March 6, 2023 - Employment & Business News

James Duncan and Hendrix Montecastro’s scam which saw them jailed for a total of 100 years

Posted on March 6, 2023 - 3:37 pm by Kris Paterson

James Duncan was born in 1971 and went on to work in insurance and broking- his efforts there led to a cease and desist order from regulators in Iowa and Washington.

He then set up Sunburst Factor Fund with Hendrix Montecastro, later renamed Pacific Wealth Management, to give the appearances of an affinity with the well-known wealth-management company (which had nothing to do with the fund).

The duo approached investors in Orange County, California, with a real-estate scheme, which they claimed would make “infinite returns” so long as clients agreed to follow all their instructions for at least three years, without asking any questions.

What was the scam?

The scheme involved investors buying properties on Duncan’s recommendation and Montecastro by taking them out of new mortgages over the new houses’ value.

Pacific Wealth Management would then take the difference between the mortgage and the purchase price as a “concession fee”, promising to invest the money to cover the mortgage cost.

Most of the money was in reality diverted to Duncan and Montecastro, funding trips to Las Vegas casinos-$18,000 was spent on one holiday alone. The duo diverted cash from new investors to make payments, turning the fund into a Ponzi scheme.

What happened next?

By late 2006 the number of new investors willing to take part in the real-estate side of the business was drying up.

Duncan and Montecastro demanded existing investors take out credit cards or liquidate savings accounts, to give them additional money to invest, threatening to expel those who refused.

Enough complied briefly to keep the scheme running, but by 2007 even this source of money was drying up, so Pacific Wealth Management stopped making payments on its clients’ various loans. The scheme then collapsed, and both Duncan and Montecastro were eventually convicted of fraud.

Duncan was jailed for 19 years in 2009 and was ordered to pay $3.4 million to 33 victims of the scam.

Montecastro was jailed for a staggering 81 years for his role.

The SEC, the US regulator, estimated that more than $142m worth of loans were taken out by investors, with at least $30m of the money used to pay Duncan and Montecastro’s personal expenses.

Very little of the money has since been recovered; many investors lost their investment property and their main residence.

The pair employed a number of techniques common to scams, such as claims of high-level “connections” and large risk-free returns.

The biggest red flag was their demand that investors give them control over their financial affairs and not ask questions about how their investments were doing.

Kris Paterson is a writer for WhatJobs.com

Image Credits: The Press Enterprise

UK four-day-week trial shows benefits for workers like reduced stress and better work-life balance

Posted on March 6, 2023 - 2:33 pm by Hugh Fort

The biggest-ever trial of a four-day-week has revealed improvements to employees’ lives like less stress and increased job satisfaction.

Between June and December 2022, the UK 4-Day Work Week organisation piloted a scheme involving 1,500 workers across the country.

It has released a comprehensive report on the pilot, which shows a number of positive results.

The pilot comprised 61 companies and around 2,900 workers, with staff working 32 hours a week.

The key finding of the report is reducing working hours does not necessarily mean a reduction in productivity.

In fact, the data shows productivity remained the same or increased in the companies taking part.

This was due to the fact employees working fewer hours are more focused, energized, and motivated, leading to increased efficiency.

The report also revealed the model can be applied to a number of industries, including the service sector, manufacturing, and healthcare.

Another important finding was 60 percent of employees found an increased ability to combine their work with care responsibilities, and 62 percent reported it easier to combine work with social life.

What were the negatives of the four-day-week?

The report wasn’t entirely positive.

Some companies did see a fall in productivity, which highlights how important careful planning and implementation are to making the four-day week a success.

It also highlights how the model may not be suitable for all industries and job roles.

For example, companies that need 24/7 coverage or those with time-sensitive projects might struggle to implement the shorter week.

Another issue was the challenges companies would face in organising the change.

Changing to a four-day week would require major changes to schedules and workload distribution, which could be disruptive to some employees and might require more training for managers.

The final point the report makes is that some companies could take a hit financially by making a change.

The problem some companies could face is having to for out for additional staff as cover or see increased overheads as a result of making the change.

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The report concludes that while a shorter work week can be beneficial for both employees and employers, it need to be well planned.

Companies need to take account of industry-specific challenges, and make sure they communicate effectively with their employees to make a success of the change.

Writing on LinkedIn, UK 4-Day Work Week CEO Phil McParlane said:

“The results of the largest EVER 4 day work week (32hrs) pilot were released today, here’s the results:

Companies continuing with 4 day week: 92%
Average revenue (vs last year): +35%
Number of staff leaving job: -57%
Improved physical health: 37%
Improved mental health: 43%
Absenteeism: decreased
Reduced Burnout: 71%
Reduced Stress: 39%
Hiring: easier

“Wow.

“These results are even better than I had hoped for.”

The full report can be found here.

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Zoom fires President Greg Tomb after just 10 months following job cuts

Posted on March 6, 2023 - 10:23 am by Nithya Bose

Zoom fired its President, Greg Tomb, after just 10 months.

He will be paid severance benefits as per the terms of the “termination without cause.”

The videoconferencing firm said in a Securities and Exchange Commission filing his termination would be effective from Friday, March 3.

Tomb is a former Google executive.

During his brief tenure he held a high-profile role, appearing on earnings calls and leading the company’s sales operation.

He directly reported to Zoom CEO Eric Yuan, who founded the company in 2011 and had to expand quickly during a pandemic-fueled boom.

To deal with a downturn, the company has recently slashed jobs.

A company spokesperson said it isn’t currently considering a replacement and declined to comment further.

Some on Wall Street saw the abrupt change negatively.

In a note to clients, Citigroup analyst Tyler Radke said it is “hard to read this in a positive light.”

He noted that the sharp timing and little clarification on the removal “gives investors plenty of leash to speculate on the reasons behind the departure.”

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Tomb’s compensation package included a $45 million stock grant that would vest over four years, plus a $400,000 basic pay and an eight percent bonus target.

Last month, Zoom confirmed a 15 percent job cut affecting 1,300 employees.

Mr. Yuan took the blame and accepted a 98 percent pay cut, resulting in a salary of $10,000 this year.

Source: Bloomberg

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Airbnb layoffs hit recruiting staff as growth expected to stall

Posted on March 6, 2023 - 10:07 am by Nithya Bose

Airbnb has cut some recruitment positions as it expects slower growth in 2023.

The cuts are in human resources and come as the firm plans to increase its headcount by two percent to four percent this year.

Airbnb has not revealed the number of recruiting roles affected by the downsizing.

The San Francisco-based company, which runs a marketplace for short-term rentals, expanded its global staff by 11 percent in 2022.

A company representative said: “Even though we expect to grow our head count in 2023, we have made the difficult decision to reorganize and reduce the size of our recruiting team to reflect our hiring projections.”

However, the representative stressed the staff restructuring call does not mean the firm would be carrying out the type of large scale layoffs seen in other companies.

The vacation rental business warned last month that it would try to maintain its cost structure after earning its first annual profit in 2022.

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Due to dropping average daily rates, the company expects Ebitda margins to be around the same in 2023 as last year.

It is a metric that calculates customers’ average daily rate for a reservation.

CFO Dave Stephenson said: “The way in which we are going to be able to offset the margin impact of those declines will be through fixed cost discipline.

“We are going to continue to grow, but we are going to grow modestly.”

As of December 31, Airbnb had 6,811 employees around the world.

Source: The Wall Street Journal

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Amazon to close eight grocery stores as cost-cutting continues

Posted on March 6, 2023 - 9:43 am by Nithya Bose

Amazon will shut down eight Go convenience stores as part of its ongoing plan to cut costs and to reduce its physical footprint.

The company will close two Go outlets in New York City, two in Seattle, and four in San Francisco on April 1.

Amazon said it would work with the staff impacted to help them find other jobs within the organization.

Spokesperson Jessica Martin said: “Like any physical retailer, we periodically assess our portfolio of stores and make optimization decisions along the way.

“In this case, we’ve decided to close a small number of Amazon Go stores in Seattle, New York City, and San Francisco.

“We remain committed to the Amazon Go format, operate more than 20 Amazon Go stores across the U.S.

The company said it “will continue to learn which locations and features resonate most with customers as we keep evolving our Amazon Go stores.”

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CEO Andy Jassy has been slashing costs in its grocery division and elsewhere as it deals with declining sales and a bleak economic outlook.

The company said in January that it would lay off up to 18,000 people, with some of the cuts affecting the Seattle giant’s grocery line.

The pandemic-driven rapid e-commerce growth led to the gradual decline of its warehouse and retail space in recent months.

After its fourth-quarter earnings call, Amazon executives have announced plans to close some Fresh supermarkets and Go stores.

Jassy said Amazon is also suspending the Fresh grocery chain expansion until it can discover a format that works with customers and “where we like the economics.”

Source: CNBC

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Arm to open Bristol site as tech firm looks to grow in the UK

Posted on March 6, 2023 - 9:36 am by Nagasunder

Arm has announced plans to open a new facility in Bristol.

It comes as the company, whose processing technology is used in smartphones, looks to increases its UK headcount.

It is not yet known whether a specific location in or near Bristol has been identified, how many jobs could be created, or what type of work would be performed there.

The microchip designer, which has its global headquarters in Cambridge and is owned by Japanese multinational conglomerate Softbank Group, told BusinessLive it would be providing more details on the new site “in the coming weeks”.

The announcement comes after “several months” of discussions with government officials and the Financial Conduct Authority,

CEO Rene Haas determined that a US-only listing on the NASDAQ index was the “best path forward” for this year.

He said: “In addition, we are announcing new plans to further increase our UK presence with the opening of a new site in Bristol and continued headcount growth.

“Arm also intends to maintain its headquarters, operations and material IP in the UK. Arm is proud of its British heritage, and continues to work with the British Government.

“We will continue to invest and play a significant role in the British tech ecosystem. Arm also intends to consider a subsequent UK listing in due course.”

Russ Shaw, founder of tech trade network Tech London Advocates and Global Tech Advocates, said Arm’s decision to opt for New York over London was “a significant blow” to the UK sector.

Mr. Shaw, who lately led calls for Prime Minister Rishi Sunak to submit a national semiconductor strategy, said Arm had been “an important global leader” in the field and an “exemplar of British technology and chip design company”.

He said: “There are glimpses of hope from Arm that they still recognise a commercial value in keeping roots in the UK. For example, they are keeping their HQ and material IP in Cambridge and that they plan to open a site in Bristol – but it’s a far cry from an LSE listing and demonstrates a lack of faith in the UK.

“Ultimately, this will reinforce valuable lessons. Arm’s decision must be upheld as a case study for the UK Government of how ‘not to do it’.

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“Arm’s journey to the NASDAQ was somewhat sealed when it was allowed to be sold to an overseas acquirer back in 2016. Nations like the US and China that recognise the strategic value of chip companies would not have allowed such decisions to be made – then or now – and the UK must now endeavour to proactively protect its semiconductor industry.”

The move comes after the company turned down the government’s offer to consider a float on the London Stock Exchange.

Source: Business Live

Morrisons will drop property maintenance suppliers putting 1,000 jobs at risk

Posted on March 6, 2023 - 9:20 am by Nagasunder

Morrisons plans to end its relationship with at least 83 property maintenance suppliers, threatening over 1,000 jobs.

The grocer wants to replace its suppliers, many of whom are based in its hometown of Bradford, with a single provider for repairs.

Morrisons is also planning to lay off up to 50 property maintenance workers at its headquarters in Bradford and around the UK.

Ken Morrison, the chain’s co-founder, took on the suppliers, some of whom had worked with Morrisons for decades.

The workers have been told their contracts are likely to expire in July, affecting more than 200 providers, which include subcontractors, as well as more than 100 head office employees.

Several suppliers said their contracts were terminated in a brief video call during which they were unable to ask questions.

Some Morrisons employees will be transferred to the new sole provider, City Facilities Management, which is headquartered in Glasgow but has offices throughout the United Kingdom.

Some current suppliers may be converted into subcontractors.

Morrisons said it expected 120 job cuts in total, but vendors said they had been given no assurances and expect many more to go.

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Morrisons said: “We are proposing some important changes and improvements to our maintenance model through a new national partnership with City FM, but we anticipate many of our existing suppliers to continue to work for Morrisons under subcontracting arrangements.

“We are endeavouring to communicate and execute these changes carefully and thoughtfully with all those affected.”

Source: Retail Gazette

Thai factory workers who made jeans sold at Tesco sue over alleged negligence

Posted on March 6, 2023 - 9:06 am by Nagasunder

Former employees at a clothing company in Thailand are suing Tesco for alleged negligence and unfair treatment.

One of the claimants is a seven-year-old girl, who was raped in the factory compound while her mother worked late making F&F clothes.

VK Garment Factory (VKG) in Mae Sot is currently facing criminal charges for fraud, illegally using employees’ bank cards, withholding their immigration documents, and forcing them to work overtime.

Between 2017 and 2020, the workers produced F&F jeans for Tesco’s Thai branch.

In December, it was revealed the factory was forcing Burmese workers to work 99-hour weeks for illegally low pay in deplorable conditions.

Tesco responded by saying it was not involved in the factory’s day-to-day operations and would have ended its relationship with the supplier “immediately” if it had discovered any problems.

Oliver Holland, a partner at Leigh Day, which is representing the workers in the UK, welcomed the new police investigation in Thailand.

He told The Guardian: “However, our clients experienced further serious labour abuses whilst working at the factory including allegations of forced labour.

“We hope that the further investigations by the Thai police will reveal these further abuses in a timely manner so that our clients can get justice.”

Workers claimed the factory paid them in cash but opened bank accounts for them to create a false trail that made them appear to be paid the minimum wage.

136 Burmese workers were fired from the factory in August 2020.

They claim this was because they demanded the minimum wage.

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Tesco said: “We understand the Thai labour court has awarded compensation to those involved, and we would continue to urge the supplier to reimburse employees for any wages they are owed.”

Source: Retail Gazette