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26th May 2023
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Record-breaking summer travel prompts companies to rethink return-to-office rules
With over 42 million Americans expecting to travel this summer, companies are adopting hybrid work schedules with "Work from Anywhere" (WFA) weeks to accommodate employees' desire for flexibility while maintaining return-to-office mandates. WFA weeks are still relatively uncommon, but big-name companies like American Express, Visa, Mastercard, and Google have adopted the policy. Employees typically have the option to use their WFA weeks when it's most convenient for them throughout the year. Offering a set number of WFA weeks may allow companies to accommodate the desire for flexibility without committing to a fully remote future. For Suzanne Rosnowski, founder and CEO of public relations firm Relevance International, two WFA weeks alongside a three-day-a-week hybrid schedule emerged as a logical compromise with her team on how to transition back into the office after the pandemic. "We demonstrated work-from-home can be productive, but we also demonstrated too much work-from-home can be counterproductive, at least for our agency," she said.
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U.S. government alerts companies to impending ransomware attacks
A new initiative from the U.S. government's Cybersecurity and Infrastructure Security Agency (CISA) has issued around 225 notifications about planned ransomware attacks since the beginning of the year. The Pre-Ransomware Notification Initiative alerts organizations about a viable, imminent plot to lock up their systems and hold customer data hostage. Many of those alerted so far have been schools and hospitals. Through a related CISA program, the Ransomware Vulnerability Warning Pilot, the agency also identifies risks in organizations' systems and notifies them about those vulnerabilities. CISA's warnings go beyond the U.S., with the agency alerting organizations in 18 countries to 52 planned ransomware attacks. It has also received 33 notifications from 10 partner countries of impending attacks on U.S. organizations, and CISA wants to scale up the initiative, reports Bloomberg.
Tesla faces possible data protection violations in Germany
German authorities are investigating possible data protection violations by Tesla, according to Handelsblatt newspaper. The carmaker has allegedly failed to protect data from customers, employees, and business partners. One hundred gigabytes of confidential data was leaked to the newspaper by a whistleblower. The breach would violate the European Union's General Data Protection Regulation (GDPR). A lawyer for Tesla claims that a disgruntled former employee abused his access as a service technician to obtain information, and the company plans to take legal action against the suspected ex-employee. The whistleblower notified German authorities about the data protection breach in April. The Brandenburg data protection office has stated that the matter would become serious if the evidence becomes substantial. Tesla and the data protection office were not immediately available for comment.
Grant Thornton to lay off 300 U.S. employees
Grant Thornton is laying off about 300 U.S. employees, or roughly 3% of its workforce in the country, mostly in the advisory and tax divisions, due to declining demand for its services. The move follows similar cuts by other professional services firms in recent months, including Ernst & Young and KPMG. Grant Thornton cited a slowing economy and "pockets of underutilization" as reasons for the layoffs. The firm is providing severance benefits and professional outplacement services to affected professionals. "We value the contributions of all team members," said the firm in a statement.
First Republic Bank paid dozens of employees over $10m annually
First Republic Bank was paying dozens of employees over $10m annually before its collapse, according to Bloomberg News.  The bank was known for offering generous rewards to staff, but some potential rescuers were surprised by the compensation figures on display when the Federal Deposit Insurance Corp (FDIC) granted access to the bank's data room days before the agency's emergency intervention on May 1. JPMorgan Chase & Co recently agreed to pay $10.6bn to the  FDIC to take control of most of First Republic's assets.
Companies seek internal auditors when they get in trouble
Internal auditors are in especially high demand by businesses that have faced recent public failures, according to a new study.  The study, co-authored by Young Hoon Kim, an assistant professor of accounting at George Mason University's School of Business in Fairfax, Virginia, analyzed 49,000 corporate online job postings for internal auditors for the years 2010 through 2019 and found that when companies experienced a public failure the previous year, they were nearly 10% more likely to seek an internal auditor. Hiring internal auditors reduced the probability of the firm experiencing another failure by more than 17%, compared to failed companies that didn't hire an auditor. Not every company saw that much success, however, as those that hired internal auditors without providing appropriate governance structures were just as likely to fail again. 
Corporate America struggles on $80bn promise to diversify supply chains
Corporate America pledged nearly $80bn to diversify its supply chain by granting contracts to minority-owned businesses, but money spent hasn't necessarily translated into long-term success for those companies, reports Bloomberg. Diversifying supply chains has been more difficult than anticipated, and with inflation, job cuts and a possible recession, some worry the pressure to advance such efforts will abate. The challenges are myriad, including a lack of data on where suppliers are located, what sort of capacity they are capable of, and how to link them up with companies. Many companies only open up low-margin commodity purchasing to suppliers and are less likely to tap under-represented groups for high-margin tasks.
New jobless claims fall back to 229,000
The number of Americans filing new claims for unemployment benefits increased moderately last week and data for the prior two weeks was revised sharply lower likely as fraudulent applications from Massachusetts were stripped out, indicating persistent labor market strength. The Labor Department said initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 229,000 for the week ended May 20th. Data for the prior week was revised to show 17,000 fewer applications received than previously reported. Claims for the week ending May 6th were revised down by 33,000. Economists polled by Reuters had forecast 245,000 overall claims for the latest week. The four-week moving average of initial claims was unchanged at 231,750, while the number of people receiving benefits after an initial week of aid fell 5,000 to 1.794m in the week to May 13th. “After trending higher through the first quarter, initial claims have leveled off and moving more sideways in recent weeks,” said lead U.S. economist Nancy Vanden Houten of Oxford Economics. “We expect jobless claims will resume their upward trend as the economy weakens and enters a mild recession in the second half of the year, when we look for layoffs to become more widespread".
EU, Google to develop voluntary AI pact
Google's parent company, Alphabet, and the European Commission aim to develop an artificial intelligence (AI) pact involving European and non-European companies before rules are established to govern the technology, EU industry chief Thierry Breton said on Wednesday. He also urged EU countries and EU lawmakers to finalise details of the Commission's proposed AI rules before the end of the year. Both groups have yet to start negotiations to iron out their differences. EU Commissioner for Competition Margrethe Vestager underlined the need to act together. "We need the AI Act as soon as possible. But AI technology evolves at extreme speed. So we need voluntary agreement on universal rules for AI now," she said in a tweet.
Google's Wing service drops goods off by drone
In a first-of-its-kind demonstration of Google's autonomous aerial Wing fleet, an electric drone dropped a package into Denver's Coors Field baseball stadium. The new demonstration in Denver was the first delivery to a professional sports stadium, and the company said it chose Coors Field to showcase its abilities in flying drones in major U.S cities. "Our intent here is not to deliver beer and peanuts to stadium-goers. Our drones will never match the experience of flagging down a vendor and having them toss peanuts to you from 20 seats away," said company spokesman Jonathan Bass. "We’re more focused on supplementing existing methods of ground-based delivery to move small packages more efficiently across miles, not feet."
Samsung faces first strike as union calls for higher wages
An influential Samsung Electronics workers’ union has warned that its members could walk out over a wage dispute in what could be the South Korean technology giant’s first-ever strike. The National Samsung Electronics Union (NSEU) claims that Samsung management has cut the union out of wage negotiations. CNBC notes that tension with workers comes at a sensitive time for the world’s biggest smartphone and memory chip maker, after its operating profit in the first quarter plunged to its lowest level since 2009. NSEU representative Lee Hyun-kuk said the union would go on strike after a consultation with its members but said it depends on the willingness of Samsung chair Lee Jae-yong to negotiate.  “It depends on the attitude of chairman Lee Jae-yong. We sincerely ask him to come to the table for talks,” the NSEU’s Lee said.  A Samsung spokesperson said “the company has diligently followed all relevant and related procedures, and will continue to hold discussions with the union.’”
PwC Australia leak staff told to step aside
PwC has agreed to remove staff with links to the leak and use of confidential Australian tax plans from government work until a review is completed. The Australian Treasury referred the matter to police for a criminal investigation on Wednesday. The scandal originated with PwC's former head of international tax, Peter Collins, who shared confidential information about Australia’s tax plans with other staff at the firm. Other PwC staff then used the leaked intelligence to advise 14 clients on how to sidestep new multinational tax avoidance laws in 2016. The scandal has elicited anger within the professional services community in Australia, with KPMG expressing concern about the reputational damage inflicted on the industry. KPMG CEO Andrew Yates and chair Alison Kitchen have urged their firm's workforce to act ethically and in the public interest, admitting the company had not always met expectations in the past.
EU celebrates GDPR's fifth anniversary with record-breaking fine
The European Union's General Data Protection Regulation (GDPR) celebrated its fifth anniversary on Thursday. The EU marked the occasion by issuing a record-breaking fine of €1.2bn ($1.3bn) to Meta Platforms for violating the data protection rules. GDPR was hailed as a gold standard for regulating how companies use people's data, and its principles were later copied by other countries. However, Bloomberg notes the implementation of GDPR was slow, and regulators were held back by a lack of resources and procedural rules. The EU is currently negotiating new controls for AI, but it will likely take a while before the laws go into effect.
Japan's PM rules out tax hike for child care spending increase
Japan's Prime Minister Fumio Kishida has ruled out raising taxes to fund the planned increase in child care spending to tackle the country's falling birthrate. The government aims to double Japan's child policy budget by the early 2030s, which would require an additional funding of around ¥5tn ($36bn) per year. Kishida has prioritized boosting child-rearing support, seeing dwindling births as a "national crisis." The government is considering increasing social insurance contributions to cover part of the annual spending increase of around ¥3tn and creating a new special account in the state budget to manage funds specifically for child-related spending.

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