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Korn Ferry Study Reveals Talent Shortage Could Threaten Business Growth in EMEA

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Korn Ferry Study Reveals Talent Shortage Could Threaten Business Growth in EMEA
  •  Study Indicates Potential Talent Deficit of 14.3 Million Workers in the Region by 2030 —
  •  $1.906 Trillion Revenue Opportunity Potentially Lost if Talent Shortage Not Addressed —

 Already a major issue, skilled talent shortages will continue to impede growth and if not addressed, could have a significant impact on major global economies by 2030, a study* by Korn Ferry (NYSE: KFY) reveals today.

“Companies must work to mitigate this potential talent crisis now to protect their future,” said Matt Crosby, senior client partner at Korn Ferry. “Left to run its course, this shortage will severely impact the growth of markets across Europe, the Middle East and Africa (EMEA) with a talent deficit of more than 14.3 million workers and $1.906 trillion in unrealised annual revenue across the region at 2030.”

Korn Ferry’s Global Talent Crunch study estimates the gap between future talent supply and demand in 20 major economies at three milestones: 2020, 2025 and 2030, and across three sectors: financial and business services; technology, media and telecommunications (TMT); and manufacturing.

The talent deficit issue could threaten economies and sectors across EMEA:

  • Germany could experience the largest deficit in EMEA of 4.9 million workers and could lose out on $629.89 billion of annual revenue by 2030 if labour shortages are not addressed – equivalent to 14 percent of its economy.
  • London’s financial market dominance is under threat – the U.K. faces a shortage of more than half a million workers in financial and business services, losing out on $89.98 billion in annual revenues by 2030 – equivalent to 7 percent of the sector.
  • Financial and business services are hardest hit across the EMEA region – losing out on more than $358.70 billion in annual revenue by 2030.
  • Technological advancement across all sectors could be hindered by an acute labour shortage – TMT faces a shortage of more than 700,000 workers, with the sector losing out on annual revenues of $103.25 billion by 2030.
  • Germany and the U.K. face the highest TMT sector opportunity cost – losing out on $30.70 and $27.70 billion in annual revenue respectively by 2030.
  • Manufacturing is facing a talent deficit crisis in EMEA of more than 1.1 million workers by 2030, despite having a surplus of highly skilled workers in 2020.
  • Germany’s manufacturing powerhouse status at risk, ranking highest within EMEA and second highest among the 20 markets studied for unrealized revenue within the manufacturing sector ($77.93 billion by 2030).

Globally, the study reveals a potential crisis with a sizable mismatch between supply of available workers and business demand:

  • The United States, Japan, France, Germany and Australia face the largest threat in the near term, with a combined opportunity cost of $1.876 trillion by 2020.
  • Labour shortages in global financial and business services are the most acute, with a potential deficit of 10.7 million workers globally by 2030.
  • Technological advancement across all sectors of the global economy could be hindered by an acute global labour shortage of 4.3 million TMT workers by 2030.
  • Manufacturing is facing a global talent deficit crisis of 7.9 million workers by 2030, despite being the only sector with a surplus of highly skilled workers in 2020.
  • India is the only economy in the study maintaining a talent surplus in 2025 and 2030.

Matt Crosby, Korn Ferry said: “Companies across EMEA must act now to future-proof their business. Left unaddressed, the talent crunch will severely impact the growth of key markets and sectors across the region, with an opportunity cost of $1.906 trillion in annual unrealised revenue by 2030.”

“The right talent is the greatest competitive advantage there is for an organisation – and that talent is getting scarcer every day,” said Crosby “Our study reveals that there already isn’t enough skilled talent to go around and by 2030, organisations and economies could find themselves in the grip of a talent crisis. In the face of such acute talent shortages, workforce planning and a comprehensive understanding of the talent pipeline are critical.”

“The future will be built on the effective partnership between people and technology. The acute demand for workers with the right skills that businesses need, rather than the much-discussed domination of technology in business, could become the defining issue of our age,” said Crosby.

EMEA markets studied Total unrealised output 2030 (USD bn) Total labour deficit 2030
Germany 629.9 4,904,436
U.K. 407.6 2,990,955
Russia 297.1 2,848,969
France 214.6 1,518,593
Saudi Arabia 206.8 662,522
Netherlands 71.3 548,436
UAE 50.6 111,217
South Africa 29.0 746,651

Business

Nvidia forecasts sales above estimates as gaming chip sales surge

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Nvidia forecasts sales above estimates as gaming chip sales surge 1

By Chavi Mehta and Stephen Nellis

(Reuters) – Nvidia Corp forecast better-than-expected fiscal first-quarter revenue on Wednesday, expecting strong demand for its graphics chips used in gaming PCs and artificial intelligence chips for data centers.

As people wait for COVID-19 vaccine rollouts around the world, stay-at-home orders have helped sustain the demand for chips used in personal computers, gaming devices and data center infrastructure that enables remote working.

The Santa Clara, California-based company’s gaming chips have also regained popularity for mining cryptocurrency, a trend Nvidia is trying to counter by throttling its gaming chips ability to mine for currencies and instead offering specialty chips for mining.

While Nvidia was long known for its gaming graphic chips, its aggressive push into artificial intelligence chips that handle tasks such as speech and image recognition in data centers has helped it become the most valuable semiconductor maker by market capitalization.

It has eclipsed rivals Intel Corp and Advanced Micro Devices.

Shares were up 3% at $597.50 in extended trading after the results.

On a conference call with investors, Chief Financial Officer Colette Kress said that a global chip crunch made it hard to keep the company’s flagship gaming chips introduced last fall in stock and that the chips would likely remain in tight supply through the fiscal first quarter.

The company also said it will make a change to its gaming chips starting with the RTX-3060s to make them less efficient for mining cryptocurrency. The company said it will instead introduce mining-specific chips.

“We would like GeForce GPUs (graphics processing units) to end up with gamers,” Kress said.

Kress said analysts have estimated that cryptocurrency mining contributed between $100 million and $300 million to Nvidia’s sales in the fiscal fourth quarter. The company expects the new mining chips to generate about $50 million revenue in its fiscal first quarter, Kress added.

The company expects first-quarter revenue of $5.30 billion, plus or minus 2%, above analysts’ average estimate of $4.51 billion.

Revenue in the quarter ended on Jan. 31 rose to $5 billion from $3.11 billion a year earlier. Analysts on average were expecting $4.82 billion, according to IBES data from Refinitiv.

Revenue in the company’s gaming segment was $2.5 billion, above analyst estimates of $2.36 billion, according to data from FactSet. Data center revenue was $1.9 billion, above estimates of $1.84 billion according to FactSet data.

(Reporting by Chavi Mehta in Bengaluru and Stephen Nellis in San Francisco; Editing by Maju Samuel and Will Dunham)

 

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Running boom to help Puma recover after slow start

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Running boom to help Puma recover after slow start 2

By Emma Thomasson

BERLIN (Reuters) – German sportswear company Puma expects the financial impact from coronavirus lockdowns to last well into the second quarter, but believes global growth in running should help to support a strong improvement after that.

“We clearly see a running boom in the whole world,” Chief Executive Bjorn Gulden told journalists, noting that yoga and other outdoor activities are also doing well. He expects the healthy living trend to continue even after the pandemic.

Gulden said his optimism is underlined by the fact that orders for 2021 are up almost 30% compared to a year ago, with bookings for running products particularly high.

However, there is still uncertainty about when lockdowns in Europe will end, with about half of the stores selling its products currently closed in its home region.

For the full year, Puma expects at least a moderate increase in sales in constant currency, with an upside potential, and a significant improvement for both its operating and net profit compared with 2020.

Shares in Puma were down 2.9% at 1100 GMT.

“The wording on outlook looks softer than we had anticipated, even by Puma’s cautious standards,” said Jefferies analyst James Grzinic.

Gulden noted that a shortage of shipping containers bringing products made in Asia would impact margins, with freight rates likely to double in the next 12 months.

Puma will put a stronger focus on the women’s market in future, Gulden said, creating shoes better modelled to female feet for running and soccer and capitalising on partnerships with celebrities like singer Dua Lipa and model Cara Delevingne.

Gulden admitted Puma had been slow in creating its own app, but it plans to launch one towards the end of the year, further supporting online sales, which grew by 63% in 2020.

Rival Nike in December raised its full-year sales forecast after demand for outdoor sportswear drove an 84% surge in online sales.

Gulden said he is hopeful that the Olympics will go ahead in Japan and the European soccer championship will also take place after both were postponed from 2020.

($1 = 0.8226 euros)

(Reporting by Emma Thomasson; Editing by Mark Potter and Keith Weir)

 

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ExxonMobil to sell some UK, North Sea assets to HitecVision for over $1 billion

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ExxonMobil to sell some UK, North Sea assets to HitecVision for over $1 billion 3

(Reuters) – Exxon Mobil Corp said on Wednesday it would sell its non-operating interest in its UK and North Sea exploration and production assets to private-equity fund HitecVision for more than $1 billion.

Exxon has been looking to sell its oil and gas assets since late 2019, seeking to free up cash to focus on a handful of mega-projects.

The deal includes ownership interests in 14 producing fields operated primarily by Shell as well as interests in the associated infrastructure. Exxon could also receive about $300 million in contingent payments based on a potential for increase in commodity prices.

Exxon’s share of production from these fields was about 38,000 barrels of oil equivalent per day in 2019, the company said.

Exxon said it would retain its non-operated share in upstream assets in the southern part of the North Sea as well as its interest in the Shell Esso gas and liquids (SEGAL) infrastructure, which supplies ethane to the company’s Fife ethylene plant.

HitecVision, in partnership with Eni, had bought Exxon’s Norwegian North Sea assets for $4.5 billion in 2019.

Initially, Exxon hoped to raise more than $2 billion from the sale, which was planned for late 2019. In June 2020 sources told Reuters that the portfolio was more likely to fetch $1 to $1.5 billion given the oil price weakness last year.

(Reporting by Arathy S Nair in Bengaluru; Editing by Anil D’Silva)

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