ReportWire

Tag: restructuring

  • Xi Jinping’s Purge and What Trump’s Foreign Policy Means for China

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    Were there different phases of this anti-corruption drive, and did its contours reveal something about Xi’s political priorities?

    At first, Xi focussed very heavily on the security services—the source of hard power on the civilian side. This allowed Xi to rip apart networks of people in the security services who didn’t necessarily support him, then put his own people in and build up that support. If you’re the dictator and you’re trying to insure that your personal position is secure, you need to consolidate and control the sources of hard power. And the civilian side was really the richest target and the easiest target for him, easier than going after the P.L.A. The P.L.A. has been successful at resisting lots of reforms and cleanups over the years. So he targeted the civilian side first, and then he started working through the P.L.A.

    When did that start with the P.L.A.?

    The real turning point that signalled that something big was going to happen was the fall of 2014. Back in 1929, Mao had convened the Gutian Conference, which was really about the C.C.P. taking control of the military and really about Mao consolidating his power. Xi effectively reënacted this in 2014, summoning all the top generals to Gutian, and it was clear from the messaging that came out of that meeting, and the steps Xi took afterward, that this was the beginning of this massive anti-corruption campaign inside the P.L.A. I think this had multiple objectives. There was real corruption. There was a massive problem in the P.L.A. where, if you wanted to get promoted to certain levels, you had to actually buy that promotion. So various people would put money up because they figured once this person got promoted, they could get a return, since it would open up all these graft opportunities. It was almost like they were angel-investing in a P.L.A. officer.

    There was also the question for Xi was how to unravel these networks and put your own people in, so that you ultimately have control over the P.L.A., and it becomes the kind of fighting force you want.

    Does the purging of Zhang Youxia make sense within this strategy, or does it seem like something new?

    Zhang was promoted and thrived during the incredibly corrupt era of Hu’s leadership. He oversaw, for a period of time, the P.L.A.’s equipment department and its weapons-development and -acquisition programs, which, given how much the P.L.A.’s budget has increased over the past several decades, had massive graft opportunities. And, since that Gutian meeting, the C.C.P. has been rooting through the top ranks of the P.L.A. Now, the Central Military Commission has been reduced from seven members to Xi and one vice-chairman: Zhang Shengmin.

    But why now, and why so quickly? That is something that I don’t have a great answer for. And I have not found anybody who has a great answer. Some people argue that, in order to make an accusation like this, you have to work up the vine, and you have to build cases, which becomes harder and harder the more senior they are. There are rumors that Zhang was building a putsch against Xi. But I think that’s bullshit, and ultimately we really don’t know. It is such a black box.

    One theory behind Xi’s military purges you did not bring up was that he wants people who are in line with his foreign-policy priorities.

    I talked about how he needed to clean out corruption because he wanted to build a professional fighting force. That is absolutely one of the reasons. It’s about the combination of control over the P.L.A. and insuring the P.L.A. leadership has the right political standing or political positioning, but it is also about having an actually competent P.L.A. that has good weapons, and can fight. The leadership is constantly talking about fighting and winning. Xi’s stated goals for the P.L.A. are all about actually being able to fight and win wars and becoming a world-class army.

    Sure, but any leader of any country, democratic, nondemocratic, whatever else, is going to want a military that’s competent. But you may also want a military leadership explicitly aligned with your foreign-policy priorities, whatever those may be. And those strike me as different things.

    I think what you’re getting at is the speculation out there that perhaps this latest round of purges was triggered by the fact that Zhang Youxia was not aligned with Xi on Taiwan, for example, and that there was some sort of discord between what Xi thought the P.L.A. should do and what the generals wanted. It’s possible, but I am skeptical of that because I think that the way the system is structured, it would be pretty shocking if the most senior generals had been really pushing back on Xi around that. It’s possible, but we just don’t know, and that’s the problem.

    Do we know what happens to high-ranking figures who are purged?

    On the civilian side, they’ll usually have a trial, and then it’ll be announced that they’re getting sentenced for some range of years, or for life. Rarely do senior civilian officials get executed. It has happened to some of the people in the financial system who were purged, but in general, they get sent off to a pretty comfortable prison life at a sort of Club Fed-type facility outside of Beijing. On the military side, we don’t know.

    There has been a lot of concern about how President Trump has alienated NATO allies in recent months, leading to questions about how this may reshape American foreign policy in some fundamental way. Do you have any sense of whether the Chinese government thinks the Trump era could dramatically reshape international relations? And could that be to China’s advantage?

    I think if you go back to what Xi has been saying for years, he’s been talking about how we are in an era where there are changes in the global landscape unseen in a century, and the Trump Administration’s recent moves just reinforce what he’s been saying about how the world is changing. So the C.C.P. absolutely does think that the world is changing.

    I think it’s a mixed bag for them. On the one hand, it’s creating a lot of opportunities for their external propaganda approach, which for many years has been about weakening the U.S. position in the global order as much as they can. We are now helping them with that cause in a lot of ways, more than maybe some previous Administrations did. But, at the same time, the C.C.P. also benefitted a lot from the U.S.-led order. They are, I think, concerned about some sort of sudden collapse into real chaos. And so I think they would prefer to see a managed decline of the order, where they can more thoughtfully find ways to exploit it, which I think they’ve already been doing over the last decade or so.

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    Isaac Chotiner

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  • This CEO laid off nearly 80% of his staff because they refused to adopt AI fast enough. 2 years later, he says he’d do it again | Fortune

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    Eric Vaughan, CEO of enterprise-software powerhouse IgniteTech, was unwavering as he reflected on the most radical decision of his decades-long career. In early 2023, convinced generative AI was an “existential” transformation, Vaughan looked at his team and saw a workforce not fully on board. His ultimate response: He ripped the company down to the studs, replacing nearly 80% of staff within a year, according to headcount figures reviewed by Fortune.

    Over the course of 2023 and into the first quarter of 2024, Vaughan told Fortune, IgniteTech replaced hundreds of employees, declining to disclose a specific number. “That was not our goal,” he told Fortune. “It was extremely difficult … But changing minds was harder than adding skills.” It was, by any measure, a brutal reckoning—but Vaughan insists it was necessary, and said he’d do it again.

    For Vaughan, the writing on the wall was clear and dramatic.

    “In early 2023, we saw the light,” he told Fortune in an August 2025 interview, adding he believed every tech company was facing a crucial inflection point around adoption of artificial intelligence. “Now I’ve certainly morphed to believe that this is every company, and I mean that literally every company, is facing an existential threat by this transformation.”

    Where others saw promise, Vaughan saw urgency—believing failing to get ahead on AI could doom even the most robust business. He called an all-hands meeting with his global remote team. Gone were the comfortable routines and quarterly goals. Instead, his message was direct: Everything would now revolve around AI. “We’re going to give a gift to each of you. And that gift is tremendous investment of time, tools, education, projects … to give you a new skill,” he explained. The company began reimbursing for AI tools and prompt-engineering classes, and even brought in outside experts to evangelize.

    “Every single Monday was called ‘AI Monday,’” Vaughan said, with his mandate for staff that they could work only on AI. “You couldn’t have customer calls; you couldn’t work on budgets; you had to only work on AI projects.” He said this happened across the board, not just for tech workers, but also for sales, marketing, and everybody else at IgniteTech. “That culture needed to be built. That was the key.”

    This was a major investment, he added: 20% of payroll was dedicated to a mass-learning initiative, and it failed because of mass resistance, even sabotage. Belief, Vaughan discovered, is a hard thing to manufacture.

    “In those early days, we did get resistance, we got flat-out, ‘Yeah, I’m not going to do this’ resistance,” he said. “And so we said goodbye to those people.”

    The pushback: white collar resistance

    Vaughan was surprised to find it was often the technical staff, not marketing or sales, who dug in their heels. They were the “most resistant,” he said, voicing various concerns about what the AI couldn’t do, rather than focusing on what it could. The marketing and salespeople were enthused by the possibilities of working with these new tools, he added.

    This friction is borne out by broader research. According to the 2025 enterprise AI adoption report by Writer, an agentic AI platform for enterprises, one in three workers say they’ve “actively sabotaged” their company’s AI rollout—a number that jumps to 41% of millennial and Gen Z employees. This can take the form of refusing to use AI tools, intentionally generating low-quality outputs, or avoiding training altogether. Many act out because of fears that AI will replace their jobs, while others are frustrated by lackluster AI tools or unclear strategy from leadership.

    Writer’s chief strategy officer Kevin Chung told Fortune the “big eye-opening thing” from this survey was the human element of AI resistance.

    “This sabotage isn’t because they’re afraid of the technology,” he said. “It’s more like there’s so much pressure to get it right, and then when you’re handed something that doesn’t work, you get frustrated.”

    He added Writer’s research shows workers often don’t trust where their organizations are headed.

    “When you’re handed something that isn’t quite what you want, it’s very frustrating, so the sabotage kicks in, because then people are like, ‘Okay, I’m going to run my own thing. I’m going to go figure it out myself.’” You definitely don’t want this kind of “shadow IT” in an organization, he added.

    Vaughan said he didn’t want to force anyone.

    “You can’t compel people to change, especially if they don’t believe,” he said, adding belief was really the thing he needed to recruit for.

    Company leadership ultimately realized they’d have to launch a massive recruiting effort for what became known as “AI innovation specialists.” This applied across the board: to sales, finance, marketing, and elsewhere. Vaughan said this time was “really difficult” as things inside the company were “upside down … We didn’t really quite know where we were or who we were yet.”

    A couple of key hires helped, starting with the person who became IgniteTech’s chief AI officer, Thibault Bridel-Bertomeu. That led to a full reorganization of the company that Vaughan called “somewhat unusual.” Essentially, every division came to report into the AI organization, regardless of domain.

    This centralization, Vaughan said, prevented duplication of efforts and maximized knowledge sharing—a common struggle in AI adoption, where Writer’s survey shows 71% of the C-suite at other companies say AI applications are being created in silos and nearly half report their employees have been left to “figure generative AI out on their own.”

    No pain, no gain?

    In exchange for this difficult transformation, IgniteTech reaped extraordinary results. By the end of 2024, the company had launched two patent-pending AI solutions, including a platform for AI-based email automation (Eloquens AI), with a radically rebuilt team.

    Financially, IgniteTech remained strong. Vaughan disclosed the company, which he said was in the nine-figure revenue range, finished 2024 at “near 75% Ebitda”—all while completing a major acquisition, Khoros.

    “You multiply people … give people the ability to multiply themselves and do things at a pace,” he said, touting the company’s ability to build new customer-ready products in as little as four days, an unthinkable timeline in the old regime. In the months since, Vaughan told Fortune in an early 2026 statement, the company has only kept growing its headcount, recruiting globally for AI Innovation Specialists across every function, from marketing to sales to finance to engineering to support.

    What does Vaughan’s story say for others? On one level, it’s a case study in the pain and payoff of radical change management. But his ruthless approach arguably addresses many challenges identified in the Writer survey: lack of strategy and investment, misalignment between IT and business, and the failure to engage champions who can unlock AI’s benefits.

    The ‘boy who cried wolf’ problem

    To be sure, IgniteTech is far from alone in wrestling with these challenges. Joshua Wöhle is the CEO of Mindstone, a firm that provides AI upskilling services to workforces, training hundreds of employees monthly at companies including Lufthansa, Hyatt, and NBA teams. He recently discussed the two approaches described by Vaughan—upskilling and mass replacement—in an appearance on BBC Business Today.

    Wöhle contrasted the recent examples of Ikea and Klarna, arguing the former’s example shows why it’s better to “reskill” existing employees. Klarna, a Swedish buy-now, pay-later firm, drew considerable publicity for a decision to reduce members of its customer support staff in a pivot to AI, only to rehire for the same roles.

    “We’re near the point where [AI is] more intelligent than most people doing knowledge work. But that’s precisely why augmentation beats automation,” Wöhle wrote on LinkedIn.

    A representative for Klarna told Fortune the company did not lay off employees, but has instead adopted several approaches to its customer service, which is managed by outsourced customer service providers who are paid according to the volume of work required. The launch of an AI customer service assistant reduced the workload by the equivalent of 700 full-time agents—from roughly 3,000 to 2,300—and the third-party providers redeployed those 700 workers to other clients, according to Klarna. Now that the AI customer service agent is “handling more complex queries than when we launched,” Klarna says, that number has fallen to 2,200. Klarna says its contractor has rehired just two people in a pilot program designed to combine highly trained human support staff with AI to deliver outstanding customer service. 

    In an interview with Fortune, Wöhle said one client of his has been very blunt with his workers, ordering them to dedicate all Fridays to AI retraining, and if they didn’t report back on any of their work, they were invited to leave the company.

    He said it can be “kinder” to dismiss workers who are resistant to AI: “The pace of change is so fast that it’s the kinder thing to force people through it.” He added he used to think if he got all workers to really love learning, then that could help Mindstone make a real difference, but he discovered after training literally thousands of people that “most people hate learning. They’d avoid it if they can.”

    Wöhle attributed much of the AI resistance in the workforce to a “boy who cried wolf” problem from the tech sector, citing NFTs and blockchain as technologies that were billed as revolutionary but “didn’t have the real effect” that tech leaders promised.

    “You can’t really blame them” for resisting, he said. Most people “get stuck because they think from their work flow first,” he added, and they conclude AI is overhyped because they want AI to fit into their old way of working. “It takes a lot more thinking and a lot more kind of prodding for you to change the way that you work,” but once you do, you see dramatic increases. A human can’t possibly keep five call transcripts in their head while you’re trying to write a proposal to a client, he offers, but AI can.

    Ikea echoed Wöhle when reached for comment, saying its “people-first AI approach focuses on augmentation, not automation.” A spokesperson said Ikea is using AI to automate tasks, not jobs, freeing up time for value-added, human-centric work.

    The Writer report notes companies with formal AI strategies are far more likely to succeed, and those who heavily invest in AI outperform their peers by a large margin. But as Vaughan’s experience shows, investment without belief and buy-in can be wasted energy. “The culture needed to be built. Ultimately, we ended up having to go out and recruit and hire people that were already of the same mind. Changing minds was harder than adding skills.”

    From the vantage point of early 2026, Vaughan reflected in a statement to Fortune, monthly all-hands meetings look nothing like they used to: “We killed the format of reviewing goals and metrics. Now teams demo what they built.” He wanted to stress something else: Despite the drastic actions he took to restructure, he still doesn’t think he’s ahead of the curve.

    “We’re just not getting run over from behind yet,” he said. “The pace of change in AI is relentless. If we don’t keep pushing, keep learning every single day, we’re toast.”

    For Vaughan, there’s no ambiguity. Would he do it again? He doesn’t hesitate: He’d rather endure months of pain and build a new, AI-driven foundation from scratch than let an organization drift into irrelevance.

    “This is not a tech change. It is a cultural change, and it is a business change,” he said, adding he doesn’t recommend others follow his lead and swap out 80% of their staff.

    “I do not recommend that at all,” he said. “That was not our goal. It was extremely difficult.”

    But at the end of the day, he added, everybody’s got to be in the same boat, rowing in the same direction. Otherwise, “we don’t get where we’re going.”

    A version of this story was published on Fortune.com on August 17, 2025.

    More on AI in the workplace:

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    Nick Lichtenberg

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  • Starbucks announces significant store closures and layoffs

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    Starbucks is taking “significant action” to turn around its struggling business, closing a large number of cafés and announcing a second round of layoffs at its headquarters as part of CEO Brian Niccol’s efforts to resuscitate the troubled chain.Niccol announced Thursday that Starbucks will close hundreds of stores this month, or about 1% of its locations. The company had 18,734 North American locations at the end of June, and the company said it will end September with 18,300 stores.The company expects its restructuring efforts will cost $1 billion. Shares of Starbucks were flat in premarket trading.In a letter to employees, Niccol said the company underwent a review of its footprint and the locations that will close were ones “unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance.”Starbucks often closes locations for a variety of reasons, including underperformance. But Niccol said this larger-scale effort is more substantial.”This is a more significant action that we understand will impact partners and customers. Our coffeehouses are centers of the community, and closing any location is difficult,” he said.Despite the hundreds of closures, which will take place before the end of the company’s fiscal year next week, Starbucks said it will return to growth mode, and it also plans to remodel more than 1,000 locations. The new look for Starbucks features cozier chairs, more power outlets and warmer colors.In addition to the store closures, Starbucks announced an additional 900 corporate layoffs, on top of the roughly 1,000 layoffs in February. Affected employees will be notified on Friday and will receive “generous severance and support packages.” Also, “many” open positions will be closed, he announced.”I know these decisions impact our partners and their families, and we did not make them lightly,” Niccol wrote. “I believe these steps are necessary to build a better, stronger and more resilient Starbucks that deepens its impact on the world and creates more opportunities for our partners, suppliers and the communities we serve.”One year onNiccol joined Starbucks about a year ago, hoping to revive the storied coffee chain. However, the financial results haven’t come to fruition, with the stock down about 12% and sales haven’t turned around.He’s pared back the menu by about 30%, while also introducing new items to keep the brand on trend, like protein toppings and coconut water. Food is also getting a revamp, with new croissants and baked goods being rolled out.In addition to remodels, smaller touches have been integrated, like bringing back self-serve milk and sugar stations as well as doodles on coffee cups. The company also tweaked its name to “Starbucks Coffee Company” to reinforce its coffee roots.However, his changes have butted heads with some baristas, including uniform changes that sparked a lawsuit. And some new drinks are causing stress for baristas because they are overcomplicated to make during peak times.

    Starbucks is taking “significant action” to turn around its struggling business, closing a large number of cafés and announcing a second round of layoffs at its headquarters as part of CEO Brian Niccol’s efforts to resuscitate the troubled chain.

    Niccol announced Thursday that Starbucks will close hundreds of stores this month, or about 1% of its locations. The company had 18,734 North American locations at the end of June, and the company said it will end September with 18,300 stores.

    The company expects its restructuring efforts will cost $1 billion. Shares of Starbucks were flat in premarket trading.

    In a letter to employees, Niccol said the company underwent a review of its footprint and the locations that will close were ones “unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance.”

    Starbucks often closes locations for a variety of reasons, including underperformance. But Niccol said this larger-scale effort is more substantial.

    “This is a more significant action that we understand will impact partners and customers. Our coffeehouses are centers of the community, and closing any location is difficult,” he said.

    Despite the hundreds of closures, which will take place before the end of the company’s fiscal year next week, Starbucks said it will return to growth mode, and it also plans to remodel more than 1,000 locations. The new look for Starbucks features cozier chairs, more power outlets and warmer colors.

    In addition to the store closures, Starbucks announced an additional 900 corporate layoffs, on top of the roughly 1,000 layoffs in February. Affected employees will be notified on Friday and will receive “generous severance and support packages.” Also, “many” open positions will be closed, he announced.

    “I know these decisions impact our partners and their families, and we did not make them lightly,” Niccol wrote. “I believe these steps are necessary to build a better, stronger and more resilient Starbucks that deepens its impact on the world and creates more opportunities for our partners, suppliers and the communities we serve.”

    One year on

    Niccol joined Starbucks about a year ago, hoping to revive the storied coffee chain. However, the financial results haven’t come to fruition, with the stock down about 12% and sales haven’t turned around.

    He’s pared back the menu by about 30%, while also introducing new items to keep the brand on trend, like protein toppings and coconut water. Food is also getting a revamp, with new croissants and baked goods being rolled out.

    In addition to remodels, smaller touches have been integrated, like bringing back self-serve milk and sugar stations as well as doodles on coffee cups. The company also tweaked its name to “Starbucks Coffee Company” to reinforce its coffee roots.

    However, his changes have butted heads with some baristas, including uniform changes that sparked a lawsuit. And some new drinks are causing stress for baristas because they are overcomplicated to make during peak times.

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  • Harney Partners Hires Louis Natale to Lead Expansion in New York Region

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    Expertise in credit management will help organizations with complex credit and financial challenges


    Online, December 9, 2024 (Newswire.com)
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    Harney Partners, a national corporate turnaround and restructuring advisory firm, is pleased to announce that Louis “Lou” Natale has joined the firm as Managing Director to lead the firm’s expansion and growth in the New York Region.

    Throughout his career as a lender, Lou has worked closely with many companies, along with their trusted advisors or turnaround consultants, to successfully navigate complex credit and financial challenges. This included assisting troubled and highly leveraged companies that were in transition.

    “We are beyond thrilled to have Lou join our team and lead efforts to expand our footprint and service offerings into the New York region,” said Jim Harney, President of Harney Partners. “Whether helping businesses grow or rehabilitate, Lou’s extensive insight and knowledge from a lender’s perspective is highly valuable to achieving optimal outcomes for Harney clients no matter what situation they are facing.”

    Lou has 30+ years of leadership experience in credit management including a proven track record in process improvement and helping companies solve difficult financing situations. From growth initiatives to the development and implementation of risk management frameworks, he has led cross-functional teams to identify and execute a broad range of strategies to gain efficiencies, minimize losses, and develop creative financing solutions.

    Prior to Harney, Lou has held executive positions that encompass both business development as well as operations at global and national financial lending institutions. He was Chief Credit Officer at White Oak Commercial Finance and an Executive Director at Varagon Capital Partners. He also held multiple leadership roles at GE Capital spanning 25 years.

    “I look forward to being an integral part of the Harney team by leveraging my skills and relationships to help us build out a strong presence in New York,” said Natale. “I am confident there are many middle market companies and their stakeholders in the New York region that will benefit from the expertise and solutions Harney provides.”

    About Harney Partners:

    Harney Partners is a national, corporate-advisory firm that provides independent, multi-disciplinary solutions for middle-market companies and their stakeholders to overcome financial and operational challenges. For more than 30 years, Harney Partners has helped clients realign their business for immediate stability and implement innovative, results-oriented strategies for sustainability and growth. Harney Partners has offices in Austin, Chicago, Dallas, Detroit, El Paso, Houston, Madison and New York and specializes in turnaround and restructuring, bankruptcy advisory, fiduciary services, transaction advisory, process optimization, and forensics and litigation services.

    Contact Information

    Source: Harney Partners

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  • CCAA Court Approves Sale of Pride Group Logistics

    CCAA Court Approves Sale of Pride Group Logistics

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    MISSISSAUGA, Ontario, September 26, 2024 (Newswire.com)
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    Pride Group Logistics Ltd. (“Pride Group Logistics”) today provided an update on its proceedings under the Companies’ Creditors Arrangement Act (the “CCAA”). Pride Group Logistics is pleased to announce that the Ontario Superior Court of Justice (Commercial List) (“CCAA Court”) has approved a transaction pursuant to which 1000927605 Ontario Inc. (the “Purchaser”), a special purpose entity supported by the founders of Pride Group Logistics, will acquire substantially all of the assets of Pride Group Logistics necessary to continue operating the business as a going concern (the “Transaction”) to continue to serve Pride Group Logistics customers and maintain the jobs of its over 500 employees and contractors.

    On May 15, 2024, the CCAA Court granted an order (the “SISP Order”) authorizing Pride Group Logistics to conduct, under the oversight of Ernst & Young Inc., in its capacity as court-appointed monitor (the “Monitor”), a sale and investment solicitation process (the “SISP”) for Pride Group Logistics business and assets. Pursuant to the SISP, the Purchaser’s proposal was identified as the Successful Bid (as defined in the SISP).

    The Transaction will be completed pursuant to a purchase agreement (the “Purchase Agreement”) dated Sept. 22, 2024, among the Purchaser, Pride Group Logistics and certain of its affiliates as vendors. 

    Pursuant to the Purchase Agreement, the Purchaser will:

    • acquire substantially all of the assets of Pride Group Logistics’ business, including but not limited to the fleet of Pride Group Logistics vehicles, related equipment and inventory, all intangible assets, accounts receivable, cash, cash equivalents and prepaid expenses;
    • assume Pride Group Logistics licenses and operating permits, subject to regulatory approval;
    • acquire all intellectual property and goodwill of Pride Group Logistics, including ownership of all related names and trademarks;
    • assume contracts of Pride Group Logistics and its affiliates critical to the business; 
    • acquire ownership of Pride Global Insurance Company Ltd.; and
    • retain an option to acquire certain leasehold real property ancillary to the business or leases in respect thereof, subject to certain conditions.

    The CCAA Court has approved the Successful Bid and granted authority to the Monitor to consummate the Transaction contemplated therein pursuant to the terms of an approval and vesting order (“AVO”) to be issued by the CCAA Court in respect of the Transaction. Amongst other things, the Transaction will enable a continuity of operations of Pride Group Logistics, a critically important fulfilment business in Canada, for the benefit of its customers, suppliers, service providers, stakeholders and, most critically, its over 500 employees and contractors whose jobs will be preserved.

    The closing of the Transaction is subject to issuance of the AVO and, if needed, an order assigning the critical required contracts to the Purchaser, as well as customary closing conditions and an order of the U.S. Bankruptcy Court recognizing the approval of the Transaction. The Transaction is expected to close on or about Oct. 16, 2024.

    Source: Pride Group Logistics

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  • Pride Group Restructuring Update

    Pride Group Restructuring Update

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    MISSISSAUGA, Ontario, August 15, 2024 (Newswire.com)
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    Pride Group Holdings Inc. and related companies (collectively, the “Pride Group”) had sought and obtained creditor protection under the Companies’ Creditors Arrangement Act (the “CCAA”) on 27th March 2024, pursuant to an order of the Ontario Superior Court of Justice (Commercial List), as subsequently recognized and enforced in the U.S. Ernst & Young Inc. was appointed as the Court-appointed Monitor of the Pride Group (in such capacity, the “Monitor”). 

    At this time, the Pride Group has sufficient liquidity to continue to operate and it is business as usual. There have been important recent developments in the CCAA proceedings, some which have not been accurately reported on by the media. We wanted to provide you with important context and background in respect of these developments.

    As it concerns Pride Group Logistics (“PGL”) and its business, the Court has not made any determination at this time. The Pride Group continues to seek a going-concern sale of the PGL business, which is in the best interest of PGL’s employees, contractors and business partners. The Monitor’s Reports to the Court, all of which are publicly available online, report in detail on the ongoing Court-supervised PGL sale process, including the bid submitted by a proposed purchaser that is controlled by members of the Johal family. For clarity, as at the date of this letter, PGL is not being wound down. As it stands currently, the Monitor is recommending the continuing pursuit of a going-concern sale transaction supported by the Johal family. That sale, if approved by the Court, would allow PGL to continue as a going-concern for the benefit of its customers, employees and the communities that it serves. Further, Randall Benson, Chief Restructuring Officer (the “CRO”) of the Pride Group, is recommending the Johal family bid as the preferred option.

    The Court will hear and make a decision at a future date with respect to any proposed sale of PGL’s business. In the meantime, until the Court makes its decision, it is business as usual for PGL’s employees, contractors and business partners. 

    As it concerns the Pride Group’s and Tpine’s leasing business lines, it is business as usual for Tpine’s employees, contractors, lessees and business partners — lease amounts are being collected and are expected to be paid in accordance with the Court Orders granted in these proceedings.

    As it concerns Tpine Financial’s factoring business, the Court recently approved the sale of Tpine’s factoring business as a going-concern sale. More information will be forthcoming on the mechanics of the purchase and transfer of the factoring business, however, customers of the factoring business are expected to continue to be customers of the business after it is sold.

    Finally, as it concerns truck inventory and sales, the Pride Group has determined that a going-concern transaction is no longer feasible due to the overall state of the trucking and logistics market. The Pride Group (excluding Pride Group Logistics) is considering its options, including an orderly disposition of its trucks and trailer assets and, where appropriate, turning over assets to financiers on agreed-upon terms and winding down business lines in an orderly fashion, which minimizes impact on affected stakeholders. Should a restructuring option develop involving a standalone truck dealership business, it will be presented to the creditors and the Court for consideration. More information on these decisions will be forthcoming.

    The Pride Group’s interim financing (the “DIP Facility”) matured on July 31, 2024. On Friday, the Court approved the Pride Group’s ability to fund its ongoing operations with its available liquidity, which will fund the next steps in these overall proceedings until further Court Order. The Pride Group is pursuing funding options to ensure it continues to have sufficient liquidity to pursue an orderly disposition of assets and has identified a prospective lender that is prepared to provide such interim financing, which will be subject to Court approval.

    The CRO of the Pride Group confirms that the number one priority of the Pride Group is to pursue an orderly outcome that provides the best possible recovery and minimizes the impact of the Pride Group’s restructuring on affected stakeholders.

    Source: Pride Group

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  • Simpl sees another round of layoffs, rejigs senior leadership

    Simpl sees another round of layoffs, rejigs senior leadership

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    Buy now pay later (BNPL) start-up Simpl has let go of 30 more employees a month after it laid off 160 people.

    Recently, the firm has also seen the departure of senior executives, including Vatsal Jain, Vice-President – Enterprise Business; Ashwini Ravindranath, Vice-President – Partner Success; and Ramkumar Narayanan, Vice-President – Product and Operations.

    Simpl has also revamped its leadership team. Vivek Pandey, previously a Senior Vice-President in the technology team, has been elevated to the position of Chief Technology Officer (CTO). In addition to his technology responsibilities, Pandey will also oversee the risk vertical, a role previously held by Chief Financial Officer (CFO) Russell Byrne.

    Towards profitability

    Byrne will continue as Simpl’s CFO, focusing on its capital markets function. Puneet Singh, the current CTO, will now lead the enterprise business and checkout solutions, while Khanaz KA will spearhead the expansion of Simpl’s direct-to-consumer business, along with a focus on customer experience.

    “Today’s decision to let 30 of our employees go is a continuation of our organisation-wide efforts to become a fiscally-prudent company and achieve profitability by mid-2025,” said a company spokesperson.

    The company has offered the affected employees a severance package with a fixed salary for the notice period of two months as per the employment agreement and 15 day’s salary for every year of service with the company.

    Founded in 2015, Simpl has raised more than $80 million in equity funding from the likes of Valar Ventures and IA Ventures.

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  • DXC Technology tumbles as investors fret over latest restructuring plan

    DXC Technology tumbles as investors fret over latest restructuring plan

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    (Reuters) – Shares of DXC Technology slumped 18% on Friday, after the IT services provider unveiled a new revamp and forecast fiscal 2025 revenue and profit below estimates.

    The latest attempt comes as a sale bid failed last year and exits of top executives and a slowdown due to high interest rates hampered efforts to pivot away from its declining legacy business of IT outsourcing services to cloud-based solutions.

    “DXC has been in a transition for multiple years and despite the best efforts of multiple leaders, one has to ask the question as to if this business can be fixed,” analysts at RBC Capital Markets wrote in a client note.

    “New management is undertaking yet again another restructuring to streamline the business, which suggests that FY25 will be another transition year.”

    The latest restructuring will cost an additional $250 million in fiscal 2025 and aimed to cut back on excess capacity in its legacy business, finance chief Robert Del Bene said in a post-earnings call.

    Bene assumed the role after Ken Sharp departed in September. In December, Raul Fernandez took charge as chief executive after Mike Salvino stepped down.

    The restructuring will also weigh on DXC’s free cash flow, with the company forecasting about $400 million for fiscal 2025, well below the $756 million it reported in FY24.

    “Stock tolerance for yet another restructuring that consumes near-term free cash flow and pauses share repurchases in FY25 is likely low,” J.P.Morgan analysts said.

    Shares of DXC, which announced a $1 billion buyback in May 2023, have lost 13% of their value so far in 2024, after crashing a combined 30% in the past two years.

    It was on track to lose more than $635 million in market value on Friday.

    At least nine of the 14 analysts covering the stock lowered their target prices, according to LSEG data.

    (Reporting by Harshita Mary Varghese; Editing by Shilpi Majumdar and Sriraj Kalluvila)

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