Latest / What the Flux / Deloitte's disappointing day | Tesla's business is changing | Country Road's culture problem

Transcript

Deloitte's disappointing day | Tesla's business is changing | Country Road's culture problem · What the Flux

• 0:05
  Speaker 1: This is what the plucks.
• 0:06
  Speaker 2: I'm brand, I'm justin and a Friday, the twenty sixth
• 0:09
  Speaker 2: of July, Dozzy boy. We already know that Sydney and
• 0:11
  Speaker 2: Melbourne are quote million dollar cities, but we may have
• 0:14
  Speaker 2: some new entrance soon. According to Domain, they expect Brisbane's
• 0:18
  Speaker 2: median house price will cross the one million dollar mark
• 0:21
  Speaker 2: in the next three months, and Perth is expected to
• 0:24
  Speaker 2: hit the one million dollar marks by June next year.
• 0:26
  Speaker 2: I'm thinking more like a million dollar nation.
• 0:29
  Speaker 1: Getting harder and harder, be man. But one way to
• 0:31
  Speaker 1: get a little bit of cash in your pocket is
• 0:33
  Speaker 1: through our weekly game Quick six plus dam. If you
• 0:35
  Speaker 1: knew which ASEX listed company just sold a twenty percent
• 0:38
  Speaker 1: steak in Nobu, you'd be one third of your way
• 0:41
  Speaker 1: to winning the fifty bucks from last week's quiz. And
• 0:43
  Speaker 1: we are on again today. All you need to do
• 0:45
  Speaker 1: is download the Bucks app, have you notifications turned on,
• 0:47
  Speaker 1: and were the first to answer three business or finance
• 0:50
  Speaker 1: questions correctly? And it's all yours.
• 0:52
  Speaker 2: Three highly insightful stories today, Dozzy boy, Let's do it
• 0:56
  Speaker 2: for our first Deloitte Australia has seen its revenue dropped
• 0:59
  Speaker 2: by more than seventy million dollars for the last financial
• 1:02
  Speaker 2: year after its consulting division was hit hard by a
• 1:06
  Speaker 2: slowdown in spending.
• 1:07
  Speaker 1: And here I was thinking the Big four were finally
• 1:09
  Speaker 1: out of the woods. He's not those so tell me more,
• 1:11
  Speaker 1: be man, Jusey boy.
• 1:12
  Speaker 2: Deloitte is one of the big four global professional services firms,
• 1:15
  Speaker 2: alongside PwC, EY and KPMG.
• 1:18
  Speaker 1: They do everything from order to risk, to accounting, to
• 1:21
  Speaker 1: consulting to digital whatever digital means, Juzzy Boy.
• 1:24
  Speaker 2: Since PWC's scandal and sale of its government division, Deloitte
• 1:28
  Speaker 2: has actually taken the top spot in Australia amongst the
• 1:30
  Speaker 2: big four.
• 1:31
  Speaker 1: But that doesn't mean it's all daffodils and roses and
• 1:33
  Speaker 1: billings for Deloitte.
• 1:35
  Speaker 2: That's because it warned of a two point four percent
• 1:37
  Speaker 2: drop in its FY twenty four revenue, or around seventy
• 1:40
  Speaker 2: million buccarinis.
• 1:42
  Speaker 1: And what's the reason for this decline?
• 1:43
  Speaker 2: Well, Jesse Boy, it seems like quote scrutiny is the
• 1:47
  Speaker 2: word they're running with here.
• 1:48
  Speaker 1: We're talking political and public scrutiny off the back of
• 1:51
  Speaker 1: the PwC controversy and.
• 1:52
  Speaker 2: Also economic scrutiny in that companies are being a little
• 1:56
  Speaker 2: more conservative with their spending on these sorts of services.
• 1:59
  Speaker 1: And it's like the PwC saga has also heard other
• 2:02
  Speaker 1: organizations as well.
• 2:03
  Speaker 2: Is that right, Josy boy Well, I'm wondering what is
• 2:06
  Speaker 2: the key learning here? One bad actor can tar all
• 2:08
  Speaker 2: actors with the same brush. We know the impact that
• 2:12
  Speaker 2: the PwC tax scandal had on the PwC wider business.
• 2:15
  Speaker 1: Selling out their government business for one dollar, then CEO
• 2:18
  Speaker 1: stepped down, then an intense Senate inquiry. But what we
• 2:21
  Speaker 1: didn't know is how this scrutiny has significantly impacted the
• 2:25
  Speaker 1: consulting industry as a whole. And it's all happening at
• 2:27
  Speaker 1: a tough time economically for professional services firms. In fact,
• 2:31
  Speaker 1: j Boy KPMG has cut more than five hundred staff,
• 2:34
  Speaker 1: or more than ten percent of its workforce, and that's
• 2:36
  Speaker 1: just over the last eighteen months. EY has cut more
• 2:38
  Speaker 1: than three hundred and eighty staff since November last year.
• 2:41
  Speaker 2: And PwC made more than five percent of its staff
• 2:44
  Speaker 2: redundant in March this year.
• 2:46
  Speaker 1: So Deloitte's got a bit of work to do if
• 2:48
  Speaker 1: it wants to maintain its title as the leading professional
• 2:50
  Speaker 1: services fan.
• 2:51
  Speaker 2: For our second story. Tesla has seen at share price
• 2:54
  Speaker 2: drop twelve percent after it saw an enormous drop in
• 2:57
  Speaker 2: quarterly profit thanks to more and more electric vehicle competition.
• 3:02
  Speaker 1: I feel like Tesla's shareholders are just on a roller coaster,
• 3:04
  Speaker 1: but they don't want to get up. Tell me what
• 3:06
  Speaker 1: now does he? Boy? We know?
• 3:07
  Speaker 2: Tesla is the electric vehicle company run by Elon Musk,
• 3:11
  Speaker 2: which was the leader in the EV pack, but.
• 3:13
  Speaker 1: B man as the electric vehicle market has become more
• 3:15
  Speaker 1: appealing for consumers. Almost all existing carmakers have created their
• 3:19
  Speaker 1: own electric vehicle divisions as well, but now be man.
• 3:21
  Speaker 1: After a topsy turvy year, Tesla has warned that while
• 3:24
  Speaker 1: its revenue is nearly one billion dollars above expectations, it's
• 3:27
  Speaker 1: quarterly profits dropped get this forty five.
• 3:30
  Speaker 2: Percent and this was the second straight quarterway Tesla had
• 3:33
  Speaker 2: suffered a loss.
• 3:34
  Speaker 1: But the good news Elon Musk reckons he can produce
• 3:36
  Speaker 1: twenty billion humanoid robot that everyone on Earth is going
• 3:40
  Speaker 1: to want. He's also got the power wall. He's also
• 3:43
  Speaker 1: got the robut taxis as well. Next minute, Tesla's share
• 3:46
  Speaker 1: price drops twelve percent. Investors aren't really sure what Tesla's
• 3:49
  Speaker 1: core business is anymore. So what is the key learning here?
• 3:52
  Speaker 2: As an evolving business, you've always got to keep your
• 3:54
  Speaker 2: eyes on the main prize.
• 3:56
  Speaker 1: More recently, be Man. It's fair to say that Tesla
• 3:58
  Speaker 1: has had a shifting focus on what's important to its business.
• 4:01
  Speaker 2: And the twelve percent drop in its share price really
• 4:03
  Speaker 2: reveals the risks when investors lose faith in a company's
• 4:07
  Speaker 2: core business. And right now, Juzzy Boy investors patients with
• 4:10
  Speaker 2: big pivots from the world's biggest tech companies, it's proved
• 4:14
  Speaker 2: to be thin.
• 4:15
  Speaker 1: Remember when Facebook made a mega shift to the metaverse.
• 4:17
  Speaker 2: I do it cost them more than forty six billion
• 4:20
  Speaker 2: US dollars.
• 4:21
  Speaker 1: Thankfully for them, they were able to backtrack and refocus.
• 4:24
  Speaker 2: Now, Josi Wait Tesla investors are concerned that Tesla may
• 4:27
  Speaker 2: continue pushing these new initiatives a little too far, and with.
• 4:30
  Speaker 1: That it could become hard to go back to what
• 4:32
  Speaker 1: actually made Tesla successful in the first place, electric vehicles.
• 4:35
  Speaker 2: For our third and final story, Country Road Group is
• 4:39
  Speaker 2: expected to restructure its business and reshape its team after
• 4:42
  Speaker 2: a tough couple of years in the retail space.
• 4:45
  Speaker 1: Rough days ahead for Country roadstaff by Man. So what
• 4:48
  Speaker 1: is the story.
• 4:48
  Speaker 2: Here well, Juzy Boy. Country Road Group is the fashion
• 4:51
  Speaker 2: retailer that's currently owned by South African company Woolworth's Holdings.
• 4:56
  Speaker 1: They also own Nimco, Trenery, Witchery and Politics now be Man.
• 5:00
  Speaker 1: We know Country Road as the kind of up market
• 5:02
  Speaker 1: but not two upmarket retailer of simple and stylish clothes.
• 5:06
  Speaker 2: But does it boy thinks have been anything but simple
• 5:08
  Speaker 2: and stylish over the past few years.
• 5:10
  Speaker 1: Yep. Not only has country Road been facing financial issues,
• 5:13
  Speaker 1: but it's also faced arrange at workplace scandals.
• 5:15
  Speaker 2: Earlier this year, which actually led to two executives leaving
• 5:19
  Speaker 2: and an external investigation into the company.
• 5:21
  Speaker 1: But now be Man, country Road has brought in a
• 5:23
  Speaker 1: consulting firm that specialized in mending culture within organizations.
• 5:27
  Speaker 2: And this could see a major restructure of Country Road
• 5:30
  Speaker 2: Groups operations and is likely to see a number of
• 5:33
  Speaker 2: jobs cut as well.
• 5:34
  Speaker 1: And if that wasn't about enough, Country Road has been
• 5:36
  Speaker 1: struggling with a five percent drop in sales for the
• 5:38
  Speaker 1: first half of twenty twenty four.
• 5:39
  Speaker 2: Sounds like Country Roads seeing more than just employee morale
• 5:42
  Speaker 2: drain from the company.
• 5:43
  Speaker 1: So what is the key learning here?
• 5:45
  Speaker 2: As sour company culture can very easily sour the bottom
• 5:49
  Speaker 2: line of a business man.
• 5:50
  Speaker 1: We know poor culture and an organization can directly or
• 5:53
  Speaker 1: indirectly increase a business's costs and impact its profitability.
• 5:56
  Speaker 2: Think high employee turnover and the associated recruitment costs. In fact,
• 6:01
  Speaker 2: Josey Boy disengaged employees cost their companies around eighteen percent
• 6:05
  Speaker 2: of their annual salary. And then, separate to the employee stuff,
• 6:08
  Speaker 2: there's the cost of potentially losing customers.
• 6:11
  Speaker 1: Yeah, because in a time where company culture is more
• 6:13
  Speaker 1: visible than ever, customers can pull away from brands which
• 6:16
  Speaker 1: don't align with their value.
• 6:18
  Speaker 2: So for Country Road, working on its organizational culture isn't
• 6:21
  Speaker 2: just about lifting employee spirit.
• 6:23
  Speaker 1: Nope, it's also about protecting the business's profitability and its
• 6:26
  Speaker 1: long term sustainability. Yep, Flux Am, if you want fifty
• 6:29
  Speaker 1: bucks in your pocket this Friday before a big weekend ahead,
• 6:32
  Speaker 1: there is one place to go. It's all in the
• 6:35
  Speaker 1: Flux app. Three business of finance questions. If you're the
• 6:37
  Speaker 1: first to answer, the fifty bucks is yours. Make sure
• 6:39
  Speaker 1: to download the Flux app and turn your notifications on.
• 6:42
  Speaker 2: Thanks for listening and we'll see you on Monday.