News

Fashion platform The Iconic has launched The Iconic x FNFD Incubator Program for First Nations designers.

The collaboration is an extension of The Iconic’s long-term cooperation with FNFD (First Nations Fashion + Design), which combines the brand’s e-commerce experience and worldwide network as part of Global Fashion Group (GFG), with the insight and perspective FNFD provides from their community participation and industry impact.

The 2023 Incubator Program was created as a prototype to establish the tone for young creatives. Fashion designers, jewellery and accessory designers, graphic artists, and textile artists from various backgrounds and generations are eligible for the program.

“Interest in First Nations fashion has exploded in recent years, with designers like Nungala Creative and Clothing the Gaps piquing the interest of the mainstream with considered, sustainable and beautiful designs that pay respect to country and culture,” said Grace Lillian Lee, founder and CEO at FNFD. 

The Iconic says the collaboration is an important aspect of the brand’s Indigenous Engagement strategy, which was recently unveiled as part of The Iconic and GFG’s People & Planet Positive vision. The 2030 strategy offers five strategic pillars that are intended to achieve positive environmental and social transformation while also caring for its people.

Expressions of Interest for the co-designed Incubator Program are now being accepted until January 15 but may close early due to overwhelming demand. People can learn more via this website. 

In August, The Iconic debuted a new feature that allows consumers to resell previous purchases in collaboration with the re-sale platform AirRobe.

Rapid grocery start-up Milkrun held talks with global transportation giant Uber about a strategic partnership in one of several moves it considered during a tumultuous year for loss-making delivery companies.

The closely watched Sydney-based start-up also had preliminary discussions with supermarket chain Coles and gig economy food delivery firm Deliveroo about potential ways to co-operate. Those talks did not result in any agreements, and Deliveroo pulled out of Australia last month.

Milkrun’s predicament has been a hot topic in Australia’s close-knit start-up scene, with widespread rumours swirling about a possible deal with Uber, the dominant player in food delivery. Multiple sources said the two companies held talks earlier this year, but cautioned that there is no guarantee that they will result in any formal agreements.

It is common for fledging firms to discuss partnerships or seek investment from larger rivals, and for larger firms to meet with smaller companies to better understand the market.

Company documents obtained by this masthead earlier this year showed Milkrun was bleeding cash, which it planned to stem by ditching ultrafast deliveries and reducing riders’ average hourly pay.

The food delivery sector has been hit by turmoil this year with investors increasingly unwilling to fund loss-making businesses as the economy sours. In recent months two of Milkrun’s rivals, Voly and Send, both ran out of money and ceased operating.

This masthead can also reveal that DoorDash, the US-based gig economy giant that launched a Milkrun competitor in Australia called DashMart last month, laid off some of the employees who worked on the initiative as part of a round of global job cuts.

“The positions do not affect any single team,” a DoorDash spokeswoman said. “While some of the affected employees are based in Australia, this does not affect our presence or commitment to DashMart in Australia overall.”

Several industry sources said Milkrun had briefly held talks with Deliveroo and Coles about ways to potentially collaborate, including by getting Milkrun’s products on Deliveroo’s app. But its discussions with Uber were more substantial, the sources said.

In a wide-ranging interview in October, Uber’s global chief executive Dara Khosrowshahi was sceptical about the prospects of firms like Milkrun, which had sprung up on several continents only to flounder.

“I think that the business model can work but it will be very expensive in order to build up a customer base,” Khosrowshahi said. “And right now, markets are penalising expensive business models. So I think that those companies are going to be challenged right now.”

Uber already has a presence in the grocery delivery market via a partnership with Woolworths called Metro60.

But the company has used the Australian market as a breeding ground for global product initiatives. Earlier this year it acquired Australian start-up Car Next Door, which is now forming the backbone of an international expansion into vehicle sharing.

Milkrun is the best-funded local delivery start-up, and raised $75 million from a host of prominent backers in January. It used the money to build a network of mini-warehouses in Sydney and Melbourne, enter new product areas such as alcohol, and create a confident, irreverent brand in a distinct shade of blue.

Filings with the Australian Securities and Investments Commission indicate Milkrun has not raised any fresh equity since then.

Milkrun chief executive Dany Milham did not respond to requests for comment. In June Milham said the company was in a “comfortable” financial position, growing rapidly, and predicted some of its stores would soon be profitable.

Milkrun’s total headcount, according to figures from the professional social network LinkedIn, which relies on users to update their employment status and is therefore useful as a guide only, is down 6 per cent in the last six months. But Milkrun is still advertising for a handful of open roles.

Uber and Coles declined to comment. Deliveroo no longer has Australian spokespeople.

Peter George has been appointed as the new chairman of the board and non-executive director of pureplay online book retailer Booktopia.

He replaces outgoing chairman Chris Beare who resigned after announcing his intention in September. His departure bookends a turbulent time for the company whose founder Tony Nash was ousted in a boardroom stoush which eventually led to the resignations of most of the board’s directors over several months.

George has extensive experience and background in telecommunications, media and corporate finance. He has been executive chairman of Retail Food Group since 2018, a role he will continue to hold simultaneously.

“Booktopia’s strong market position and loyal customer base mean it has huge potential for further growth,” said George.

The Booktopia board now comprises George, Booktopia co-founder Tony Nash and executive director Steve Traurig.

Amazon plans to lay off approximately 10,000 people in corporate and technology jobs starting as soon as this week, people with knowledge of the matter said, in what would be the largest job cuts in the company’s history.

The cuts will focus on Amazon’s devices organisation, including the voice-assistant Alexa, as well as at its retail division and in human resources, said the people, who spoke on condition of anonymity because they were not authorised to speak publicly.

The total number of layoffs remains fluid. But if it stays around 10,000, that would represent roughly 3 per cent of Amazon’s corporate employees and less than 1 per cent of its global workforce of more than 1.5 million, which is primarily composed of hourly workers.

Amazon’s planned retrenchment during the critical holiday shopping season – when the company typically has valued stability – shows how quickly the souring global economy has put pressure on it to trim businesses that have been overstaffed or under delivering for years.

Amazon would also become the latest technology company to lay off workers, which only recently it had been fighting to retain. This year, the e-commerce giant more than doubled the cap on cash compensation for its tech workers, citing “a particularly competitive labour market”.

Changing business models and the precarious economy have set off layoffs across the tech industry.

Tech sector layoffs

Elon Musk halved Twitter’s head count this month after buying the company, and last week Meta, the parent company of Facebook and Instagram, announced it was laying off 11,000 employees, about 13 per cent of its workforce. Lyft, Stripe, Snap and other tech firms have also laid off workers in recent months.

Brad Glasser, an Amazon spokesperson, declined to comment.

The pandemic produced Amazon’s most profitable era on record, as consumers flocked to online shopping and companies to its cloud computing services. Amazon doubled its workforce in two years, and funnelled its winnings into expansion and experimentation to find the next big things.

But earlier this year, Amazon’s growth slowed to the lowest rate in two decades, as the bullwhip of the pandemic snapped. The company faced high costs from decisions to overinvest and rapidly expand, while changes in shopping habits and high inflation dented sales.

Amazon experienced a slight rebound in its latest quarter. But it has cautioned investors that growth could weaken again, possibly falling to its lowest pace since 2001.

The company has told Wall Street that it has tightened its belt in the past and can do so again. Last week, Amazon executives met with institutional investors, according to three people, just as its stock sank to its lowest level since the early days of the pandemic, erasing $US1 trillion ($1.5 trillion) in value since Andy Jassy took over as CEO last year.

Trimming costs

Mr Jassy, who previously ran Amazon’s lucrative cloud computing business, has been closely scrutinising businesses to trim costs quickly. He initially pulled back on a warehouse expansion that was supercharged during the pandemic, then moved to other parts of the company.

In recent months, Amazon has also closed or pared back a smattering of initiatives, including Amazon Care, its service providing primary and urgent health care that failed to find enough customers; Scout, the cooler-size home delivery robot, that employed 400 people, according to Bloomberg; and Fabric.com, a subsidiary that sold sewing supplies for three decades.

From April through September, it reduced head count by almost 80,000 people, primarily shrinking its hourly staff through high attrition.

Amazon froze hiring in several smaller teams in September. In October, it stopped filling more than 10,000 open roles in its core retail business. Two weeks ago, it froze corporate hiring across the company, including its cloud computing division, for the next few months.

That news came so suddenly that recruiters did not receive talking points for job candidates until almost a week later, according to a copy of the talking points seen by The New York Times.

Echo, Alexa restraint

Devices and Alexa have long been seen internally as at risk for cuts. Alexa and related devices rocketed to a top company priority as Amazon raced to create the leading voice assistant, which leaders thought could succeed mobile phones as the next essential consumer interface.

From 2017 to 2018, Amazon doubled staff on Alexa and Echo devices to 10,000 engineers. At one point, any engineer getting a job offer for other Amazon roles was supposed to also get an offer from Alexa.

The company has sold hundreds of millions of Alexa-enabled devices. But Amazon has said the products are often low margin and other potential revenue sources such as voice shopping have not caught on.

In 2018, Echo and Alexa lost about $US5 billion, said a person with knowledge of the finances. When Amazon introduced new devices this fall in an annual event, it was notably more restrained than past years when it had featured zany products such as a sticky note printer and $US1000 home robot.

Deliveroo Australia’s 150 employees and 14,000 drivers have been suddenly left without work after the company announced it had entered voluntary administration and was no longer taking orders.

In an email sent to Australian customers on Wednesday afternoon, the UK-headquartered company said it had decided to pull out of Australia.

“Deliveroo Australia has ceased operations, meaning you can no longer place orders on Deliveroo in Australia,” the email said.

“Deliveroo, like all other companies, is now doing business in challenging economic conditions, which requires us to take difficult decisions.”

Drivers are not considered employees of Deliveroo and are technically contractors, meaning they do not get employee entitlements.

Entitlements to staff directly employed by Deliveroo Australia will receive higher priority than drivers or contractors, who are considered “unsecured creditors” in the administration process.

Deliveroo Australia staff will receive an initial compensation payment within the first eight days of liquidation, with the second to be paid after the second creditors’ meeting.

A spokesperson for Deliveroo Australia said any driver who had completed a delivery in the past three months was eligible for four weeks of compensation pay. The compensation will be calculated according to the driver’s average weekly earnings across the past 12 months.

Deliveroo admitted it had been unable to compete with other players in the Australian food-delivery market, such as Uber Eats, Menulog and Doordash, and the company’s total global earnings had taken a hit from keeping the Australian business operating.

The London Stock Exchange-listed company entered the Australian market in 2015, but failed to retain market share against its competitors.

The $3.1 billion company said in a media statement it had decided it would not be able to achieve the “sustainable and profitable scale in Australia without considerable financial investment”, and the returns would not outweigh the investment.

The business will permanently cease trading and has appointed KordaMentha’s Michael Korda, Andrew Knight and Craig Shepard as voluntary administrators. “Administrators had no alternative but to cease operations immediately in the absence of financial support,” Michael Korda said in a statement.

The Transport Workers Union, a fierce advocate for gig economy workers, is attempting to call a meeting with KordaMentha to discuss workers’ entitlements and data protection.‘Transport workers were hit first and hardest by the gig tsunami and are now being left high and dry by Deliveroo at the first indication that it can’t rely on exploitation to make profits’

“This will be a shock to the thousands of food-delivery riders who rely on Deliveroo for income,” said TWU national secretary Michael Kaine.

“These are workers that have been ripped off minimum wage and other rights, and put under deadly pressure to prioritise speed over safety when delivering food.

“Transport workers were hit first and hardest by the gig tsunami and are now being left high and dry by Deliveroo at the first indication that it can’t rely on exploitation to make profits.”

The union has previously criticised Deliveroo for forcing its food-delivery drivers to work for below-minimum pay and denying them superannuation.

Deliveroo chief operating officer Eric French said the decision to pull out of Australia was “not one we have taken lightly”, and thanked employees, customers, drivers and restaurant partners.

“Our focus is now on making sure our employees, riders and partners are supported throughout this process.”

“Certain restaurant partners” might also be eligible for compensation payments as the company worked on putting together compensation packages to creditors, the company said.

KordaMentha will hold a meeting for Deliveroo Australia’s creditors next Monday to provide them with an update. A second meeting will be held a month later, where creditors will vote on the Deed of Company Arrangement put forward by Deliveroo.

Elon Musk gave Twitter employees a deadline of 5pm US Eastern time on Thursday to decide if they wanted to work for him, and he asked those who did not share his vision to leave their jobs, in his latest shock treatment of the social media company.

Musk made the announcement in an early morning email to employees on Wednesday; The New York Times obtained the message, which had the subject line “A Fork in the Road.” In the note, Musk, 51, reiterated that Twitter faced a difficult road ahead and offered employees three months of severance if they did not want to continue working there “to build a breakthrough Twitter 2.0.”

The billionaire has been unrelenting in rapidly transforming Twitter since completing his $US44 billion ($65 billion) acquisition of the company nearly three weeks ago. Musk swiftly slashed half of Twitter’s 7500-person workforce, dismissed thousands of contractors, fired employees who had criticised him and trimmed infrastructure costs. He has also proclaimed that Twitter needed to make more money or it faced bankruptcy. And he has pushed on subscription products and alternately wooing and insulting Twitter’s advertisers.

Giving remaining employees a deadline to leave has the dual effect of allowing Musk to further cut costs and purge the company of disgruntled workers. Musk has brought in a circle of confidants and employees from some of his other companies, such as the electric carmaker Tesla, to advise him at Twitter.

Musk and Twitter did not immediately respond to requests for comment.

In his note to Twitter employees on Wednesday, Musk said they would need to work hard — very hard. “In an increasingly competitive world, we will need to be extremely hardcore,” he wrote. “This will mean working long hours at high intensity. Only exceptional performance will constitute a passing grade.”

Engineering would be the primary focus, Musk added, with design and product management taking a back seat. He included a link to an online form asking employees to confirm their interest in working at Twitter by 5pm Eastern time Thursday.

Many Twitter employees have openly balked at Musk’s leadership, and the company’s workforce could be further reduced if many workers accept the offer to leave. On Tuesday, Musk fired nearly two dozen workers who had been critical of his leadership in posts on Twitter or on the company’s internal messaging service, Slack.

Departing staff members have questioned whether Musk can keep Twitter operating effectively with a drastically reduced workforce. During the mass layoffs this month, Musk’s team made deep cuts to the group that maintained Twitter’s core infrastructure. Top executives overseeing product, security and ad sales have resigned. And the reductions of the contract workforce included the dismissals of people working on content moderation and child safety issues.

Twitter could face a test of how well it runs as soon as next week, when the World Cup is expected to bring a flood of visitors to its service. The additional strain on infrastructure could cause problems.

Features that are priorities to Musk have also been delayed. As advertisers have shied away from Musk’s leadership, he has focused on adding new revenue from subscriptions through products such as Twitter Blue, which would include selling verification check marks for $US8 a month. The paid verification feature debuted this month but was paused after impersonators used it to mimic major brands and spread misinformation.

On Tuesday, Musk said in a tweet that Twitter Blue’s debut would be delayed until November 29 to make sure that it was “rock solid.”

On Wednesday, Musk appeared in a Delaware court to testify in a case over his compensation as CEO of Tesla. After being asked about his commitments to Twitter and claims that he was sleeping at the company’s office, he said he did not expect to commit as much time to the social media company in the future.

The “restructuring” at Twitter would be done by the end of the week, he testified.

While technology and growth stocks have been punished throughout the year, fears of a recession have further dampened sentiment in the sector. The top five US technology companies by revenue have seen nearly $US4 trillion in market value evaporate this year.

The world’s largest online retailer has spent this year adjusting to a sharp slowdown in e-commerce growth as shoppers resumed pre-pandemic habits. Its shares have fallen almost 50 per cent amid slowing sales, soaring costs and a jump in interest rates.

Since the start of the year, co-founder Jeff Bezos has seen his fortune dwindle by about $US83 billion to $US109 billion, according to data compiled by Bloomberg.

Last month, Amazon projected the slowest revenue growth for a Christmas quarter in the company’s history as shoppers reduce their spending in the face of economic uncertainty.

That sent its market value below $US1 trillion for the first time since the pandemic-fuelled rally in tech stocks more than two years ago.

Amazon on Thursday forecast a slowdown in sales growth for the holiday season, disappointing Wall Street and warning that inflation-wary consumers and businesses had less money to spend.

Amazon’s 12 per cent extended-trade stock drop erased about $140 billion in its market capitalisation, greater than the entire value of companies such as Morgan Stanley, Netflix and Lockheed Martin.

For months, the world’s biggest online retailer has fought against troubling macroeconomic tides. It hosted not one, but two cornerstone sales events in a year: Prime Day in July, and the Prime Early Access Sale this month.

For the summer event, it sold more items than ever before to its Prime loyalty shoppers, and, meanwhile, the company sought revenue from higher Prime subscription fees and a surcharge on some merchants.

Net sales were $127.1 billion in the third quarter that ended Sept. 30, still a little lower than the $127.5 billion analysts expected, according to IBES data from Refinitiv.

But the macro outlook has not brightened. In a call with reporters, Amazon Chief Financial Officer Brian Olsavsky said the company was bracing for slower economic growth.

“We are seeing signs all around that, again, people’s budgets are tight, inflation is still high, energy costs are an additional layer on top of that caused by other issues,” he said. “We are preparing for what could be a slower growth period, like most companies.”

European consumers in particular have spent less than their American counterparts, pinched by the war in Ukraine and higher fuel costs, which likewise increased Amazon’s expenses, he told reporters and analysts. The company’s international-segment operation loss widened to $2.5 billion in the third quarter from $0.9 billion a year prior.

While Amazon would continue to fund earlier-stage businesses like its lucrative cloud-computing and advertising divisions, it would question costs elsewhere and proceed carefully on hiring, Olsavsky said.

Wedbush Securities analyst Michael Pachter said, “It’s possible that retail sales will decline year-over-year. I don’t actually believe that will happen, but the market definitely doesn’t like it.”

Amazon forecast net sales of between $140 billion and $148 billion, or growth as little as 2 per cent from a year earlier. Analysts were expecting $155.2 billion.

Prior holiday quarter sales growth was 9 per cent in 2021 and 38 per cent in 2020.

Cloud misses

Across the retail sector, US online sales are expected to rise at their slowest pace in years this holiday season. Consumer goods company Unilever PLC likewise believes “sentiment in Europe is at an all-time low,” its chief financial officer said earlier.

Results in the tech industry were just as poor this week for cloud-computing rivals Microsoft Corp and Alphabet Inc’s Google, adding to recession fears. US consumer confidence did a U-turn in October.

“Big tech companies are not impervious to slowdowns in the economy, particularly if they are consumer driven,” said Rick Meckler, partner at Cherry Lane Investments in New Jersey.

Amazon Web Services (AWS), the company’s lucrative data-storage and computing division serving enterprises, only helped so much. While it provided much-needed operating income, just like rival Microsoft’s Azure cloud, Amazon fell short of estimates.

Amazon’s cloud sales growth has ticked down consistently in the past year. Net sales there grew 28 per cent in the July-September period versus 39 per cent a year earlier, when adjusted for changes in foreign exchange.

Paolo Pescatore, analyst at PP Foresight, said, “With so much unpredictability there is huge concern, which is impacting confidence among enterprises to invest. In turn, it is hitting the broader cloud sector and companies such as AWS and Azure.

Facing high inflation and receding consumer demand, Amazon’s Chief Executive Officer Andy Jassy has raced to control costs across the company’s vast array of businesses.

Amazon has slowed warehouse openings and refrained from filling some open positions. It announced it would shut down its virtual healthcare service by year-end, and it is scaling back a long-touted effort to deliver goods via small autonomous sidewalk cars

Still, worldwide shipping costs grew 10 per cent in the third quarter to $19.9 billion. Amazon’s net income also decreased to $2.9 billion in the third quarter, while beating analysts’ average estimate of a $2.2 billion profit, according to IBES data from Refinitiv.

In a statement, Jassy said, “There is obviously a lot happening in the macroeconomic environment, and we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets.”

Home Affairs Minister Clare O’Neil has stunned the technology industry by introducing skilled migration rules the peak body says will make it harder to bring in cyber experts, software engineers and technology developers, amid a cyber crisis and well-documented skills shortage.

Last week as the data breach crisis at health insurer Medibank was unfolding, Ms O’Neil introduced a ministerial direction to change how migration agents prioritise skilled visa applications. The direction removed 27 job roles – including ICT security specialists – from the Priority Migration Skilled Occupation List (PMSOL).

The move by Ms O’Neil, who is also the cybersecurity minister, came as part of a broader shake-up of skilled visa processing, which aims to prioritise fixing talent shortages in health, education and across regional Australia.

However, it has shocked industry as the spate of recent cyber breaches, headlined by Optus and Medibank, has shown the need for companies to bulk up on cyber expertise.

Ms O’Neil said the changes would speed up visa processing times across all categories including cybersecurity and tech. However, Tech Council of Australia boss Kate Pounder and Council of Small Business Organisations of Australia chief Alexi Boyd disagreed, and expressed alarm at the sudden change made without industry consultation.

In mid-2014, Jordan Catalano and Tom Hywood took a leap and did what most men in their 20s wouldn’t: they went into competition against their fathers.

Catalano and Hywood, the sons of then Domain boss Antony Catalano and Fairfax Media chief executive Greg Hywood, could see an opportunity to make money from specialising in selling off-the-plan apartments. They launched AD Group, a business that has since expanded to offer developers and sales agents technology that helps track transactions.

“I was studying entrepreneurship at uni and in the very early stages of house hunting,” Catalano said. “The market was going pretty strong, but there wasn’t a dedicated portal to buy off-the-plan property. When we first approached developers, they were crying out for their own portal. The bread and butter for the two major [portals] was always established real-estate.”

This week the business sold for $32 million. The deal, worth $8 million in cash and $24 million in scrip, will bring AD Group into View Media Group, a collection of real-estate companies amalgamated by billionaire Alex Waislitz and his business partner, Antony Catalano, over the past year.

The 31-year-old co-founders said there were options to sell in previous years, but the timing wasn’t right. Catalano said VMG was a “natural fit” because of the group of companies that formed it.

“We kind of put the cart before the horse and were working with Real Estate View and The Today Business long before this deal happened. We already knew each other. It made sense,” he said.

Catalano’s father, Antony Catalano, who now runs a raft of regional newspapers including The Canberra Times and Newcastle Herald, has spent the past few years bringing together VMG, a real-estate company that offers agencies solutions that make it easier to sell to buyers.

His group owns 72.6 per cent of Australian property site realestateview.com.au, property tech company The Today Business, a shareholding in utility connections platform Beevo and is a major shareholder in data and AI business Propic. The group recently received investment from Seven West Media, a deal which gives it free advertising across Seven’s television network.

Antony Catalano said the early success of his son and Hywood was bittersweet.

“It’s naturally a proud feeling to see your children succeed, but this had some interesting twists and turns at the start,” he said. “Much of Fairfax’s future would hinge on the growth of Domain and suddenly, our sons tell us they are setting up in competition to us. That made for some interesting dinner table conversations.”

AD Group began as a property portal for off-the-plan apartment developments and house and land sales with about $200,000 funding from a range of investors, many of which worked in development. Hywood said VMG’s ties to the media sector through Seven and ACM would help AD Group reach more people.

That scale will help Hywood and Catalano to expand the business beyond the east cost, where it predominantly operates. “Watching Seven West Media jump on board and having ACM there gives us access to these huge audiences... is very enticing to a business like ours,” Hywood said.

Like most businesses, AD Group is not immune to broader economic challenges the country is facing. For portals such as Domain and REA Group, rising interest rates have had a direct impact on commercial and residential property prices. Catalano said interest rates were not a major issue, but the cost of building was having a substantial impact on project launches.

Hywood said he was unfazed by the challenges facing the sector. “I’m super bullish,” Hywood said. “Developers are always going to develop, builders will always build and people will always want to purchase or invest in property in desirable living areas. Once interest rates plateau and a new normal is realised… there are certainly greener pastures ahead of developers, who are our customers.

“As long as there are cranes in the sky, and developers continue building upwards rather than outwards, we will be sweet.”