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Kaspersky shutting down US offices in response to US ban

  • Kaspersky’s status as a Russian company operating under Russian jurisdiction has raised concerns about the potential for the Kremlin to exploit the company’s access to sensitive US customer information or its ability to install malicious software or withhold updates.

The US government’s determination that Kaspersky poses “undue and unacceptable risks to US national security and to the security and safety of US persons” has forced the Russian company to make the “sad and difficult decision” to shut down its US offices and eliminate US-based positions, starting from Friday.

Kaspersky, a global leader in cybersecurity solutions, has been a prominent player in the American market for close to two decades, contributing to the nation’s strategic cybersecurity goals by safeguarding organisations and individuals from evolving cyber threats.

The rationale behind the US government’s actions is multifaceted and rooted in geopolitical concerns. Kaspersky’s status as a Russian company operating under Russian jurisdiction has raised concerns about the potential for the Kremlin to exploit the company’s access to sensitive US customer information or its ability to install malicious software or withhold updates.

Protecting American data

Additionally, the widespread integration of Kaspersky’s software with third-party commercial hardware and software has amplified the perceived risks, as the government seeks to protect Americans’ sensitive data from foreign adversaries.

The decision to ban Kaspersky products and services is part of the broader “Information and Communications Technology and Services (ICTS) Program,” which aims to safeguard the security and safety of US persons from the threats posed by nations such as Russia, China, and North Korea.

The Commerce Department’s ruling, which gives Kaspersky until September 29th to cease all operations in the US, underscores the gravity of the situation and the government’s unwavering commitment to mitigating these perceived risks.

Cautionary tale for others

“Russia has shown time and again they have the capability and intent to exploit Russian companies, like Kaspersky Lab, to collect and weaponise sensitive US information,” US Secretary of Commerce Gina Raimondo, said.

The implications of this decision extend far beyond Kaspersky’s immediate operations. The move serves as a cautionary tale for other foreign companies operating in the US, highlighting the delicate balance between commercial interests and national security concerns. I

It also raises questions about the future of international collaboration in the cybersecurity domain, as nations grapple with the complex challenges posed by the global nature of technology and the need to protect their own strategic interests.

As Kaspersky prepares to “gradually wind down its US operations and eliminate US-based positions,” the company has vowed to “pursue all legally available options” to continue its presence in the American market.

However, given the government’s firm stance on the matter, it seems unlikely that Kaspersky will be able to overturn the decision through legal means.

The shuttering of Kaspersky’s US offices is a significant setback for the company, but it also serves as a stark reminder of the delicate balance between national security, commercial interests, and the ever-evolving landscape of global cybersecurity.

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Salesforce cuts 300 staff as part of restructuring efforts

  • Salesforce emphasises importance of continuous assessment to “best serve [its] customers and fuel growth areas“.
  • About 362 tech companies had laid off 106,630 employees so far this 2024, Layoffs.fyi data shows.

Salesforce, a leading player in the software and cloud computing sectors, has decided to cut approximately 300 roles as part of a broader effort to streamline its operations.

The tech industry, renowned for its rapid growth and innovation, has recently faced a significant shift in its dynamics.

Amidst the global economic uncertainties and the aftermath of the COVID-19 pandemic, companies have been compelled to reevaluate their operational strategies to maintain their competitive edge and ensure long-term sustainability.

According to Layoffs.fyi, about 362 tech companies had laid off 106,630 employees so far this 2024.∙

The strategic move by Salesforce, a software giant, underscores the broader trend of the tech industry’s focus on cost control and operational efficiency.

The US giant had cut about 700 staff earlier this year and pared about 10 per cent of its total workforce in 2023.

The company’s decision to reduce its workforce, albeit a relatively small portion of its total employee base, is a testament to the industry’s heightened awareness of the need to align its resources with evolving market demands and customer needs.

As the software industry continues to evolve, companies like Salesforce must constantly evaluate their structures, processes, and talent allocation to ensure they remain agile and responsive to the ever-changing landscape.

In its statement, Salesforce emphasised the importance of continuous assessment to “best serve [its] customers and fuel growth areas.”

The approach reflects the industry’s broader shift towards a more strategic and data-driven decision-making process, where organisations are closely monitoring their performance, identifying areas for optimization, and making necessary adjustments to maintain their competitive edge.

The cuts at Salesforce are not an isolated incident, but rather part of a broader trend observed across the tech industry.

Several other major players, such as Intuit Inc, Microsoft, Google, UiPath Inc, and Open Text Corp, have also announced significant layoffs in recent months, signaling a widespread effort to streamline operations and align their workforce with the changing market dynamics.

The impact of these restructuring efforts extends beyond the immediate job losses, as they can have far-reaching consequences for the affected employees, the company’s organisational culture, and the industry as a whole.

However, it is essential to recognise that these restructuring initiatives are not solely driven by a desire to cut costs. They are often part of a broader strategic plan aimed at positioning the company for long-term success.

Salesforce, for instance, has highlighted its focus on driving revenue growth in key areas, such as its Data Cloud product, while maintaining a vigilant eye on expenses.

As the tech industry continues to navigate these turbulent times, companies like Salesforce must strike a delicate balance between cost optimisation and strategic investments in growth areas.

The process requires a clear understanding of the company’s core competencies, customer needs, and market trends, as well as a willingness to make tough decisions that may not always be popular in the short term but are necessary for the organization’s long-term sustainability.

Potential impact on Dubai with shifting sands of regional headquarters

  • Saudi Arabia is actively luring companies to establish their regional headquarters.
  • Companies setting up bases in the Kingdom will face challenges as some sectors and financial rules are less advanced than in Dubai.

As the global business landscape continues to evolve, the recent trend of companies relocating their regional headquarters from Dubai to Riyadh in Saudi Arabia has sparked significant interest and speculation.

The development, driven by Saudi Arabia’s strategic initiatives and incentives, has the potential to reshape the economic landscape of the Middle East, particularly in the emirate of Dubai.

Dubai has long been hailed as a thriving regional hub, attracting many multinational corporations and serving as the Middle East headquarters for numerous global giants.

The emirate’s strategic location, favourable business environment, and world-class infrastructure have been instrumental in its rise as a premier destination for businesses seeking to establish a foothold in the region.

However, the Kingdom of Saudi Arabia has now emerged as a formidable contender, actively luring companies to establish their regional headquarters within its borders.

Saudi Arabia’s ambitious plan

Saudi Arabia’s ambitious plan to attract 480 companies to open regional headquarters by 2030, coupled with the implementation of enticing incentives, such as a 30-year corporate tax break and a 10-year exemption from “Saudisation” workforce rules, has proven to be a significant draw for businesses.

The kingdom’s strategic location at the crossroads of Europe, Asia, and Africa, as well as its large population of over 30 million and high per capita income, have further bolstered its appeal as an investment destination.

The impact of this shift is already being felt; with close to 350 firms that had obtained regional headquarters licenses already relocating to Saudi Arabia after the kingdom’s January 1, 2024, deadline.

Ripple effects

On Monday (15/07/2024), Alstom, the global leader in green and smart mobility solutions, and Arthur D. Little (ADL) inaugurated its regional headquarters in Saudi Arabia.

Alstom’s Riyadh office also established the Services Digital Centre, a core part of Alstom’s strategy to advance condition-based and predictive maintenance for railway assets.

Companies that had already relocated their regional headquarters included PepsiCo, DiDi, Unilever, Siemens, KPMG, Novartis, Baker Hughes, Halliburton, Philips, Schlumberger, SAP, PwC, Oyo, Boston Scientific and Tim Hortons, Nortal,  Deloitte, IHG Hotels & Resorts, New York-based international law firm White & Case, Bechtel, GE Healthcare,  Northern Trust Corp, Knight Frank, major Chinese corporations such as BGI, Nuctech, Dahua Technology, iMile Delivery, Huawei, and China Comservice, to name a few.

“The relocation of these major players likely to leave a significant void in Dubai’s business landscape,” a Dubai-based lawyer, on condition of anonymity, told TechChannel News.

As companies depart from Dubai, he said the ripple effects are likely to be felt across various sectors, including real estate, employment, and the overall economic dynamics of the emirate.

CBRE’s data indicates a 7.7 per cent increase in employment figures in the first quarter of 2024, highlighting the growing appeal of Saudi Arabia as a regional hub.

Furthermore, the lawyer said that the giga projects planned in Saudi Arabia, such as NEOM and Qiddiya, are expected to contribute significantly to the kingdom’s economic diversification and reduce its dependence on oil.

Property prices increase

CBRE said that Riyadh’s grade A offices average rents increased by 11.8 per cent year on year to reach 1,975 Saudi riyals per square metre while average rents for grade A offices in Jeddah increased by 13.6 per cent year on year to 1,406 riyals per square metre and grade A office in Dammam registered an increase of eight per cent at 1,017 riyals per square metre.

Moreover, the kingdom plans to invest about $175 billion in industrial and other large projects over the next five years.

These large-scale initiatives, he said, coupled with the implementation of various economic reforms, including the privatisation of state-owned entities and the introduction of a new bankruptcy law, have further strengthened Saudi Arabia’s position as an attractive destination for businesses.

“Conducting business in Saudi Arabia poses unique challenges for foreign entities, as the country’s legal system is firmly rooted in Islamic law, or Sharia, which can significantly differ from the legal frameworks found in many other parts of the world.”

Fragmented regulatory environment

Unlike the relatively straightforward offshore banking hub of Dubai’s International Finance Centre, which operates under its own distinct regulatory framework, he said the landscape in Saudi Arabia’s King Abdullah Financial District is far more complex.

“The banking sector in the Kingdom is subject to the oversight and regulation of multiple authorities, including the Saudi central bank and the capital markets authority. This fragmented regulatory environment can create a considerable degree of ambiguity and uncertainty for businesses navigating the financial landscape.”

However, it is important to note that the Saudi government is actively working to harmonise and strengthen its regulatory framework, he said intending to provide a more coherent and streamlined system for both domestic and international players.

“The country’s efforts to modernise and diversify its economy, as outlined in its Vision 2030 plan, present numerous opportunities for businesses willing to navigate the complexities of its legal and regulatory environment.”

However, the lawyer said that Dubai’s logistics sector and aviation sector are much more advanced than Saudi Arabia’s, especially with DP World and Emirates Airlines.

“It will take years for Saudi Arabia to attain Dubai’s importance in logistics and aviation sectors.”

Many in dilemma

A top executive at a global consultancy, based in Dubai, said that it is a “do or die situation” for many companies as they don’t want to move out of Dubai and have invested a lot in setting up regional headquarters in Dubai.

“Dubai is more open than Saudi Arabia and many are moving to Saudi to meet the criteria.”

While Dubai’s resilience and ability to adapt to changing market conditions have been well-documented in the past, the lawyer said that the current exodus of regional headquarters presents a significant challenge.

Moreover, he said that the emirate will need to carefully evaluate its strategies and offerings to remain competitive and retain its status as a premier business hub in the region.

Swiggy unlocks fifth employee wealth-creation options worth $65m

  • Move not only rewards its workforce but also positions the company for long-term success in the highly competitive food delivery landscape.
  • Move comes as the startup is aiming to raise about $450m in fresh capital and another $800m through an offer-for-sale component.

As Swiggy, the prominent food delivery giant, navigates a challenging market landscape and prepares for its highly anticipated public listing, the company has unveiled its fifth employee stock options (ESOPs) liquidity programme, valued at a substantial $65 million.

The strategic move aims to retain top talent and foster unwavering loyalty within its workforce, underscoring Swiggy’s commitment to rewarding its employees as it continues to grow and expand.

The secondary transaction, which is being executed at a discounted valuation of over $9 billion, is expected to attract additional investors as more employees opt in, according to a person familiar with the matter.

The ESOP liquidity programme marks Swiggy’s fifth such initiative since 2018, cumulatively enabling over Rs1,000 crore of liquidity across these events and benefiting more than 3,200 employees.

 “Rewarding employees by unlocking wealth-creation opportunities as Swiggy grows has always been a key priority for us,” Girish Menon, head of human resources at the company, said.

Swiggy remains resilient

By unlocking these wealth-creation opportunities, the company is not only recognising the contributions of its employees but also fostering a sense of loyalty and commitment as it navigates the challenges of a slowing market and intensifying competition.

The move also comes as Swiggy prepares for its highly anticipated initial public offering (IPO), which is slated for the coming months.

The company has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi), aiming to raise about $450 million in fresh capital and another $800 million through an offer-for-sale component, as per the filing.

Despite the challenges it has faced, including a slowing market, price-conscious customers, and senior-level management exits, Swiggy has remained resilient.

The company’s operating revenues increased by approximately 45 per cent to Rs8,264 crore in FY23, although losses widened by 15 per cent to Rs4,179 crore from the previous year.

Partior’s $60m fund raise paves way for frictionless cross-border payments

  • Series B funding round led by Peak XV Partners, with participation from Valor Capital Group, Jump Trading Group, and existing shareholders JP Morgan, Standard Chartered, and Temasek
  • Funds to be allocated to develop new capabilities, including intraday FX swaps, cross-currency repos, and programmable enterprise liquidity management, further strengthen Partior’s offerings.

Singapore-based Partior, a cross-border payments and settlement blockchain company, has successfully raised $60 million in its Series B funding round.

The round was led by Peak XV Partners, with participation from Valor Capital Group, Jump Trading Group, and existing shareholders JP Morgan, Standard Chartered, and Temasek.

Partior, founded in 2021, is a joint venture between DBS, JP Morgan, and Standard Chartered, aimed at establishing unified interbank payment systems for immediate clearing and settlement.

The company’s innovative blockchain-based platform allows financial market participants, including banks and payment service providers, to access real-time, cross-border, multi-currency clearing and settlement services.

To develop new capabilities

The successful Series B funding round is a testament to Partior’s strong growth and the industry’s confidence in the company’s vision. The funds will be allocated to develop new capabilities, including intraday FX swaps, cross-currency repos, and programmable enterprise liquidity management, further strengthening Partior’s offerings.

Partior’s platform has already garnered significant traction, with companies such as Siemens and iFAST Financial utilising the service through Standard Chartered to improve their working capital management, benefit from 24/7 availability, and experience faster and more seamless payment flows.

“We see a very bright future for blockchain-based frictionless, cross-border transactions,” Humphrey Valenbreder, Chief Executive Officer of Partior, said.

 “Having some of the world’s best banks and investors back our vision validates this even further.”

Shailendra Singh, managing director of Peak XV, echoed this sentiment, stating, “Partior is an extremely ambitious attempt to transform global money transfer and settlement amongst banks. It’s a unique approach where multiple banks have come together to catalyse change in this industry.”

The investment will significantly support Partior’s international network growth and the integration of additional currencies.

Currently, the platform is live with USD, EUR, and SGD, and the company aims to expand its reach further.

AT&T says 109m US customers’ accounts hacked

  • AT&T has taken additional cybersecurity measures to close off the point of unauthorised access and is working closely with law enforcement to address the situation.
  • Customers affected by the incident will be notified, and AT&T has promised to set up a website where individuals can determine if their data has been compromised.

The US telecom company AT&T has announced a massive hacking incident that has compromised the data of approximately 109 million customer accounts.

The breach, which occurred in April 2023, has resulted in the illegal downloading of records detailing the calls and text messages of AT&T’s cellular and landline customers from May 2022 to October 2022.

According to the company’s statement, the compromised data does not include the content of the calls or texts, nor does it contain sensitive personal information such as social security numbers.

However, the records do include details about the telephone numbers with which a specific wireless number interacted, as well as the duration of those interactions and the associated cell site identification numbers.

No material impact on operations

The FBI is currently investigating the incident, and at least one person has been arrested in connection with the breach. AT&T has also taken additional cybersecurity measures to close off the point of unauthorised access and is working closely with law enforcement to address the situation.

While the company has stated that the incident has not had a material impact on its operations, the breach of such a significant volume of customer communication records is a concerning development.

Customers affected by the incident will be notified, and AT&T has promised to set up a website where individuals can determine if their data has been compromised.

This event underscores the ongoing challenge of maintaining the security and privacy of customer data in the digital age. As technology continues to advance, companies must remain vigilant in implementing robust cybersecurity measures to protect the sensitive information entrusted to them by their customers.