Latest / What the Flux / ANZ slashes 4,500 jobs | Coles & Woolies face $1 billion cost | Cashrewards shuts down

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ANZ slashes 4,500 jobs | Coles & Woolies face $1 billion cost | Cashrewards shuts down · What the Flux

• 0:05
  Speaker 1: This is what the Flux I'm bred justin ads Wednesday,
• 0:08
  Speaker 1: the tenth of September.
• 0:09
  Speaker 2: Does avoid the Future Fund, Australia's sovereign wealth fund. There's
• 0:12
  Speaker 2: top two hundred and fifty billion dollars for the very
• 0:14
  Speaker 2: first time thanks to it for more than twelve percent
• 0:16
  Speaker 2: return over the last financial year. And this return is
• 0:19
  Speaker 2: even better than the median return of super funds over
• 0:22
  Speaker 2: the same period.
• 0:23
  Speaker 1: Get my super money in there, xam. There is less
• 0:26
  Speaker 1: than fifty days until your tax return needs to be submitted.
• 0:29
  Speaker 1: If you're submitted via my gad. If you're so confused
• 0:31
  Speaker 1: you don't even know where to start, that's where the
• 0:33
  Speaker 1: Flux Academy comes in. This month. It's called the FI
• 0:35
  Speaker 1: twenty five Tax Toolkit and covers everything from Medicare levees
• 0:39
  Speaker 1: to working from home tax deductions and how to submit
• 0:41
  Speaker 1: it onlines. If you want to learn more about how
• 0:43
  Speaker 1: to get your tax return done, make sure you download
• 0:45
  Speaker 1: the Flux app and check out the academy.
• 0:47
  Speaker 2: Three lethal stories today jus boy, wooh, let's do it
• 0:50
  Speaker 2: for our first. A and Z Bank is cutting four thousand,
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  Speaker 2: five hundred jobs and scaling back consultants in a five
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  Speaker 2: hundred and sixty million dollar restructure under its spanking new ceoey.
• 1:02
  Speaker 1: Up to ten percent of the workforce. It just gone like.
• 1:04
  Speaker 2: That, tell me all okay. So A and Z is
• 1:06
  Speaker 2: one of Australia's Big Four alongside CBA, NAB and Westpac.
• 1:10
  Speaker 1: He's a fun FACTVB Man A and Z actually has
• 1:12
  Speaker 1: a larger global workforce than both NAB and west Pack
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  Speaker 1: despite being the smallest of the four. Not for long though,
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  Speaker 1: ain Z's new CEO, Nunomatos, who started in May, has
• 1:22
  Speaker 1: begun to swing the acts yeap. He's now announced three
• 1:25
  Speaker 1: thy five hundred redundancies of ANZED staff by next September.
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  Speaker 1: And on top of this, an ZED will also cut
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  Speaker 1: ties with a thousand consultants and contractors.
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  Speaker 2: And it will affect teams in technology, procurement, risk and retail.
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  Speaker 1: The man. Here's the twist. These job cuts are just
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  Speaker 1: for now because ANZ promised to maintain its head count
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  Speaker 1: by twenty twenty seven.
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  Speaker 2: That was a commitment it made as part of its
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  Speaker 2: acquisition of Suncot Bank.
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  Speaker 1: So now it effectively allows A and Z to cut
• 1:49
  Speaker 1: jobs in the short term, so long as the number
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  Speaker 1: of staff are re hired by twenty twenty seven and Jazi.
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  Speaker 2: Boy, this is all part of an Z's plan to
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  Speaker 2: improve its cost to income ratio.
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  Speaker 1: So what the key learning here.
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  Speaker 2: One of the most closely watched metrics in banking is
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  Speaker 2: the cost to income ratio, also known as an efficiency ratio.
• 2:06
  Speaker 1: It measures how much a bank spends to earn a
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  Speaker 1: dollar of revenue.
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  Speaker 2: The lower the ratio, more efficiently the bank is operating.
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  Speaker 1: For example, AMZ spens roughly fifty two cents in costs
• 2:15
  Speaker 1: to generate one dollar of inco, so its cost to
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  Speaker 1: income ratio is fifty two percent.
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  Speaker 2: Whereas Combank's cost to income ratio is about forty nine percent.
• 2:22
  Speaker 1: And it's believe that Westpac and nabs cost to income
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  Speaker 1: ratio is even lower than combat.
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  Speaker 2: So, Jazi Boy, jobcuts and a reduced reliance on consultants
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  Speaker 2: will help lower costs and improve this ratio.
• 2:32
  Speaker 1: And the man cutting costs is one of the clearest
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  Speaker 1: ways to lift returns as long as it doesn't also
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  Speaker 1: hit sales, given up to ten percent of its workforce
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  Speaker 1: will be cut now. Interestingly, be Man, Amz's new CEO
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  Speaker 1: has been known to enter a new business or business
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  Speaker 1: division and cut immediately.
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  Speaker 2: Yes, he did this at HSBC in Mexico where he
• 2:50
  Speaker 2: used to work, as well as when he moved to
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  Speaker 2: HSBC in Europe.
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  Speaker 1: And now he's taking the cost cutting playbook and bring
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  Speaker 1: it to Anz.
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  Speaker 2: For our second story, Coals and Woolies are facing a
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  Speaker 2: bit billion dollar bill after a court ruled on its
• 3:02
  Speaker 2: staff under payments.
• 3:03
  Speaker 1: Jeez, it turns out paying people properly isn't optional, be man.
• 3:07
  Speaker 2: So we all okay? So Coles and Woworth's Australia's two
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  Speaker 2: supmarket giants, making up more than sixty five percent of
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  Speaker 2: all of the grocery market, and.
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  Speaker 1: Willworth's is actually Australia's biggest private employer, with over two
• 3:18
  Speaker 1: hundred thousand staff on its books.
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  Speaker 2: But juzz boy. Last Friday, the Federal Court ruled against
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  Speaker 2: the way that both companies structured annual salaries and.
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  Speaker 1: This impacted nearly thirty thousand employees across the businesses.
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  Speaker 2: Alrighty, so what exactly did they do?
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  Speaker 1: They were both using the set off approach? All right?
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  Speaker 2: What's that?
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  Speaker 1: Well, with the set off approach, employees have paid one
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  Speaker 1: salaried sum. It's meant to cover all of their entitlements
• 3:39
  Speaker 1: under the modern.
• 3:40
  Speaker 2: Awards, including overtime pay. And penalty rates, but the.
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  Speaker 1: Court ruled that these arrangements didn't actually keep track of
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  Speaker 1: all the employee entitlements and staff were therefore underpaid for
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  Speaker 1: a number of years.
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  Speaker 2: And Woolly's warned that the potential extra costs could top
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  Speaker 2: five hundred million bucks. After Taos and Coal's estimated around
• 3:57
  Speaker 2: two hundred and fifty mil and Juzie Boy combined repayments
• 4:00
  Speaker 2: already made, the scandal could cost north of one billion
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  Speaker 2: dollars in total.
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  Speaker 1: Well, while is what I'd like to say, So what
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  Speaker 1: is the key learning here?
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  Speaker 2: Compliance may not be as exciting as half priced tymtams,
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  Speaker 2: but getting it wrong is seriously costly.
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  Speaker 1: In this case, loose payroll processes and record keeping failures
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  Speaker 1: have turned into a billion dollar liability.
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  Speaker 2: And the true cost of non compliance isn't just the repayments.
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  Speaker 1: Now We're talking a heap of dough in legal fees.
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  Speaker 2: And regulatory scrutiny. Don't forget interest, superannuation, back pay and
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  Speaker 2: payroll tax, as well as well as the distraction of
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  Speaker 2: management time and be man.
• 4:32
  Speaker 1: There's no doubt that retail industry awards are very, very complicated.
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  Speaker 2: It is The Retail Industry Award has nine and ninety
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  Speaker 2: four different pay rates across almost one hundred pages.
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  Speaker 1: But that doesn't mean it should be put in the
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  Speaker 1: two hard basket.
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  Speaker 2: Now for boards, the lesson is clear. Treat compliance like
• 4:47
  Speaker 2: your milk and bread.
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  Speaker 1: It's not optional, it is essential.
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  Speaker 2: Otherwise you risk a very expensive cost at the checkout.
• 4:53
  Speaker 1: For our third and final story, cash rewards, the Australian
• 4:56
  Speaker 1: cash back platform has announced plans to shut down immediately
• 5:00
  Speaker 1: after eleven years.
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  Speaker 2: Two and a half million dollarses need to cash out pronto.
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  Speaker 2: Tell me what's going on?
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  Speaker 1: Okay, So cash Rewards found it in twenty fourteen as
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  Speaker 1: a way to give Ozzie's cash back when they shopped
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  Speaker 1: at retailers across Australia.
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  Speaker 2: We're talking brands like apple Meyer and Added Ass.
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  Speaker 1: This that works. Retailers pay cash rewards a commission, and
• 5:16
  Speaker 1: cash rewards then passes a slice of that commission. That's
• 5:19
  Speaker 1: the shopper and Juzieboy.
• 5:20
  Speaker 2: These cash backs range anywhere from two percent of a
• 5:23
  Speaker 2: purchase price to sometimes even twenty percent.
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  Speaker 1: Now a man in December twenty twenty, in the midst
• 5:28
  Speaker 1: of the COVID spending spree, cash rewards listed on the
• 5:30
  Speaker 1: ASX at a value of around one hundred and thirty
• 5:33
  Speaker 1: million dollars.
• 5:33
  Speaker 2: But Jazze boy, it didn't last long. By jan twenty
• 5:36
  Speaker 2: twenty two, Anz's venture took Cash Rewards private at a
• 5:39
  Speaker 2: thirty five percent discount to its IPO price.
• 5:42
  Speaker 1: The Maan Cash Roads was big. At its peak, it
• 5:44
  Speaker 1: had over two and a half million members and returned
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  Speaker 1: to one hundred and sixty five million bucks in cash back.
• 5:48
  Speaker 2: But now Cash Awards has announced it will shut down
• 5:51
  Speaker 2: immediately as A and Z does a cleanup of its business.
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  Speaker 1: Despite spending nearly one hundred million dollars in total to
• 5:57
  Speaker 1: acquire the Cash Rewards business, it hadn't quite met A
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  Speaker 1: and z's expectations.
• 6:00
  Speaker 2: So Anz's corporate VCM eighteen thirty five I has announced
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  Speaker 2: plans to close it down immediately.
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  Speaker 1: So what is the key learning here?
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  Speaker 2: Corporate venture capital is when big companies set up investment
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  Speaker 2: arms to back startups and emerging businesses.
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  Speaker 1: The idea is kind of two fold. There's a financial
• 6:15
  Speaker 1: return as well as a strategic alignment.
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  Speaker 2: For ANZ, its venture arm was created in twenty eighteen
• 6:21
  Speaker 2: to fend off fintech disruptors.
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  Speaker 1: And by investing in them, it meant AMZ could learn
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  Speaker 1: from them and sometimes even integrate them into the larger
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  Speaker 1: an Z business. But unlike independent vcs, corporate vcs often
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  Speaker 1: rise and fall with the priorities of the larger company.
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  Speaker 2: So while corporate vcs can open doors, it's also tied
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  Speaker 2: to the whims of corporate boardrooms, and.
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  Speaker 1: In this case, the whim of the CEO was to
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  Speaker 1: shut it down immediately without even looking for a buyer.
• 6:45
  Speaker 1: Flux am the time is ticking and the ATO is
• 6:48
  Speaker 1: waiting for your tax return before October thirty first this year,
• 6:51
  Speaker 1: so if you want to learn more, may shut it,
• 6:52
  Speaker 1: download the Flux app and check out the academy this month.
• 6:55
  Speaker 2: Thanks for listening and we'll see you on Friday.