Business

EVEN BY ITALY’S chaotic standards, TIM Group, the country’s largest provider of telecommunication services, is an odd beast. In the past seven years it has churned through five chief executives. It has amassed net debt of more than €25bn ($27bn), making it the most indebted of Europe’s large telecoms firms. And now, to lower the load, it wants to do what none of its peers has done, by selling off its main asset: the fixed network. When Pietro Labriola, TIM’s latest new boss, explains the spin-off, he does not beat around the bush. With interest rates rising, the debt burden is becoming crushing. All three big ratings agencies now score TIM’s debt as below investment grade. Selling off the fixed network, which is expected to fetch more than €20bn, is “the clearest way to regain industrial options”. Offers were due to be in by June 9th. Listen to this story. Enjoy more audio and podcasts on More

Job interviews are an opportunity to see allegiances shift in real time. A candidate will usually refer to a prospective employer as “you” at the start of an interview (“What do you want to see from someone in this position?”). But occasionally the pronoun changes (“We should be thinking more about our approach to below-the-line marketing. Sorry, I mean ‘you’ should be”). That “we” is a tiny, time-travelling glimpse of someone imagining themselves as the employee of a new company, of a fresh identity being forged and of loyalties being transferred.Listen to this story. Enjoy more audio and podcasts on More

“We are at a dangerous point,” worries Arndt Kirchhoff, boss of the employers’ association in North Rhine-Westphalia and one of three brothers who run Kirchhoff, a maker of car components. Germany recently slipped into a technical recession. Many companies are investing abroad rather than at home. Chinese consumers are importing less after the lifting of pandemic restrictions than German manufacturers had been hoping. And Ukraine’s counter-offensive against Russian invaders is injecting uncertainty into Germany’s backyard. In May an index of business confidence from the Ifo Institute, a think-tank, fell for the first time in seven months (see chart). On June 5th manufacturers’ gloomy mood became darker still when the vDMA, the main lobby group for machinery-makers, announced that orders for engineering companies fell by 20% last month, year on year. A small contraction in GDP (German output More

ANTHONY ALBANESE, Australia’s prime minister, has called it “completely unacceptable”. Jim Chalmers, his treasurer, is “furious”. The object of their ire is PwC. The professional-services giant is in hot water over allegations that, after helping the government design a new system to make foreign multinational firms pay more tax, it used its inside knowledge to help global clients circumvent those same measures.Listen to this story. Enjoy more audio and podcasts on More

The FAA warned it could slow inbound flights to New York City, Philadelphia, Charlotte and Washington, D.C.
Heavy smoke from wildfires in Canada was cutting visibility.
More than 800 U.S. were delayed as of Thursday morning according to flight-tracker FlightAware.

People walk in Central Park as smoke from wildfires in Canada cause hazy conditions in New York City on June 7, 2023. 
Timothy A. Clary | AFP | Getty Images

Smoke from Canada wildfires could disrupt flights in the Eastern U.S. again Thursday after hundreds were delayed a day earlier due to decreased visibility, the Federal Aviation Administration said.
“The FAA will likely need to take steps to manage the flow of traffic safely into New York City, DC,  Philadelphia and Charlotte due to reduced visibility from wildfire smoke,” the agency said.

Inbound traffic to Philadelphia International Airport was paused until 9:15 a.m., the FAA said.
Hundreds of flights to and from LaGuardia Airport in New York and nearby Newark Liberty International Airport were delayed on Wednesday due to the heavy smoke. The FAA had briefly paused traffic altogether into LaGuardia during the day.
As of about 9:15 a.m. ET on Thursday, more than 800 flights to, from and within the the U.S. were delayed according to flight-tracker FlightAware.
Nearly 50 departures from LaGuardia, or 8% of the schedule, were delayed on Thursday as of 9:15 a.m., according to FlightAware.
This story is developing. Please check back for updates. More

NEIL SHEN has god-like status in the Chinese private-equity industry. The lead dealmaker at Sequoia China placed big, early bets on some of the country’s most successful technology companies, such as Meituan, a delivery super-app, and Pinduoduo, an e-commerce giant. Now Mr Shen’s investment firm is planning to go it alone, dropping the Sequoia name and eventually severing all connections with its Silicon Valley parent. On June 6th Sequoia Capital, a 51-year-old stalwart of the venture-capital industry, announced it would split into separate American, Chinese and Indian businesses. Sequoia China has operated with a high degree of autonomy for a while, with Mr Shen calling most of the shots. So has Sequoia’s Indian and South-East Asian business, led by Shailendra Singh. By March 2024 the entities will no longer share investors or returns, as they have done for years. The Chinese branch will be known as HongShan, the mandarin word for redwood. Sequoia says the split is part of a “local-first” approach designed for a world where it has become “increasingly complex to run a decentralised global investment business”. Many of Mr Shen’s investments were indeed made for a globalised, connected world. He was an investor in Didi Global, a Chinese ride-hailing company whose listing in New York was hobbled by China’s government in 2021. He hoped to make American social media work in his home country by investing in the Chinese arm of LinkedIn, a networking platform for professionals—before growing censorship and onerous rules forced LinkedIn to give up almost completely on the country. Meanwhile in America, where bashing China is just about the only thing that Democrats and Republicans can agree on, Sequoia and other investors face mounting political pressure to quit China. Montana has just banned TikTok, a short-video app in whose Chinese parent, ByteDance, both Sequoia Capital and Sequoia China have stakes. DJI, a big Chinese dronemaker part-owned by Sequoia China, is on an American investment blacklist.Investors and bankers in China have seized on Sequoia’s decision as a sign that the country is losing important business connections with the rest of the world. The environment for foreign businesses has indeed turned dark. Raids by Chinese authorities on several Western consulting firms have put multinationals on edge. So has the glum outlook for the economy, which has been boosted less than expected by its reopening after hard pandemic-era lockdowns. Imports and exports both slumped by more than forecast in May. A two-year government campaign against China’s digital giants, though now supposedly over, has left deep scars. The Communist Party is taking ever larger stakes in promising technology companies. Fraught geopolitics and heavy-handed domestic politics are taking a toll on investments in Chinese private assets. Funds that focus on such bets raised just $25bn last year worldwide, down by 77% from the year before, according to Bain, a consultancy (see chart). Greater China’s share of fundraising relative to the rest of Asia has fallen to a 15-year low. Deal value for private equity in China tumbled by more than half last year, more than anywhere else in the region. Sequoia is unlikely to be the last to step away. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

GameStop fired CEO Matthew Furlong and appointed Ryan Cohen as executive chairman.
The company didn’t provide a reason for the termination.
Shares of the video game company dropped more than 20% in extended trading after the news was released.

Ryan Cohen from an appearance on CNBC.

GameStop fired its CEO Matthew Furlong and appointed its board chairman Ryan Cohen as executive chairman effective immediately, the company said Wednesday. 
Shares of GameStop dropped more than 20% in extended trading after the video game retailer announced the termination. It released the news on the same day it reported its revenue dropped and its loss narrowed in its fiscal first quarter compared to the year-ago period.

The company didn’t provide a reason for the firing but noted the change in its quarterly securities filing.
“We believe the combination of these efforts to stabilize and optimize our core business and achieve sustained profitability while also focusing on capital allocation under Mr. Cohen’s leadership will further unlock long-term value creation for our stockholders,” the filing states.
Cohen took a stake in GameStop in 2020, and in January 2021 he and two other former Chewy executives were named to the retailer’s board as part of an agreement with the company’s management. His investment firm, RC Ventures, currently has an 11.9% stake in GameStop, according to filings.
In a separate securities filing, GameStop disclosed Furlong was fired on Monday and said he will be permitted to receive payments and benefits “associated with a termination without cause.” Furlong also resigned from the company’s board on the same day, which reduced it to just five members.
The filing noted Cohen will be in charge of capital allocation, evaluating potential investments and acquisitions and overseeing the managers of GameStop’s holdings.

In a cryptic tweet posted about a half an hour after Furlong’s firing was announced, Cohen wrote: “Not for long.”
The activist investor and Chewy founder is known for saying very little publicly and making vague statements online.
The decision to part ways with Furlong comes just months after GameStop reported its first quarterly profit in two years while he was at the helm.

A GameStop store operates in a strip mall on March 16, 2023 in Chicago, Illinois.
Scott Olson | Getty Images

As part of the leadership shuffle, Alan Attal, a former Chewy executive and a current member of GameStop’s board, was named lead independent director of the board, the filing said.
Mark Robinson, GameStop’s general counsel, was named the retailer’s general manager and principal executive officer. His duties will include “administrative matters, corporate development, legal affairs and support for GameStop’s holdings, including the oversight of other executive officers besides [Cohen],” according to the filing.
Robinson will report directly to Cohen and will continue to serve as general counsel and secretary of GameStop.
Furlong was appointed as GameStop’s CEO in June 2021 when the company was in the early stages of a turnaround plan. The former Amazon executive was appointed as GameStop was transitioning from a longtime brick-and-mortar retailer to an online player with the ability to compete with rivals like Walmart, Sony and Microsoft. 
Prior to his tenure as GameStop’s CEO, which lasted about two years, Furlong spent nearly nine years at Amazon, most recently leading the growth of its Australia business. Prior to that, he served as a technical advisor to the head of Amazon’s North America consumer business and worked for Procter & Gamble.
Furlong could not immediately be reached for comment.
The announcement coincided with GameStop’s fiscal first quarter earnings release. In the three months that ended April 29, GameStop reported revenue of $1.24 billion, down from $1.38 billion in the year-ago period. Its net loss narrowed to $50.5 million, or 17 cents per share, from $157.9 million, or 52 cents a share, a year earlier.
Sales in United States, Canada and Australia dropped by 16.4%, 18.5% and 8.9%, respectively, compared to the year-earlier period, while sales in Europe increased 26.2% year over year, according to GameStop’s quarterly filing.
The company attributed the drop in sales to currency fluctuations, fewer significant gaming title launches and soft sales in pre-owned software and hardware and collectibles. In the collectibles category, where GameStop has the ability to drive long-term growth, sales dropped to $173 million, compared to $220.9 million in the year-ago period.
The company incurred $14.5 million in transition costs related to its restructuring efforts in Europe. It noted it will take more transition charges in the current quarter.
GameStop has improved its margins by dramatically slashing costs. Selling, general and administrative expenses came in at $345.7 million for the quarter, down from $452.2 million in the year-ago period.
In a news release, the company said it would not hold a conference call to discuss the quarter’s earnings.
Read the full earnings release here. More

Smoke from wildfires in Canada delayed flights at Northeast airports as haze blanketed the region.
The FAA slowed flights in New York, Newark and Philadelphia.
As of 5:20 p.m. ET, more than 3,000 U.S. flights were delayed, according to flight-tracking site FlightAware.

Smoke from Canada’s wildfires blanketed New York City on Wednesday, June 7, 2023.
Leslie Josephs/CNBC

Smoke from wildfires in Canada delayed hundreds flights at New York-area airports and in Philadelphia on Wednesday as haze blanketed the region and cut visibility.
“The FAA is now slowing traffic from the East Coast and Midwest bound for Philadelphia International Airport due to reduced visibility from wildfire smoke,” the agency said in a statement.

Earlier, the FAA briefly halted flights bound for New York’s LaGuardia Airport.
“The agency will adjust the volume of traffic to account for the rapidly changing conditions,” the FAA said.
Smoke drifting south from wildfires in Canada covered the New York City area on Tuesday into Wednesday, tainting air quality and sending residents indoors. As of noon Wednesday, the city ranked fourth in the world for worst air quality, with an IQAir World Air Quality Index of 158, a level considered unhealthy for all residents.
As of about 5:20 p.m. ET, more than 3,000 U.S. flights were delayed, according to flight-tracking site FlightAware.
At LaGuardia Airport, 209 departures, more than a third of the day’s schedule, were delayed as were 253 arrivals, or 44%, according to FlightAware. Nearly a quarter of flights bound for Newark Liberty International Airport were delayed, or 157 flights, and another 100 outbound flights were running behind.

Flights to LaGuardia were delayed an average of about two hours, and flights to Newark were delayed an average of 82 minutes, the FAA said. New York’s John F. Kennedy International Airport also reported both arrival and departure delays.
United Airlines said in a statement it was “monitoring the situation closely and looking out for the safety of our employees who work outside, and adjusting our schedule where needed.”
A spokesman for Delta Air Lines told CNBC that the carrier has protective equipment for staff.
“And for those who work on the tarmac, we’re having them come inside to where breakrooms are in between aircraft turns,” the spokesman said. “We are also watching the forecasts which call for rain in NYC in the days ahead which should improve the air quality.”
An American Airlines spokesperson said the company is making sure ramp workers have access to vehicles in between flights as well as other supplies like water and masks.
— CNBC’s Emma Newburger contributed to this report. More