AM I NEXT? NO LOVE AT TWO SIGMA

New York, New York-based Two Sigma Investments, a hedge fund specializing in quantitative technological trading strategies, has announced a 10% reduction in its workforce.

The reduction impacts 200 employees following the firm's strategic review.

According to a company spokesperson, “This area-specific review has revealed that our business is strong and poised for continued growth. We have also discovered opportunities to more effectively direct our resources to areas that will drive the most value.”

Hedge fund Two Sigma is facing a massive fine, up to $100 million, to resolve a U.S. Securities and Exchange Commission trading scandal investigation involving employee misconduct that resulted in hundreds of millions of dollars in losses and profits.

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. We see good people being laid off through no fault of their own. Just because something terrible hasn't happened yet doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. While many employees can read the writing on the wall, why do most assume it’s targeted at someone else? Are you now wondering, Am I Next?

AM I NEXT? TOSHIBA SPLITS INTO 3 -- THE HANDWRITING IS ON THE WALL

Driven by a major governance scandal and extreme pressure from activist investors who threatened a hostile takeover, Toshiba has approved a plan to split the company into three separate public companies to maximize the firm's value by dividing its businesses.

Over the next two years, the company will split off two core businesses, the energy and infrastructure business and the device and storage business, while retaining its core semiconductor business.

According to the company…

Toshiba Corporation announced a bold and ambitious plan to separate into three standalone companies to create enhanced value for our shareholders. This Plan is the culmination of nearly five months of work by the Strategic Review Committee of Toshiba’s board of directors to:

•Undertake a rigorously objective review process;

•Consider a full range of options to unlock shareholder value;

•Take into consideration the direct input of our shareholders and potential investors, both strategicand financial; and

•Develop the best approach for the Company to optimize value for shareholders and otherimportant stakeholders.

For Toshiba, its shareholders, employees and customers, the Separation Plan also represents a significant inflection point in its evolution – a new initiative that capitalizes on the government’s recent actions and looks beyond the confines of past Japanese business practices. It utilizes a tax-qualified spin-off structure permitted under recent legislation and represents a first for a major Japanese company of such size and importance. This approach reflects Toshiba’s determination to follow a course that will enhance long-term value for shareholders and it advances the intent of the recent legislation to further open up and revitalize Japan’s economy.

The implication for employees is unclear as each division will seek to maximize value by eliminating underperforming segments, burdensome layers of management, and seek expansion opportunities.

AM I NEXT? GE SPLITS INTO 3 -- THE HANDWRITING IS ON THE WALL

Uncertainty abounds as an underperforming General Electric engages in financial engineering to increase its overall value to shareholders by splitting the enterprise into three companies focused on healthcare, aviation, and power.

According to the company…

GE announced its plan to form three industry-leading, global public companies focused on the growth sectors of aviation, healthcare, and energy, by:

1. Pursuing a tax-free spin-off of GE Healthcare, creating a pure-play company at the center of precision health in early 2023, in which GE expects to retain a stake of 19.9 percent; and

2. Combining GE Renewable Energy, GE Power, and GE Digital into one business, positioned to lead the energy transition, and then pursuing a tax-free spin-off of this business in early 2024.

3. Following these transactions, GE will be an aviation-focused company shaping the future of flight.

As independently run companies, the businesses will be better positioned to deliver long-term growth and create value for customers, investors, and employees, with each benefitting from:

• Deeper operational focus, accountability, and agility to meet customer needs;

• Tailored capital allocation decisions in line with distinct strategies and industry-specific dynamics;

• Strategic and financial flexibility to pursue growth opportunities;

• Dedicated boards of directors with deep domain expertise;

• Business- and industry-oriented career opportunities and incentives for employees; and

• Distinct and compelling investment profiles appealing to broader, deeper investor bases.

The implication for employees is unclear as each division will seek to maximize value by eliminating underperforming segments, burdensome layers of management, and seek expansion opportunities.