of its products.

The news sent the Hong Kong-listed stock up as much as 39.6% to HK$12.98, the highest since October 2, 2019. The stock is on track for a fourth straight session of gains, and the best day since listing in February 2019.

Shanghai-based CStone said the deal would allow it to focus on product development and strengthen its ability to commercialise CS1001 - an anti-PD-L1 monoclonal antibody.

Pfizer Corporation had agreed to buy 115.93 million new shares of China-based CStone at HK$13.37 apiece, representing 43.8% premium over the closing price of HK$9.30 on Tuesday.

CStone, which focuses on immuno-oncology medicines, said it had granted a Pfizer unit an exclusive licence to commercialise CS1001 in mainland China. – Nampa/Reuters