Economy

India’s IT outsourcers have started cracking down on their workers as they try to eradicate moonlighting out of fear that staff will share corporate secrets with rivals.Many outsourcers, which do work for global businesses such as Microsoft, AstraZeneca and Vanguard, raised concerns in an unprecedented way about multiple employment on their latest quarterly earnings calls. These worries have led to a growing cottage industry of businesses offering intermittent background checks on employees to identify moonlighting.The biggest warning has come from Wipro. Chair Rishad Premji claimed last month that the outsourcer had dismissed 300 workers in a single move who were caught moonlighting. Premji has called moonlighting “cheating — plain and simple” even though it is not illegal.Tata Consultancy Services called the practice an “ethical issue” earlier this month. Infosys had said it would allow workers to take second jobs under some conditions but chief executive Salil Parekh told an investor call that the company had recently fired staff found to be moonlighting.Low wages and strong technical expertise have made India a chosen outsourcing destination for international companies. But India’s IT firms, key drivers of the country’s economy, are struggling to retain their workers’ loyalty for the same reasons. “It’s kind of top of mind right now for pretty much everyone here in India because the problem does exist and it’s large,” said Ashok Hariharan, CEO of identification verification company IDfy.While productivity losses were a concern, Hariharan said IT businesses were most worried about moonlighting employees disclosing valuable intellectual property.“What the IT sector really cares about is if they’re working in competing companies,” he said. “The risk significantly increases because your data can get out, your proprietary methodology can get out.” Although public cases of IP theft are scant, companies remain concerned about the issue.IDfy has developed machine learning software that combs sources such as freelance job websites, social media posts, court documents and other public records, as well as employees’ social security information.Companies have made particular use of tax data to catch moonlighters, unions said. “They go through the employees’ income tax filings . . . [to see] if you have a separate source of income,” said Tanmay Pereira Naik, a volunteer with the All India IT workers’ union in Bangalore.IDfy said it found evidence of moonlighting in 5-6 per cent of IT employees who have gone through its background checks. AuthBridge, another company offering moonlighting detection services, said it was seeing rates of 8-9 per cent.Workers have said that prolonged periods of downtime during shifts, the availability of casual work and difficulty making ends meet as the cost of living rises have made moonlighting an obvious choice for employees in many sectors.“At Covid time, I became the primary earner for my family,” said Dev, not his real name, who works in the IT department at a multinational bank while simultaneously holding down another job at a foreign start-up. “[The second job] allowed me to take care of myself and help my family with some additional salary.”Dev said that poor treatment of workers and the lack of significant recent pay rises would only increase moonlighting. “Big tech thinks we are slaves to them,” he said.While executives have sought to stamp out the practice, workers like Dev have a new voice in small but vocal IT unions, which are now emerging after workers feared for years that organising would lead to dismissal.Although many IT companies ban dual working in their employment contracts, “legally there is no express restriction under law as to how many jobs a person can do”, said Harpreet Saluja, president of the Nascent Information Technology Employees Senate.Indeed, Rajeev Chandrasekhar, India’s minister of state for skill development, entrepreneurship, electronics and IT, has openly supported moonlighting.“Any captive models will fade. Employers expect employees to be entrepreneurial while serving them . . . Time will come where there will be a community of product builders who will divide their time on multiple projects,” he said last month. “This is the future of work.”Government minister Rajeev Chandrasekhar supports moonlighting and says it is ‘the future of work’ © Sonu Mehta/Hindustan Times/Sipa/ReutersAs the pandemic forced companies across sectors to digitise, IT outsourcers were in hot demand. Yet they were forced to compete for talent with India’s blossoming start-up sector, which was buoyed with cheap money. IT professionals had their pick of well-paid jobs. This triggered a change in employee attitudes, according to Saluja.Now struggling to bring their workforces back to the office, IT companies have started investigating what they have branded as “two-timing”.“What has triggered [the crackdown] is the scale of resistance from employees to return to the office,” said Anil Ethanur, co-founder of specialist staffing company Xpheno. “In a declining market with fewer jobs, the resistance to return was seen as unusual and suspicious.”“With sample investigations exposing dual employment cases, the issue became real for companies as employees have wilfully violated their signed terms of employment,” Ethanur added.But unions stressed that many workers were moonlighting because “the money from their first job is not enough”, said Pereira Naik.While mid-level employees’ salaries have risen 40-45 per cent over the past decade, according to Xpheno, salaries for junior IT workers known as freshers have stagnated at around $5,000 per annum in the same period. Executive pay had increased 70-90 per cent over the decade, Xpheno added.“Juggling between two jobs, they are doing it only because they are being paid less,” said Pereira Naik. “If the employers paid a fair wage, then the need wouldn’t arise at all.” More

SAN FRANCISCO (Reuters) – South Korea’s Mirae Asset Financial Group is planning to commit about 300 billion Korean won ($208 million) to help finance Elon Musk’s $44-billion buyout of Twitter Inc (NYSE:TWTR), a person familiar with the matter told Reuters on Monday.The deal with Mirae is expected to be finalized in the coming days before the deadline for the closing of the Twitter deal on Oct. 28, the source added. Mirae Asset earlier this year invested in Musk’s rocket and satellite company SpaceX, the person said. Musk’s lawyer and Mirae Asset were not immediately available for comments. The Korea Economic Daily earlier reported Mirae Asset’s investment plan for Twitter. Analysts say Musk needs to attract more equity investors to finance the Twitter purchase and avoid further sales of his stock in electric carmaker Tesla (NASDAQ:TSLA). Earlier this month, a Delaware judge gave Musk until Oct. 28 to close his takeover of the social media platform.Tesla investors have feared the billionaire might sell more Tesla stocks to finance the deal, weighing on its shares. ($1 = 1,442.9400 won) More

TOKYO (Reuters) – Japan reiterated a warning that “full attention” should be paid to market volatility in its monthly economic report published on Tuesday, following the government’s repeated market interventions in the wake of the yen’s slide to a 32-year low.With a yen-buying operation last week estimated at a record 5.5 trillion yen ($36.95 billion), and another suspected intervention on Monday, Japan has been attempting to stem the currency’s depreciation that has jacked up costs of imported goods for households and businesses.The October economic report kept the overall assessment of the economy unchanged for a fourth month, saying it was in a moderate recovery, though it raised its view on business spending while downgrading its assessment of imports.The government also maintained a reference to the need to “pay full attention to the impact of financial and capital market fluctuations,” a warning it added in the September report.The line “mainly refers to currency exchange trends, but is also meant to warn against heightened volatility in general in other markets including stocks and interest rate moves,” a Cabinet Office official told reporters ahead of the release of the report.Authorities raised their view on capital expenditure for the first time since February, given robust spending plans shown in the Bank of Japan’s (BOJ) quarterly business survey earlier this month.The assessment on imports, meanwhile, was lowered on a shrinking shipment volume from China and other Asian trade partners, even the yen-denominated import value hit a record in September.On private consumption, which accounts for more than half of Japanese gross domestic product, the government kept its view that it was moderately picking up. Service spending was rising, but consumer sentiment has tumbled due to inflation, especially among low-income earners, the official said.To support Japan’s fragile pandemic recovery and amid falling public approval rates, Prime Minister Fumio Kishida’s government is set to release an economic stimulus package on Friday worth over 20 trillion yen.Despite the abrupt resignation of Daishiro Yamagiwa, the minister in charge of economic revitalisation, the stimulus package will be announced by end-October as planned, Kishida said on Monday.The BOJ is expected to keep ultra-low interest rates steady to support the economy in the policy meeting concluding on Friday, even at the cost of accelerating a fall in the yen.($1 = 148.8400 yen) More

TOKYO (Reuters) -The Bank of Japan is expected to raise its inflation forecasts on Friday but keep ultra-low interest rates steady in a show of resolve to support the fragile economy, even at the cost of accelerating an unwelcome fall in the yen to fresh 32-year lows.Authorities have struggled to tame the yen’s relentless declines as investors focus on the BOJ’s ultra-low interest rates that make it an outlier among a global wave of central banks tightening policy to combat soaring inflation.Given rising commodity prices and the boost to import costs from the yen’s slump, Japan’s core consumer inflation rate hit an eight-year high of 3% in September and is seen staying above the BOJ’s 2% target for the rest of this year, analysts say.But with inflation modest compared with western nations and Japan’s economic recovery still fragile, the BOJ is set to leave intact its minus 0.1% target for short-term interest rates and the target for the 10-year bond yield at around 0% at its two-day policy meeting that ends on Friday.”It’s hard to expect the BOJ to take monetary action to stem the yen’s fall as currency policy falls under the jurisdiction of the finance ministry,” said Mari Iwashita, chief market economist at Daiwa Securities.Some market participants speculate the BOJ could tweak its dovish policy guidance amid growing public discontent over the weak-yen effect of its ultra-loose monetary policy.”With the Fed determined to combat inflation, a minor policy tweak by the BOJ will do little to narrow the gap between U.S. and Japanese monetary policy,” said Iwashita.In fresh quarterly projections due on Friday, the BOJ is expected to slightly revise up its consumer inflation forecasts for the year ending in March 2023 and the following year, said five sources familiar with the bank’s thinking.The upgraded forecast will still show core consumer inflation sliding below the BOJ’s 2% target next fiscal year as the impact of one-off factors, such as past rises in fuel costs, dissipate, the sources said.The board will likely cut its growth forecasts for the current and following fiscal years, as global recession fears cloud the outlook for the export-reliant economy, they said.Investors’ attention will be focused on Governor Haruhiko Kuroda’s post-meeting briefing for his views on the economic fallout from the yen’s sharp declines, and clues on the timing of an eventual exit from the ultra-loose policy.In July, the BOJ forecast core consumer inflation to hit 2.3% in fiscal year 2022 before slowing to 1.4% the following year. It projects the economy to expand 2.4% in the current fiscal year and rise 2% in fiscal 2023. More

Energy suppliers are set to force vulnerable British households to switch to expensive prepayment electricity and gas meters at a rate of 10,000 meters a month by the end of 2022, as consumers fall behind with regular payments.Data from the energy regulator Ofgem showed the number of prepayment meters fitted in homes rising on a quarterly basis for the first time since 2019, despite government intervention aimed at shielding families from soaring wholesale gas and power prices. Price comparison website Uswitch, which obtained the figures via a freedom of information request, predicted that if the trend continued there would be 10,000 installations a month by the end of the year. That would take the total number of fitted meters to 7.5mn, up from 7.35mn in the last quarter of 2021. Some homes may have more than one meter.The increase in prepayment meters is an early sign of distress in the energy market. Although a minority of households choose to pay for their energy consumption in advance, the majority are pushed into using them by suppliers if they fall behind with regular payments. Households normally pay for their energy after using it.Fuel poverty campaigners have highlighted the risks of households “self- rationing” if they cannot afford to top up their meters. The forecasts will add to concern that many households will struggle this winter despite the government’s pledge to limit typical household energy bills to £2,500 a year until April by restricting the price per unit of electricity or gas suppliers can charge. But the cap is still almost double what the average household paid last winter. Outgoing prime minister Liz Truss originally promised the support would last two years but chancellor Jeremy Hunt last week reduced it to six months. He said the Treasury would review the policy after April and seek to target “the most vulnerable”. The cost of the original package had been estimated at £150bn. 

Richard Neudegg, Uswitch’s director of regulation, said the rise in prepayment meters suggested households were “increasingly at risk this winter”. “Families and individuals on prepayment meters will be plunged into darkness as they self-disconnect when they can’t afford to top up,” said Neudegg, as he urged the Treasury to prioritise those households in its April review.Households on prepayment meters have to pay more for their energy under Britain’s price cap because of the higher costs incurred by suppliers in servicing them.Peter Smith, director of policy at the charity National Energy Action, called the forecasts “really worrying” and criticised suppliers for often defaulting “too quickly” to installing prepayment meters “despite this often not being wanted by the customer”.EnergyUK, a trade body that represents companies including Centrica, EDF Energy, ScottishPower and SSE, said “suppliers offer a range of ways to pay for energy” and that “customers may find prepayment meters an effective way to help them manage their budget and monitor their energy usage”. More

About two-thirds of companies in the S&P 500 that reported earnings in the first two weeks of the season (Oct. 10-21) had representatives mention inflation, according to a search of conference call transcripts by FactSet.
Included among those companies are PepsiCo, Citigroup and Abbott Laboratories.
“The environment clearly is still very inflationary with a lot of supply chain challenges across the industry,” said PepsiCo CEO Ramon Laguarta.

Pepsi products are displayed for sale in a Target store on March 8, 2022 in Los Angeles, California.
Mario Tama | Getty Images

One thing is clear at the start of the corporate earnings season: Inflation remains a hot topic for companies.
About two-thirds of companies in the S&P 500 that reported earnings in the first two weeks of the season (Oct. 10-21) had representatives mention inflation, according to a search of conference call transcripts by FactSet. Included among those companies are PepsiCo, Citigroup and Abbott Laboratories.

“The environment clearly is still very inflationary with a lot of supply chain challenges across the industry,” said PepsiCo CEO Ramon Laguarta. The snack and beverage company beat analyst expectations for both revenue and earnings per share as its price hikes buoyed its bottom line, even as some units saw volume declines.

Recent economic data shows little sign of inflation letting up.
The consumer price index increased 0.4% in September, which was a hotter reading than the 0.3% expected by Dow Jones, according to the Bureau of Labor Statistics. It was at 0.6% without food and energy factored in, which was also above Dow Jones’ estimate of 0.4%.
The producer price index, which gauges wholesale prices, also rose 0.4% in September. That was similarly above the Dow Jones expectation of 0.2%.
Lingering inflation has led consumers to rethink expensive purchases as their spending power is squeezed and has also created higher costs for companies like Procter & Gamble. Last week the household goods maker of brands like Tide and Charmin posted quarterly results that narrowly outperformed analyst expectations.

“Raw- and packaging-material costs inclusive of commodities and supply inflation have remained high since we gave our initial outlook for the year in late July,” Chief Financial Officer Andre Schulten said during Wednesday’s conference call. “Based on current spot prices and latest contracts, we now estimate a $2.4 billion after-tax headwind in fiscal 2023.”
The company was among a handful of multinationals that said inflation abroad was chomping at international bottom lines as well as in the U.S. Citigroup and Pool, which distributes pool supplies, both said inflation in Europe hurt their businesses in the previous quarter.
Pool said total construction volume would likely be down in 2022 compared to 2021, though it beat expectations for the quarter.
Inflation is also making it harder for some companies to fill positions. Human resources company Robert Half said the workforce remains tight, while Snap-On said wages had to continue growing to get skilled workers. To be sure, Union Pacific said crew availability continued to improve and HCA Healthcare said it could lean less on contract workers to fill voids.
This year’s inflationary pressure have led to multiple rate increases from the Federal Reserve. It is expected to keep hiking until the end of 2022, at least.
On the fiscal side, the government passed the Inflation Reduction Act earlier this year.
Multiple companies said the Inflation Reduction Act would likely help their outlook, with those who emphasize green energy poised to benefit from the legislation’s tax credits for alternative energy forms.
Electric vehicle maker Tesla said it was too early to predict specific impacts on demand, but they did expect to benefit from the legislation’s benefits for consumers who migrate away from gas-powered cars. The company beat earnings per share expectations for the third quarter but revenue came in lower than analysts anticipated.

How long will pressures last?

Predictions about how long these pressures will last varies with the executives being asked for their opinion.
“Inflation continues to be a stubborn force globally, though we’ve started to see some moderating impacts in certain areas of our businesses compared to earlier in the year,” Abbott CEO Robert Ford said Oct. 19. The science company beat expectations for the quarter with per-share earnings nearly 23% higher than expected.
Manufacturing company Dover also said inflation has come down compared to the past year and a half, specifically pointing to the company’s decreasing costs related to logistics and raw material. That view is in line with that of some economics experts, who said “soft” inflation gauges are falling faster than the main indicators the Fed favors like the consumer price index which can lag.
“Clearly, we have some caution in terms of what’s going to develop in the marketplace,” said Dover CEO Richard Tobin on Oct. 20. “I fundamentally disagree with what the Fed is doing now.”
Others weren’t as upbeat, though. Whirlpool and Tractor Supply Company both said inflation should persist at the current level for the first half of 2023 before cooling. Tractor Supply beat per-share earnings but missed on sales, while Whirlpool came in below expectations for per-share earnings by about 16%.
“Inflation remains persistent and elevated, and we anticipate this to continue well into 2023 with some moderation in the back half of 2023,” Tractor Supply CEO Harry Lawton said.

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Keen to avoid Britain’s recent mini-budget debacle, Treasurer Jim Chalmers has said officials have worked to ensure fiscal and monetary policies are aligned in the budget to support the Reserve Bank of Australia’s fight against soaring inflation.”This budget will be solid, sensible and suited for the times. It will recognise that in a time of extreme global uncertainty, our best defence is a responsible budget at home,” Chalmers told reporters in Canberra on Tuesday.”It will understand that even though these economic pressures are coming at us from around the world, they’re felt most acutely around the kitchen table,” he said, adding taming inflation will be his primary focus.Chalmers is expected to reveal just over A$40 billion ($25 billion) in improvements to the budget bottom line over four years, Australian media reported. The treasurer’s office did not immediately respond to a request seeking comment. Prime Minister Anthony Albanese said the budget will provide cost of living relief without putting pressure on inflation. Chalmers, in an interview with ABC Radio Brisbane on Monday, reiterated that fiscal prudence will underpin his spending plans and that though there would be cost-of-living relief in the budget, he said it would be “pretty responsible, pretty restrained.”He warned recently that a slowing global economy, in particular the sputtering Chinese property sector, will hit growth in Australia which is enjoying its lowest unemployment rate since the 1970s.Domestically, the slackening growth also reflects the worldwide phenomenon of sky-high inflation rates, which have cut into household spending and overall consumption.Budget papers are set to show gross domestic product (GDP) growth for the fiscal year ending June 30, 2024 will be downgraded to 1.5% from the 2.5% forecast in April. GDP growth is also due to be downgraded to 3.25% from 3.5% for 2022-2023, according to draft figures from the Treasury on Monday. The budget deficit will be much smaller than first feared thanks to high prices for many of Australia’s major commodity exports and a surprisingly strong labour market. Analysts are tipping the 2022/23 deficit will range from A$25 billion to A$45 billion, or around 1-1.5% of gross domestic product and relatively frugal by international standards.($1 = 1.5853 Australian dollars) More

(Reuters) – Kinder Morgan Inc (NYSE:KMI) reported a 16.4% rise in quarterly profit on Wednesday, as the U.S. pipeline operator benefited from higher natural gas pipeline earnings and improved margins from crude oil, gas-liquids and carbon dioxide transport businesses.Earnings from natural gas pipelines rose 6% to $1.16 billion in the reported quarter, primarily on increased volumes on the KinderHawk gathering system.”Our Natural Gas Pipelines segment continues to see strong demand for the extensive firm transport and storage services we offer, as well as favorable contract renewals on multiple assets across our network,” Chief Executive Officer Steve Kean said.The Texas-based company posted a net income of $576 million, or 25 cents per share, for the third-quarter ended Sept. 30, compared with $495 million, or 22 cents per share, a year earlier. More