The daily business briefing: August 17, 2020

1. Japan's economic decline is worst on record

Japan's economy shrank at a record annual rate of 27.8 percent in the second quarter as the coronavirus pandemic disrupted businesses around the world, according to government data released Monday. The figures indicated that the country's seasonally adjusted real gross domestic product, or GDP, fell 7.8 percent quarter on quarter, the worst since the government began compiling records of such drops in 1980. Japan's previous record contraction occurred during the global financial crisis just over a decade ago. Japan fell into recession, officially defined as two consecutive quarters of contraction, in the first quarter when its economy shrank by 0.6 percent following a 1.8 percent decline in the last three months of 2019.

The Hill The New York Times

2. Chinese drone-leader DJI makes sharp staff cuts

Chinese drone company DJI has been slashing its global sales and marketing teams as it struggles to get through a slowdown fueled by the coronavirus crisis, Reuters reported Monday, citing comments by current and former staff. DJI, the world's biggest drone maker, has cut its corporate sales and marketing team in half, from 180 to 60, at its Shenzhen headquarters. It has made similar staff reductions on its consumer side and has all but eliminated its global video production team, which the company has used to show off the filming potential of its drones. That staff, once up to 50 people, has been reduced to about three. "We had to make some difficult decisions to realign talent so that we can continue to achieve our business goals during challenging times," a DJI spokesman said, although he claimed Reuters' figures were inaccurate.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Reuters

3. Ex-McDonald's CEO fights company's attempt to take back severance money

Former McDonald's CEO Steve Easterbrook is fighting back against the fast-food giant's attempt to claw back tens of millions of dollars of his compensation. McDonald's said it found out after Easterbrook was fired last year over a relationship with an employee that he "concealed evidence and lied" about other sexual relationships he had with subordinates. Easterbrook's lawyers said in a Friday filing that the company already knew about the other relations when Easterbrook negotiated his departure package. "McDonald's — a sophisticated entity represented by numerous internal and external experts when it entered into the separation agreement — is aware it cannot credibly allege a breach of contract claim," Easterbrook's lawyers said. McDonald's said it stood by its claim.

Bloomberg

4. Stocks edge higher after three weeks of gains

U.S. stock index futures rose early Monday following a third straight weekly gain. Futures for the Dow Jones Industrial Average and the S&P 500 were up by about 0.3 percent, while those of the Nasdaq rose by 0.6 percent. The S&P 500 rose by 0.6 percent last week, nearly breaking a record high it set in February before the coronavirus crisis hit. Wall Street has struggled against concerns about the failure of Democrats and Republicans to reach an agreement on a new coronavirus relief package. Investors this week will be watching retail earnings and new housing data. Although second-quarter earnings season is nearly over, major retailers haven't posted yet. Walmart, Home Depot, Lowe's, and Target are among those preparing to unveil their results.

CNBC Reuters

5. Knorr changes dressing's name due to racist connotations

Knorr, one of Germany's best-known food companies, said it would change the name of a spicy dressing due to the racist connotations of its name, "Zigeunersauce," or "gypsy sauce," the German weekly Bild am Sonntag reported Sunday. The product will be renamed "Paprika Sauce Hungarian Style." The popular sauce will reappear in grocery stores under its new name within a few weeks, the company said. "Since 'gypsy sauce' can be interpreted in a negative way, we have decided to give our Knorr sauce a new name," said Unilever, the international consumer goods giant that owns Knorr. Civil rights groups started demanding a new name for the sauce years ago. The decision followed similar rebranding moves by numerous companies in the United States as protests against racism have spread.

The Associated Press