FTI Consulting News Bytes – 19 May 2023

This week’s news

Tech skills shortage amongst key factors delaying UK digital transformation

New research commissioned by global digital transformation solutions company, UST, reveals that 33% of large UK companies (average turnover of £9 billion) cite a lack of technical skills in-house and legacy IT systems as key factors delaying digital transformation efforts. The research surveyed 200 senior decision-makers from diverse industries, Business Leader reports. When asked about the key benefits of digital transformation, the respondents rated building resilience to cope with future disruption highest (41%). Praveen Prabhakaran, Chief Delivery Officer and UK Managing Director at UST, re-iterated the need for continued investment in technology capabilities which are “vital for improving sustainability”, particularly given the increasing pressure on companies to meet net zero targets.

Vice Media announces plans to sell

The Financial Times has covered Vice Media’s decision to file for bankruptcy following flat revenue results and declining retention figures of its younger audiences. The group once boasted of an audience of millions of younger readers through social media networks such as Facebook and Instagram. However, recent changes by the likes of Meta in digital advertising strategies, less use of third-party apps and the emergence of TikTok have left the media startup lagging behind. Vice’s peers have succumbed to the same fate, with Buzzfeed closing its news operations and Vox being forced to make staff cuts. The article added audiences were now returning to the use of more traditional media groups instead of traffic referrals. Vice’s co-chief executive officers Bruce Dixon and Hozefa Lokhandwala, said: “This accelerated court-supervised sale process will strengthen the company and position Vice for long-term growth.”

European startups need more love 

Sifted writes that, according to new research produced by analysts PitchBook, late-stage valuations of European startups (Series C+) have fared substantially worse this year than in previous years. Amid the downturn, research showed early-stage valuations of startups had remained strong with the average angel valuation standing at €7m, while seed-stage startups were valued at €10m and early stage at €32m. The wider VC landscape remains tough with VC funding into European startups continuing to decline, reaching only €11.8bn in Q1 2023, down 32% on last quarter and 65% in Q1 last year. Nalin Patel, lead PitchBook analyst predicted the valuations of 2021 and 2022 may not be met in the near future, suggesting, “that [the] record year probably won’t be eclipsed in the next few years.” The Sifted article also referenced the likes of Revolut whose shareholders have written down its valuation in recent months as a further example of the downturn.

Government minister’s facial recognition fiasco: UK gets ready to say cheese  

UK’s Minister for Policing, Chris Philp, is pushing for a country-wide rollout of facial recognition technology despite concerns about its accuracy and legality. In closed-door meetings, Philp expressed his desire to expand the use of controversial systems by law enforcement, ignoring critics who argue that the technology violates privacy and human rights. The Times added that the UK’s data protection and information bill will seek to remove the requirement for a surveillance camera code of practice and abolish the role of a surveillance camera commissioner. However, the use of facial recognition has faced widespread criticism; The Guardian reported on EU’s plans to ban it in public spaces through its upcoming Artificial Intelligence Act last week. Despite previous rulings that deemed trials of facial recognition software by South Wales Police as unlawful, the force continues to employ the technology. Recent developments have seen privacy campaigners and independent researchers weighing in, condemning the plans for its inaccuracy and bias, particularly against darker-skinned individuals. Likewise, human rights campaigners such as Liberty are calling for safeguards to ensure the legal and responsible use of this technology.

New Vodafone CEO sets out restructuring process to revive the company

Global telecoms providers Vodafone, in their latest set of results alongside the new Chief Executive Margherita Della Valle’s, unveiled their new strategy to restore growth, writes The Guardian. Following a disappointing set of full-year results, the company revealed plans to cut 11,000 jobs globally over the next three years (roughly 10% of the workforce) as it aims to restore investor confidence. The recently appointed CEO, and former CFO, said Vodafone’s performance had “not been good enough” and will be focusing on “simplifying the organisation” to regain the Group’s competitiveness. In what has been a busy few months at the helm, Della Valle also reiterated the company’s intention to merge the UK division with Three UK; a deal believed to be close pending CMA approval. Sky News also reported that the company has picked advisers to help sell a stake in its IoT division as it “bets on a rapid global expansion of connected devices amid growing investor interest in the space.”

Top Tweets of the Week

• Linda Yaccarino, CEO of Twitter: Thank you @elonmusk! I’ve long been inspired by your vision to create a brighter future. I’m excited to help bring this vision to Twitter and transform this business together!
• Dan Serter, Host of the Secret Leaders podcast: Today in A.I: Sam Altman, the CEO of OpenAI and founder of ChatGPT is facing a senate hearing over the safety and regulation of A.I
• Ashley Armstrong, Business Editor at The Sun: Is BT the first big British company to make job cuts directly linked to AI replacing them? Telecom is axing 55,000 jobs – 10,000+ of them due to advances in artificial intelligence replacing roles. It has already been using AI for the past two years for its chatbot “Amy”

Number of the Week

$12.7bn  – The investment Amazon plans to make in cloud infrastructure in India by 2030, joining other global big tech firms in betting on growth in the South Asian nation’s digital economy – according to Bloomberg.

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