What to watch: Nokia to cut 10,000 jobs, vaccine review in focus, NatWest faces criminal charges

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·5-min read
The Nokia booth at the 3rd China International Import Expo at the National Exhibition and Convention Center on 7 November 2020 in Shanghai, China. Photo: VCG/VCG via Getty Images
The Nokia booth at the 3rd China International Import Expo at the National Exhibition and Convention Center on 7 November 2020 in Shanghai, China. Photo: VCG/VCG via Getty Images

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Nokia to cut 10,000 jobs

Finnish telecoms giant Nokia (NOKIA.HE) has announced plans for a sweeping overhaul of its business that could see up to 10,000 jobs cut.

Nokia announced plans to "reset its cost base" on Tuesday as part of a wholesale restructure of the business. The company will cut back on legacy business lines and investing in growth areas like cloud computing and 5G.

The transformation, which is forecast to cost up to €700m, will involve job cuts of up to 10,000. Nokia said headcount would be reduced from 90,000 to between 80,000 and 85,000 over the next two years.

"Decisions that may have a potential impact on our employees are never taken lightly," Nokia's president and chief executive Pekka Lundmark said in a statement. "Ensuring we have the right setup and capabilities is a necessary step to deliver sustainable long-term performance. My priority is to ensure that everyone impacted is supported through this process."

The cuts aim to save Nokia €600m a year by 2023. Savings will be used to invest in research and development.

"In those areas where we choose to compete, we will play to win," Lundmark said. "We are therefore enhancing product quality and cost competitiveness, and investing in the right skills and capabilities."

Shares rose 0.2% in Helsinki.

Vaccine review in focus

AstraZeneca is likely to remain "under pressure" this week, analysts said, as Europe's official medicines watchdog reviews the risks associated with the company's COVID-19 vaccine.

Multiple countries around the world have moved to suspend the rollout of AstraZeneca's COVID-19 vaccine in recent days amid concerns it could cause blood clots. Germany, Spain, France, Denmark, Ireland, the Netherlands and Italy have all announced suspensions.

The case has been referred to Europe's top medical watchdog, the European Medicine Agency (EMA). An official verdict is due on Thursday.

The EMA said on Monday that it "currently remains of the view that the benefits of the AstraZeneca vaccine in preventing COVID-19, with its associated risk of hospitalisation and death, outweigh the risks of side effects."

AstraZeneca said there had been 15 events of deep-vein thrombosis and 22 events of pulmonary embolism reported among more than 17 million people vaccinated. Ann Taylor, the firm's chief medical officer, said this was "lower than the hundreds of cases that would be expected among the general population.”

AstraZeneca said there was no evidence of a causal link between its vaccine and blood clotting.

Stocks rise despite COVID-19 third wave

European markets opened higher on Tuesday despite ongoing concerns about the rollout of COVID-19 vaccines on the continent and rapidly spreading cases.

The FTSE 100 (^FTSE) and the DAX (^GDAXI) were both up 0.5% shortly after the open, while the CAC 40 (^FCHI) was 0.2% higher.

The modest rise came despite renewed concern about the speed of Europe's COVID-19 vaccine rollout. Multiple European nations — including Germany, France, Spain, and Italy — have moved to suspend the rollout of the AstraZeneca vaccine in recent days following reports of blood clotting.

COVID-19 cases are once again on the rise across parts of Europe. Germany's Robert Koch Institute on Tuesday said the country was "on the flank of the third wave" with "exponential growth" in cases, Reuters reported.

Wall Street looked set for a relatively quiet open later today in New York. S&P 500 futures (ES=F) were flat, Dow Jones futures (YM=F) were down 0.1%, and Nasdaq futures (NQ=F) were up 0.4%.

NatWest faces criminal charges

The UK's Financial Conduct Authority (FCA) said on Tuesday it has started criminal proceedings against NatWest (NWG.L) bank, which it alleges has breached the UK's Money Laundering Regulations 2007 (MLR 2007).

The FCA said that the case has arisen from the handling of funds deposited into accounts operated by a UK incorporated customer of NatWest.

NatWest is a subsidiary of the NatWest group, which is state-backed and 62% owned by the taxpayer. It was previously known as the Royal Bank of Scotland.

The City watchdog said that this is the first criminal prosecution under the MLR 2007 by the FCA and the first prosecution under the MLR against a bank.

The FCA alleges that increasingly large cash deposits were made into the customer’s accounts. It is alleged that around £365m ($505m) was paid into the customer’s accounts, of which around £264m was in cash.

The allegations date back to between 2011 and 2016.

"NatWest Group takes extremely seriously its responsibility to seek to prevent money laundering by third parties and accordingly has made significant, multi-year investments in its financial crime systems and controls," the bank said in a statement.

Shares fell over 1% on the news.

Greggs makes first loss in 36 years

Greggs (GRG.L) on Tuesday reported its first ever loss since it went public 36 years ago but said it is still planning to open 100 more stores in 2021.

The group said in its preliminary results for the 53 weeks ending 2 January this year that it made a loss of £13.7m ($19m) before tax in 2020, down from profit of £108.3m in 2019. Total sales fell 30.5% to £811.3m and like-for-like sales in company-managed shops declined by 36.2%.

“Financially, 2020 was a year of two very different halves,” the company said.

The period to June included an extensive lockdown, where shops were closed and it relied on financial support from a number of government-backed schemes.

In the second half of the year, it took action to reduce this reliance and saw a “progressive strengthening of business performance, albeit materially impacted by COVID-19 restrictions, supported by the development of new digital channels.”

Shares were up roughly 5% on Tuesday morning.

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