Today's business and finance round up 8th December 2021
🚌Transport for London faces job cuts as funding deadline looms
8th December 2021
Good morning The award for the world’s worst Zoom meeting must surely go to Better.com where last week, the CEO of the US mortgage firm fired 900 employees on one video call.
The company later accused 250 fired staff of stealing by working “2 hours a day while clocking 8 hours+ a day in the payroll system”.
- Transport for London faces job cuts as funding deadline looms
- UK startup raises $11m to take activist investing to the masses
Transport for London faces job cuts as funding deadline looms
What’s going on?
The Mayor of London is planning major job cuts to keep the city’s transport service afloat as it negotiates with the government for more funding.
Why is this important?
In 2019 Transport for London (TfL), the organisation behind the capital’s tube, bus and rail services, saw 27m daily journeys and generated close to £5bn in revenue.
Last year the pandemic decimated its finances as traveller numbers plummeted during lockdown resulting in a 90% drop in revenue. Since March 2020 it has received more than £4bn in government bailouts and is seeking a further £1.7bn as usage remains below pre-pandemic levels.
The government has called on TfL to take serious action to cut costs before any extra funding is granted. So up to 600 jobs across London stations are set to be axed to save cash.
TfL and the government have until Saturday to come to an agreement as that’s when the current funding runs out. The additional cash, if granted, would run up to April 2023.
The mayor has warned that he will have to slash bus services and potentially close an entire tube line without a new deal.
With hybrid working becoming more prevalent as Covid lingers it’s likely that public transport use won’t return to 2019 levels for some time.
TfL expects that it will need an extra £6.6bn over the next three years to fund the shortfall in ticket sales.
With the government demanding drastic changes to TfL operations to extend extra cash, London transport services may look very different going forward.
UK startup raises $11m to take activist investing to the masses
A London-based investment platform that lets retail investors take on big business has raised $11m just four months after launching.
Tulipshare lets retail investors pool together their shares and voting power in global companies like Amazon, Coca-Cola and Apple to lobby for change. This activism is something usually only done by institutional investors like pension and hedge funds.
In the US, investors must hold $25,000 worth of company shares for a year to bring forward a shareholder vote. In the UK, votes must be supported by at least 100 shareholders or those representing 5% of the stock.
Tulipshare users can invest from as little as £1. Their shares are then aggregated with other users to reach the required threshold to table a shareholder vote to enact change.
To date the platform has launched campaigns including: safer and fairer conditions in Amazon warehouses, demanding all Coca-Cola bottles to be made from recycled plastic and calling for JPMorgan to stop investments in fossil fuel.
The business model capitalises on two growing themes in the world of investment – retail investors and ethical investment. During Covid millions of people opened share dealing accounts and invested for the first time. At the same time companies have come under growing pressure to improve their environmental and social impact.
Tulipshare will use its new funds grow its engineering and compliance teams as well as complete its broker-dealer license process in the UK.
Stat of the day
Google and YouTube reached 49.7m people aged over 15 in the UK – everyone in the country who used the internet
Other stories to keep you in the loop
- UK house prices rise at fastest pace in 15 years
- Asda distribution workers to vote on strike
- Amazon services down for thousands of users
- Central bank of Norway acquires stake in Boohoo
- Why your Christmas dinner will cost more this year
- Zopa to exit peer-to-peer lending
- Twitter acquires messaging platform Quill
- UAE moves to Monday-Friday working week to match global business
Interesting links from around the web