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Google to restructure Cloud business, with some roles eliminated

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Thomas Kurian, the incoming head of Google Cloud and formerly president of product development at Oracle, speaks at the Oracle OpenWorld conference in San Francisco on Sept. 24, 2013.

David Paul Morris | Bloomberg | Getty Images

Google is restructuring its Cloud group internally, which will include eliminating some roles, a Google spokesperson confirmed to CNBC.

“We recently communicated organizational changes to a handful of teams that will improve how we market, partner, and engage with customers in every industry around the globe,” a company spokesperson said in an email to CNBC on Friday. “We made the difficult, but necessary decision to notify a small number of employees that their roles will be eliminated.”

The restructuring comes as CEO Thomas Kurian has been at the helm for one year. In that time frame, he’s made a number of changes, mostly additions to the headcount, which he and Alphabet CEO Sundar Pichai have boasted of over the last few quarters.

The restructuring is primarily meant to realign focus on international markets and affects fewer than 50 employees, according to a person close to the company. The company would not comment on how many employees are affected or which areas within the Cloud business would be affected, only saying it is working with internal “mobility teams” to find the employees new roles within the company.

“We are grateful for everything they have accomplished and their commitment to Google Cloud,” the spokesperson said.

Kurian this week outlined the company’s strategy, which included targeting five industries: retail, health care, financial services, media and entertainment, and manufacturing.

Alphabet broke out Cloud revenue numbers for the first time in its fourth-quarter earnings report. Google’s cloud business generated $8.92 billion in revenue in fiscal 2019, compared with $5.84 billion in 2018, and the company claims it’s on a $10 billion annual run rate.

While that growth is impressive, Amazon Web Services booked more than $35 billion in revenue last year, and analysts including Synergy and Gartner put it in firm first place in terms of market share, with Microsoft as the clear No. 2.

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N26 customers feel ‘betrayed’ by German digital bank for leaving UK

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N26’s logo seen displayed on a smartphone.

Rafael Henrique | SOPA Images | LightRocket via Getty Images

Customers of the German online bank N26 say they feel “outraged” and “betrayed” by the firm’s decision to leave the U.K.

Berlin-based N26 announced last week that it would no longer be able to operate in the country as it won’t have the appropriate license to do so after Brexit. The start-up will be closing all U.K. accounts on Apr. 15.

The firm made its U.K. foray in October 2018, over two years after the U.K. referendum on its EU membership and six months before Brexit was initially planned.

Miguel Frias Mosquea, an N26 customer based in London, told CNBC he felt “outraged” N26 had blamed its U.K. departure on Brexit: “It’s fake news.”

“Surely they need an excuse for investors and blame it on Brexit, not on mismanagement or lack of knowledge on how to tackle the U.K. market,” the 33-year-old said. “It’s better to pretend it’s not their own failure.”

Another, Ian Cook, said he felt “disappointed” by N26’s U.K. closure, saying he was a fan of the firm’s offering, having started using it in July 2019.

“They are still my only bankers so I haven’t used any other banks,” Cook, who is based in the English county of West Midlands, said. “I prefer N26 over other banks because of the ‘extras’ that come with the accounts.”

Cook, 62, said he also felt “betrayed” as N26 “never gave any indication that the U.K. leaving the EU would make trading difficult for them.” He added: “I don’t believe Brexit was to blame.”

What is N26?

N26 is one of a breed of new branchless banking challengers looking to gain market share from the incumbents with their slick apps and word-of-mouth marketing. In Britain, it had arrived into a market already flooded with banking challengers, from Monzo to Revolut.

N26 hasn’t disclosed its U.K. customer numbers publicly, but reports have said it managed to attract just 200,000 customers in the U.K. since it opened there in 2018. Monzo, its closest rival, has picked up 3.6 million customers since it was founded in 2015.

Andrew Bowen, the CEO of a Cardiff, Wales-based personal finance comparison website called PocketRate, said that, though he is not an N26 user himself, customers of the bank he’s interacted with are “disappointed that N26 have pulled out.”

But, he added: “They are the sort of customers that will already have downloaded the Monzo app or the Starling app beforehand anyway.”

Following N26’s announcement to clients that it would shutter its operations in the U.K., rivals Starling and Monese used it as a marketing opportunity to take advantage of the loss of a competitor.

“Just found out your bank’s making a swift Brexit? Don’t worry — we’re here to stay,” Starling said in a tweet. “If you’re in need of a Brexit-proof GBP account, we can be your perfect match,” Monese tweeted.

Mosquea said he preferred Monzo and Revolut’s offerings over N26’s, claiming the “customer service of N26 was severely lacking.”

‘We are sorry’

For its part, N26 said its intention was “always to stay in the U.K.” but that the result of the December general election and the signing of Brexit into law “meant we will in due course be unable to operate in the U.K. with our European bank license.”

“As soon as it was clear that we would have to exit the U.K. market, we communicated this to our customers in order to be as open and transparent as possible,” N26 told CNBC in response to customer criticisms.

“We are sorry to be leaving and we understand this will be disappointing for our customers, and our priority now is to ensure a smooth transition for them.”

Founded in 2013, N26 has picked up an impressive 5 million users around the world. It’s said that 250,000 of those are in the U.S. where it launched last year, and the firm is currently planning on entering Brazil next.

The company has raised over $680 million from investors including PayPal co-founder Peter Thiel, Hong Kong billionaire Li Ka-shing and Chinese tech giant Tencent. It was valued at $3.5 billion last year, making it one of the biggest fintech firms in Europe.

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Dubai’s DP World is delisting and returning to private ownership

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A gantry crane stands in the DP World Ltd. terminal at Port Metro Vancouver in Vancouver, British Columbia, Canada, on Wednesday, Sept. 19, 2018.

Darryl Dyck | Bloomberg | Getty Images

DP World, one of the world’s largest port operators, is delisting from the Nasdaq Dubai and returning to fully private ownership, the company announced Monday.

The UAE-owned port behemoth’s parent company, Port and Free Zone World, has offered to buy the 19.55% of DP World’s shares traded on the Nasdaq Dubai for $16.75 a share, representing a 29% premium on its closing price of $13 per share on Sunday, the statement said.

Following the announcement, the firm’s stock rose 10% to $14.30 in morning trade in the Middle East.

The company said the move would enable DP World to “focus on its medium-to-long-term strategy of transforming from a global port operator to an infrastructure-led end-to-end logistics provider.” Company executives described the company’s public trading as ultimately too beholden to short-term returns.

Upon completion of the deal, it will be 100% owned by Port and Free Zone World.

The development could be bad news for the Nasdaq Dubai, for whom DP World has been a major draw for investors trading the publicly-listed shares. The Dubai-based exchange did not offer comment when contacted by CNBC. DP World had a market value of about $10 billion as of Monday morning, whereas the whole exchange is worth over $130 billion.  

“The DP World Board has concluded that the disadvantages of maintaining a public listing outweigh the benefits,” Yuvraj Narayan, group chief financial, strategy and business officer of DP World, said in the statement Monday.

“Delisting from Nasdaq Dubai is in the best interest of the company, enabling it to execute its medium to long-term strategy … In contrast, public markets typically hold a short-term view. As a result of this gap, the DP World strategy is not fully appreciated by the equity markets, and consequently is not reflected in the company’s share price performance.”

DP World Group Chairman and CEO Sultan Ahmed bin Sulayem described the ports and logistics industry as in the midst of a major transition, with its customer base undergoing consolidation and the “vertical integration of several competitors.”

“Returning to private ownership will free DP World from the demands of the public market for short term returns which are incompatible with this industry, and enable the company to focus on implementing our mid-to-long-term strategy,” he said.

DP World operates 48 marine terminals and 13 port developments in more than 30 countries.

Shares of DP World peaked in late January 2018 at $26.99 per share and have fallen about 52% since then as of Sunday’s market close in the United Arab Emirates. The company’s revenue in 2018 was $5.6 billion, a nearly 20% increase on the previous year, according to its latest available financial report.

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Malaysia bars entry of MS Westerdam cruise passengers

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Malaysia has barred the entry of remaining passengers from a cruise ship docked in Cambodia — after an American passenger tested positive for the new coronavirus upon her arrival in Kuala Lumpur.

Confirming local media reports, Malaysia’s deputy minister for international trade and industry, Ong Kian Ming, told CNBC on Monday that his country will stop “other people who want to come to Malaysia from the cruise ship … for now.”

The 83-year-old American woman, who arrived in Malaysia from Cambodia last week, was the first person from the MS Westerdam cruise ship to test positive for the virus, now called COVID-19.

She and her husband were found to have flu-like symptoms while going through the thermal scanner at the Kuala Lumpur International Airport last week, local media reported. Her husband tested negative for the virus, the reports said.

The cruise — which carried 1,455 guests and 802 crew — departed Hong Kong on Feb. 1. The ship arrived in Cambodia last Thursday after being turned away by several countries including Japan, the Philippines, and Thailand, which were afraid passengers onboard might be infected.

Malaysia is also closing its ports to cruise ships originating from or had transited in China, according to local media reports. The country has confirmed 22 cases of COVID-19, according to data from the Johns Hopkins University.

Speaking to CNBC’s “Squawk Box Asia,” Ong said the spread of the coronavirus would drag down Malaysia’s growth.

“Definitely, we’re anticipating that there will be short-term disruptions in the supply chains that could affect some of the multinational companies working and operating in Malaysia,” he said.

He added that the country’s growth could be lower than the government’s target of 4.8% for 2020. But both the government and the central bank, Bank Negara, have the ability to support the Malaysian economy, said Ong.

Still, various banks and research houses have downgraded their growth forecasts for Malaysia after the economy expanded by 3.6% year-on-year in the fourth quarter of 2019 — the slowest rate in a decade.

One of the most drastic downgrades came from Dutch bank ING, which cut its forecast for Malaysia’s 2020 growth from 4.5% to 3.5%.

“It’s not going to be too long before demand takes a hit from the rapid spread of Covid-19, the virus currently causing havoc worldwide,” Prakash Sakpal, Asia economist at ING, wrote in a note last week.

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