Brexit, IMF, the “big four”, AstraZeneca trial, FIFA, Viagogo, Greggs: your commercial news round-up

Keeping up with news affecting the business and legal world can be daunting on an ‘ordinary’ day or week, so this week’s commercial round-up is designed to pick out some of the most relevant, important and pressing issues that are facing the business and legal world as we speak.

• David Frost, the UK’s chief Brexit negotiator and Michel Barnier, chief EU negotiator will continue Brexit trade talks virtually, with week-long negotiations starting on 20 April, 11 May and 1 June. The government continues to refute the notion that the 31 December deadline to reach an agreement should be extended as a result of coronavirus. In a statement, the Prime Minister Boris Johnson’s official spokesperson stated that “it is written in law that the transition period will end on 31 December”, while confirming that there are no plans to move the deadline.

“June is a period in which we can take stock in relation to how the negotiations are progressing so far”, he added.

• The International Monetary Fund’s (IMF) chief has confirmed that half of the world’s countries have requested a bailout from the IMF in light of the severity of the global economic downturn.

Following the IMF’s announcement earlier in the week that it expects the global economy to shrink by 3% this year – the steepest downturn since the 1930s – Managing Director Kristalina Georgieva told the CNBC: “This is an emergency like no other. It is not because of bad governors or mistakes.

“For that reason, we are providing funding very quickly.” She added: “We are asking for one thing only: please pay your doctors and nurses, make sure that your health[care] systems are functioning and that vulnerable people and first responders are protected”. While Georgieva explained that the global economy could grow by 5.8% in 2021 if the virus is contained and new cases begin to subside, she added that if the virus takes a “double trip” around the world, the economic outlook could be worse.

• The Financial Conduct Authority (FCA) has found that most UK businesses do not have the correct insurance coverage to permit a payout during a pandemic, it revealed in an open letter to insurance chief executives on Wednesday.

• Oasis and Warehouse, two British fashion retail chains, have collapsed into administration, resulting in the immediate loss of 200 jobs and putting another 1,800 jobs at risk. A spokesperson has revealed that the government’s furlough scheme has been implemented, effecting 1,800 of the store’s employees, with 41 head office staff being retained during the group’s endeavour to recover the business.  

• Following the collapse of advertising revenue for news industries, on Wednesday 15 April the Guardian, Financial Times and The Telegraph announced that they will be furloughing dozens of employees. Guardian Media Group (GMG) has revealed that due to the collapse in advertising it is likely that revenue will fall by £20 million for the first six months of the financial year. In light of these figures, GMG – which runs the Guardian and Observer – has furloughed around 100 non-editorial staff and implemented a voluntary reduced hours scheme. Over the past two weeks 90 employees at The Telegraph have been furloughed, with a four-day week being introduced from 1 May, as well as a 20% drop in pay for non-editorial staff. The Financial Times has also confirmed that it will cut salaries by 10% for top managers and editors, in addition to reducing pay for board members by 20%. On top of this, the newspaper also revealed plans to put around 20 non-editorial employees on paid leave, while also provisionally halving its pension contributions.

• Among other big industry names to introduce cuts are “big four” accounting organisations Deloitte and Ernst & Young (EY). Deloitte UK has said it will cut partner profits by 20% in 2020, while staff salaries will be frozen across the business, there will be no annual salary increase and bonuses and promotions will be reduced and deferred. EY also revealed earlier in the week that partner profit will by cut by 20%: “Its partners will do everything possible to navigate through the covid-19 situation with no redundancies amongst its 17,000 UK employees, no people furloughed and no reduction in employee salaries.”

Partners at KPMG are expected to experience a 25% cut in pay and higher earning partners face a bigger percentage hit. As well as freezing pay, promotions and bonuses, with decisions deferred until the Autumn, PwC told its partners that they will be expected to bear the financial impact of the economic slowdown.

• British-Swedish multinational pharmaceutical and biopharmaceutical company AstraZeneca is due to begin clinical trials to test the effectiveness of its Calquence drug – used to treat some blood cancers – to treat severe coronavirus patients. After revealing that it would begin a clinical trial, the company’s shares soared in early trading. Jose Baselga, executive vice president of oncology research and development said “this is the fastest launch of any clinical trial in the history of AstraZeneca”. The Calquence coronavirus trial will open in the US and across Europe in the coming days.

• World football’s governing body FIFA is prepared for legal challenges over its recommendation that player contracts should be extended until the league seasons that were put on hold as a result of the pandemic can be completed.

• Following Viagogo’s £3.2 billion acquisition of StubHub, the UK’s Competition & Markets Authority (CMA) launched a Phase 1 inquiry after previously opening an investigation in December 2019 to consider whether the acquisition would be "expected to result in a substantial lessening of competition within any market or markets in the United Kingdom". It will be clear by 11 June whether the CMA will refer the merger for a Phase 2 investigation.

• After securing £150 million in funding under the Covid Corporate Financing Facility, Greggs is preparing for a “return to profitable growth”.

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