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European Edition
26th May 2023
 
THE HOT STORY
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.
WORKFORCE
Deutsche Bahn offers 12% wage increase in bid to avert strikes
Deutsche Bahn has offered a wage increase of up to 12% to employees and a separate payment of €2,850 to ameliorate the impact of rising inflation. The offer gives 12% to the lowest paid workers, and 10% and 8% for higher earners, a statement said. The proposed wage increases by the German railways operator would be rolled out over 24 months.  The EVG union, which has previously held strikes that precipitated widespread disruption, said it would comment on the offer next week and ruled out any further industrial action until then.
TECHNOLOGY
UK government acknowledges 'existential' risk of AI
The UK government has acknowledged the "existential" risk of artificial intelligence (AI) development for the first time. Prime minister Rishi Sunak and Chloe Smith, the secretary of state for science, innovation and technology, met with the CEOs of Google DeepMind, OpenAI, and Anthropic AI to discuss safety and regulation measures. “They discussed safety measures, voluntary actions that labs are considering to manage the risks, and the possible avenues for international collaboration on AI safety and regulation,” the participants said in a joint statement. “The lab leaders agreed to work with the UK government to ensure our approach responds to the speed of innovations in this technology both in the UK and around the globe . . . The PM and CEOs discussed the risks of the technology, ranging from disinformation and national security, to existential threats . . . The PM set out how the approach to AI regulation will need to keep pace with the fast-moving advances in this technology.”
Workers get ahead by embracing AI
Emerging data shows that workers are more optimistic about AI in the workplace than headlines suggest. Microsoft's Work Trend Index reveals that 70% of workers would delegate as much work as possible to AI to lessen their workloads. AI tools are already being used to improve productivity and efficiency, freeing up mental bandwidth for more creative tasks. Experts believe that as workers reclaim time previously spent on meetings and emails, they will have more time for the complex, creative, and human parts of their jobs. AI is seen as a collaborator, not a replacement, and workers are eager for relief from digital overload. “Employees are more eager for AI to help with this burden of digital debt than they are afraid of job loss,” said Colette Stallbaumer, Microsoft's general manager for Future of Work.
CULTURE
UK blue-chips to vote on the future of the CBI
Scores of UK blue-chip companies, including BP and Marks & Spencer, will be allowed to vote on the future of the Confederation of British Industry (CBI) at an extraordinary general meeting next month. The poll will be conducted on a 'one member, one vote' basis, regardless of a company's size or subscription fee. Insiders said the group was drafting proposals for a slimmed-down organisation that would inevitably result in some redundancies among its workforce. The group's director-general, Tony Danker, was sacked last month amid allegations of personal misconduct. His successor, Rain Newton-Smith, has vowed to lead the CBI's rebirth, and has said it is likely to involve changing the group's name. The scandal has also ensnared the CBI's former president, John Allan, who acknowledged making an inappropriate comment to a colleague, and has since stepped down early as chair of Tesco and Barratt Developments amid allegations about his behaviour.
HIRING
Recruiters embrace non-traditional candidates
Recruiters are broadening their search to include non-traditional candidates and different skill sets, reports the BBC's Worklife. Companies are moving away from choosing prospective hires based on technical abilities alone and are prioritising soft skills. The pandemic has changed the hiring pool, as many workers had reduced opportunities for professional development during the public health crisis, and de-emphasizing hard skills on job ads is opening up options for those job seekers who might not have had the opportunity to attend or complete a four-year degree. Some job ads are even indicating that job-listing requirements themselves are a formality by adding notes encouraging candidates that don't meet all the stated criteria to apply regardless. Ultimately, the definition of an ‘ideal' candidate is broader than it's ever been. “I really don't care about a candidate's schooling or past companies. I care if they have the right skills that the company needs, and the right mentality, meaning the right fit for the company culture,” says Jan Tegze, a tech recruiter.
Banco Santander targets Credit Suisse dealmakers
Banco Santander is in talks to hire more senior bankers from Credit Suisse as it looks to expand its talent base, particularly in the US. The new hires will bring teams of junior bankers under them, potentially resulting in dozens of fresh employees. José Linares and Darren Jones are spearheading Santander's effort to recruit Credit Suisse merger advisers and capital markets bankers.
STRATEGY
Meta carries out final round of layoffs
Facebook owner Meta has completed the final round of a three-part layoff plan, which was announced in March to eliminate 10,000 roles. The company had already laid off over 11,000 employees in the fall, bringing its headcount down to mid-2021 levels. The latest round of layoffs hit non-engineering roles the hardest, with content design and user experience research being eliminated even among technology teams. The cuts are expected to deeply impact the company's ad sales, marketing, and partnerships teams. Meta CEO Mark Zuckerberg had pledged to restructure business teams and return to a more optimal ratio of engineers to other roles. The layoffs come after months of waning revenue growth and high inflation, as well as the company's investment in its metaverse-oriented Reality Labs unit and infrastructure to support artificial intelligence work.
ECONOMY
Germany slips into recession
German output fell by 0.3% in the first three months of this year following a contraction of 0.5% at the end of 2022, putting the country in a technical recession. High energy prices and gas shortages have weighed on growth and dragged down consumer spending. The latest figures show household consumption fell by 1.2% compared with the previous quarter while government spending dropped by 4.9%. Andreas Scheuerle, an analyst at the German asset management company DekaBank, said: “Under the weight of immense inflation, the German consumer has fallen to his [sic] knees, dragging the entire economy down with him.”
TAX
Estonia's far-right surges amid outrage over tax hikes
Estonia's far-right EKRE party has surged ahead of Prime Minister Kaja Kallas's Reform party in a recent opinion poll. The poll comes after Kallas faced criticism for tax hikes and spending cuts. The EKRE party received 24.4% of the vote in the poll, while the Reform party received 22.2%.
TRAINING & DEVELOPMENT
Schneider Electric launches sustainability school
Schneider Electric has launched a free digital platform called the Schneider Electric Sustainability School, which offers interactive courses to professionals and companies of all sizes. The three-part program was initially launched internally to educate Schneider Electric employees to better support the company's partner ecosystem. The program is now available externally to empower professionals to take a first step towards a more sustainable future. The comprehensive training platform is designed to support small and medium-sized enterprises (SMEs) in embarking on their decarbonisation journey. The program covers a range of topics from energy efficiency and renewable energy to the circular economy and sustainable transportation. "Despite this growing commitment to decarbonisation, a sizable knowledge and skills gap remains a barrier to progress," said Schneider Electric.
INTERNATIONAL
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.
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.’”
Boeing deploys pilots to train airlines
Boeing is deploying experienced pilots to airlines to train their employees to fly Boeing aircraft. The move is part of a wider push to reduce aviation safety risks after two 737 MAX crashes in 2018 and 2019. In 2022, 125 Boeing "flight operations representatives" worked with more than 60 airlines. Boeing hopes to recruit additional flight operations representatives, who are mostly retired airline pilots with more than 13,000 flight hours under their belt. While Boeing has historically sent engineering and maintenance experts to embed with airlines, sending pilots on a semi-permanent basis to answer questions about flight operations procedures is a new endeavour for the company. Boeing's Chief Safety Officer, Mike Delaney, said that having Boeing pilots on the ground allows the company to address practices that may be of concern.
China's youth unemployment crisis
China's economy has rebounded after the Covid-19 pandemic, but youth unemployment has soared, reaching a new high in April at nearly four times the national level. The unemployment rate for 16- to 24-year-olds in China's urban areas spiked at 20.4% - or roughly 6 million young people out of work. Almost 12 million college graduates will hit the job market this year, likely taking the youth unemployment rate to above 25%, according to Citigroup. This is a worrying development for the Communist Party, which Bloomberg says is obsessed with social stability, and for the economy's longer-term prospects. While Beijing is trying to encourage public and private hiring, underlying trends could keep youth unemployment relatively high for some time.
 


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