Category: News

6 Jul

Microsoft cutting thousands of jobs in sales shakeup

Microsoft is laying off thousands of employees in a shake-up aimed at selling more subscriptions to software applications that can be used on any internet-connected device.

Most of the people losing their jobs work in sales and are located outside the U.S. The Redmond, Washington, company confirmed that it began sending the layoff notices Thursday, but declined to provide further specifics except that thousands of sales jobs will be cut.

“Like all companies, we evaluate our business on a regular basis,” Microsoft said in a statement. “This can result in increased investment in some places and, from time-to-time, re-deployment in others.”

Microsoft Corp. employs about 121,500 people worldwide. Nearly 71,600 of them work in the U.S., with the remainder elsewhere.

The job cuts are part of Microsoft’s shift away from its traditional approach of licensing its Office software and other programs for a one-time fee tied to a single computer. The company is now concentrating on selling recurring subscriptions for software accessible on multiple devices, a rapidly growing trend known as “cloud computing.”

That part of Microsoft’s operations has been playing an increasingly important role, especially among corporate and government customers, since Satya Nadella replaced Steve Ballmer as the company’s CEO in 2014.

Microsoft’s “commercial cloud” segment is on a pace to generate about $15-billion in annual revenue. More than 26 million consumers subscribe to Microsoft’s Office 365 service that includes its Word, Excel and other popular programs. That number has more than doubled in the past two years.

Meanwhile, revenue from licensing of Microsoft’s Windows operating system has been increasing by 5 per cent or less in the past three quarters.



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28 Jun

Australia probes Uber recruitment as drivers seek employee status



Australia’s workplace regulator on Wednesday said it is investigating U.S. ride-hailing firm Uber Technologies Inc over the way it recruits drivers, after a drivers group sought employee rather than subcontractor status. The Fair Work Ombudsman plans to focus on whether the San Francisco-based startup, which makes apps that allow people to book journeys on their smartphones, is in breach of Australian workplace rules, a spokesman said.

“We have started an investigation,” the spokesman said. “That is all that can be said at this time.”

The ombudsman is empowered to take legal action to force firms to comply with workplace laws and pay employees minimum wage and retirement benefits.

Uber defended the way it engages drivers, saying it allowed them more independence.

The investigation is Uber’s latest brush with authorities. In March, the San Francisco-based startup lost a court battle against Britain’s Transport for London (TfL) over English-language requirements for drivers, but was granted an appeal on Tuesday. The Australian probe comes after RideShare Drivers United, a group representing some Uber drivers, earlier this month sought classification as employees entitled to compensation under Australian law, rather than subcontractors.

“More than 60,000 Australian driver-partners choose to drive using the Uber app because they like setting their own schedule and being their own boss,” Uber said in a statement emailed to Reuters.

“We will be happy to assist the Fair Work Ombudsman with any questions they may have,” Uber said.

Uber has endured a tumultuous few months with allegations of sexism and bullying at the company leading to the ousting of chief executive and co-founder Travis Kalanick.



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27 Jun

Pandora Media’s CEO Tim Westergren to step down

Pandora Media Inc’s co-founder Tim Westergren stepped down as chief executive and board member, less than a month after Sirius XM agreed to invest in the music streaming company.

Westergren, who co-founded Pandora in 2000, served as CEO and president for about two years until July 2004, before returning to lead the company in March last year.

Since his return, the stock has tumbled 22 per cent. Pandora’s shares were down 0.6 per cent at $8.41 on Tuesday.

Sirius XM Holdings Inc, controlled by media mogul John Malone’s Liberty Media Corp, had said it would invest $480-million in the company, get three board seats and the right to pick the chairman.

“We expect the new CEO of (Pandora) to come from (Sirius) directly, or from John Malone’s extensive rolodex,” Needham & Co analyst Laura Martin wrote in a note.

Westergren’s departure implies Sirius XM is quickly getting its own people in place at the top of Pandora, she said.

Reuters had previously reported that talks about Sirius XM buying the company outright ended unsuccessfully over price disagreements.

Pandora also said on Tuesday that President Mike Herring and Chief Marketing Officer Nick Bartle were leaving the company.

“It isn’t clear whether there are experienced people actually running the company,” Wedbush Securities analyst Michael Pachter said.

Pandora named Naveen Chopra, who was hired as chief financial officer in February, as its interim CEO.

The company, which has never turned a profit on an annual basis, faces intensifying competition from services such as Sweden’s Spotify, Apple Inc’s Apple Music and Alphabet’s Google Play Music.

In May, Pandora cut its full-year revenue forecast and reported its slowest ever revenue growth and its biggest-ever loss since going public.



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27 Jun

Cyberattack hits computer servers across Europe

A major ransomware attack on Tuesday hit computers at Russia’s biggest oil company, the country’s banks, Ukraine’s international airport as well as global shipping firm A.P. Moller-Maersk.

Moscow-based cyber security firm Group IB said hackers had exploited code developed by the U.S. National Security Agency (NSA) which was leaked and then used in the WannaCry ransomware attack that caused global disruption in May.

One of the victims of Tuesday’s cyberattack, a Ukrainian media company, said its computers were blocked and it had received a demand for $300 worth of the Bitcoin crypto-currency to restore access to its files.

“If you see this text, then your files are no longer accessible, because they have been encrypted. Perhaps you are busy looking for a way to recover your files, but don’t waste your time. Nobody can recover your files without our decryption service,” the message said, according to a screenshot posted by Ukraine’s Channel 24.

The same message appeared on computers at Maersk offices in Rotterdam, according to screenshots posted on local media.

The Danish shipping giant said it had been hit across multiple regions by a computer outage. “We can confirm the breakdown is caused by a cyberattack,” a spokeswoman said.

Other companies that said they had been hit by a presumed cyberattack included Russian metal maker Evraz, French construction materials firm Saint Gobain and the world’s biggest advertising agency, WPP – though it was not clear if their problems were caused by the same virus.

Food company Mondelez International also said its staff in different regions were experiencing technical problems.

WannaCry again

Cyber security firms scrambled to understand the scope and impact of the attacks, seeking to confirm suspicions hackers had leveraged the same type of NSA hacking tool exploited by WannaCry and to identify ways to stop the onslaught.

Researchers with multiple firms identified the ransomware as Petya, malware that makes computers inoperable by encrypting their hard drives and demands ransoms in exchange for a digital key to restore access.

“It’s like WannaCry all over again,” said F-Secure Chief Research Officer Mikko Hypponen.

He said it was highly likely the attack had exploited the NSA hacking tool and he expected the outbreak to be reported in the Americas soon, as workers turned on vulnerable machines, allowing the virus to attack.

“Nothing is stopping Petya now. This could hit the U.S.A. pretty bad,” he said.

The first reports of disruption emerged from Russia and Ukraine, with Ukraine’s Prime Minister Volodymyr Groysman describing the attacks on his country as “unprecedented.”

An advisor to Ukraine’s interior minister said the virus got into computer systems via “phishing” emails written in Russian and Ukrainian designed to lure employees into opening them.

In Russia, Rosneft, one of the world’s biggest oil producers, said its crude production had not been affected by the outage. The company’s website went down for at least two hours but was back up by 1450 GMT.

“The hacking attack could lead to serious consequences, but the company has moved to a reserve production processing system and neither oil output nor refining have been stopped,” it said on Twitter.

In Ukraine, Yevhen Dykhne, director of the capital’s Boryspil Airport, said it had been hit too. “In connection with the irregular situation, some flight delays are possible,” Dykhne said in a post on Facebook.

Ukrainian Deputy Prime Minister Pavlo Rozenko said the government’s computer network had gone down and posted a picture on Twitter of a computer screen with an error message.

The Ukrainian central bank said a number of banks and companies, including the state power distributor, were hit by a cyberattack that disrupted some operations.

“As a result of these cyberattacks these banks are having difficulties with client services and carrying out banking operations,” the central bank said in a statement.



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23 Jun

German executives and state employees targeted by cyber attacks



Germany’s federal cyber-security agency, BSI, said on Friday the private email inboxes of German executives and government employees were being targeted by professional cyber attacks.

Selected executives are being sent deceptively real-looking “spear-phishing” emails. They claim to have noticed irregularities in the use of the inbox or offer new security functions, the BSI said in a statement.

Germany is heading for elections in September, and security experts have warned that officials might face cyber attacks like those that occurred before elections in France and the United States over the past year.

The attacks identified by BSI ask users to click on a link and put their passwords into the website that then opens. If they do, the attackers can get access to their personal inbox.

Yahoo and Gmail accounts were targeted in the attacks. The BSI said it had prevented an attack on the government networks.

BSI President Arne Schoenbohm said the BSI generally could detect such phishing attempts, but private email inboxes were beyond its remit, which made them an attractive target.

“The attack infrastructure used is similar to that used in the attacks on and resulting leaks from the Democrats in the U.S. and against the French En Marche movement,” the BSI said.

U.S. intelligence agencies have concluded Russia orchestrated a wide-ranging influence operation that included email hacking and online propaganda, in an effort to discredit presidential candidate Hillary Clinton and help Donald Trump win the White House in November.

The German government has warned political parties to step up their defenses against hacking after emails from the campaign of Emmanuel Macron were leaked just before he was elected president of France.



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14 Jun

Element AI closes landmark $102-million financing



A Montreal startup in artificial intelligence has closed a landmark financing, raising $102-million (U.S.) just eight months after launching with the audacious goal of building a firm that can rival Silicon Valley tech giants by “democratizing” AI.

The financing for Element AI has support from some of the largest names in the global tech sector. It is led by San Francisco venture-capital firm Data Collective and backed by Intel Corp., Microsoft Corp. and a number of institutional investors, including China’s Tencent Holdings Ltd., Fidelity Investments Canada, Real Ventures, National Bank of Canada and the Business Development Bank of Canada.



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12 Jun

Apple shares drop 3% after Mizuho downgrade

Apple shares were stung by a broker downgrade for a second straight week on Monday, sending the stock lower in early trading, and on the heels of a sharp selloff in the tech sector in the prior session.

Mizuho Securities cut its rating on the iPhone maker to “neutral” from “buy” and reduced its price target to $150 from $160 per share.

“The stock has meaningfully outperformed on a year-to-date basis and we believe enthusiasm around the upcoming product cycle is fully captured at current levels, with limited upside to estimates from here on out,” said analyst Abhet Lamba.

Last week, Pacific Crest Securities lowered its rating on the stock to “sector weight.”

Apple shares were down 3.1 per cent to $144.30 in early trading.

Tech shares came under heavy pressure on Friday, falling 2.7 per cent.

Suppliers to Apple Inc. have borne the brunt of the decline in tech sector stocks after a sell-off started in the U.S. spread to Asia and Europe.

In Europe shares in AMS AG, the Swiss-listed supplier of sensors, fell as much as 9 per cent, while chipmaker STMicroelectronics NV traded as much as 8 per cent lower. The Stoxx 600 Technology index fell as much as 3.6 per cent, the biggest decline in nearly a year.

On Friday, Robert Boroujerdi, global chief investment officer at Goldman Sachs Group Inc., said that low volatility in Facebook Inc., Amazon.com Inc., Apple Inc., Microsoft Corp. and Google parent Alphabet Inc. may be blinding investors to risks such as cyclicality and regulation. Apple’s new iPhone is also said to be lacking the tech to match rivals’ data speed, according to a Bloomberg report Friday.

“It is really the U.S. selloff that is happening now in Europe,” said Charles Lepetitpas, analyst at Natixis Securities. “I don’t see any specific news.”

Both AMS and STMicroelectronics — the biggest tech fallers in Europe — supply chips to companies such as Apple and Samsung. AMS also flagged a weaker-than-expected dividend late Friday. Many of the stocks being hit have been on a tear this year: AMS is the biggest riser on the Stoxx Europe 600 in that period, having more than doubled.

“Some investors are just taking profit,” said Karsten Iltgen, analyst at Bankhaus Lampe KG.

The European slump was the last leg in a global tech selloff that began Friday in the U.S. In Asia, Taiwanese iPhone manufacturer Hon Hai Precision Industry Co., Ltd, closed 2.9 per cent lower. It was the largest single-day decline since last November, according to data compiled by Bloomberg. Hon Hai, better known as Foxconn, said Friday its May sales declined 5.3 per cent year-on-year to NT$279.8 billion.

With files from Bloomberg News



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9 Jun

Digital Realty to buy DuPont Fabros in $7.6-billion deal

Digital Realty Trust Inc said it would buy fellow data center operator DuPont Fabros Technology Inc for an enterprise value of about $7.6-billion, its biggest-ever deal, to help expand in high-demand markets in the United States amid a rapid shift to the cloud by technology companies.

DuPont Fabros’s shares rose as much as 14.6 per cent to hit a record high of $63.46, just below the offer price of $63.60 based on Thursday’s close.

Washington-based DuPont Fabros operates 12 data centers in three major U.S. markets, including Silicon Valley and Northern Virginia, while Digital Realty operates 145 data centers globally.

Digital Realty and DuPont Fabros, which rent out space that companies use for data centers, have also benefited from the surge in demand for data and video.

The combined company would be the “home to the cloud,” Digital Realty Chief Executive William Stein said on a conference call on Friday.

The deal, which would add companies such as Facebook Inc and Yahoo Inc to Digital Realty’s customer base, is expected to close in the second half.

DuPont Fabros shareholders will receive a fixed exchange ratio of 0.545 Digital Realty shares per share held, the companies said.

Based on Digital Realty’s Thursday close, the offer is worth $63.60 per share, a premium of 14.9 per cent to DuPont Fabros’s close. The implied price per share is $64.32, according to a Digital Realty presentation.

The equity value of the deal is about $4.95-billion based on DuPont Fabros’s 77.8 million shares outstanding as of April 2, according to Thomson Reuters data.

“The addition of (DuPont Fabros) should enhance (Digital Realty’s) growth prospects, as it’s acquiring an asset that’s growing at plus 10 per cent per year, with recent momentum including a 28.8 MW lease signed by who we believe to be (Apple),” Wells Fargo analyst Jennifer Fritzsche wrote in a client note.

The deal has the potential to realize up to $18-million of annualized overhead savings, the companies said.

San Francisco, California-based Digital Realty has been acquiring companies to boost growth.

The company said in May last year that it would buy eight data centers from Equinix Inc and in October 2015 bought Telx Group Inc.

Digital Realty said it had a fully committed bridge loan facility from BofA Merrill Lynch and Citigroup to finance the DuPont Fabros deal.

BofA Merrill Lynch and Citigroup are Digital Realty’s financial advisers while Goldman Sachs is advising DuPont Fabros.

DuPont Fabros’s shares were up 12 per cent in morning trading, while Digital Realty’s stock was little changed at $116.77.



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9 Jun

BlackBerry hopes to ride truck tech to further growth

A visit to trucking firm Titanium Transportation helps explain why BlackBerry’s stock is once again a darling in Canadian markets, having soared 70 per cent in two months.

Nestled in an industrial area some 50 kilometers north of Toronto, the trucker is an early adopter of a new BlackBerry fleet-tracking service known as Radar, which uses $400 boxes to collect and transmit information on movement, temperature and physical contents of Titanium’s 1,300 truck trailers.

Efficiency gains tied to Radar should allow Titanium to get maximum utilization of its fleet, positioning it to cut the number of trailers by five percent and also reduce labor costs, company executive Marilyn Daniel told Reuters.

“Time is everything in our world,” she said. “Being able to tell a driver where exactly a trailer is as opposed to having a driver search through a yard for sometimes hours has been a definite improvement.”

Radar is emblematic of BlackBerry Chief Executive John Chen’s strategy for turning around the Canadian icon, by steering the company away from consumer electronics and back to its roots of selling products to businesses.

Beyond Radar, BlackBerry is also betting on other types of software for industrial customers. It is leveraging its QNX subsidiary’s software foothold deep inside car infotainment consoles to expand into self-driving technology, while promoting its cyber-security software and services to thwart increased threats from hacking.

BlackBerry’s stock rallied after it showed signs of progress in quarterly earnings results at the end of March, followed by news in April of a nearly $1 billion cash windfall from arbitration with Qualcomm expected to fund future investments in growth. That comes in the face of an expected revenue decline to below $1 billion this year for the first time since 2004. At its smartphone peak, BlackBerry had annual sales of $20 billion.

Among the recent BlackBerry bulls are institutional investors such as Nokota Management, which took a new position with almost 4.8 million shares in the first quarter, and Oppenheimer Funds, which added 3.3 million more shares to its existing 4 million share stake, according to U.S. securities filings.

Iridian Asset Management and Connor, Clark & Lunn Investment Management, two of BlackBerry’s biggest shareholders, each raised their stakes by around a quarter as of the end of March.

Nokota did not respond to requests for comment, while the others all declined to discuss their stakes in BlackBerry.

“HOPE AND PROMISE”

The strategy is not without risks. BlackBerry faces challenges entering the telematics market, where analysts say rivals include Omnitracs, Teletrac Navman, Tomtom NV , Trimble Inc and U.S. telecommunications giant Verizon Communications Inc. Verizon last year paid some $2.4 billion to buy GPS vehicle tracking firm Fleetmatics Group Plc.

Radar “is not a unique and earth-shattering product,” said Nicholas Farhi, a partner at OC&C Strategy Consultants who advises companies on optimizing logistics operations.

That’s why some investors advise caution, saying it is too soon to figure out how to properly value the new BlackBerry offerings.

“It’s not the type of situation you can justify from a valuation standpoint,” said Tim Ghriskey, chief investment officer at Solaris Asset Management, which manages more than $1.5 billion and exited the stock a decade ago, when BlackBerry phones were still dominant. “It is all about hope and promise.”

And yet hope and promise among BlackBerry investors were hard to come by in the aftermath of Apple and Samsung walking away with the consumer hand-held phone business.

Since taking the company’s helm in 2013 to attempt a turnaround, Chen has turned to technology products used inside automobiles and corporate cyber security services, in addition to targeting the gritty trucking industry with Radar.

He also bolstered the company’s ability to manage rival devices in the workforce – still the single largest contributor to sales – with the purchase of rival Good Technology in 2015. And he outsourced production of handsets last year, meaning the company receives a cut from any devices sold by its partners rather than carrying the risk and revenue on its own books.

With Radar, BlackBerry enables customers to track trailers across country, and drivers can quickly locate vacant trailers scattered across vast parking lots. Previously, where drivers had to walk around those lots, banging on trailers in search of a hollow sound indicating it was empty.

BlackBerry charges $10 to $20 per month for every trailer connected to Radar, a product that an analyst at investment bank Macquarie says could play a pivotal role in a more than doubling of BlackBerry’s sales by 2020.

Sandeep Chennakeshu, president of the BlackBerry Technology Solutions unit that oversees Radar, told Reuters that large package delivery firms and big carriers of lumber and home goods are among the more than 50 companies testing it.

“It really depends on us convincing our customers to try our solution,” he said. “Once they try it, we’re very confident they’ll see the benefit.”

BlackBerry says that it is targeting some 16 million to 20 million trailers, chassis, vans, refrigerated units and piece of construction equipment for the Radar service, with a new variant on the hardware due to launch later this year.

On its last earnings call, the company named Trailer Wizards, a Canadian trailer rental and storage company with 25,000 trailers, as its third Radar customer.

AT&T will supply needed cellular connections for Radar in North America, and a second carrier is lined up to provide such services when it expands to Europe and Asia, Chennakeshu said.

The company expands Radar’s functionality with quarterly updates. The next one will tell customers if a trailer is a quarter, half or three-quarters full and improve integration with warehouse inventory management systems, he said.

The Radar boxes can send alerts when a trailer door is opened, its internal temperature goes beyond a set range, has been emptied or travels through a specific geography, features which Chennakeshu said are attractive for tightly-regulated movers including pharmaceutical companies.

Raymond James analyst Steven Li forecasts that 8 million trailers will be equipped with Radar by fiscal 2020, generating annual revenue of $80 million.

Macquarie analyst Gus Papageorgiou is even more bullish, saying combined hardware sales and subscription fees could hit $540 million in fiscal 2020.

“The best is yet to come for BlackBerry,” said Paul Rivett, president of Fairfax Financial, the company’s second largest shareholder and owner of BlackBerry debt that can be converted into shares at $10 a piece in late 2020.

“Its future earnings growth as a software company is only starting to be understood,” said Rivett.



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8 Jun

Sony’s PlayStation VR headset sales top 1-million units



Sony Corp has sold more than one million units of its virtual reality (VR) headset globally, the Asia chief of the Japanese firm’s gaming unit said on Wednesday, as a relatively low price helps push the product into an early lead.

Sales of the PlayStation VR headset, released in October, have “exceeded our expectations,” Atsushi Morita, president of Sony Interactive Entertainment Japan Asia, said in an interview.

“We are boosting production and a supply shortage should be solved accordingly,” Morita told Reuters.

The sales momentum supports analysts’ view that Sony is in a good position to build an early lead in the high-end VR headset race with its more modest price tag and by tapping the nearly 60 million users of its flagship PlayStation 4 console.

The headset, designed to work with the PlayStation 4 rather than requiring new equipment, retails at $399, cheaper than Facebook Inc’s $599 Oculus Rift and HTC Corp’s $799 Vive.

According to researcher IDC, about 2 million VR headsets were shipped worldwide in the first three months of 2017. Excluding cheaper smartphone-based headsets, Sony ranked top with 429,000 units.

Morita stressed it was still the beginning of Sony’s long-term vision of VR eventually taking over functions offered by television sets.

“I believe that VR technology is the (greatest) innovation since the birth of television,” he said. “VR allows you to travel to World Heritage sites or to space while staying at home. It’s like a time machine or a door to anywhere.”



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