Tag: Labor economy

‘Accent reduction’ is racist to some but empowering to others. Here’s a look at the controversy

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To counteract bias, some workers are taking classes to learn how to speak with American or British accents. CNBC takes a look at some of the pros and cons.

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July 30, 2023
Dock workers at key Canadian ports reject labor deal, creating further trade uncertainty

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Shipping containers are loaded onto rail cars at the Global Container Terminals Vanterm container terminal on Vancouver Harbour in Vancouver, British Columbia, Canada.

Bloomberg | Bloomberg | Getty Images

Overseas trade entering North America through key ports on Canada’s West Coast faces more uncertainty after dock workers rejected a tentative labor deal late Friday.

The flow of trade destined for U.S. chemical companies, retailers, and manufacturers is delayed at least two months as a result of 14 days of strikes.

Rob Ashton, president of the International Longshoremen and Warehouse Union of Canada, has called on the dock workers’ employers to come back to negotiating table and reach a deal that works for both the union and industry.

The British Columbia Maritime Employers Association did not respond to the union’s request to go back to the negotiating table. BCMEA said they are disappointed that ILWU Canada rejected the four-year tentative agreement. The employers association said it is waiting for the Canadian government to provide direction on next steps.

Canada’s Labor Minister Seamus O’Regan said he has directed the country’s industrial relations board to determine whether the union’s rejection of the tentative agreement eliminated the possibility of a negotiated resolution.

If the board does determine this to be the case, O’Reagan has directed the board to either impose a new collective agreement or impose binding arbitration. If binding arbitration is decided, the union is not allowed to strike.

“Our economy cannot face further disruption from this dispute,” O’Regan said.

The proposed deal which was voted down by the union was presented to both sides by the senior federal mediator. The BCMEA released the terms of the deal in its announcement. This is not the first time the BCMEA has released the deal.

The four-year package increased the compounded wage over four years by 19.2%. A signing bonus of $1.48 an hour per employee which tallied to approximately $3,000 per full-time worker was included. Also in the deal was an 18.5% increase in retirement payout.

In a pushback against the union’s argument of having a salary sustainable against rising inflation, the BCMEA said, “Over the course of the past 13 years, longshore wages have risen by 40%, ahead of inflation at 30%.”

U.S. trade impact

The timing of this strike adds unnecessary hurdles to peak season when holiday items are arriving for retailers. At the height of the strike, $12 billion in freight was stranded on the water. Some of that trade was diverted on vessels that called on ports on the U.S. West Coast.

“Our clients are facing about a two-month delay in the delivery of their product,” said Paul Brashier, vice president of drayage at ITS Logistics. “The vessel was delayed by several weeks and now the rail-bound containers sit at the Ports of Vancouver and Prince Rupert.”

Steve Lamar, CEO of the American Apparel and Footwear Association, said his group estimated that the first strike would cause an average of 6 to 8 weeks of supply chain disruption before conditions return to normal. AAFA had called on the Canadian government to step in during the first strike.

For the third week in a row, rail traffic from Canada into the U.S. is down following the on-again, off-again western Canadian ports strike. The first two weeks of the labor strike prevented over 80% of rail trade from entering the United States. The U.S. saw another 12% decrease in trade this week.

Immediate impact on railroad earnings

The strike is also hitting the bottom lines of railroad companies. The labor unrest will negatively impact Canadian Pacific Kansas City railroad’s revenue by $80 million, Chief Marketing Officer John Brooks told analysts on a conference call Thursday. Brooks said the company is working to claw back those losses over the remainder of the third and fourth quarter.

Canadian National Railway railroad announced they were running additional trains to help expedite the clearing out of the container congestion.

The Railway Association of Canada originally estimated that it would take three to five days for every day the strike lasted for networks and supply chains to recover. When the first strike ended on its thirteenth day, delays for rail containers were estimated at 39 to 66 days. Adding another day with the on-again, off-again strike last week brings the congestion removal tally up to 42 to 70 days.

“Delays appear to be bearing out toward the mid-to-upper end of that range,” a Railway Association of Canada spokesperson wrote in an email to CNBC.

Eric Byer, CEO of the National Association of Chemical Distributors, said that hundreds of chemicals that arrive through West Coast Canadian ports are needed to complete U.S. manufacturing of products.

“There are millions of dollars of chemicals stranded on the water. We have members waiting for chemicals to be unloaded in Vancouver and then railed down to Chicago,” Byer said.

That includes chemicals like sulfuric acid, which is used in drain cleaning products like Drano; phosphates used in laundry detergent; and acetone, which is used in the nail industry as well as a solvent that breaks down grease and wax.

Sodium fluoride, found in toothpaste, and sodium bicarbonate, also known as baking soda, also come through the West Coast ports of Canada. Additional chemicals transported through the Canadian ports go into food, power drinks, cleaning, water purification, and personal care products.

The on-again, off-again strike has left logistics managers and the world of trade in turmoil as they attempt to assess the situation and make decisions on ocean and rail transport during peak shipping season.

Alan Baer, CEO of trucking company OL USA, said global supply chains are complex and cannot be simply turned on and off like a light switch.

Historical cargo volumes show how trade moving via the the U.S. West Coast eroded due to fears about cargo being stuck and or diverted due to labor tensions over the past year, Baer said. Many shippers diverted business to East Coast ports, he said.

“Once changed, not everyone will simply return,” Baer added.

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July 29, 2023
The top 10 U.S. cities for retirees — No. 1 isn’t in Florida
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Many cities in Florida remain popular retirement destinations, but a Pennsylvania city ranks as the best place to spend your post-work years.

Lancaster, Pennsylvania, is the No. 1 city to retire in, according to U.S. News & World Report’s recent “Best Places to Retire in the U.S.“

U.S. News & World Report evaluated the 150 largest metropolitan areas in the U.S., including Puerto Rico, using data from a variety of sources, including the U.S. Census Bureau and the Tax Foundation. The report assigns each city an overall retirement score based on six factors:

Housing affordability

Desirability

Happiness

Quality of health care

Retiree taxes

Job market

The researchers surveyed 3,100 people aged 45 and older about which of those categories would be most important to them in retirement and assigned weights to those categories accordingly.

Lancaster scored particularly high marks in the health-care category, but scored lower in the housing-affordability category on its way to an overall score of 7.2 out of 10, according to the analysis.

The city offers a combination of rolling farmlands and a bustling downtown that hosts arts and culture events such as “First Fridays,” which features exhibitions and performances from the local art community. Additionally, about 18% of the population is above the age of 65, per the study’s findings.

For those looking to save money on housing in retirement, those costs in Lancaster are below the national average. The median home price there is about $290,354, according to U.S. News & World Report. Meanwhile, the national median home price as of the first quarter of 2023 is around $436,800, per the St. Louis Federal Reserve Bank.

A second Pennsylvania city, state capital Harrisburg, is No. 2 on the list. It scored slightly lower in the health-care category, which dragged down its ranking, but earned high marks in the housing-affordability section.

Florida makes it first appearance on the list with Pensacola in the third spot. Although the beach town received a slightly higher housing-affordability score, it didn’t score well in the health-care category, which brought down its rank.

It’s clear Pennsylvania and Florida dominate the top spots on the list of best places to retire. Retirees do benefit from certain tax breaks in both states. Florida doesn’t tax income and Pennsylvania doesn’t tax retirement pensions and distributions from 401(k)s, IRAs or Social Security, according to Kiplinger.

Here are the top 10 U.S. cities for retirees, according to U.S. News & World Report:

Lancaster, Pennsylvania

Harrisburg, Pennsylvania

Pensacola, Florida

Tampa, Florida

York, Pennsylvania

Naples, Florida

Daytona Beach, Florida

Ann Arbor, Michigan

Allentown, Pennsylvania

Reading, Pennsylvania

While lists like these can be helpful while researching potential retirement locations, remember that everyone’s ideal retirement is unique and shaped by different priorities. For example, you may want to be closer to family or move to a state with a lower cost of living than where you currently are.

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July 23, 2023
Singapore’s gig workers are its most financially stretched group, DBS study says

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A DBS study conducted in May 2023 found that gig workers were the most financially stretched, with relatively less stable income flows and savings declining year on year to an “unhealthy range.”

Bloomberg | Bloomberg | Getty Images

High inflation and interest rates have diminished the purchasing power of Singaporeans — and gig workers and low-income individuals are the most affected.

That’s according to a new DBS study conducted in May 2023, which analyzed its database of about 1.2 million customers.

The report from the Singapore bank said that gig workers were found to be the most financially stretched, with relatively less stable income flows and savings declining year on year to an “unhealthy range.”

In Singapore, gig workers are generally self-employed. “These would include platform workers, who derive a significant part of their income through online matching platforms,” said the report.

Such platforms include ride-hailing or food delivery drivers from apps like Grab, GoJek and Foodpanda.

Those workers don’t receive employer contributions to the Central Provident Fund, a national savings scheme.

The expense-to-income ratio of gig workers was 112% in May 2023 — “significantly higher” than the median customer’s 57%, DBS said.

Additionally, ride-hailing or food gig workers’ savings can cover only 1.7 months’ worth of expenses, down from 1.9 months in May 2022. That’s lower than the bank’s recommended range of three to six months.

And customers earning between 2,500 Singapore dollars ($1,891) and SG$5,000 ($3,783) have savings that can cover 2.3 months of expenses.

“Some segments of society could potentially find themselves in a double-whammy situation, where inflation continues to dilute their purchasing power and erode savings, while high interest rates take a toll on their balance sheets,” said Irvin Seah, DBS Bank’s senior economist.

Low-income group and boomers at risk

Disposable income for the bank’s customers improved from a year ago, as the growth of the median customer’s income outpaced that of expenses, said the report.

It found that the rate of expense growth was 2.7%, while income grew almost three times more.

“The slower growth in expenses can be attributed to the moderation of post pandemic pent-up spending,” said DBS.

However, findings for the lower-income group and baby boomers (59 to 77 years old) paint a different picture — growth in expenses outpaced income growth.

Low-income customers, or those earning S$2,499 and below per month, saw their expenses grow 1.2 times faster than their income, said the report.

For that group, expenses made up 93% of take-home incomes, suggesting “worsening cashflows” over the past year.

Expenses for boomers grew about five times faster than their income, with spending making up 86% of income.

That’s higher than the 64% for Gen X (43 to 58 years old), 47% for millennials (27 to 42 years old) and 38% for Gen Z (26 years old and below).

Rising mortgage payments

Housing loans in Singapore have also grown, owing to rising property values and interest rates.

The median DBS customer is borrowing 3% more for home purchases than last year, with median mortgage payments increasing by about 12%, said the report.

Middle-income earners, in particular, who bring home between SGD$2,500 and SGD$4,999 each month, may also be in “financial distress,” DBS added in a press release.

Those individuals are allocating close to 60% of income growth to service the increase in their monthly mortgage payments.

DBS also cautioned that those earning below SGD$5,000 may be hit when mortgages are refinanced on higher interest rates — with more than half of such customers having loans under floating rates.

Floating rates are variable interest rates that are tied to a benchmark rate. In Singapore, a floating rate home loan is usually pegged to the Singapore Overnight Rate Average (SORA), which has been increasing steadily with the successive interest rate hikes by the U.S. Federal Reserve.

According to DBS, the three-month compounded SORA rose from 0.1949% at the beginning of 2022 to about 3% in January 2023.

“Potential stresses could emerge if income growth moderates going forward, and interest rates continue to remain high,” the report added.

“The support from higher income growth to customers’ mortgage servicing ability may fade if the economic outlook deteriorates.”

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July 13, 2023
Hybrid work is the new normal, as companies rethink work habits and office and retail space

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Virojt Changyencham | Moment | Getty Images

Office demand declines

That flexibility is helping drive down demand for office space. By 2030, McKinsey predicts, demand for office space will be as much as 20% lower than it was in 2019, depending on the city. While remote and hybrid work is the big reason, the trend toward more desks in less space and shifts to automation were also factored into its analysis.

Lower office space demand has companies rethinking how to make their real estate jibe with new work habits. Working in teams and increasing productivity are the top reasons office workers with flexibility give for being on-site.

Many office environments are not meeting employees’ needs. Having spaces for employees that are free from noise and distraction so they can work independently is “critical to job performance,” says Jordan Goldstein, a managing principal at architecture firm Gensler.

Creating what’s called “meeting equity” is also important, so people who are physically in the office and people who are working remotely can conduct business. “The days of a four- to six-person room with a 42-inch flat screen on the wall are over,” said Goldstein. Instead, he suggests employers should create an environment where the virtual and physical offices are brought together.

The ripple effect: People moving out

The evolution in office culture has also changed where people are choosing to live. Of the people surveyed who moved after March 2020, 20% said that their move was possible only because they could now work from home more frequently, according to McKinsey.

Researchers looked at neighborhoods in San Francisco, Houston and the borough of Manhattan in New York, and found people moved out of expensive, office-dense ZIP codes and into cheaper ones with more mixed use of real estate.

McKinsey’s comparison of the pandemic’s effect on New York’s Financial District and Lower East Side neighborhood showed that mixed-use neighborhoods, with a diverse offering of office, residential and retail space fared the best.

The Financial District, which consists of 80% office real estate, a large concentration of workers and an average home price of about $1.5 million saw people leave at more than two times the rate than the Lower East Side, where the average home price is about $500,000 lower and just 7% of real estate is dedicated to office space.

Retail demand is changing

Shopping patterns were also changed by the pandemic, with remote and hybrid workers less likely to spend near the office.

“Retailers need to rethink their model,” said Jan Mischke, a partner at the McKinsey Global Institute, as foot traffic and and spending continues to be lower — especially in office-dense neighborhoods — and online shopping continues to take market share from stores. “The demand for retail floorspace in 2030 will be lower than it than it [was] in 2019,” he said.

“We feel we have a sufficient clarity now that it’s relatively clear what needs to happen,” said Mischke. At the city level, that means creating more mixed-use environments, which proved more resilient during the pandemic.

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July 13, 2023
Private sector companies added 497,000 jobs in June, more than double expectations, ADP says

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A Now hiring sign at McDonald”u2019s restaurant in Yorba Linda, CA, on Monday, Sept. 13, 2021 offering pay from $15 an hour for new employees as signs around the region are getting the cold shoulder from workers reluctant to resume service-industry jobs.”

Jeff Gritchen | Medianews Group | Getty Images

The U.S. labor market showed no signs of letting up in June, as companies created far more jobs than expected, payroll processing firm ADP reported Thursday.

Private sector jobs surged by 497,000 for the month, well ahead of the downwardly revised 267,000 gain in May and much better than the 220,000 Dow Jones consensus estimate. The increase resulted in the biggest monthly rise since July 2022.

From a sector standpoint, leisure and hospitality led with 232,000 new hires, followed by construction with 97,000, and trade, transportation and utilities at 90,000.

Annual pay rose at a 6.4% rate, representing a continued slowing that nonetheless still is indicative of brewing inflationary pressures.

“Consumer-facing service industries had a strong June, aligning to push job creation higher than expected,” said Nela Richardson, chief economist at ADP. “But wage growth continues to ebb in these same industries, and hiring likely is cresting after a late-cycle surge.”

The unexpected jump in payrolls comes despite more than a year’s worth of Federal Reserve interest rate increases aimed in large part to cool a jobs market in which there are still nearly two open positions for every available worker.

ADP’s count comes a day ahead of the more closely watched nonfarm payrolls report from the Department of Labor. That is expected to show an increase of 240,000 after a 339,000 gain in May. While the two reports can differ broadly, the ADP numbers pose some upside risk for Friday’s report.

Other industries seeing solid gains included education and health services (74,000), natural resources and mining (69,000), and the “other services” classification (28,000).

Manufacturing lost 42,000 jobs, while information was off 30,000 and financial activities saw a decline of 16,000.

Broadly speaking, service providers contributed 373,000 of the total, while goods producers added 124,000.

Companies with fewer than 50 employees were responsible for most of the job growth, adding 299,000 positions. Firms with more than 500 workers lost 8,000 jobs, while mid-size companies contributed 183,000.

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July 6, 2023
EU and Japan look to partner on A.I. and chips as China ‘de-risking’ strategy continues

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Thierry Breton, internal market commissioner for the European Union, delivers a keynote at Mobile World Congress in Barcelona.

Angel Garcia | Bloomberg | Getty Images

The European Union is looking to cooperate more closely with Japan on key technologies such as artificial intelligence, the bloc’s industry chief said, as the coalition looks to reduce its reliance on China in certain areas.

EU Commissioner Thierry Breton is meeting with the Japanese government on Monday, and artificial intelligence will be “very high” on his agenda, he said in a video posted on Twitter on Sunday.

“I will engage with [the] Japanese government … on how we can organize our digital space, including AI based on our shared value,” Breton said.

Breton also said there will be an EU-Japan Digital Partnership council, to discuss areas including quantum and high-performance computing. The EU held a similar council with South Korea last week, in which the two sides agreed to cooperate on technologies such as AI and cybersecurity.

Partnerships with key Asian countries with strong technology sectors come as the EU looks to “de-risk” from China — a different approach from that of the U.S., which has sought to decouple its economy from Beijing.

Part of that EU strategy involves deepening the relationship with allied countries around technology.

Breton told Reuters on Monday that the bloc and Japan will cooperate in the area of semiconductors. Japan is a key country in the semiconductor supply chain, and Tokyo has been looking to strengthen its domestic industry. Last week, a fund backed by the Japanese government proposed to buy domestic chipmaking firm JSR for around 903.9 billion yen ($6.3 billion).

The EU has also been looking to strengthen its own semiconductor industry across the bloc.

Semiconductors are vital components that go into everything from cars to smartphones and have potential military applications. Countries around the world have been reassessing their supply chains, and some, like the U.S., have looked to bring semiconductor manufacturing back onshore.

Semiconductors are also key to training artificial intelligence models. AI and chips are seen as two key areas of technology for the future, which countries are trying to position themselves to take advantage of.

At the same time, the U.S. in particular has sought to cut China off from critical technologies, such as semiconductors, through export restrictions and Washington has looked to convince European allies to join.

The Netherlands, home to one of the world’s most critical chip firms ASML, last week announced new export restrictions on advanced semiconductor equipment.

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July 3, 2023
West Coast port workers in Canada officially begin strike

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A union representing port workers in Western Canada officially began striking, an action that could have ripple effects reaching beyond the U.S.’s northern neighbor.

The International Longshore & Warehouse Union Canada’s Longshore Division announced its labor strike began in a Saturday Facebook post signed by union president Rob Ashton. More than 99% of members of the union, who support West Coast ports such as Vancouver and Prince Rupert, voted to approve the strike last month. Notice of the strike came Wednesday.

“The ILWU Canada Longshore Division has not taken this decision lightly, but for the future of our workforce we had to take this step,” Ashton said in the post. “We are still hopeful a settlement will be reached through FREE Collective Bargaining!”

The union has been open to bargaining since February with the British Columbia Maritime Employers Association, which represents port owners, and remains ready to continue working on a contract, Ashton added.

The employers association, known as the BCMEA, said in a statement it has worked to “advance proposals and positions in good faith, with the objective of achieving a fair deal at the table.” It noted the role of federal mediators and said it was open to “any” solution that can get the parties to a balanced agreement, including a mediated arbitration process.

Cruises remain able to sail and bulk grain is moving, but containerized grain is not. Canadian labor minister Seamus O’Regan Jr. tweeted seemingly in support of continued negotiations between the two groups, noting that “the best deals for both parties are reached at the table.”

The two parties are at odds over issues including automation, the use of contract work and the cost of living for workers. Two mediators appointed by the Canadian government oversaw discussions that ran through the end of May. Those discussions were followed by a so-called cooling-off period between the two groups.

A strike in the western ports occurring around holidays in both the U.S. and Canada could result in impacts on the American economy, industry followers say. The Port of Vancouver and Port of Prince Rupert are popular destinations for U.S. trade because these ports are among the major ports of call for goods arriving from Asia. Some logistics managers have told CNBC that rail service out of those ports is a lot faster than going through the port of Seattle or Tacoma.

The International Longshoremen’s Association said it won’t take diverted cargo from ports with striking workers, while the head of the International Longshore and Warehouse Union, which represents West Coast port workers in the U.S., made a statement of solidarity with the Canadian union but did not mention any specific action.

The strike could lead to congestion in these ports with longshoremen unable to unload vessels. Congestion can turn into backlogs and lead to delayed pickups from terminals, which can then lead to late fees that are often passed on to consumers — a situation similar to what occurred during the pandemic.

“With the Canadian holiday and July Fourth holidays, the volume of containers moving are lighter than normal but now vessels are not being worked because of the strike,” said Paul Brashire, vice president of drayage and intermodal at ITS Logistics. “If this strike continues into the middle of next week, it will impact congestion in the coming weeks at Chicago and Detroit rail terminals because of the amount of containers that would have built up and eventually moved to those rail terminals.”

The Canadian ports handle nearly $225 billion in cargo each year, according to estimates, with items spanning industries such as home goods, electronics and apparel transported by rail. Approximately 15% of consumer trade going through the Port of Vancouver is headed to or coming from the U.S., according to port authority data. Around two-thirds of containerized import volume going to the Port of Prince Rupert are headed to the U.S., port data shows.

Three Class 1 railways operate at these ports: CN, Canadian Pacific and BNSF, a subsidiary of Berkshire Hathaway. In an email to CNBC, BNSF said it had no comment on a strike impact. CN could not be immediately reached for comment.

In a CPKC customer advisory issued Wednesday, the railway said: “The work stoppage related to this notice could impact port operations in British Columbia. At this time, we do not anticipate any significant service interruptions to result from this work stoppage and, as such, CPKC has not initiated embargoes related to a potential service interruption but we are closely monitoring developments to evaluate any impact to shipments on CPKC’s network. We will provide updates as necessary.”

Steve Lamar, CEO of the American Apparel and Footwear Association, told CNBC that the “fragile and recovering supply chains cannot tolerate a strike,” while urging the Canadian government to help keep parties at the table.

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July 1, 2023
Starbucks union says workers at more than 150 stores will strike over Pride decor

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Marchers with Starbucks pass through the landmark intersection of Hollywood and Highland during the annual Pride Parade in Los Angeles, June 12, 2022.

David Mcnew | Getty Images

Strikes at some organized U.S. Starbucks stores started Friday in Seattle, after the coffee giant and the union representing baristas publicly clashed over claims that the company was not allowing Pride month decor in cafes.

The union, Starbucks Workers United, said more than 150 stores representing nearly 3,500 workers have pledged to join the strikes, which will take place over the next week. More than two dozen additional stores are voting on strike authorizations and the count could rise to nearly 200 stores by the end of the week, the union said.

Last week, the union alleged dozens of U.S. stores were not allowing employees to decorate for Pride month, accusations that suggested a wave of backlash against LGBTQ+ inclusion had reached a perceived liberal bastion in corporate America. Starbucks said it had not revised its guidelines for store decorations.

“We want to be crystal clear – Starbucks has been and will continue to be at the forefront of supporting the LGBTQIA2+ community, and we will not waver in that commitment!” Starbucks CEO Laxman Narasimhan and Executive Vice President and President for North America Sara Trilling said in a statement Friday.

“Despite today’s public commentary, there has been no change to any of our policies as it relates to our inclusive store environments, our company culture and the benefits we offer our partners. We continue to encourage our store leaders to celebrate with their communities including for U.S. Pride month in June, as we always have,” they added. The executives said they “strongly disapprove of any person or group, seeking to use our partners’ cultural and heritage celebrations to create harm or flagrantly advance misinformation for self-interested goals.”

In response to the strike pledges, the company earlier said, “Workers United continues to spread false information about our benefits, policies and negotiation efforts—a tactic used to seemingly divide our partners and deflect from their failure to respond to bargaining sessions for more than 200 stores.”

In a post on its website, Starbucks shared a June 14 letter from its VP of Partner Resources, May Jensen, to Workers United President Lynne Fox demanding the union “cease from knowingly misleading partners.”

Protesters in Seattle join a Starbucks Workers United strike over what the union alleges is a change in policy over Pride décor in stores. Starbucks maintains it has not changed its policies and encourages stores to celebrate within the company’s security and safety guidelines, while the union alleges workers in 22 states where workers have not been able to decorate.

Rob Weller | CNBC

Workers United has alleged instances in at least 22 states when workers have not been able to decorate, pointing to social media accounts where workers have documented their claims. The union said it has filed an unfair labor practice charge against Starbucks over what it alleges is a change in policy. Some of the strikes in the coming days are tied to that claim.

Not all of the stores that will strike had issues related to Pride decor.

Parker Davis, a 21-year-old barista in San Antonio, Texas, works at a store that has not had a dispute around Pride decor but will be a part of the strikes.

“There’s a large percentage of partners at my store who are part of the LGBTQ community, and who feel that Starbucks’ continued actions with trying to limit or take down pride decorations just doesn’t make sense with what the company has done in the past,” Davis said.

Davis told CNBC he expects several picketers, but said it was unclear if the store would be able to open during the strike.

The public back-and-forth over decorations to celebrate Pride month comes as major brands including Target and Bud Light have been targeted for supporting the LGBTQ+ community. In both of those cases, the companies faced opposition from conservative consumers to partnerships with or merchandise for transgender people — and then saw backlash from more liberal customers for perceived deference to the critics.

In Oklahoma, workers were told restrictions on decorating were out of a concern for safety after recent attacks at Target stores, the union said.

Protesters in Seattle join a Starbucks Workers United strike over what the union alleges is a change in policy over Pride décor in stores. Starbucks maintains it has not changed its policies and encourages stores to celebrate within the company’s security and safety guidelines, while the union alleges workers in 22 states where workers have not been able to decorate.

Rob Weller | CNBC

The Starbucks workers are also striking over claims that the coffee chain is dragging its feet on negotiating contracts.

“Good faith bargaining looks like both sides providing proposals and trying to meet in the middle — Starbucks is not willing to do that,” Workers United said in a statement. “Despite having our non-economic proposals for over 8 months and our economic proposals for over a month now, Starbucks has failed to tentatively agree to a single line of a single proposal or provide a single counter proposal. What Starbucks is doing is not bargaining, it’s stalling.”

The strike “is important to me because it sends the message that we are not going to stand idly by while Starbucks continues to delay contract negotiations and continues to participate in union busting,” Davis said.

For its part, Starbucks maintains Workers United has responded to only a quarter of the more than 450 bargaining sessions Starbucks has proposed for individual stores nationally, to date, and said it is committed to progressing negotiations toward a first contract.

Protesters in Seattle join a Starbucks Workers United strike over what the union alleges is a change in policy over Pride décor in stores. Starbucks maintains it has not changed its policies and encourages stores to celebrate within the company’s security and safety guidelines, while the union alleges workers in 22 states where workers have not been able to decorate.

Rob Weller | CNBC

The roastery where the strikes started Friday has not had any disputes over Pride decorations, but is also striking in solidarity. About two dozen unionized employees protested outside the store during the day. The location was closed after it briefly opened, a Starbucks spokesperson said.

“The roastery wants to show solidarity with all workers that have been discriminated against in the company,” Mari Cosgrove, a 28-year-old barista at the Seattle location, told CNBC.

“Frankly, it feels like an attack when these flags are taken down,” Cosgrove said. “The partners in these stores really appreciate being able to be seen and feel like this is a community space for them. Starbucks has really prided itself on being a third place, including for its workers.”

More than 300 company-owned stores have voted to unionize since the first filing took place in August of 2021, but Starbucks and Workers United have yet to agree to a contract.

Starbucks has more than 9,000 company-owned locations in the U.S.

— CNBC’s Amelia Lucas contributed to this report.

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June 23, 2023
Grab cuts 1,000 jobs, its biggest round of layoffs since the pandemic

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The headquarters of Grab Holdings Ltd., in Singapore. Grab Holdings Ltd., reported its latest earnings on Feb. 23, 2023.

Bryan van der Beek | Bloomberg | Getty Images

Singapore-based Grab Holdings is cutting over 1,000 jobs, its CEO said Tuesday, in a bid to manage costs and reorganize the company in a competitive landscape.

In an email to staff, CEO Anthony Tan said the layoffs are a “painful but necessary step” that the ride-hailing and food delivery app operator must take to remain competitive in the future.

“The primary goal of this exercise is to strategically reorganize ourselves, so that we can move faster, work smarter, and rebalance our resources across our portfolio in line with our longer term strategies,” said Tan.

This is the group’s largest round of layoffs since 2020, when it cut 360 jobs in response to Covid-19 pandemic challenges.

Even without layoffs, Tan said Grab is on track to hit breakeven this year on group adjusted earnings before interest, taxes, depreciation, and amortization. In February, the company said it was bringing forward its target to the fourth quarter of 2023, half a year earlier than its previous guidance.

The CEO said the job cuts are not a “shortcut to profitability” but will enable Grab to adapt to the business environment and rapid emergence of A.I.

Tan said Grab will provide severance payment of half a month for every six months of completed service, or based on local statutory guidelines, whichever is higher. Laid off workers will also receive medical insurance coverage until the end of the year, repatriation support as well as career transition and development support, among other measures.

The announcement comes after Grab’s COO Alex Hungate told Reuters in September that the company does not expect to conduct mass layoffs despite weaker economic conditions. Hungate said Grab was “very careful and judicious about any hiring.”

Major U.S. tech firms like Amazon and Meta went on a hiring spree during the pandemic as lockdowns boosted business. Many later laid off thousands of workers as business conditions reverted to or approached pre-pandemic conditions.

Grab posted strong revenue growth and narrowed losses for 2022, citing a rebound in mobility demand.

Tuesday’s announcement is the latest round of layoffs from a major Southeast Asian tech company. In March, Indonesia’s GoTo announced it was laying off 600 employees to boost profitability, Reuters reported, while Singapore-based Sea cut more than 7,000 jobs in the last six months of 2022.

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June 20, 2023
How to tell your company has layoffs planned. Some signs ‘will send shivers down your spine,’ career expert says
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Daniel Grill | Tetra Images | Getty Images

The start of the year was plagued by waves of layoffs: through the end of May, companies announced plans to cut 417,500 jobs, up 315% from the same period last year, according to Challenger, Gray & Christmas. Big names like Disney, Google, Lyft and Meta were among those announcing cuts.

Figuring out if your company might be next isn’t easy, but there are some clues to watch for, experts say.

“There are signs that will send shivers down your spine,” said Suzy Welch, a career advisor and CNBC contributor.

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The state of layoffs

The tech industry has led layoff headlines, with more than 206,000 workers losing their jobs so far in 2023, according to Layoffs.fyi, a survey that keeps score of tech roles in the industry.

But every industry except for four — education, government, industrial manufacturing and utilities — has seen an increase in layoffs this year, according to Challenger, Gray & Christmas data.

Retailers laid off 45,168 workers through May, while financial firms announced 36,937 cuts, the firm found. The media industry slashed 17,436, its highest year-to-date tally on record.

Overall layoffs declined to 1.6 million in April from 1.8 million in March, according to the latest figures from the Job Openings and Labor Turnover Summary (JOLTS), a measure that also serves as a recession indicator.

“When the involuntary rate goes up, we are looking at more recessionary times,” said economist José Fernández, an associate professor at University of Louisville. “But if the voluntary rate is going up, it’s saying that workers have more demand, so they’re out there trying to get a better opportunity for themselves.”

Amazon, Dropbox and Lyft had the biggest layoffs in the tech industry for April. Google and Facebook parent Meta Platforms are responsible for the most tech layoffs since the pandemic, according to Layoffs.fyi.

Look at WARN notices in your state

So-called WARN notices can help workers figure out if layoffs are coming, Vivian Tu, a former trader turned influencer who goes by “Your Rich BFF,” said in a March Instagram video.

WARN notices get their name from the Worker Adjustment and Retraining Notification Act of 1988, a labor-protection law that requires companies with 100 or more employees to provide a 60 calendar-day notice of planned closings and layoffs.

In her video, Tu suggests searching for WARN notices in your state and others where your company does business to find the state government website that lists companies letting go of employees.

However, sometimes companies can avoid releasing these notices by spreading out the layoffs, said Susan Houseman, director of research for the W.E. Upjohn Institute for Employment Research.

“So maybe you’re going to lay off 75, say you lay off 40 one month and 26 the next to avoid WARN notice,” she said.

The law also protects employers by providing exceptions, such as unforeseen circumstances where the company could not have given a two-month notice to employees.

“All of a sudden something happens, demand for your product does a sudden nose[dive], and you just have to lay off workers, and you don’t have time to give them a 60-day notice,” Houseman said.

She clarified that this exception is not a solution for companies undergoing bankruptcies, because “you can’t have anticipated the bankruptcy 60 days out and declined to give notice.”

“Unless there’s rigorous enforcement of this, there certainly can be circumstances where companies should have given notice and didn’t,” Houseman said.

More ways to scope out layoffs

WARN notices are not the only red flags that can signal pending layoffs. Welch offers three more ways to investigate:

Pretend you are an investor and follow news on your company. “Sometimes the earliest canary in the coal mine are the industry media,” Welch said. Monitor your company online by reading what industry analysts and other experts are saying on different platforms about its finances and prospects. Subscribe to newsletters, blogs and outlets that cover your industry to keep a closer look at trends in your sector.

Pay attention to your company’s financial health. Workers can know how their company is doing financially by paying attention to earnings reports and guidance, and movements in its share price. “You have to have the discipline to take a look at what the markets are saying about your company and which way the stock price is going,” Welch said.

Watch your boss for clues. A trusting relationship with your supervisor can positively impact your work life on several fronts. You could hear of an incoming layoff earliest from them, as they will know before you. “Your boss is a human being. A boss will share that information with members of the team that they really trust,” Welch said.
Of course, cost cutting is another sign to watch out for. Some examples include the cancellation of annual or regular events, or programs, projects and perks.

“Anything that signals resource cuts that are not people, companies generally will try to cut projects, programs and events before they start cutting staff. You can be concerned that they are coming for people next,” Welch said.
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June 20, 2023
$5.2 billion in cargo stuck off West Coast ports in truck and container bottleneck

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A photo of Fenix Marine Services rail terminal on June 8, 2023, taken by a trucker.

The “slow and go” pace of the International Longshore and Warehouse Union workforce at West Coast ports has slowed ground port productivity to a crawl. As a result, supply chain intelligence company MarineTraffic data shows what it is calling a “significant surge” in the average number of containers waiting outside of port limits.

At the Port of Oakland, during the week of June 5, the average TEUs (ton equivalent units) waiting off port limits rose to 35,153 from 25,266, according to MarineTraffic. At the Port of Los Angeles and Long Beach, California, the average TEUs waiting off port limits rose to 51,228 from 21,297 the previous week, said a MarineTraffic spokeswoman.

The value of the combined 86,381 containers floating off the ports of Oakland, Los Angeles, and Long Beach reached $5.2 billion, based on a $61,000 value per container, and customs data.

According to data exclusively pulled for CNBC by Vizion, which tracks container shipments, the seven-day rate for a container cleared through the Port of Oakland is operating at 58%; at Port of Long Beach it is 64%; and at Port of Los Angeles it is 62%.

“Our data shows that vessels will continue arriving at West Coast ports in the coming days with significant amounts of cargo to unload,” said Kyle Henderson, CEO of Vizion. There are no indications at this time that ocean carriers have plans to cancel any sailings to these ports, he said, but he added, “If these labor disputes continue to affect port efficiency, we could see backlogs similar to those experienced during the pandemic. Obviously, that’s the last thing that any shipper wants as we turn the corner into the back half of the year and peak season.”

Logistics managers with knowledge of the way the union rank-and-file displeased with unresolved issues in negotiations with port management are influencing work shifts tell CNBC the slowdown can be attributed to skilled labor not showing up for work. CNBC has also learned that at select port terminals, requests for additional work made through official work orders are not being placed on the wall of the union hall for fulfillment. The Pacific Maritime Association, which negotiates on behalf of the ports, is not allowed in the union hall to see if the terminal orders are indeed being requested. CNBC has been told that if the additional job postings were being put up the data would show they are not being filled. Only original labor ordered from the PMA is being filled.

The PMA said in a statement on Friday afternoon that between June 2 and June 7, the ILWU at the Ports of Los Angeles and Long Beach refused to dispatch lashers who secure cargo for trans-Pacific voyages and unfasten cargo after ships arrive. “Without this vital function, ships sit idle and cannot be loaded or unloaded, leaving American exports sitting at the docks unable to reach their destination,” the statement read. “The ILWU’s refusal to dispatch lashers had been part of a broader effort to withhold necessary labor from the docks.”

PMA cited a failure on Wednesday morning to fill 260 of the 900 jobs ordered at the Ports of Los Angeles and Long Beach, and in total, 559 registered longshore workers who came to the dispatch hall were denied work opportunities by the union, PMA asserted in its statement.

“Each shift without lashers working resulted in more ships sitting idle, occupying berths and causing a backup of incoming vessels,” it stated.

However, the PMA said ILWU’s decision to stop withholding labor has allowed terminals at the Ports of Los Angeles and Long Beach to avert, for now, “the domino effect that would have resulted in backups not seen since last year’s supply chain meltdown.”

The PMA cited “generally improved” operations at the Ports of Los Angeles, Long Beach, and Oakland, but at the Ports of Seattle and Tacoma, a continuation of “significant slowdowns.”

The ILWU has declined to comment, citing a media blackout during ongoing labor talks.

Truck and container backups

The average truck turns to go in and out of the West Coast ports are up.

A trucker waiting for a container at LA’s Fenix Marine Services terminal shared photos from their truck with CNBC showing congestion on both rail and the road where truckers wait to pick up their containers.

Shippers are becoming increasingly concerned about the potential need to find alternative supply chain options.

A spokesperson for Long Beach, California-based Cargomatic, which focuses on drayage and short-haul trucking logistics, said it isn’t yet seeing trade diversions, but added, “As a national drayage partner, we have contingency plans built in with capacity ready to service our customers anywhere in the U.S. We know that shippers are very nervous and it’s only a matter of time before they pivot if this situation becomes prolonged.”

The PMA said in its statement that even though some port operations have improved, “the ILWU’s repeated disruptive work actions at strategic ports along the West Coast are increasingly causing companies to divert cargo to more customer-friendly and reliable locations along the Gulf and East Coasts.”

West Coast ports, which had lost significant volume to East Coast ports over the past year due to volatility in the labor contract talks, had in recent months begun to gain back volume.

A photo of a truck build up at Fenix Marine Services terminal at the Port of Los Angeles waiting to pick up containers taken by a trucker.

Ocean freight intelligence company Xeneta says its data shows that container spot freight rates jumped 15% in the first days of June as a result of several simultaneous disruptions. Recent Panama Canal low water levels limited cargo throughput, and soon after that, large parts of U.S. West Coast ports stopped handling inbound and outbound container trade.

“Shippers in search of more reliable and resilient supply chains now consider their options,” said Peter Sand, chief analyst at Xeneta. “The longer this drags on, the more severe the consequences will be for shippers and terminals,” he said.

During Covid, the supply chain breakdowns saw the pileup of vessels waiting off the West Coast influence trade to move to the Gulf and East Coast Ports. If vessels do start diverting again, there are extra costs tacked onto the goods being transferred, which the shipper will be charged. If the vessels divert and go to the Gulf or East Coast ports, they have to either use the Panama Canal, where extra charges on top of the normal additional charges are levied because the Panama Canal is in a critical situation with lower water levels due to drought.

Routes for monthly long-term 'tramp sailings' from Asia to the Americas

— Core trade route --- Alternate route

The Panama Canal's water issues exacerbate costs that would be incurred in any trade re-routing. It has instituted weight requirements for vessels — they need to be lighter to move through. If the vessel is at or under that weight requirement, shippers will be paying additional charges. In addition to the canal fees, some ocean carriers like Hapag Lloyd have instituted a $260 container fee for traveling through the canal. CMA CGM is charging $300 a container. If vessels are heavier than the current requirement, they would be forced to traverse the Pacific Ocean and go around the horn of South America, which would add weeks of travel time and travel costs.

"Vessel diversions are some of the most difficult activities that shippers and our clients deal with during a crisis," said Paul Brashier, vice president of drayage and intermodal at ITS Logistics. During the pandemic and its aftermath, containers destined for Los Angeles or Long Beach would show up unannounced in Houston or Savannah with little to no notice, he said. "We have visibility applications that alert us prior to the container arriving so we can reassign trucking capacity at the new port. But if you don't have this visibility, if you are not able to track the containers like that in real time, you could face thousands of dollars more in shipping and D&D costs per container to accommodate those changes. That inflationary pressure adversely not only affects the shipper but the consumer of those goods," he added.

ITS Logistics raised its freight rail alert level to "red" this week, signifying severe risk.

Supply chain costs have come down considerably on a global basis, according to the Federal Reserve's data, though they have been mentioned by Fed Chair Jerome Powell as one inflationary trigger the central bank has no control over. In a report by Georgetown economist Jonathan Ostry, the spike in shipping costs increased inflation by more than two percentage points in 2022.

"These slowdowns leave little options for shippers who have containers already en route to the West Coast," said Adil Ashiq, head of North America for MarineTraffic, who told CNBC earlier this week that the maritime supply chain issues were "breaking normal."

"They could skip a port and go to another West Coast port, but they are all experiencing levels of congestion," he said on Friday. "So do they wait or divert and go to Houston as the next closest port to discharge cargo?"

If vessels do decide to reroute, it will add days to their journey, which would delay the arrival of the product even more.

For example, if a vessel inbound from Asia decided to reroute to Houston, it would add another 7 to 11 day journey to the Panama Canal. If a vessel is approved to transit through the canal, that adds 8-10 hours of transit time. "You then have to add travel time once out of the canal to the port. So we're looking at conservatively, a 12 to 18 day additional delay if a vessel decides to go to Houston directly from the Canal. Even more, if you have to travel around South America," he said.

Key sectors of the U.S. economy have been pleading with the Biden administration to step in and broker a labor agreement, including trade groups for the retail and manufacturing sectors. On Friday, the U.S. Chamber of Commerce added its voice to this effort, expressing its concerns about a "serious work stoppage" at the ports of Los Angeles and Long Beach which would likely cost the U.S. economy nearly half a billion dollars a day. It estimates a more widespread strike along the West Coast could cost approximately $1 billion per day.

"The best outcome is an agreement reached voluntarily by the negotiating parties. But we are concerned the current sticking point – an impasse over wages and benefits – will not be resolved," U.S. Chamber of Commerce CEO Suzanne Clark wrote in a letter to President Biden.

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June 9, 2023
West Coast ports shut down as union workers ‘no show’ after breakdown in wage negotiations

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West Coast ports are shutting down as union workers “no show” after a breakdown in negotiations with port management.

The Port of Oakland was shut down Friday morning due to insufficient labor for terminal operations, a stoppage that is expected to last at least through Saturday. A source close to the situation told CNBC the port shutdowns are expected to spread across the West Coast as a result of lack of sufficient labor as workers protest over wage negotiations in contract talks with port management.

Two of the Oakland port marine terminals — SSA, its largest, and TraPac — were closed as of the morning shift on Friday, said Robert Bernardo, spokesman for the Port of Oakland. The majority of imports and exports are processed through those terminals, he said.

While the actions taken by workers are not a formal strike, the source told CNBC to expect stoppages at other West Coast ports as union workers refuse to report for assignments, with operations also reportedly stopping at the port hub of Los Angeles, including Fenix Marine, the APL terminal, and Port of Hueneme, which processes automobiles and perishables — bananas the largest import in that category. The situation remains fluid, with truck drivers being turned away at Los Angeles sites.

In an ILWU press release, International President Willie Adams said talks have “not broken down” and added “we aren’t going to settle for an economic package that doesn’t recognize the heroic efforts and personal sacrifices of the ILWU workforce that lifted the shipping industry to record profits.”

The stoppages come at a time when activity at West Coast ports had picked up again after losing volume to the East Coast ports due to concerns about the volatile labor situation.

At the Port of Oakland, total container volume increased for two consecutive months, with port officials optimistic about the upswing. It is the eighth-largest port in the country, importing a wide range of items, from Australian wine and meat, to aluminum from South Korea, and clothing, electronics and furniture from China.

“Given the increase we’ve seen in business over the last couple of months, we are optimistic about a stronger second half of 2023 for the amount of cargo moving through Oakland,” said Port of Oakland Maritime Director Bryan Brandes. “We also anticipate increasing the number of ocean carrier services offered at the Port of Oakland in the coming months.”

“Oakland is a big port for U.S. ag exporters,” said Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC). “Fridays are a big day for Ag exports.”

Webcams showing no truck activity at Port of Oakland where lack of workers closed terminal operations

The ports and unions have been involved in contract negotiations over the past year, adding tension to port operations.

On April 20, the Pacific Maritime Association, which represents the ports, and the International Longshore and Warehouse Union, announced they reached a tentative agreement on certain key issues, though they did not disclose more.

People familiar with the negotiation process told CNBC at the time that it represented “major progress.” Prior agreements included maintenance of health benefits. But known issues that still needed to be worked out included wages, as well as safety, automation and pension benefits.

PMA, which represents port management, in a statement on Twitter called the events Friday “concerted and disruptive work actions” by the ILWU.

The ILWU released a statement on Friday saying that rank-and-file workers had taken it upon themselves to “voice their displeasure” amid the ongoing “arduous fight” with port management. ILWU said cargo workers at ports “remain on the job,” but the port source told CNBC there is an insufficient number of workers overall for port operations to continue. The ILWU statement did not call out wages specifically, but cited “basic requests,” including health and safety, and the $500 billion in profits made by ocean carriers and terminal operators during the past two years.

The last work stoppage at the Oakland port came in early November, when hundreds of clerks walked off the job over a pay dispute.

Any port closure creates backups that impact both the pickup and drop off of products by truck drivers.

Truckers also had a work stoppage related to the AB 5 legislation in California covering classification of truckers as employees, a stoppage which lasted for five days, but took two months to clear up. ILWU did not cross that picket line.

At the Port of Oakland, over 2,100 trucks go through the terminals each day, but none are expected through Saturday with insufficient labor to serve the trucks.

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June 2, 2023
Elon Musk and Twitter face San Francisco city probe over headquarters

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In an aerial view, a modified company sign is posted on the exterior of the Twitter headquarters in San Francisco, April 10, 2023.

Justin Sullivan | Getty Images News | Getty Images

Elon Musk and X Corp. — the Musk-backed parent company of social media platform Twitter — face an investigation over building code violations at Twitter’s San Francisco headquarters on Market Street, according to online public records with the county’s Department of Building Inspection.

The probe, which was previously reported by the San Francisco Chronicle, follows a lawsuit filed May 16 in Delaware court by six former Twitter employees, who allege Musk’s “transition team” knowingly and repeatedly ordered them to break local and federal laws, including by making unsafe modifications to the company’s office space.

The lawsuit alleges under Musk’s management, X Corp. directed employees to turn rooms in the San Francisco headquarters office into “hotel rooms,” while lying to inspectors and their landlord they were just “temporary rest spaces” with some comfortable furniture added and no substantive or structural changes.

The lawsuit says one employee was told to place locks on the unauthorized “hotel room” doors that did not meet a California code which “requires locks that automatically disengage when the building’s fire suppression systems are triggered.”

The ex-Twitter employee said in the complaint Musk’s transition team repeatedly told them “compliant locks were too expensive” and instructed them instead to “immediately install cheaper locks that were not compliant with life safety and egress codes.”

The employee quit rather than break that law, their attorneys noted in the lawsuit.

The complaint also alleges Musk-led Twitter failed to pay the employees severance, back pay and benefits they were owed, and discriminated against some senior employees on the basis of age, gender and sexual orientation when it decided to terminate them.

Additionally, the lawsuit said Musk and members of his transition team, namely Boring Company executive Steve Davis, ordered employees involved in the management of real estate to slash costs by $500 million as quickly as they could. In the drive to cut costs, the Musk transition team told employees to simply refuse to pay landlords who were owed rent by the company.

When informed of the risks of termination fees for certain leases, Davis told Twitter senior employees, “Well, we just won’t pay those. We just won’t pay landlords,” adding, “we just won’t pay rent,” the complaint says.

Meanwhile, Miami Mayor Francis Suarez is actively courting Musk to move Twitter headquarters to his jurisdiction. On Friday, he wrote on Twitter, “let’s get them to MIA asap.”

CNBC reached out to Twitter for further information and the company responded with an automated response that included a poop emoji but no comment.

A representative for the Department of Building Inspection in San Francisco said in an emailed statement that the complaint was opened Friday morning and “no further action has been taken yet.”

“We expect to reach out to building management soon,” the spokesperson wrote. “We are not speculating on future potential enforcement action.”

Read the lawsuit here.

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May 19, 2023
Disney scraps plans for new Florida campus, mass employee relocation amid DeSantis feud

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Cinderella Castle in Walt Disney World.

Roberto Machado Noa | Lightrocket | Getty Images

Disney has abandoned plans to open up a new employee campus in Lake Nona, Florida, amid rising tensions with the state’s governor.

Citing “changing business conditions” and the return of CEO Bob Iger, Josh D’Amaro, chairman of Disney’s parks, experiences and products division, penned a memo to employees Thursday, announcing that the company will not move forward with construction of the campus and will no longer be asking more than 2,000 California-based employees to relocate to Florida.

“This was not an easy decision to make, but I believe it is the right one,” D’Amaro told employees.

Many Disney employees balked at the company’s relocation plans when they were first announced in July 2021 by former CEO Bob Chapek. While some left the company, or transitioned to other posts within Disney that would not require a move to Florida, others held out hope that the plan would fizzle out after a postponement. The campus was originally slated to open in 2022-2023, but was later delayed to 2026.

Disney is headquartered in Burbank, California, but operates a number of satellite offices across the country and the world.

D’Amaro said employees who have already moved to Florida may be able to relocate back to California.

“It is clear to me that the power of this brand comes from our incredible people, and we are committed to handling this change with care and compassion,” he said.

Disney’s announcement comes amid a bitter feud between the company and Florida Gov. Ron DeSantis. The company filed a lawsuit accusing DeSantis and the new board members of its special district of carrying out a campaign of political retribution against the entertainment giant.

DeSantis targeted Disney’s special district, formerly called the Reedy Creek Improvement District, after the company publicly criticized a controversial Florida bill — dubbed “Don’t Say Gay” by critics — that limits discussion of sexual orientation and gender identity in classrooms.

The special district has allowed the entertainment giant to effectively self-govern its Orlando parks’ operations for decades. The district was ultimately left intact, but its five-member board was replaced with DeSantis picks and renamed the Central Florida Tourism Oversight District.

Disney filed its suit in late April after the new board voted to undo development contracts that the company said it struck to secure its investments. The company has since updated that lawsuit to include newly passed legislation targeting its monorail system as further evidence of retaliation by the governor.

Iger has publicly lambasted DeSantis and the Florida government, noting that Disney has created thousands of indirect jobs, brings around 50 million visitors to Florida every year and is the state’s largest taxpayer.

In a statement later Thursday, representatives for DeSantis called the decision to nix the Lake Nona campus “unsurprising.”

“Disney announced the possibility of a Lake Nona campus nearly two years ago. Nothing ever came of the project, and the state was unsure whether it would come to fruition,” DeSantis’ office said in the statement.

D’Amaro reiterated in his memo that the company still plans to invest $17 billion in Florida over the next 10 years, including the addition of around 13,000 jobs. The company currently employs more than 75,000 people in the state.

Disney declined to provide specific updates on that investment, but has previously announced plans to update park attractions, expand existing parks and add more cruise ships to its fleet in Florida.

“I remain optimistic about the direction of our Walt Disney World business,” D’Amaro told employees.

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May 18, 2023
CEOs thought the return to office debate was over. It looks like they were wrong

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Many corporate leaders were hoping that the debate over the return to the office was over when they implemented mandates for workers, but the latest data from New York City’s key office market suggests that many employees are still setting their own terms.

While average building visits are back above their pre-pandemic baseline, at 61%, according to the latest data from The Real Estate Board of New York, the momentum has stalled. Among its key findings released earlier this month: the 61% mark is a notable increase from 51% during Q1 2022. But visitation rates have “essentially plateaued,” REBNY said, since reaching a peak of 65% in mid-2022.

A report out on Thursday from the Boston Consulting Group warns of the coming wave of “zombie” office buildings, with vacancy rates and utilization under 50% — it says many buildings across the U.S. are already at that mark. Its analysis matches the 61% plateau cited by REBNY: “Assuming these trends continue and organizations right-size to fit new levels of demand, utilization may tick up slightly from today’s depths, but still only 60% to 65% of current US office space will be needed.”

While this is all bad for municipal budgets tied to tax revenue, and ancillary businesses close to office districts, the message to employers is different: taking a sudden hard line on return-to-office policies isn’t necessarily going to work, and in fact, can be bad for talent retention and recruitment efforts.

Companies including Amazon, Disney and Starbucks have enacted strict return-to-office mandates though not the exact same number of days in each case, and many employees aren’t happy. Other companies, too, could see reverberations if they enact similar policies, especially if the mandates feel arbitrary, human resources professionals say.

“It’s dangerously risky to take a my-way-or-the-highway approach,” said Yolanda M. Owens, a career coach with The Muse, an online career platform. Flexibility is especially important when recruiting for difficult-to-fill roles and in jobs where competitors continue to offer hybrid or remote-only positions, she said.

Wall Street leadership veteran Sallie Krawcheck, co-founder and CEO of Ellevest and the former Citi CFO and head of global wealth management at Bank of America, recently told a room of leaders at a CNBC C-suite event that just thinking everything can go back to “the way it was” is a flawed mindset.

While companies can have legitimate reasons to enact stricter in-office policies, they have to be mindful that talent is their biggest asset and taking too hard a line could be a major strategic misstep.

This is true even as U.S. worker productivity fell 2.7% in the first quarter of this year, according to U.S. Bureau of Labor Statistics, and as employers announced plans to cut 337,411 jobs in the first four months of the year, a 322% increase from the same period in 2022, according to Challenger, Gray & Christmas Inc., the global outplacement and business and executive coaching firm.

For many employers, there is still time to get it right. Here are five actionable ways companies can navigate return-to-work decisions.

Think through the ‘why’ in forcing workers back

Companies shouldn’t simply issue a return-to-work edict, said Janine Yancey, founder and chief executive at Emtrain, an online training platform. Rather, they should clearly explain to employees the rationale behind the moves. Say, for example, a company wants to bring its marketing department back to the office more regularly. Executives could explain that collaboration helps the company achieve its targets more efficiently, citing real examples such as the advantages of face-to-face feedback for a design or messaging campaign.

When companies don’t offer a rationale or tie the return to business objectives, there can be meaningful ramifications. She offers the example of a small technology company that took a sudden, inflexible stance on return-to-office. The company lost so many people in a short period of time that it had to backpedal, lowering its requirement for in-office days and allowing for more flexibility.

“Company executives need to take the time and energy to paint the picture for the rank and file so it doesn’t appear to be an arbitrary exercise of power,” Yancey said.

Seek input from in-person and remote employees

Companies should attempt to collect data on who is coming to the office now and how frequently, so they have qualitative and quantitative information to base their decisions on. It’s also advisable to seek input from various teams to understand productivity and how employees view their current work situation. A company-wide survey is also a good idea to understand more clearly whether workers find working from home productive and enjoyable and what challenges they are facing.

Businesses should also understand the barriers employees face in coming back to the office, whether that’s a long commute or taking care of children, an elderly parent or a pet. Companies should also seek to understand what incentives would help mitigate these challenges.

As Krawcheck said, going back to five days a week in the office, “worked for white men, not everyone, and certainly not women and under-represented groups.”

Offer perks, but free food won’t cut it

Many employees need incentives to come back to the office. “It needs to be more than free food and happy hours,” Owens said.

Companies could also consider perks such as helping with commuting costs or subsidizing daycare for children and adults.

A little creativity can go a long way. Massage therapy and jewelry vendors are among the occasional offerings Workhuman, a provider of human resources software, has added for employees, said Zoe Peterson-Ward, chief customer officer. The company also hosts in-office celebrations for birthdays and anniversaries. That’s in addition to other perks such as free meals and an on-site gym in its Dublin office.

Invest in more than the same old cubicles

It can be frustrating when employees are required to come to the office just so they can be on video calls with colleagues in other locations, human resources professionals say. That’s why companies that want to bring workers back to the office need to focus on reconfiguring workspaces to foster additional collaboration.

Sandra Moran, chief marketing and customer experience officer at WorkForce Software, a human resources software provider, offers the example of a large technology firm that has reconfigured its workspace so that teams can work in close proximity on the days they’re in the office. Additionally, they’ve made a sizable investment in technology, so whether employees are in the office or not, they appear to be in the same physical space, Moran said.

“If all you are asking people to do is come back to sit in their cubicle, that’s not really interactive,” Peterson-Ward said.

Second-rate workspaces will be the losers in the future, according to the research. REBNY finds a widening gap between Class A properties and everything else in the commercial real estate market, with the highest quality Class A+ properties outperforming Class B by more than 10 percentage points.

While it said building where tenants are mandating workers back should be “shielded” from some of the impacts, Boston Consulting Group concluded in its new report that, “Older, cubicle-based buildings catering to office workers but lacking in modern amenities will suffer the most.”

If your company hasn’t yet, maybe don’t ‘mandate’

Many companies are still ironing out their return-to-office policies. JustAnswer, an online source for professional information, has seen a 49% increase in questions related to return-to-office mandates and/or policies in its Employment Law category compared with May 2022.

Before making widespread pronouncements, companies need to take a hard look at the reasons behind their decisions. Considerations include: what business imperatives require a stricter stance on in-office work? Is the decision related to productivity, collaboration or culture, or is it more arbitrary?

“There might be excellent reasons to have people come back five days a week, but in other cases, there might be no reason at all,” said Merry A. Kogut, who is a contributing attorney for JustAnswer and an employment law expert.

Companies should also evaluate whether across-the-board policies make sense, or whether in-office mandates should be implemented for certain functions only, Kogut said.

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May 13, 2023
Here’s the inflation breakdown for April 2023, in one chart

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A shopper in Greenville, New York, April 30, 2023.

Robert Nickelsberg | Getty Images News | Getty Images

Inflation in April notched its lowest reading in two years, as price pressures for consumers continue to moderate from multidecade highs and costs for household staples appear to be in retreat.

The consumer price index, a key barometer of inflation, increased 4.9% in April versus a year ago. That is the smallest annual reading since April 2021, the U.S. Bureau of Labor Statistics, or BLS, said Wednesday.

The index also fell from 5% in March, marking the 10th consecutive month of declines.

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“Increasingly, we can be confident that inflation is coming back in” to target, said Mark Zandi, chief economist of Moody’s Analytics.

Inflation measures how quickly prices are changing across the U.S. economy. The CPI measures anything from fruit and vegetable prices to those for a haircut or concert ticket.

Since the CPI reading was a positive number in April, it means consumers didn’t see prices falling, in a broad sense. But it shows the rate at which they’re rising has slowed significantly from the 9.1% peak in June 2022.

Policymakers aim to keep inflation at about 2% a year. It may take another year or so to reach that target, but “we’re definitively headed in that direction,” Zandi said.

Where consumers saw prices fall in April

Consumers saw average prices decline outright in April in certain categories.

Grocery prices, for example, retreated 0.2% during the month, following a 0.3% decrease in March. This trend should continue as supply chains continue to normalize, as do costs for labor and diesel, a key input for transportation from farm to shelf, economists said.

Monthly prices also declined for airline fares, new cars, hotels and household energy (such as electricity, fuel oil and utility gas service), among others.

Where consumers saw prices rise in April

On the flip side, notable increases in monthly prices occurred in categories such as shelter, used cars and trucks, motor vehicle insurance, recreation and personal care, according to the BLS.

Gasoline prices also jumped 3% in April relative to March, though are down 12% in the last 12 months.

Housing, the largest component of the average household’s budget, was the largest contributor to inflation in April, the BLS said. Shelter costs rose 0.4% in April relative to the prior month, a decrease from 0.6% in March.

However, average rents have moderated or even decreased over the past six months, a trend that will soon be reflected in lower inflation readings for shelter, since those price dynamics typically take several months to feed through into federal data, economists said.

“It looks like inflation in the [shelter] category has peaked,” Andrew Hunter, senior U.S. economist at Capital Economics, said.

Overall, households are faring much better than they were months ago relative to inflation in staples such as food, energy and housing, according to Zandi.

“Gas prices are way down from where they were a year ago,” he said. “Food prices are no longer rising quickly.”

“And rents are now flat to down,” Zandi added. “Those are the key items in people’s budget and all of them feel pretty good at this point in time.”

Why inflation surged to multidecade highs

Consumer prices began rising rapidly in early 2021 as the U.S. economy started to reopen after the pandemic-related shutdown. Americans unleashed a flurry of pent-up demand for dining out, entertainment and vacations, aided by savings amassed from government relief.

Meanwhile, the rapid economic restart snarled global supply chains, a dynamic exacerbated by Russia’s invasion of Ukraine. In other words, supply couldn’t keep up with consumers’ willingness to spend.

Inflation, which increased in economies around the world during the Covid-19 pandemic era, was initially siloed in categories of physical goods such as used cars and trucks. But the dynamic has morphed.

Now, it’s largely being driven by the labor market, not a shortage of physical goods, economists said.

Increasingly, we can be confident that inflation is coming back in.

Mark Zandi

chief economist of Moody’s Analytics

As the economy reopened after the pandemic, businesses rushed to hire workers and job openings surged to record highs. That demand tilted the job market in favor of workers, who had ample opportunities. They saw wages grow at their fastest pace in decades as employers competed to hire them.

That strong wage growth has nudged employers, especially labor-intensive service businesses, to raise their prices, economists said.

But now, “the earlier extreme levels of excess demand for workers are easing,” Hunter said.

Those labor-market dynamics should continue to put downward pressure on overall inflation.

“The trend from here is definitely looking a lot better,” Hunter said. “I think we’re finally seeing clear signs of progress.”

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May 10, 2023
LinkedIn lays off 716 employees, kills China jobs app

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Aytac Unal | Anadolu Agency | Getty Images

LinkedIn, the popular business social networking platform owned by Microsoft, will discontinue its China-specific jobs app InCareer and lay off 716 employees worldwide, the company said in a message to employees.

The move, announced Monday, will impact around 3.5% of LinkedIn’s approximately 19,000 employees worldwide. LinkedIn launched InCareer in Dec. 2021 after sunsetting its localized LinkedIn product in China.

“Though InCareer experienced some success in the past year thanks to our strong China-based team, it also encountered fierce competition and a challenging macroeconomic climate,” LinkedIn CEO Ryan Roslansky said in the message.

Shares of parent company Microsoft were largely flat in pre-market trading Tuesday morning. In the third quarter of 2023, LinkedIn revenue grew 8% year-over-year to $3.7 billion, according to Microsoft’s earnings report and quarterly SEC filing.

InCareer will delete all user data by Aug. 9, according to a LinkedIn help page.

LinkedIn will continue to operate other businesses in China, including its LinkedIn Learning product. But Roslansky signaled that the company would continue to “manage expenses” in the year ahead, suggesting that further cost cuts or layoffs could be on the table.

China is a fertile market for U.S.-based tech companies, which often jostle with homegrown competitors to capture market share. The total number of InCareer and LinkedIn users in China was over 57 million, according to an InCareer page. By comparison, domestic competitor Zhaopin claimed over 320 million professional users and corporate users ranging from Baidu to Chinese government agencies.

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May 9, 2023
Tech’s been hit by layoffs. But Singapore is still investing big in its talent — in tech and beyond

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Demand for individuals with specialized tech talent isn’t limited to the tech sector, says Singapore’s Infocomm Media Development Authority.

Jimmyfam | E+ | Getty Images

Singapore hasn’t been spared the layoffs that have hit the global tech industry since 2022.

Online marketplace Carousell cut 10% of its total headcount last December, and Shopee told The Straits Times it started a third round of layoffs last November.

But despite the downsizing, Singapore is still investing heavily in tech skills. Efforts at hiring and cultivating tech talent — in both the country’s tech and non-tech sectors — continue to be robust.

Singapore banks OCBC, DBS and UOB have each developed programs that train technology staff and prepare students to enter the tech industry. OCBC, for its part, announced in 2022 plans to hire 1,500 tech employees over the next three years.

And STLogistics announced last year it would invest 1.7 million Singapore dollars ($1.2 million) to encourage employees to pick up digital skills like software robotics. Singaporean telecommunications company M1 launched a program to equip undergraduate students with skills like cloud infrastructure support, it said on its website.

Demand for those skills isn’t going away anytime soon — in the tech sector and beyond.

Strong demand for tech jobs

Tech jobs have become increasingly popular in recent years.

In 2022, nearly seven in 10 of all vacancies in information and communications were new positions, which a report by the Ministry of Manpower showed was the highest level across all sectors for the third consecutive year.

Across job vacancies, technology talent like software developers and applications managers continued to be highly sought after, the report added.

That level of demand is expected to remain as the economy digitalizes, said Terence Chia, cluster director at Singapore’s Infocomm Media Development Authority (IMDA).

“This has been a consequence of tech companies anchoring and growing their higher-value tech development and corporate functions here,” he said.

On top of that, demand for individuals in “specialized tech areas” such as artificial intelligence and cybersecurity isn’t limited to the tech sector, Chia told CNBC. Such tech workers are needed across multiple industries such as finance, manufacturing, logistics and professional services, he said.

Tech ‘powers all the big banks’

In finance, technology is the engine that “powers all the big banks,” said Donald MacDonald, OCBC head of group data.

“We want everyone in the bank to … at least have foundational data literacy,” he said.

OCBC designed a program that equips employees with basic data skills and teaches them how data can be used in their jobs, he said.

According to MacDonald, the bank uses data to understand its customer profiles and personalize each customer’s experience.

Data also plays a part in reducing risk — OCBC scans every transaction to detect scams and uses algorithms to figure out “who to lend to and … how much to lend,” he said.

Another data analysis program trains employees in divisions like finance and risk management, MacDonald said. It has trained about 400 employees to use advanced data analysis skills like Python, which MacDonald said will help them “move beyond” using Excel and other simple tools.

“I see Singapore establishing [itself] as a kind of regional hub for A.I. and deep tech,” MacDonald said.

Specialized tech skills

IMDA’s plans are broader in scale: It has trained more than 15,000 Singaporeans and placed them in specialized tech jobs, said Chia. The jobs span a range of industries, including financial services, wholesale and retail trade, and education, he added.

Those jobs often have steep learning curves but, Chia said, program participants receive “on-the-job training and classroom learning” to pick up specialized skills.

One of IMDA’s programs puts non-tech professionals through an “intensive, bootcamp-style experience” that helps them develop into tech professionals, he said.

Higher education is no exception. Chia said “many leading companies” support IMDA’s joint initiative with the Ministry of Education to train and create job opportunities for tech students in vocational institutes.

“There continue to be many opportunities in the digital economy for Singaporeans,” Chia said.

Globally, tech companies have reportedly cut 102,391 jobs so far this year, but the value of tech talent has far from diminished in Singapore.

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May 8, 2023
A.I. trade is leaving investors vulnerable to painful losses: Evercore

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The artificial intelligence trade may be leaving investors vulnerable to significant losses.

Evercore ISI’s Julian Emanuel warns Big Tech concentration in the S&P 500 is at extreme levels.

“The AI revolution is likely quite real, quite significant. But… these things unfold in waves. And, you get a little too much enthusiasm and the stocks sell off,” the firm’s senior managing director told CNBC’s “Fast Money” on Monday.

In a research note out this week, Emanuel listed Microsoft, Apple, Amazon, Nvidia and Alphabet as concerns due to clustering in the names.

“Two-thirds [of the S&P 500 are] driven by those top five names,” he told host Melissa Lee. “The public continues to be disproportionately exposed.”

Emanuel reflected on “odd conversations” he had over the past several days with people viewing Big Tech stocks as hiding places.

“[They] actually look at T-bills and wonder whether they’re safe. [They] look at bank deposits over $250,000 and wonder whether they’re safe and are putting money into the top five large-cap tech names,” said Emanuel. “It’s extraordinary.”

It’s particularly concerning because the bullish activity comes as small caps are getting slammed, according to Emanuel. The Russell 2000, which has exposure to regional bank pressures, is trading closer to the October low.

For protection against losses, Emanuel is overweight cash. He finds yields at 5% attractive and plans to put the money to work during the next market downturn. Emanuel believes it will be sparked by debt ceiling chaos and a troubled economy over the next few months.

“You want to stay in the more defensive sectors. Interestingly enough with all of this AI talk, health care and consumer staples have outperformed since April 1,” Emanuel said. “They’re going to continue outperforming.”

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May 8, 2023