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Tag: labor and employment

  • Amazon reinstates Alabama warehouse worker and union leader weeks after her firing | CNN Business

    Amazon reinstates Alabama warehouse worker and union leader weeks after her firing | CNN Business

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    New York
    CNN
     — 

    An Amazon worker and union organizer has been given her job back after she appealed her firing by the e-commerce giant earlier this month.

    Amazon on Thursday confirmed that it had reinstated Jennifer Bates — who became the face of the effort to unionize an Amazon facility in Bessemer, Alabama — following its appeals process. Bates had received notice of her termination from Amazon in early June.

    “Amazon was wrong, they tried to fire me and stifle a movement, but the movement pushed back, and I’m incredibly humbled by the global outpouring of support for my unjust termination,” Bates said in a statement Thursday about Amazon’s decision to reverse her firing.

    Bates will be reinstated with back pay per Amazon’s standard process, according to the company.

    At the time of her firing, Amazon had said that company records indicated “that Ms. Bates failed to show up to work for a period of time and didn’t respond or provide documentation to excuse her absences.” The Retail, Wholesale and Department Store Union (RWDSU), which spearheaded the so-far unsuccessful effort to unionize the Bessemer facility, said at the time that Bates was fired by Amazon after returning from medical leave following injuries sustained on the job.

    During its appeals review process, Amazon says it determined that Bates had failed to respond to requests for additional information regarding her leave, but that the company could have been more clear about what information was needed.

    Amazon spokesperson Mary Kate Paradis said in a statement to CNN that “as is our standard process for this type of situation, Ms. Bates had the opportunity to, and did, appeal her termination. After a full review of her case, the decision was made to reinstate her.”

    Bates’ firing had threatened to renew tensions between Amazon

    (AMZN)
    and workers who were spurred to organize earlier in the pandemic amid frustrations with the company’s response to the health crisis and a broader spotlight on racial inequities in the United States. In 2021, Bates testified before lawmakers about her “grueling” experience working at one of the company’s warehouses.

    Amazon workers at a New York warehouse voted to form the company’s first US union last year, although Amazon has since refused to recognize the union or come to the bargaining table. Other efforts to unionize Amazon facilities, including one across the street from the New York warehouse, have failed.

    The closely watched union election at the Bessemer facility ended with the results too close to call due to hundreds of challenged ballots. The National Labor Relations Board is still reviewing challenges brought against Amazon by the union accusing the company of illegal activity during the campaign. (Amazon has previously filed its own objections to the RWDSU’s conduct.)

    –CNN’s Catherine Thorbecke contributed to this report.

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  • How the CEO behind ChatGPT won over Congress | CNN Business

    How the CEO behind ChatGPT won over Congress | CNN Business

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    Washington
    CNN
     — 

    OpenAI CEO Sam Altman seems to have achieved in a matter of hours what other tech execs have been struggling to do for years: He charmed the socks off Congress.

    Despite wide-ranging concerns that artificial intelligence tools like OpenAI’s ChatGPT could disrupt democracy, national security, and the economy, Altman’s appearance Tuesday before a Senate subcommittee went so smoothly that viewers could have been forgiven for thinking the year was closer to 2013 than 2023.

    It was a pivotal moment for the AI industry. Altman’s testimony on Tuesday alongside Christina Montgomery, IBM’s chief privacy officer, promised to set the tone for how Washington regulates a technology that many fear could eliminate jobs or destabilize elections.

    But where lawmakers could have followed a familiar pattern, blasting the tech industry with hostile questioning and leveling withering allegations of reckless innovation, members of the Senate Judiciary Committee instead heaped praise on the companies — and often, on Altman in particular.

    The difference seemed to come down to OpenAI calling for proactive government regulation — and persuading lawmakers it was serious. Unlike the long list of social media hearings in recent years, this AI hearing came earlier in OpenAI’s lifecycle and, crucially, before the company or its technology had suffered any high-profile mishaps.

    Altman, more than any other figure in tech, has emerged as the face of a new crop of powerful and disruptive AI tools that can generate compelling written work and images in response to user prompts. Much of the federal government is now racing to figure out how to regulate the cutting-edge technology.

    But after his performance on Tuesday, the CEO whose company helped spark the new AI arms race may have maneuvered himself into a privileged position of influence over the rules that may soon govern the tools he’s developing.

    Altman’s easy-going, plain-spoken demeanor helped disarm skeptical lawmakers and appeared to win over Democrats and Republicans alike. His approach contrasted with the wooden, lawyerly performances that have afflicted some other tech CEOs in the past during their time in the hotseat.

    “I sense there is a willingness to participate here that is genuine and authentic,” said Connecticut Democratic Sen. Richard Blumenthal, who chairs the committee’s technology panel.

    New Jersey Democratic Sen. Cory Booker, adopting an unusual level of familiarity with a witness, found himself repeatedly addressing Altman as “Sam,” even as he referred to other panelists by their last names.

    Even Altman’s fellow witnesses couldn’t resist gushing about his style.

    “His sincerity in talking about those [AI] fears is very apparent, physically, in a way that just doesn’t communicate on the television screen,” Gary Marcus, a former New York University professor and a self-described critic of AI “hype,” told lawmakers.

    With a relaxed yet serious tone, Altman did not deflect or shy away from lawmakers’ concerns. He agreed that large-scale manipulation and deception using AI tools are among the technology’s biggest potential flaws. And he validated fears about AI’s impact on workers, acknowledging that it may “entirely automate away some jobs.”

    “If this technology goes wrong, it can go quite wrong, and we want to be vocal about that,” Altman said. “We want to work with the government to prevent that from happening.”

    Altman’s candor and openness has captivated many in Washington.

    On Monday evening, Altman spoke to a dinner audience of roughly 60 House lawmakers from both parties. One person in the room, speaking on condition of anonymity to discuss a closed-door meeting, described members of Congress as “riveted” by the conversation, which also saw Altman demonstrating ChatGPT’s capabilities “to much amusement” from the audience.

    Lawmakers have spent years railing against social media companies, attacking them for everything from their content moderation decisions to their economic dominance. On Tuesday, they seemed ready — or even relieved — to be dealing with another area of the technology industry.

    Whether this time is truly different remains unclear, though. The AI industry’s biggest players and aspirants include some of the same tech giants Congress has sharply criticized, including Google and Meta. OpenAI is receiving billions of dollars of investment from Microsoft in a multi-year partnership. And with his remarks on Tuesday, Altman appeared to draw from a familiar playbook for Silicon Valley: Referring to technology as merely a neutral tool, acknowledging his industry’s imperfections and inviting regulation.

    Some AI ethicists and experts questioned the value of asking a leading industry spokesperson how he would like to be regulated. Marcus, the New York University professor, cautioned that creating a new federal agency to police AI could lead to “regulatory capture” by the tech industry, but the warning could have applied just as easily to Congress itself.

    “It seems very very bad that ahead of a hearing meant to inform how this sector gets regulated, the CEO of one of the corporations that would be subject to that regulation gets to present a magic show to the regulators,” Emily Bender, a professor of computational linguistics at the University of Washington, said of Altman’s dinner with House lawmakers.

    She added: “Politicians, like journalists, must resist the urge to be impressed.”

    After years of fidgety evasiveness from other tech CEOs, however, lawmakers this week seemed easily wowed by Altman and his seemingly straight-shooting answers.

    Louisiana Republican Sen. John Kennedy, after expressing frustration with IBM’s Montgomery for providing a nuanced answer he couldn’t comprehend, visibly brightened when Altman quickly and smoothly outlined his regulatory proposals in a bulleted list. Kennedy began joking with Altman and even asked whether Altman might consider heading up a hypothetical federal agency charged with regulating the AI industry.

    “I love my current job,” Altman deadpanned, to audience laughter, before offering to send Kennedy’s office some potential candidates.

    Compounding lawmakers’ attraction to Altman is a belief on Capitol Hill that Congress erred in extending broad liability protections to online platforms at the dawn of the internet. That decision, which allowed for an explosion of blogs, e-commerce sites, streaming media and more, has become an object of regret for many lawmakers in the face of alleged mental health harms stemming from social media.

    “I don’t want to repeat that mistake again,” said Judiciary Committee Chairman Dick Durbin.

    Here too, Altman deftly seized an opportunity to curry favor with lawmakers by emphasizing distinctions between his industry and the social media industry.

    “We try to design systems that do not maximize for engagement,” Altman said, alluding to the common criticism that social media algorithms tend to prioritize outrage and negativity to boost usage. “We’re not an advertising-based model; we’re not trying to get people to use it more and more, and I think that’s a different shape than ad-supported social media.”

    In providing simple-sounding solutions with a smile, Altman is doing much more than shaping policy: He is offering members of Congress a shot at redemption, one they seem grateful to accept. Despite the many pitfalls of AI they identified on Tuesday, lawmakers appeared to thoroughly welcome Altman as a partner, not a potential adversary needing oversight and scrutiny.

    “We need to be mindful,” Blumenthal said, “of ways that rules can enable the big guys to get bigger and exclude innovation, and competition, and responsible good guys such as our representative in this industry right now.”

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  • Google workers in London stage walkout over job cuts | CNN Business

    Google workers in London stage walkout over job cuts | CNN Business

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    Reuters
     — 

    Hundreds of Google employees staged a walkout at the company’s London offices on Tuesday, following a dispute over layoffs.

    In January, Google’s parent company Alphabet announced it was laying off 12,000 employees worldwide, equivalent to 6% of its global workforce.

    The move came amid a wave of job cuts across corporate America, particularly in the tech sector, which has so far seen companies shed more than 290,000 workers since the start of the year, according to tracking site Layoffs.fyi.

    Trade union Unite, which counts hundreds of Google’s UK employees among its members, said the company had ignored concerns put forward by employees.

    “Our members are clear: Google needs to listen to its own advice of not being evil,” said Unite regional officer Matt Whaley.

    “They and Unite will not back down until Google allows workers full union representation, engages properly with the consultation process and treats its staff with the respect and dignity they deserve.”

    A Google employee attending the protest, who asked not to be named for fear of retaliation, told Reuters that talks between employees and management had been “extremely frustrating.”

    “It has been difficult for those involved. We have a redundancy process for a reason, so that employees can make their voice heard,” they said. “But it feels as if our concerns have fallen on deaf ears.”

    Google’s senior management has been engaged in redundancy talks in many parts of Europe, in line with local employment laws.

    Last month, workers at the company’s Zurich office in Switzerland staged a similar walkout, with employee representatives claiming Google had rejected their proposals to reduce job cuts.

    “As we said on January 20, we’ve made the difficult decision to reduce our workforce by approximately 12,000 roles globally. We know this is a very challenging time for our employees,” a Google spokesperson said.

    “In the UK, we have been constructively engaging and listening to our employees through numerous meetings, and are working hard to bring them clarity and share updates as soon as we can in adherence with all UK processes and legal requirements.”

    Google employs more than 5,000 people in the United Kingdom.

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  • Meta’s business groups cut in latest round of layoffs | CNN Business

    Meta’s business groups cut in latest round of layoffs | CNN Business

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    New York
    CNN
     — 

    Facebook-parent Meta on Wednesday began cutting employees in its business groups as part of a previously announced round of layoffs, according to social media posts from impacted workers.

    Meta employees in operations, project management, marketing, policy, communications and risk analytics announced on LinkedIn Wednesday morning that they had been laid off.

    The company declined to confirm the reductions were underway, but a Meta spokesperson pointed CNN to the March blog post from CEO Mark Zuckerberg announcing that the company would cut 10,000 employees this year, and that affected members of the business groups would be notified this month.

    Zuckerberg previously said the business groups would be the third and final major round of those layoffs. Laid off members of Meta’s technology and recruiting teams were notified in the past two months. Some smaller reductions may continue through the end of 2023, Zuckerberg said in March.

    The 10,000 job reductions mark the second significant wave of layoffs at Meta in recent months. The company said in November that it was eliminating approximately 13% of its workforce, or 11,000 jobs, in the single largest round of cuts in its history.

    In September, Meta reported a headcount of 87,314, per a securities filing. With the 11,000 job cuts announced in November and the 10,000 announced in March, Meta’s headcount will fall to around 66,000 — a total reduction of about 25% — assuming no additional hiring.

    Meta has said the layoffs are part of its “year of efficiency,” as the company attempts to recover from repeated revenue declines, heightened competition, concerns about user growth and big losses in its Reality Labs division amid its pivot to building the so-called metaverse. Zuckerberg has also taken responsibility for over-hiring earlier in the pandemic, when there was strong demand for the company’s products and online advertising, which dropped off somewhat once the world reopened.

    The turnaround strategy is showing early signs of success. Meta’s stock jumped last month after the company posted a 3% year-over-year revenue increase for the first three months of 2023, reversing a trend of three consecutive quarters of revenue declines. Still, profits declined by nearly a quarter compared to the same period in the prior year, and price per advertisement — an indicator of the health of the company’s core digital ad business — also decreased by 17% from the year prior.

    Zuckerberg said on an earnings call with analysts last month that when Meta started its “efficiency work” late last year, “our business wasn’t performing as well as I wanted, but now we’re increasingly doing this work from a position of strength.”

    But left in its wake are the thousands of employees affected by layoffs.

    “Finding work you care about and believe in and the right people to be in the trenches with is an incredible dream; it also makes moments like this incredibly difficult,” one employee affected by Wednesday’s layoffs said in a LinkedIn post. The employee called the cuts a “shock to the system.”

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  • One of Asia’s top female entrepreneurs is stepping down at Grab, the ride-hailing company she helped found | CNN Business

    One of Asia’s top female entrepreneurs is stepping down at Grab, the ride-hailing company she helped found | CNN Business

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    Hong Kong
    CNN
     — 

    One of Southeast Asia’s most well-known female entrepreneurs is to step down from her operational roles at Grab, the ride-hailing giant she helped found more than a decade ago.

    Tan Hooi Ling, a former chief operating officer who currently leads the firm’s technology and corporate strategy teams, will move to an advisory role by the end of the year, the company said Thursday. She will also give up her seat on the board.

    Her exit leaves Grab’s Chief Executive Officer Anthony Tan the tough task of reversing years of losses amid increasingly fierce competition in the ride-hailing and food delivery markets, all without the help of the woman who helped him co-found the company in 2012.

    “Grab has been one of the most fulfilling experiences of my life. The impact we create is a reflection of who we are as a team, and I am humbled to have been able to walk alongside Anthony and the many amazing Grabbers who share the same values and work ethic to build something that improves lives in Southeast Asia,” a statement from the company quoted Tan Hooi Ling as saying.

    After being founded as a ride-hailing company by the two Tans – who are both from Malaysia but are unrelated – Grab quickly soared to become Southeast Asia’s most valuable private company. It acquired Uber’s Southeast Asia business in 2018, and has since expanded into a variety of other services, including food delivery, digital payments and even financial services.

    But Grab has faced intensifying competition from Southeast Asia rivals, including Singapore’s Sea Ltd, Indonesia’s GoTo Group, and Berlin-based Delivery Hero’s Foodpanda.

    Grab, which unlike some of its competitors avoided mass layoffs during the coronavirus pandemic, posted an annual loss of $1.74 billion in 2022. That was a 51% improvement on the year before, according to its annual report.

    In 2021, the company merged with a special-purpose acquisition company, or SPAC, backed by Altimeter Capital in a deal that would pave the way for a New York listing and value Grab at nearly $40 billion.

    Before that, Grab had heavyweight backers including Japan’s SoftBank

    (SFTBF)
    and China’s ride-hailing startup, Didi Chuxing.

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  • Manchin rails against Biden’s clean energy plans as he faces tough political headwinds in West Virginia | CNN Politics

    Manchin rails against Biden’s clean energy plans as he faces tough political headwinds in West Virginia | CNN Politics

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    CNN
     — 

    West Virginia political observers were not surprised when Sen. Joe Manchin appeared on Fox News on Monday to make a stunning threat: He could be persuaded to vote to repeal his own bill, the Inflation Reduction Act, if the Biden administration pushed him far enough.

    The conservative Democratic senator reiterated this to CNN, saying he would “look for every opportunity to repeal my own bill” if the administration continued to use the IRA to steer the US quickly towards the clean energy transition and away from fossil fuels.

    The IRA, passed and signed into law last year, was a sweeping $750 billion bill that lowered prescription drug costs, raised taxes on large corporations, and invested $370 billion into new tax credits for cleaner energy. Even though Manchin carved out space for fossil fuels, the bill represents by far the biggest climate investment in US history.

    From the start, Manchin has insisted the IRA was an “energy security bill,” rather than a clean-energy bill. Still, experts said he must be sensitive to the idea that he ushered in what ended up being the nation’s largest climate law, given he represents West Virginia – a state where coal and natural gas reign supreme.

    Manchin’s repeal threat “was probably good politics,” West Virginia University political science professor Sam Workman told CNN. If he decides to seek reelection in 2024, the 75-year-old senator will face his toughest political fight yet, as popular West Virginia Republican Gov. Jim Justice jumped into the race this week.

    Justice’s bid for the seat “doesn’t change anything at all,” Manchin told CNN. But political experts from his home state see a man who is gearing up for a fight.

    Since delivering President Joe Biden one of his biggest legislative wins with the IRA last summer, Manchin has spent the last few months on a rampage against the administration, homing in on what he calls its “radical climate agenda.” Manchin has voted against Biden’s nominees for high-ranking administration positions, bashed new rules from the Environmental Protection Agency and Treasury Department and clashed with members of the president’s cabinet at Senate hearings.

    Manchin’s appearance on Fox to slam Biden and threaten to repeal the law he had an outsized role in writing “is a pretty good indicator to me that he’s running,” said John Kilwein, chair of West Virginia University’s political science department.

    Manchin has been silent on whether he’ll run for reelection, but as Justice announced his candidacy, Manchin expressed confidence. “Make no mistake, I will win any race I enter,” he said in a statement.

    The Democrat beat his Republican challenger by just three percentage points in 2018. And though Justice still must get through a primary against Republican Rep. Alex Mooney, the governor is already backed by Senate Republicans’ electoral arm and many in the state think he will present a serious challenge to Manchin.

    “Justice is a likable candidate – he takes that ‘aw shucks’ thing to the next level,” Kilwein said. “This is going to be [Manchin’s] toughest fight, but I think anyone who thinks this is going to be a piece of cake is wrong. I don’t think he’s going to be easy to beat.”

    Manchin is “in danger” politically, his Democratic colleague Sen. Richard Blumenthal of Connecticut told CNN.

    “Joe Manchin is the last remaining statewide elected Democrat [in West Virginia], and we want [him] back in the United States Senate,” Blumenthal said, adding Manchin was a “pillar of strength to Democrats in the last session.”

    Justice made little mention of Manchin during his official campaign launch but came out swinging against Biden and his agenda. On Friday, Justice told Fox News that Manchin “would be a formidable opponent” if he runs for reelection, but added that he’s “done some things that have really alienated an awful lot of West Virginians.”

    There is no denying that West Virginia is incredibly conservative; the state went nearly 40 percentage points for Trump in the 2020 election. But even with those fundamentals, political experts said Manchin has had tremendous staying power through retail politics and argue he can deliver for the state while standing up to Biden.

    “His whole appeal is a retail appeal; every blueberry festival, huckleberry festival, Joe Manchin’s there,” former West Virginia political science professor Patrick Hickey told CNN. “He’s a really smart and talented politician. He gets all the benefits that come from supporting (the IRA), but the next time he’s in West Virginia, he’ll be in a diner telling voters how terrible Biden is.”

    Behind the political rhetoric, the Inflation Reduction Act’s energy provisions could be a windfall for West Virginia, and Manchin is walking a tightrope in his messaging around the law.

    Despite blasting the Biden administration, Manchin has spent the past few months at home touting the benefits of the IRA and jobs it is already bringing to the state.

    Several major clean energy companies have invested hundreds of millions of dollars to build new manufacturing plants in the state: a battery factory, a new industrial facility totally powered by renewable energy, and a plant to make electric school buses.

    “The way Manchin talked about those, he’s crediting the IRA and saying, ‘see, these are the good things that have happened,’” said Angie Rosser, executive director of environmental group West Virginia Rivers. “Those are hundreds of jobs reaching into the thousands, which for our small state is a big, big deal.”

    The John E. Amos coal-fired power plant in Poca, West Virginia. Fossil fuel energy is still a mainstay in state.

    Rosser and others pointed out that Manchin designed the IRA specifically to deliver money to West Virginia, designing tax credits to incentivize more manufacturing in coal country and funding to help these communities during the transition to clean energy.

    Morgan King, a staff member of West Virginia Rivers, has been traveling across the state recently to talk to local officials about how they can apply for federal IRA funding. The response has been overwhelmingly positive, King told CNN.

    “We’ve spoken with people of all parties,” she said. “People don’t care [about] the politics of how this bill was created so long as this funding can make it into their communities. West Virginia is set to disproportionately benefit from this bill more than any other state.”

    Manchin has been at odds with the Biden administration on several fronts, but the administration’s climate policies and implementation of the Inflation Reduction Act seem to have struck a particular nerve – and Republicans have continued to heavily criticize the law.

    A political ad from Republican dark money group One Nation is already circulating in the state, claiming that the IRA would kill 100,000 jobs in West Virginia.

    “The notion that this is just a climate bill … it is damaging here in the state because we’re pretty far to the right on these issues, especially energy issues,” Workman said. “When you sell something as a climate bill, given the economic context here and our history, it’s somewhat harder for people to see indirect benefits like jobs.”

    Manchin recently voted alongside Republicans on Congressional Review Act bills to undo EPA emissions rules for heavy-duty trucks as well as a climate-focused Labor Department rule (Biden has already vetoed one and promised to veto the other). In March, Manchin tanked top Interior Department nominee Laura Daniel-Davis, claiming she wasn’t upholding a part of the IRA that mandates offshore oil drilling in certain federal waters.

    The dynamic has put Senate Democrats in a tough spot. Democrats have a slightly expanded Senate majority after the midterms, but the continued absence of California Sen. Dianne Feinstein, who has been away from Washington as she recovers from shingles, has made for nailbiter votes.

    “He’s one of the most independent US senators out there,” Democratic Sen. Brian Schatz of Hawaii told CNN. “When he is frustrated, he’s not going to be shy about it. And right now, he’s obviously extremely frustrated with the administration, and that has to get sorted.”

    Manchin has also spent the last few months lobbing a steady stream of blistering statements aimed at Biden’s agencies. When the Environmental Protection Agency proposed strong new vehicle emissions regulations intended to push the US auto market towards electric vehicles in the next decade, Manchin said the agency was “lying to Americans” and called the regulations “radical” and “dangerous.”

    And when the Treasury Department issued guidance on IRA’s new EV tax credits – which were written by Manchin – the senator called it “horrific” and said it “completely ignores the intent” of his law.

    Some of his Democratic colleagues have panned his comments about repealing the IRA.

    “Maybe he should run for president,” Democratic Sen. Martin Heinrich of New Mexico told CNN. “He’s got one job; the president’s got another. The IRA is working.”

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  • Biden kicks off reelection bid with union rally in Philadelphia | CNN Politics

    Biden kicks off reelection bid with union rally in Philadelphia | CNN Politics

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    CNN
     — 

    President Joe Biden kicked off his reelection campaign Saturday at a union rally in his frequent haunt of Pennsylvania, the state that remains an intersection of his personal and political identities that he hopes can propel him to a second term.

    The first official rally of his final political campaign was a moment for Biden to underscore recent economic wins that undergird his argument for another four years in the White House.

    “Just think back. Remember what it was like when I came to office, we came into office. Remember the mess we inherited,” Biden told the audience in Philadelphia. “Now look at where we are today.”

    To a roaring crowd, who repeatedly cheered “four more years,” the president touted several accomplishments, including the bipartisan infrastructure law, a coronavirus relief package, a bipartisan semiconductor chip manufacturing law and the recently negotiated debt ceiling deal that helped avert a US default.

    Biden also criticized recent Republican tax proposals while describing what he called his middle-class vision for the American economy, referring to it several times as “Biden-omics.”

    Biden made only brief mention of Donald Trump, the current front-runner for the 2024 GOP presidential nomination, steering clear of the former president’s recent federal indictment and arraignment but hitting him on infrastructure.

    “Under my predecessor, infrastructure week became a punchline,” Biden said. “On my watch, we’re making infrastructure a decade headline.”

    First lady Jill Biden, who spoke shortly before her husband, highlighted the president’s optimism. Wearing a corsage to mark their 46th wedding anniversary Saturday, the first lady recalled how she met Biden following the death of his first wife and baby daughter in a tragic car accident that also injured his two sons.

    “What I love about Joe is that even though he has faced unimaginable tragedies, his optimism is undaunted,” Jill Biden said. “His strength is unshakeable.”

    She added that the president was “not done.”

    “He’s ready to finish the job,” she said. “He’s ready to win, and with your help, he will.”

    Though his economic wins were the centerpiece of Biden’s opening campaign event, polls show many voters give him poor marks for his handling of the economy, particularly as prices have soared post-pandemic. Recent figures have shown inflation easing, however, and fears of an imminent recession have faded.

    Biden has said more Americans will come to reward him for his economic stewardship once the benefits of some of his signature legislative achievements, including a new infrastructure law, begin taking hold.

    Labor groups that threw their backing behind Biden ahead of his speech include the AFL-CIO, which said it was the earliest point in a presidential election cycle it had ever endorsed a candidate.

    “There’s absolutely no question that Joe Biden is the most pro-union president in our lifetimes,” said AFL-CIO President Liz Shuler. “From bringing manufacturing jobs home to America to protecting our pensions and making historic investments in infrastructure, clean energy and education, we’ve never seen a president work so tirelessly to rebuild our economy from the bottom up and middle out.”

    Supporters cheer before Biden speaks at the Pennsylvania Convention Center.

    Biden, who made his first stop after announcing his reelection bid a legislative conference for North America’s Building Trades Unions in Washington, has long relied on union support for his political ambitions.

    “I’m more honored by your endorsement than you can imagine – coming this early, it’s going to make a gigantic difference in this campaign,” Biden said during Saturday’s event in Philadelphia, where he called himself “the most pro-union president in American history.”

    Not all unions have thrown their support behind Biden’s reelection bid. The powerful United Auto Workers said last month it was holding off on endorsing Biden, citing concerns over his policies that would encourage a transition to electric vehicles, according to a memo from the union.

    The UAW has more than 400,000 members, and Biden has touted its support in the past. Last year he called American autoworkers “the most skilled autoworkers in the world.” The group’s membership is mostly concentrated in Michigan, a presidential election battleground.

    Biden also rankled union members last year when he signed legislation that averted a nationwide rail strike – a step he said was necessary to prevent a stoppage of important freight movement.

    Biden’s campaign has leaned into his economic record, including releasing a 60-second ad titled “Backbone” last month. The spot struck a populist tone, mixing audio of the president speaking about “investing in places and people that have been forgotten” and a narrator ticking through the administration’s work to boost infrastructure and manufacturing in the country.

    “Joe Biden’s building an economy that leaves no city, no town, no American behind,” the narrator says.

    This story has been updated with additional information.

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  • Fixing Social Security involves hard choices | CNN Politics

    Fixing Social Security involves hard choices | CNN Politics

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    CNN
     — 

    There’s a reason why politicians have long shied away from addressing Social Security’s massive financial problems. The commonly proposed solutions involve cutting benefits or raising taxes, which would spark an outcry from a range of powerful constituents, including senior citizens and the business community.

    The situation, however, is only growing more critical. The combined Social Security trust funds are projected to run dry in 2034, according to the latest annual report from the entitlement program’s trustees that was released last week. At that time, the funds’ reserves will be depleted, and the program’s continuing income will only cover 80% of benefits owed.

    The estimate is one year earlier than the trustees projected last year.

    About 66 million Americans received Social Security benefits in 2022. It’s a vital lifeline for many of them. Some 42% of elderly women and 37% of elderly men rely on the monthly payments for at least half their income, according to the Social Security Administration.

    Though congressional Republicans’ drive to cut spending amid debt ceiling negotiations this year has prompted renewed interest in the entitlement’s finances, little is likely to happen, experts say. The insolvency date is still too far in the future.

    The last time Congress enacted a major overhaul, in 1983, Social Security was only months away from being able to pay full benefits. At that time, Democratic lawmakers who controlled the House agreed with Senate Republicans and then-GOP President Ronald Reagan to increase payroll taxes and gradually raise the full retirement age from 65 to 67, among other reforms.

    While President Joe Biden has promised to strengthen Social Security and defend it from any cuts by Republicans, he has yet to lay out a concrete vision for protecting the program. It was not included in his annual budget proposal this year, though he did suggest a financial fix for Medicare, which is facing its own solvency issues.

    Asked about the president’s plan, the White House said that the budget “clearly states his principles for strengthening Social Security.”

    “He looks forward to working with Congress to responsibly strengthen Social Security by ensuring that high-income individuals pay their fair share, without increasing taxes on anyone making less than $400,000,” said Robyn Patterson, assistant press secretary at the White House.

    A multitude of proposals have been floated over the years to address Social Security’s shortfall, many of which have multiple measures.

    Several options focus on saving the entitlement program money, though left-leaning advocates and senior citizen groups are quick to point out that these moves are actually benefit cuts that they would strenuously oppose.

    One common proposal is raising the retirement age. Currently, Americans can start collecting Social Security benefits at 62, though doing so would reduce their lifetime payments by as much as 30%.

    The full retirement age, which had been 65 for much of the program’s existence, is slowly rising to 67 for Americans born in 1960 or later.

    Some policymakers advocate for raising the full retirement age to 70 for future retirees, bringing it more in line with changes in life expectancy. That would mean those retiring earlier than that would get smaller monthly checks than under current law.

    Doing so could wipe out about a third of the Social Security trust fund’s 75-year deficit.

    Last year, the conservative Republican Study Committee released a budget plan that called for raising the full retirement age for future retirees at a rate of three months per year until it is increased to 70 for those born in 1978. It would then link the retirement age to future increases in life expectancy, as well as adjust the number of working years included in benefit calculations to 40 years, up from 35 years.

    Other options include reducing benefits for higher-income Americans, which was also included in the Republican Study Committee’s budget plan.

    New retirees’ Social Security benefits are one-third higher today than they were for folks who retired 20 years ago, even after accounting for inflation, according to Andrew Biggs, senior fellow at the right-leaning American Enterprise Institute. Plus, the maximum Social Security benefit in the US is two to three times higher than the maximum retirement benefit in Canada, the United Kingdom, Australia and New Zealand.

    Biggs supports placing a cap on the maximum benefit that the highest-earning retirees can receive. The maximum benefit this year is about $43,000 and will rise to $59,000 by 2050, he said. Though such a cap would only solve about 10% to 15% of the long-term solvency gap, Biggs argues it’s one step, and it only affects those who he says don’t depend on the benefits.

    “We’re going way, way beyond a pure safety net program,” Biggs said at a recent webinar hosted by the Committee for a Responsible Federal Budget, a government watchdog group. “Here we’re looking at a retirement program for middle income and upper income people.”

    Other suggestions that have been floated include changing the formulas that determine the benefits Americans get upon retirement or the annual cost-of-living adjustment retirees receive to slow the growth of payments.

    The main way to bring more money into the Social Security system is to increase the amount of payroll taxes collected.

    A proposal popular among Democrats and left-leaning experts is to lift the wage cap so that higher-income earners have to shell out more in payroll taxes.

    The Social Security tax rate of 6.2% is levied on both employers and employees, for a total rate of 12.4%. However, in 2023, it’s only applied to annual wages of up to $160,200. (By contrast, Medicare’s 2.9% total payroll tax rate is applied to all wages, and higher-income Americans are subject to an additional 0.9% Medicare tax.)

    When payroll taxes for Social Security were first collected in 1937, about 92% of earnings from jobs covered by the program were subject to the payroll tax, according to the Congressional Budget Office. By 2020, that figure had fallen to about 83% as income inequality has increased.

    Several congressional Democrats have floated proposals to raise the amount of wages subject to the payroll tax. Rep. John Larson of Connecticut wants to apply the payroll tax to wages above $400,000, which he says would extend the program’s solvency by nine years.

    Vermont Sen. Bernie Sanders, an independent, and Massachusetts Sen. Elizabeth Warren, a Democrat, introduced a bill earlier this year that would make multiple changes to Social Security, including subjecting all income above $250,000 to the payroll tax and applying it to investment and business income. They say their reforms would extend the entitlement’s solvency for 75 years.

    But changing the wage cap could also alter the fundamental design of Social Security, in which retirees’ benefits are tied to the amount of taxes they paid into the system while working.

    For instance, the proposal from Sanders and Warren would not credit the additional taxed earnings toward benefits. That would increase the beneficial impact on solvency but would also raise resistance among some advocates who believe the link between taxes and benefits should be maintained.

    Another option is raising the payroll tax rate. Increasing it to a total of 16% would just about assure 75 years of solvency, said Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget.

    Most lawmakers, however, would not find that type of tax hike very palatable, particularly not Republicans who control the House.

    While experts disagree on the best way to address Social Security’s shortfall, one thing they are generally united on is that waiting will only result in having to employ harsher solutions. But that isn’t spurring elected officials to action.

    “Nobody’s acting as if that’s something they’ve got to take seriously,” Biggs said. “So I’ll just be honest and say I’m worried about how this thing plays out.”

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  • Job site ZipRecruiter cutting 20% of its staff | CNN Business

    Job site ZipRecruiter cutting 20% of its staff | CNN Business

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    New York
    CNN
     — 

    Fewer employers looking for workers means 270 employees at job search site ZipRecruiter will soon be out of a job.

    The company is cutting 20% of its staff by the end of this month, the company disclosed in a filing late Wednesday.

    “This action was taken in response to current market conditions and after reducing other discretionary expenses, with a view toward driving long-term efficiency,” according to the filing.

    The company had previously said it is experiencing a “typical softness in jobs posting” in January, but sounded other alarms about a slowing in the labor market. Its first quarter revenue fell 19% from a year earlier and it forecast that its revenue in the current quarter would be down nearly 30% from the second quarter of 2022.

    The job search site still projects adjusted earnings that are roughly the same for this year as last year, although it said to do so it would “respond to our environment quickly” by “increasing our focus on profitability during times of decreased demand from employers.”

    About half of the 270 employees losing their job are in the sales and customer support teams. The company will take a charge of between $7 million to $9 million to cover severance costs. It expects to still make the same level of profits, excluding special items such as severance, as in its earlier guidance.

    It also announced that CEO Ian Siegel agreed to a 30% cut in base salary, as of June 1. He has a base salary of $550,000, according to an earlier filing, but had total compensation last year of about twice that amount.

    Layoffs across the tech sector have become widespread in recent months. Amazon, one of the nation’s largest private-sector employers, has announced two rounds of job cuts this year totaling 27,000 positions, and Facebook holding company Meta has announced 21,000 job cuts since last fall. Alphabet, Microsoft and Salesforce — and especially Twitter — have all announced large job cuts.

    Outplacement firm Challenger, Gray & Christmas said Thursday there have been 137,000 layoffs in the sector in the first five months of the year, the most job cuts in the sector since there were 168,000 in all of 2001, the year after the dot.com bubble burst.

    Despite all the job cuts in technology and also in media, US employers overall are still hiring more people than they’re cutting.

    Private sector employment increased by 278,000 jobs in May, according to ADP’s monthly National Employment Report released Thursday, much stronger than the 170,000 forecast by economists. Economists are also forecasting a gain of 190,000 jobs for May when the Labor Department issues its monthly jobs report Friday. The April jobs report also came in much stronger than expected, as employers added 253,000 jobs.

    Still, hiring is at a slower pace than a year ago, when employers added 445,000 jobs a month, on average, in the first half of 2022. The Labor Department’s count of job openings, while up 3% in April compared to March, is down 14% from a year earlier — though that still means there are 1.8 jobs available for every job seeker.

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  • Chinese tech giant Alibaba announces new chairman and CEO succession plan in major shakeup | CNN Business

    Chinese tech giant Alibaba announces new chairman and CEO succession plan in major shakeup | CNN Business

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    Hong Kong
    CNN
     — 

    Joseph Tsai, executive vice chairman and cofounder of Alibaba Group, will succeed Daniel Zhang as chairman, according to an announcement by the Chinese tech giant on Tuesday.

    This is Alibaba’s second succession in just a few years after founder Jack Ma stepped away in 2019.

    Eddie Wu, chairman of Alibaba’s e-commerce platform Taobao and Tmall Group, will succeed Zhang as chief executive officer and replace him on the company’s board of directors. Both appointments will take effect on September 10, 2023, the company said.

    Following the transition, Zhang will continue to serve as the chairman and CEO of Alibaba’s cloud unit.

    “This is the right time for me to make a transition, given the importance of Alibaba Cloud Intelligence Group as it progresses towards a full spin-off,” Zhang said in the announcement.

    He added that the emergence of generative AI has opened up “exciting new opportunities” for the company’s cloud business.

    Wu, also a cofounder of Alibaba, served as the technology director at the company’s inception in 1999.

    “I am grateful for the trust of the Alibaba Group board of directors and am honored to succeed Daniel as Alibaba’s CEO,” he said.

    “While our current transformation brings in a new corporate organizational and governance structure, Alibaba’s mission remains unchanged.”

    The succession comes just a few months after the internet giant announced its biggest restructuring in its 24-year history.

    The company would split into six separate units, including cloud, e-commerce, logistics, media and entertainment, according to a company statement in March. Each unit would be overseen by its own CEO and board directors, and most of them can pursue separate listings or fundraisings.

    Zhang was appointed by Alibaba as CEO in May 2015, eight years after he joined the company. On September 10, 2019, he replaced Jack Ma as the executive chairman, as Ma retired on his birthday and the 20th anniversary of the company as he had promised.

    Alibaba is China’s largest e-commerce company, boasting more than 900 million active users annually on its Taobao and Tmall platforms. It also operates the country’s biggest cloud computing and digital payment platforms.

    But the company, along with its co-founder Ma, has been at the center of a sweeping crackdown by Beijing in recent years.

    After Ma criticized Chinese financial regulators in a public speech in late 2020, Beijing called off the blockbuster IPO of Ant Group, the affiliate of Alibaba that owns Alipay, at the last minute. The cancellation marked the start of a regulatory onslaught against the country’s internet industry and the private sector, during which Beijing imposed a record fine of $2.8 billion on Alibaba Group for violating antitrust rules.

    Since then, Ma had largely disappeared from public view and retreated further from his companies. He has reportedly spent more time overseas, including in Hong Kong and Japan, home to his friend and Alibaba investor, SoftBank CEO Masa Son.

    But in March, he made a surprising public appearance in mainland China, days before Alibaba announced its major restructuring plan. His return was a symbolic move and probably a “planned media event” by Beijing intended to appease private sector fears, according to analysts.

    Since then, Ma has shown up in public more frequently, with a more visible focus on researching and teaching. In April, the University of Hong Kong announced that Ma would join its business school for the next three years.

    Last week, Ma gave his first lecture as a visiting professor to the University of Tokyo, according to a statement from the university.

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  • Russian-speaking cyber gang claims credit for hack of BBC and British Airways employee data | CNN Business

    Russian-speaking cyber gang claims credit for hack of BBC and British Airways employee data | CNN Business

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    CNN
     — 

    A group of Russian-speaking cyber criminals has claimed credit for a sweeping hack that has compromised employee data at the BBC and British Airways and left US and UK cybersecurity officials scrambling to respond.

    The hackers, known as the CLOP ransomware gang, say they have “information on hundreds of companies.” They’ve given victims until June 14 to discuss a ransom before they start publishing data from companies they claim to have hacked, according to a dark web posting seen by CNN.

    The extortion threat adds urgency to an already high-stakes security incident that has forced responses from tech firms, corporations and government agencies from the US to Canada and the UK.

    The compromise of employee data at the BBC and British Airways came via a breach of a human resources firm, Zellis, that both organizations use.

    “We are aware of a data breach at our third-party supplier, Zellis, and are working closely with them as they urgently investigate the extent of the breach,” a BBC spokesperson told CNN Wednesday. The spokesperson declined to comment on the hackers’ extortion threat.

    A British Airways spokesperson said the company had “notified those colleagues whose personal information has been compromised to provide support and advice.”

    The hackers — a well-known group whose favored malware emerged in 2019 — last week began exploiting a new flaw in a widely used file-transfer software known as MOVEit, appearing to target as many exposed organizations as they could. The opportunistic nature of the hack left a broad swath of organizations vulnerable to extortion.

    Numerous US state government agencies use the MOVEit software, but it’s unclear how many agencies, if any, have been compromised.

    The US Cybersecurity and Infrastructure Security Agency has ordered all federal civilian agencies to update the MOVEit software in light of the hack. No federal agencies have been confirmed as victims, a CISA spokesperson told CNN.

    Together with the Federal Bureau of Investigation, CISA also released advice on dealing with the CLOP hack. Progress, the US firm that owns the MoveIT software, has also urged victims to update their software packages and has issued security advice.

    CISA Executive Director for Cybersecurity Eric Goldstein said in a statement: “CISA remains in close contact with Progress Software and our partners at the FBI to understand prevalence within federal agencies and critical infrastructure.”

    But the effort to respond to the cyber attack is very much ongoing.

    The CLOP hackers are “overwhelmed with the number of victims,” according to Charles Carmakal, chief technology officer at Mandiant Consulting, a Google-owned firm that has investigated the hack. “Instead of directly reaching out to victims over email or telephone calls like in prior campaigns, they are asking victims to reach out to them via email,” he said on LinkedIn Tuesday night.

    Allan Liska, a ransomware expert at cybersecurity firm Recorded Future, also told CNN: “Unfortunately, the sensitive nature of the data often stored on MOVEit servers means there will likely be real consequences stemming from the [data theft] but it will be months before we understand the full fallout from this attack.”

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  • Bernie Sanders launches Senate probe into Amazon warehouse safety conditions | CNN Business

    Bernie Sanders launches Senate probe into Amazon warehouse safety conditions | CNN Business

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    CNN
     — 

    Sen. Bernie Sanders on Tuesday launched a Senate investigation into working and safety conditions at Amazon warehouses, adding to federal scrutiny on the labor practices of one of the country’s largest employers.

    Sanders, the chairman of the Senate committee on health, education, labor and pensions, also unveiled a website where Amazon workers can submit stories about their experiences at the company to help inform the investigation.

    “The company’s quest for profits at all costs has led to unsafe physical environments, intense pressure to work at unsustainable rates, and inadequate medical attention for tens of thousands of Amazon workers every year,” Sanders wrote in a letter to Amazon CEO Andy Jassy announcing the probe.

    Over the years, some Amazon workers have described the “grueling” experience of long hours racing around warehouses that can be the size of 28 football fields while the company tracks their every move.

    Sanders has been one of Amazon’s most vocal and high-profile antagonists. He has sparred with the company over its labor practices and joined a rally of workers looking to unionize one of its facilities. In 2018, following heavy criticism from Sanders, Amazon announced it was raising its minimum wage for US employees to $15 an hour.

    In his letter Tuesday, Sanders argued that Amazon warehouses “are uniquely dangerous,” and cited recent citations from the Labor Department’s Occupational Safety and Health Administration against Amazon.

    After inspecting three Amazon warehouse facilities, OSHA issued hazard letters in January related to injury risks from workers lifting packages. An Amazon spokesperson at the time said the company “strongly” disagrees with OSHA’s claims and intends to appeal.

    Sanders also cited a report from a group of labor unions that said Amazon’s rate of serious injuries at warehouses was more than double the rate at non-Amazon warehouses, as well as “concerning stories from workers around the country about the toll that working at Amazon warehouses takes on their bodies.” (Amazon said it disputes how the data in the labor unions’ report characterizes serious injury rate.)

    Steve Kelly, an Amazon spokesperson, told CNN that the company “reviewed the letter and strongly disagree with Senator Sanders’ assertions.”

    “We take the safety and health of our employees very seriously,” Kelly, the Amazon spokesperson, said in a statement. “There will always be ways to improve, but we’re proud of the progress we’ve made which includes a 23% reduction in recordable injuries across our U.S. operations since 2019. We’ve invested more than $1 billion into safety initiatives, projects, and programs in the last four years, and we’ll continue investing and inventing in this area because nothing is more important than our employees’ safety.”

    Sanders also has an open invitation to come tour one of its facilities, the company said.

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  • Indian tech giant Wipro will invest $1 billion in AI, including training all staff | CNN Business

    Indian tech giant Wipro will invest $1 billion in AI, including training all staff | CNN Business

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    Hong Kong
    CNN
     — 

    Wipro, one of India’s top providers of software services, wants everyone on staff to know how to use artificial intelligence.

    The IT giant announced Wednesday it would spend $1 billion on improving its artificial intelligence capabilities over the next three years, including training its entire staff of 250,000 people across 66 countries in the fast-moving technology.

    Wipro

    (WIT)
    said it plans to run workshops “on AI fundamentals and responsible use of AI over the course of the next 12 months, and will continue to provide more customized, ongoing training for employees in AI-specialized roles.”

    Wipro is one of India’s biggest outsourcing firms, specializing in IT and consulting services. Its move comes as generative AI, the technology that underpins popular platforms such as ChatGPT, has taken the world by storm.

    “With the emergence of generative AI, we expect a fundamental shift up ahead, for all industries,” Wipro CEO Thierry Delaporte said in the statement.

    The company added it was launching a software system to integrate AI into every platform and tool used internally and offered to clients, as it capitalizes on its existing efforts in the space that started about a decade ago.

    Businesses are increasingly using AI to either bolster or replace tasks usually carried out by humans.

    This week, the CEO of an Indian startup made headlines for laying off about 90% of his support staff, saying the company had built an AI-powered chatbot that could process customer service requests faster than employees.

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  • 5 ways a debt default could affect you | CNN Politics

    5 ways a debt default could affect you | CNN Politics

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    CNN
     — 

    President Joe Biden and House Republicans may have as little as a month to prevent the US from defaulting on its debt, which would impact millions of Americans and unleash economic and fiscal chaos here and around the world.

    Treasury Secretary Janet Yellen warned Monday that the government may not be able to pay all of its bills in full and on time as soon as June 1. However, the forecast was uncertain, and the default date might come several weeks later, she said. The US hit its $31.4 trillion debt ceiling in January, and Treasury has been using cash and “extraordinary measures” to satisfy obligations since then.

    Just what would happen if the nation defaults on its debt is unknown since it’s never actually happened before. A close call in 2011 roiled the financial markets and prompted Standard & Poor’s to downgrade the US’ credit rating to AA+ from AAA.

    Yellen gave a sense of the turmoil it would cause in her letter to House Speaker Kevin McCarthy on Monday.

    “If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests,” she wrote.

    To be clear, a debt default doesn’t mean all payments would stop and people would permanently lose out on money they are owed. Treasury would have the funds to satisfy some obligations, but it’s not certain how the agency would handle the disbursements. Much would also depend on how long it takes Congress to address the borrowing cap.

    “Tens of millions of people across the country who expect payments from the federal government may not get them on time,” said Shai Akabas, director of economic policy at the Bipartisan Policy Center.

    Here are five ways that Americans could be affected by debt default:

    About 66 million retirees, disabled workers and others receive monthly Social Security benefits. The average payment for retired workers is $1,827 a month in 2023.

    Almost two-thirds of beneficiaries rely on Social Security for half of their income, and for 40% of recipients, the payments constitute at least 90% of their income, according to the National Committee to Preserve Social Security and Medicare.

    These payments could be delayed in a debt default scenario, though it’s possible Treasury could continue making on-time payments because of the entitlement program’s trust fund, Akabas said.

    The benefits are disbursed four times a month, on the third day of the month and on three Wednesdays. Roughly $25 billion a week is sent out, according to the Congressional Budget Office.

    “Even a short delay in the payment of Social Security benefits would be a burden for the millions of Americans who rely on their earned benefits to pay for out-of-pocket health care expenses, food, rent and utilities,” Max Richtman, the committee’s CEO, said in a statement.

    Many other government payments could also be affected, including funding for food stamps; federal grants to states and municipalities for Medicaid, highways, education and other programs; and Medicare payments to hospitals, doctors and health insurance plans.

    More than 2 million federal civilian workers and around 1.4 million active-duty military members could see their paychecks delayed. Federal government contractors could also see a lag in payments, which could affect their ability to compensate their workers.

    Also, certain veterans benefits, including disability payments and pensions for some low-income veterans and their surviving families, could be affected.

    “Such calamity would place further stress on our servicemembers, retirees, and veterans, as well as their families, caregivers, and survivors,” Rene Campos, senior director of government relations for the Military Officers Association of America, said in a blog post. “Though life in uniform is not always predictable, those who serve or have served their country expect their country to honor their commitment to service.”

    About $25 billion in pay or benefits for active-duty members of the military, civil service and military retirees, veterans and recipients of Supplemental Security Income is sent out on the first day of the month, according to the CBO.

    Americans’ investments would take a direct hit. Case in point: Markets had what was then their worst week since the financial crisis during the 2011 debt ceiling standoff after the Standard & Poor’s downgrade.

    Even if the debt ceiling impasse is resolved soon after a default, stocks could shed as much as a third of their value. That would wipe out around $12 trillion in household wealth, according to Moody’s Analytics.

    If a default occurs, yields on US Treasuries will inevitably rise to compensate for the increased risk that bondholders won’t receive the money they’re owed from the government.

    Since interest rates on loans, credit cards and mortgages are often based on Treasury yields, the cost of borrowing money and paying off debt would rise. That’s on top of the increased costs Americans are already facing from the Federal Reserve rate hikes.

    Families and businesses would also have a tougher time getting approved for lines of credit since banks would have to be more selective about to whom they loan money. That’s because their costs of borrowing money will also rise, which limits the amount of money they can lend out.

    A debt default could trigger an economic downturn, which would prompt a spike in unemployment. It would come at a particularly fragile time – when the nation is already dealing with rising interest rates and stubbornly high inflation.

    How much damage would be done would depend on how long the crisis continues. If the default lasts for about a week, then close to 1 million jobs would be lost, including in the financial sector, which would be hard hit by the stock market declines. Also, the unemployment rate would jump to about 5% and the economy would contract by nearly half a percent, according to Moody’s.

    But if the impasse dragged on for six weeks, then more than 7 million jobs would be lost, the unemployment rate would soar above 8% and the economy would decline by more than 4%, according to Moody’s. The effects would still be felt a decade from now.

    “It would be a body blow to the economy, and it would be a manufactured crisis,” said Bernard Yaros, an economist at Moody’s.

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  • Twitter accused of failing to pay millions in employee bonuses after Musk takeover | CNN Business

    Twitter accused of failing to pay millions in employee bonuses after Musk takeover | CNN Business

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    CNN
     — 

    Twitter failed to pay out annual bonuses to staff after its acquisition by billionaire Elon Musk despite repeated assurances from executives in the lead-up to the deal closing that the company would do so, according to a new lawsuit filed on behalf of employees.

    The lawsuit was filed in a San Francisco federal court on Tuesday by Mark Schobinger, who was a senior director of compensation at Twitter until he left the company late last month. The suit is seeking class action status for former and current Twitter employees who did not receive their 2022 bonus.

    “We estimate about a couple thousand employees would have been eligible for the bonuses,” Shannon Liss-Riordan, the attorney representing Schobinger, said in a statement to CNN. “While I don’t have an exact number, we expect the amount owed is in the tens of millions.”

    Twitter, which has cut much of is public relations team, did not respond to CNN’s request for comment.

    The complaint states that after it was announced that Musk was acquiring the social media company last April, “many employees raised concerns” over the fate of “their compensation and annual bonus” if and when the deal closed.

    In the months leading up to Musk completing his acquisition of Twitter, company executives repeatedly promised employees that 2022 bonuses would be paid out at 50% of the target, according to the complaint. “The promise was repeated following Musk’s acquisition,” the complaint said.

    Despite the promises, however, Twitter has yet to pay out bonuses, the lawsuit says. Schobinger left the company last month following “Twitter’s reneging on various promises it had made to employees, including its failure to pay promised bonuses,” according to the complaint.

    The lawsuit is the latest in a string of legal actions taken by former Twitter employees after Musk’s acquired the company and slashed 80% of the staff in an urgent bid to cut costs.

    Liss-Riordan previously brought multiple proposed class action suits against Twitter, including on behalf of female employees and disabled employees. Another suit was filed by a group of former employees who accused Twitter of breach of contract because it allegedly failed to follow through on promises to allow remote work and provide consistent severance benefits after the acquisition.

    Twitter has denied the breach of contract allegations in the lawsuit brought by former employees about remote work and severance. The proposed class action suits on behalf of female and disabled employees were dismissed by federal judges last month. The suits were later refiled.

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  • First on CNN: Senators press Google, Meta and Twitter on whether their layoffs could imperil 2024 election | CNN Business

    First on CNN: Senators press Google, Meta and Twitter on whether their layoffs could imperil 2024 election | CNN Business

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    CNN
     — 

    Three US senators are pressing Facebook-parent Meta, Google-parent Alphabet and Twitter about whether their layoffs may have hindered the companies’ ability to fight the spread of misinformation ahead of the 2024 elections.

    In a letter to the companies dated Tuesday, the lawmakers warned that reported staff cuts to content moderation and other teams could make it harder for the companies to fulfill their commitments to election integrity.

    “This is particularly troubling given the emerging use of artificial intelligence to mislead voters,” wrote Minnesota Democratic Sen. Amy Klobuchar, Vermont Democratic Sen. Peter Welch and Illinois Democratic Sen. Dick Durbin, according to a copy of the letter reviewed by CNN.

    Since purchasing Twitter in October, Elon Musk has slashed headcount by more than 80%, in some cases eliminating entire teams.

    Alphabet announced plans to cut roughly 12,000 workers across product areas and regions earlier this year. And Meta has previously said it would eliminate about 21,000 jobs over two rounds of layoffs, hitting across teams devoted to policy, user experience and well-being, among others.

    “We remain focused on advancing our industry-leading integrity efforts and continue to invest in teams and technologies to protect our community – including our efforts to prepare for elections around the world,” Andy Stone, a spokesperson for Meta, said in a statement to CNN about the letter.

    Alphabet and Twitter did not immediately respond to a request for comment.

    The pullback at those companies has coincided with a broader industry retrenchment in the face of economic headwinds. Peers such as Microsoft and Amazon have also trimmed their workforces, while others have announced hiring freezes.

    But the social media companies are coming under greater scrutiny now in part due to their role facilitating the US electoral process.

    Tuesday’s letter asked Meta CEO Mark Zuckerberg, Alphabet CEO Sundar Pichai and Twitter CEO Linda Yaccarino how each company is preparing for the 2024 elections and for mis- and disinformation surrounding the campaigns.

    To illustrate their concerns, the lawmakers pointed to recent changes at Alphabet-owned YouTube to allow the sharing of false claims that the 2020 presidential election was stolen, along with what they described as content moderation “challenges” at Twitter since the layoffs.

    The letter, which seeks responses by July 10, also asked whether the companies may hire more content moderation employees or contractors ahead of the election, and how the platforms may be specifically preparing for the rise of AI-generated deepfakes in politics.

    Already, candidates such as Florida Gov. Ron DeSantis appear to have used fake, AI-generated images to attack their opponents, raising questions about the risks that artificial intelligence could pose for democracy.

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  • 300 million jobs could be affected by latest wave of AI, says Goldman Sachs | CNN Business

    300 million jobs could be affected by latest wave of AI, says Goldman Sachs | CNN Business

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    Hong Kong
    CNN
     — 

    As many as 300 million full-time jobs around the world could be automated in some way by the newest wave of artificial intelligence that has spawned platforms like ChatGPT, according to Goldman Sachs economists.

    They predicted in a report Sunday that 18% of work globally could be computerized, with the effects felt more deeply in advanced economies than emerging markets.

    That’s partly because white-collar workers are seen to be more at risk than manual laborers. Administrative workers and lawyers are expected to be most affected, the economists said, compared to the “little effect” seen on physically demanding or outdoor occupations, such as construction and repair work.

    In the United States and Europe, approximately two-thirds of current jobs “are exposed to some degree of AI automation,” and up to a quarter of all work could be done by AI completely, the bank estimates.

    If generative artificial intelligence “delivers on its promised capabilities, the labor market could face significant disruption,” the economists wrote. The term refers to the technology behind ChatGPT, the chatbot sensation that has taken the world by storm.

    ChatGPT, which can answer prompts and write essays, has already prompted many businesses to rethink how people should work every day.

    This month, its developer unveiled the latest version of the software behind the bot, GPT-4. The platform has quickly impressed early users with its ability to simplify coding, rapidly create a website from a simple sketch and pass exams with high marks.

    Further use of such AI will likely lead to job losses, the Goldman Sachs economists wrote. But they noted that technological innovation that initially displaces workers has historically also created employment growth over the long haul.

    While workplaces may shift, widespread adoption of AI could ultimately increase labor productivity — and boost global GDP by 7% annually over a 10-year period, according to Goldman Sachs.

    “Although the impact of AI on the labor market is likely to be significant, most jobs and industries are only partially exposed to automation and are thus more likely to be complemented rather than substituted by AI,” the economists added.

    “Most workers are employed in occupations that are partially exposed to AI automation and, following AI adoption, will likely apply at least some of their freed-up capacity toward productive activities that increase output.”

    Of US workers expected to be affected, for instance, 25% to 50% of their workload “can be replaced,” the researchers added.

    “The combination of significant labor cost savings, new job creation, and a productivity boost for non-displaced workers raises the possibility of a labor productivity boom like those that followed the emergence of earlier general-purpose technologies like the electric motor and personal computer.”

    — CNN’s Nicole Goodkind contributed to this report.

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  • Key Senate Democrats remain non-committal on Biden’s labor secretary pick ahead of confirmation hearing | CNN Politics

    Key Senate Democrats remain non-committal on Biden’s labor secretary pick ahead of confirmation hearing | CNN Politics

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    CNN
     — 

    President Joe Biden’s pick to be the next labor secretary, Julie Su, has yet to secure the support of key Democrats ahead of her nomination hearing on Thursday, suggesting she faces an uphill battle to confirmation by the Senate.

    The tepid reception among some members of the president’s own party is part of a broader issue that’s emerged in recent months for the Biden administration. Despite a narrow majority in the Senate, Democrats have with more recent frequency failed to sign off on high-profile Biden appointees – torpedoing Phil Washington’s nomination to lead the Federal Aviation Administration as well as Gigi Sohn’s nomination to the Federal Communications Commission. If Su does not secure enough support from the Senate, she would be the highest-ranking Biden nominee so far to fail to be confirmed.

    In the 51-49 Democratic-controlled Senate, more than two liberal defections could tank the nomination. And if California Sen. Dianne Feinstein, who has been away from Congress while recovering from shingles for the past two months, or another Democratic senator is absent, the path would narrow ever more.

    Senate Majority Leader Chuck Schumer has called on the chamber to confirm Biden’s labor nominee, and on Tuesday afternoon, Su was on Capitol Hill meeting with Democratic Majority Whip Dick Durbin. But two Democratic senators up for reelection in red states, Montana Sen. Jon Tester and West Virginia Sen. Joe Manchin, are not ready to throw their support behind her yet. It’s also not clear how Arizona independent Sen. Kyrsten Sinema, who left the Democratic Party last year but kept her committee assignments with the majority, will vote.

    Tester, who says he plans to meet with Su following Thursday’s hearing, told reporters on Tuesday that he remains “very ambivalent,” adding, “I voted for her before. I don’t have a problem with her right now.”

    “I have no comment,” Manchin told CNN three times when asked about Su.

    Hannah Hurley, a spokesperson for Sinema’s office, told CNN that the senator “does not preview her votes.”

    Su was narrowly confirmed to be the deputy secretary of labor in 2021, receiving unanimous support at the time from Senate Democrats and no support from Republicans. In March, when then-Labor Secretary Marty Walsh departed the administration, Su was appointed acting secretary of the agency.

    Sen. Bill Cassidy, the ranking member on the Senate Health, Education, Labor, and Pensions Committee, which will oversee Su’s confirmation hearing, has suggested that Su lacks the bona fides to handle labor negotiations.

    “Setting his politics aside, no one could say Marty Walsh didn’t have significant experience in negotiations and managing organizations,” Cassidy, a Louisiana Republican, said in a statement Monday. “With 150 labor contracts expiring this year, the potential of replacing him with someone who has no direct experience handling labor disputes should be concerning.”

    Prior to joining the Biden administration, Su was the secretary for the California Labor and Workforce Development Agency and the state’s labor commissioner. Su has gained critics over her time in leadership in California as well as her support for A.B. 5, a California law that aims to reclassify certain gig workers as regular employees.

    She faced scrutiny for California’s handling of unemployment benefits during the Covid-19 pandemic, particularly her oversight of the state’s Employment Development Department. During the pandemic, the department delayed approving unemployment benefits and paid out billions on fraudulent claims. Su has said EDD’s systems were not prepared for the number of unemployment claims made.

    Su will emphasize the importance of American small businesses during the hearing Thursday, according to an excerpt of her prepared opening remarks provided to CNN by a source familiar with the nomination process, telling committee members that she has “seen first-hand the strength and creativity of American workers and business owners.”

    “While I was growing up, my family also saw opportunity and their shot at the middle class in the form of small businesses. They owned a dry cleaning and laundromat business, and then a franchise pizza restaurant,” Su is expected to say. “For years, my dad would work his day job and then head right to the pizza shop, returning home after 10 pm, often with leftover pizza for our school lunches the next day. I know small business owners are the engines of our economy, because I watched it every day.”

    The high-stakes nomination has pushed outside groups to lodge broad public efforts to lobby for and against Su’s leadership.

    One outside group called “Stand Against Su” has launched a public ad campaign lobbying against the nominee, calling her a “fiery critic of capitalism” and citing her past actions in California. Provisions she has supported, they argue, have made it more difficult for independent contractors and franchisees to operate in California.

    The AFL-CIO, the nation’s largest labor federation, is leading a new campaign in support of Su, Director of Public Affairs Ray Zaccaro confirmed to CNN. The campaign, led by AFL-CIO President Liz Shuler, will include a six-figure digital ad buy targeting Arizona and other states, as well as Washington, DC. The federation is also committing resources and mobilizing the 60 affiliate unions nationally as part of the effort. Punchbowl News first reported on the federation’s campaign launch.

    The White House continues to stand by Su, pointing to Senate Democrats’ past unanimous support during her last confirmation proceedings.

    A White House official told CNN Su was part of the efforts to avert a rail shutdown last year, and that she has met with senators from both sides of the aisle during the nomination process. They further pointed out that she’s offered to meet with every member of the Senate HELP Committee.

    “We’re looking forward to the hearing coming up on Thursday and feel confident … about Julie’s confirmation process. … She has a proven track record she can stand on proudly,” White House press secretary Karine Jean-Pierre told reporters on Tuesday. “The president is proud to have nominated her.”

    This story has been updated with additional developments.

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  • TV and film writers are fighting to save their jobs from AI. They won’t be the last | CNN Business

    TV and film writers are fighting to save their jobs from AI. They won’t be the last | CNN Business

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    CNN
     — 

    By any standard, John August is a successful screenwriter. He’s written such films as “Big Fish,” “Charlie’s Angels” and “Go.” But even he is concerned about the impact AI could have on his work.

    A powerful new crop of AI tools, trained on vast troves of data online, can now generate essays, song lyrics and other written work in response to user prompts. While there are clearly limits for how well AI tools can produce compelling creative stories, these tools are only getting more advanced, putting writers like August on guard.

    “Screenwriters are concerned about our scripts being the feeder material that is going into these systems to generate other scripts, treatments, and write story ideas,” August, a Writers Guild of America (WGA) committee member, told CNN. “The work that we do can’t be replaced by these systems.”

    August is one of the more than 11,000 members of the WGA who went on strike Tuesday morning, bringing an immediate halt to the production of some television shows and possibly delaying the start of new seasons of others later this year.

    WGA is demanding a host of changes from the Alliance of Motion Picture and Television Producers (AMPTP), from an increase in pay to receiving clear guidelines around working with streaming services. But as part of their demands, the WGA is also fighting to protect their livelihoods from AI.

    In a proposal published on WGA’s website this week, the labor union said AI should be regulated so it “can’t write or rewrite literary material, can’t be used as source material” and that writers’ work “can’t be used to train AI.”

    August said the AI demand “was one of the last things” added to the WGA list, but that it’s “clearly an issue writers are concerned about” and need to address now rather than when their contact is up again in three years. By then, he said, “it may be too late.”

    WGA said the proposal was rejected by AMPTP, which countered by offering annual meetings to discuss advancements in the technology. August said AMPTP’s response shows they want to keep their options open.

    In a document sent to CNN responding to some of WGA’s asks, AMPTP said it values the work of creatives and “the best stories are original, insightful and often come from people’s own experiences.”

    “AI raises hard, important creative and legal questions for everyone,” it wrote. “Writers want to be able to use this technology as part of their creative process, without changing how credits are determined, which is complicated given AI material can’t be copyrighted. So it’s something that requires a lot more discussion, which we’ve committed to doing.”

    It added that the current WGA agreement defines a “writer” as a “person,” and said “AI-generated material would not be eligible for writing credit.”

    The writers’ attempt at bargaining over AI is perhaps the most high-profile labor battle yet to address concerns about the cutting-edge technology that has captivated the world’s attention in the six months since the public release of ChatGPT.

    Goldman Sachs economists estimate that as many as 300 million full-job jobs globally could be automated in some way by the newest wave of AI. White-collar workers, including those in administrative and legal roles, are expected to be the most affected. And the impact may hit sooner than some think: IBM’s CEO recently suggested AI could eliminate the need for thousands of jobs at his company alone in the next five years.

    David Gunkel, a professor at the department of communications at Northern Illinois University who tracks AI in media and entertainment, said screenwriters want clear guidelines around AI because “they can see the writing on the wall.”

    “AI is already displacing human labor in many other areas of content creation—copywriting, journalism, SEO writing, and so on,” he said. “The WGA is simply trying to get out-in-front of and to protect their members against … ‘technological unemployment.’”

    While film and TV writers in Hollywood may currently be leading the charge, professionals in other industries will almost certainly be paying attention.

    “There’s certainly other industries that need to be paying close attention to this space,” said Rowan Curran, an analyst at Forrester Research who focuses on AI. He noted that digital artists, musicians, engineers, real estate professionals and customer service workers will all feel the impact of generative AI.

    “Watch this #WGA strike carefully,” Justine Bateman, a writer, director and former actress, wrote in a tweet shortly after the strike kicked off. “Understand that our fight is the same fight that is coming to your professional sector next: it’s the devaluing of human effort, skill, and talent in favor of automation and profits.”

    AI has had a place in Hollywood for years. In the 2018 “Marvel Avengers Infinity Wars” film, the face of Thanos – a character played by actor Josh Brolin – was created in part with the technology.

    Crowd and battle scenes in films including the “Lord of the Rings” and “Meg” have utilized AI, and the most recent Indiana Jones used it to make Harrison Ford’s character appear younger. It’s also been used for color correction, finding footage more quickly during post production and making improvements such as removing scratches and dust from footage.

    But AI in screenwriting is in its infancy. In March, a “South Park” episode called “Deep Learning,” was co-written by ChatGPT and the tool was highly focused on in the plot (the characters use ChatGPT to talk to girls and write school papers).

    August said writers are largely willing to play ball with tools, as long as they’re used as launching pads or for research and writers are still credited and utilized throughout the production process.

    “Screenwriters are not luddites, and we’ve been quick to use new technologies to help us tell our stories,” August said. “We went from typewriters to word processors happily and it increased productivity. …. But we don’t need a magical typewriter that types scripts all by itself.”

    Because large language models are trained on text that humans have written before, and find patterns in words and sentences to create responses to prompts, concerns around intellectual property exist, too. “It is entirely possible for a [chatbot] to generate a script in the style of a particular kind of filmmaker or scriptwriter without prior consent of the original artist or the Hollywood studio that holds the IP for that material,” Gunkel said.

    For example, one could prompt ChatGPT to generate a zombie apocalypse drama in the style of David Mamet. “Who should get credited for that?” August said. “What happens if we allow a producer or studio executive to come up with a treatment or pitch or something that looks like a screenplay that no writer has touched?”

    For now, the legal landscape remains very much unsettled on the matter, with regulations lagging behind the rapid pace of AI development. In early April, the Biden administration said it is seeking public comments on how to hold artificial intelligence systems like ChatGPT accountable.

    “We can’t protect studios from their own bad choices,” August said. “We can only protect writers from abuses.”

    The strike, and the demands around AI specifically, come at a time when both the writers and the studios are feeling financial pain.

    Many of the businesses represented by AMPTP have seen drops in their stock price, prompting deep cost cutting, including layoffs. The need to manage costs, combined with addressing the fallout from the strike, might only make the companies feel more pressure to turn to AI for scriptwriting.

    “In the short term, this could be an effective way to circumvent the WGA strike, mainly because [large language models], which are considered property and not personnel, can be employed for this task without violating the picket line,” Gunkel said. Such an “experiment” could also show production studios whether it’s possible “to get by with less humans involved,” he said.

    But Joshua Glick, a visiting professor of film and electronic arts at Bard University, believes such a move would be ill-advised.

    “It would be a pretty aggressive and antagonistic move for studios to move forward with AI-generated scripts in terms of getting writers to come to the negotiating table because AI is such a crucial sticking point in the negotiations,” said Glick, who also co-created Deepfake: Unstable Evidence on Screen, an exhibition at the Museum of the Moving Image in New York.

    “At the same time, I think the result of those scripts would be pretty mediocre at best,” he said.

    However the studios react, the issue is unlikely to go away in Hollywood. Film and TV actors’ contracts are up in June, and many are worried about how their faces, bodies and voices will be impacted by AI, August said.

    “As writers, we don’t want tools to replace us but actors have the same concerns with AI, as do directors, editors and everyone else who does creative work in this industry,” he added.

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  • Silicon Valley escalates the battle over returning to the office | CNN Business

    Silicon Valley escalates the battle over returning to the office | CNN Business

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    CNN
     — 

    Three years after Silicon Valley companies led the charge for embracing remote work in the early days of the pandemic, the tech industry is now escalating the fight to bring employees back into the office -— and igniting tensions with staff in the process.

    Google, which has long been a bellwether for workplace policies in the tech industry and beyond, frustrated some employees this week by announcing plans to begin more strictly enforcing its policy that requires workers in-office at least three days a week. The updated policy includes tracking office badge attendance and possibly factoring it into performance reviews, according to CNBC, citing internal memos.

    “Overnight, workers’ professionalism has been disregarded in favor of ambiguous attendance tracking practices tied to our performance evaluations,” Chris Schmidt, a software engineer at Google and member of the grassroots Alphabet Workers Union, told CNN in a statement. “The practical application of this new policy will be needless confusion amongst workers and a disregard for our various life circumstances.”

    In a statement, Ryan Lamont, a Google spokesperson, told CNN that its policy of working in the office three days a week is “going well, and we want to see Googlers connecting and collaborating in-person, so we’re limiting remote work to exception only.”

    Lamont said that company leaders can see reports showing how their teams are adopting the hybrid work model, including “aggregated data” on badge swipes. He added that now that the company is more than a year into its hybrid model, “we’re formally integrating this approach into all of our workplace policies.”

    Google isn’t alone in facing pushback from employees. Other tech companies are also grappling with how best to compel workers to come into the office after they’ve grown accustomed to greater flexibility. The tug-of-war is compounded by the fact that tech companies have laid off tens of thousands of employees over the past year, leveling a major blow to employee morale.

    At Amazon, tensions boiled over last week as hundreds of office workers staged a walkout to call attention to their grievances, including the three-day return-to-office mandate that was implemented in May.

    A current Amazon worker who spoke at the walkout said that she started an internal Slack channel called “remote advocacy” because she wanted a space where workers could discuss how the new return-to-office policy would impact their lives.

    “Before I realized what was happening, that channel had 33,000 people in it,” the worker, who identified only as Pamela, said to the crowd at the event. Pamela called the Slack channel advocating for remote work “the largest concrete expression of employee dissatisfaction in our entire company history.”

    But the employee criticism isn’t stopping tech companies, who have spent billions on sprawling campuses over the years and often preach the value of serendipitous workplace interactions, from moving forward with their return to office policies.

    In response to the walkout, Amazon previously told CNN it may “take time” for some workers to adjust to being in the office more days. But the company also said it’s “happy with how the first month of having more people back in the office has been” and touted the extra “energy, collaboration, and connections happening” in the office.

    Facebook-parent Meta similarly doubled down last week on its push to get workers in the office, warning that employees currently assigned to an office must return to in-person work three days a week starting this September. (A Meta spokesperson told CNN the updated policy was not set in stone, and employees designated as remote workers will be allowed to keep their remote status).

    At least one tech company is taking a gentler approach.

    Salesforce is trying to lure staff into offices by offering to donate $10 to a local charity for each day an employee comes in from June 12 to June 23, according to an internal Slack message reported on by Fortune.

    A Salesforce spokesperson told CNN: “Giving back is deeply embedded in everything we do, and we’re proud to introduce Connect for Good to encourage employees to help us raise $1 Million+ for local nonprofits.”

    But it might take more than temporary charitable contributions to convince some workers it’s worthwhile to return. Schmidt, the software engineer at Google, said that even if you go into the office, there’s no guarantee you’ll have people on your team to work with or even a desk to sit at.

    “Many teams are distributed, and for some of us there may not be anyone to collaborate with in our physical office locations,” Schmidt said. “Currently, New York City workers do not even have enough desks and conference rooms for workers to use comfortably.”

    “A one size fits all policy does not address these circumstances,” he added. “We deserve a voice in shaping the policies that impact our lives to establish clear, transparent and fair working conditions for all of us.”

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