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North American Edition
23rd May 2025
 
THE HOT STORY
Unemployment claims dip amid uncertainty
The number of Americans filing for unemployment benefits decreased slightly last week, with claims falling by 2,000 to 227,000 for the week ending May 17, according to the Labor Department. This figure is close to the 230,000 applications analysts had predicted. Despite ongoing economic uncertainty, businesses are retaining employees, and the labor market remains robust with a low unemployment rate of 4.2%. Fed chair Jerome Powell noted that "tariffs have dampened consumer and business sentiment," contributing to a 0.3% annual economic contraction in the first quarter of 2025. While some companies, including Microsoft, have announced layoffs, the overall job market continues to show strength, with 177,000 jobs added in April. The total number of Americans receiving unemployment benefits rose to 1.9m.
LEGAL
SCOTUS blocks Trump’s firings
The U.S. Supreme Court has temporarily allowed Donald Trump to keep two Democratic members, Cathy Harris and Gwynne Wilcox, from their positions on federal labor boards while their legal challenges proceed. This decision comes as part of a broader legal dispute testing Trump's authority over independent government agencies. Chief Justice John Roberts halted lower court orders that had protected Harris and Wilcox from dismissal, stating: "The president should not be forced to delegate his executive power to agency heads who are demonstrably at odds with the administration's policy objectives." The ongoing legal battle raises questions about the extent of presidential power in removing officials from independent boards, with federal judges previously ruling that such removals require cause. Without these members, the boards risk losing their ability to function effectively.
Judge reinstates education workers
In a significant ruling, District Court Judge Myong J. Joun temporarily reinstated over 1,300 Education Department workers laid off by the Trump administration. The judge stated that the firings hindered the federal government's ability to implement essential programs, causing "delays and uncertainty" in federal educational funding. This decision, made at the request of a coalition of states, aims to provide short-term relief to K-12 schools and colleges facing challenges since the Education Department was effectively reduced. The judge emphasized that only Congress has the authority to abolish federal agencies, stating, "Defendants cite to no case that this power includes the power to dismantle Congressionally created departments." While this ruling is a victory for agency workers, it remains uncertain how many will choose to return to their positions.
LAHSA executives face explosive allegations
Two former employees of the Los Angeles Homeless Services Authority (LAHSA) received a total of $800,000 in settlements after alleging misconduct by CEO Va Lecia Adams Kellum. Emily Vaughn Henry, a former deputy chief information officer, claimed she was fired for raising concerns about Kellum's hiring practices and alleged inappropriate behavior at a conference. Kristina Dixon, the former chief financial officer, described her termination as part of a “witch hunt” and accused Kellum of hiring unqualified staff, leading to budget deficits. LAHSA officials denied the allegations, stating they made a business decision to resolve the claims. The agency is currently facing scrutiny following audits and a significant funding cut from the Los Angeles County Board of Supervisors.
Microsoft fires employee over protest
Microsoft has terminated software engineer Joe Lopez after he interrupted CEO Satya Nadella's speech during the annual Build developer conference in Seattle. Lopez protested the company's involvement in supplying technology to the Israeli military amid the ongoing conflict in Gaza. His comments were part of a series of pro-Palestinian incidents at the event, which included protests outside the venue. Microsoft acknowledged providing AI services to the Israeli military but stated it found no evidence that its Azure platform was used to target civilians. The advocacy group No Azure for Apartheid reported that Lopez received a termination letter he could not open, and claimed the company has blocked internal emails mentioning "Palestine" and "Gaza."
WORKFORCE
Ohio's pension bill sparks controversy
Ohio is facing a potential increase in pension contributions for police and firefighters due to House Bill 280. If passed, the employer contribution rate would rise from 19.5 cents to 24 cents per dollar paid to police officers, aligning it with current firefighter contributions. However, local officials, including Kent Scarrett of the Ohio Municipal League, express concerns about the financial burden this bill could impose on cities. The Ohio Police & Fire Pension Fund, which serves 62,000 workers and retirees, has been advocating for increased employer contributions to avoid benefit cuts. The fund's recent reduction in its assumed annual rate of return has exacerbated its financial challenges.
L.A. City Council cuts safety budget
The Los Angeles City Council approved a $14bn budget for 2025-26, reducing Mayor Karen Bass' public safety initiatives to avoid 1,000 layoffs. The council's decision, which passed 12 to 3, cut LAPD recruitment funding, allowing for only 240 new officers instead of the proposed 480. This would leave the LAPD with approximately 8,400 officers by June 2026, a significant drop from 10,000 in 2020. The budget also scaled back hiring for the Los Angeles Fire Department and proposed layoffs across various city agencies. Despite the cuts, Councilmember Tim McOsker noted that funding for LAPD recruitment could increase if the city's financial situation improves. The council's actions aim to address a nearly $1bn budget shortfall while attempting to maintain essential services.
New pension plan for meatpackers
U.S. meatpacking workers are set to receive their first new pension plan in nearly 40 years, thanks to a contract agreement between JBS, a leading meat company, and the United Food and Commercial Workers union. This new plan will benefit 26,000 workers across 14 JBS facilities, alongside wage increases, paid sick leave, and enhanced safety measures. Mark Lauritsen, head of the UFCW's meatpacking division, stated, “This contract... really starts to paint the picture of what everybody would like to have: long-term stable jobs.” The contract raises average pay to $23 to $24 per hour and aims to improve worker retention. JBS's commitment to this pension plan reflects its dedication to its workforce and the communities it serves, as the company prepares for a potential U.S. stock offering.
Side gigs: the new necessity
Experts assert that side gigs have transitioned from being optional to essential for American workers, particularly as economic uncertainties loom. Rowan Stone, CEO of Sapien, emphasises: “If we can find a way to tap into that knowledge and reward people fairly for it, gig work won't just improve; it'll fundamentally change how we think about work, technology and value creation.” Many side gigs, such as voiceover work and digital product sales, can yield substantial monthly incomes, often rivaling full-time wages. Benny Rehwald, founder of Topture, notes: “Some of these side hustles can rival full-time wages,” highlighting their accessibility and flexibility, especially for those balancing other commitments. As the landscape of work evolves, side gigs are becoming integral to long-term financial strategies for many.
CORPORATE GOVERNANCE
CEOs face job loss over AI
According to the 2025 Dataiku/Harris Poll, a staggering 74% of CEOs fear losing their jobs within two years if they fail to demonstrate measurable AI business gains. The pressure is mounting, with 63% of CEOs reporting that their boards demand tangible AI results, and 96% of executives agreeing these expectations are justified. Many CEOs admit that over a third of their AI initiatives are merely "AI washing," lacking real substance. Additionally, 87% acknowledge falling into the "AI commodity trap," mistakenly believing that off-the-shelf solutions will suffice. Governance gaps are also a concern, with 94% of CEOs suspecting employees use unauthorised AI tools. As AI reshapes executive responsibilities, 94% of CEOs believe AI could provide strategic counsel equal to human board members, prompting a shift in leadership structures. 
FEMA faces crisis amid leadership exodus
The U.S. Federal Emergency Management Agency (FEMA) has seen a dramatic shakeup with 16 senior executives resigning just ahead of hurricane season. High-profile departures include MaryAnn Tierney, previously acting deputy administrator, and heads of finance and disaster response. This follows the recent dismissal of acting administrator Cameron Hamilton, with new leader David Richardson pledging sweeping reforms. The agency, under pressure from President Trump’s push to reduce or dismantle it, has struggled with low morale and staffing losses. With hurricane season beginning June 1 and forecasters predicting heightened activity, the agency’s readiness is under scrutiny.  
Rio Tinto's CEO steps down
Jakob Stausholm, the chief executive of Rio Tinto, will step down after over four years at the helm. A "rigorous selection process" for his successor is already underway, with Stausholm remaining in his role until a replacement is appointed. No specific reason for his departure has been disclosed. Under Stausholm's leadership, Rio Tinto faced significant challenges, particularly following the destruction of a 46,000-year-old Aboriginal cave in Western Australia. Dominic Barton, Rio Tinto's chair, praised Stausholm for having "restored trust with key stakeholders" and for setting a "compelling growth trajectory." The firm has also faced pressure from activist investors regarding its dual listing in London and Sydney.
PRODUCTIVITY
AI transforms the future of work
As AI evolves, the concept of "digital labor" is rapidly expanding, with Salesforce CEO Marc Benioff suggesting that the total addressable market could reach trillions of dollars. Research from Harvard Business School indicates that AI agents are becoming integral teammates rather than mere assistants. To harness this potential, HR and procurement leaders must develop strategies for integrating AI into hybrid teams. Deloitte reports that AI is being applied across all enterprise processes, enhancing efficiency and collaboration. However, organizations that delay in adopting AI risk losing top talent and facing compliance challenges. A framework for integrating AI into workforce strategies includes mapping tasks, assessing AI capabilities, and establishing clear roles. As AI continues to evolve, companies must remain human-centric, focusing on high-value tasks that require human insight and creativity. The future of work will depend on how organizations navigate these changes and the ethical implications of AI integration.
DIVERSITY, EQUITY & INCLUSION
Legal risks of DEI rollbacks
Carliss Chatman, an associate law professor at SMU, warns that federal contractors who abandon diversity, equity, and inclusion (DEI) agreements may face significant legal risks. The rollback of race-conscious contracting, particularly affecting Black-owned businesses, could lead to liability under 42 U.S.C. § 1981. Chatman states, "Contracting isn't a race-neutral act," highlighting the potential for litigation if race is a factor in altering contractual relationships. Companies like Target and McDonald's are already under scrutiny for their DEI reversals, which could trigger obligations under Regulation S-K for public firms. As the legal landscape evolves, maintaining inclusive contracting practices is not just a policy choice but a crucial aspect of risk management.
Goodwin Procter cuts DEI ties
Goodwin Procter has terminated its relationships with key DEI organisations, including the Sponsors for Educational Opportunities legal fellowship and the Leadership Council for Legal Diversity, following scrutiny from the Equal Employment Opportunity Commission (EEOC). The firm disclosed that for 2026, applicants for its fellowship programme will no longer need to demonstrate a commitment to DEI. This decision comes amid a broader investigation into the firm's diversity initiatives, with the EEOC requesting extensive data on past fellowship recipients and hiring practices. Goodwin Procter has also replaced its DEI terminology with “opportunity, inclusion, and belonging.”
HEALTH & SAFETY
Safety first: workers at risk
In the aftermath of the Eaton fire, a crew from the National Day Laborer Organizing Network (NDLON) surveyed over 1,000 workers involved in cleanup efforts, revealing alarming safety violations. Only 25% wore gloves, 20% had masks, and just 10% donned full protective suits, as mandated by California regulations. Pablo Alvarado, NDLON's co-executive director, expressed concern, stating: “I just don't want to see people dying,” referencing past tragedies where workers suffered long-term health issues. The report highlights the need for stricter enforcement of safety standards, as many employers fail to provide adequate protective equipment.
INTERNATIONAL
U.K. migration drop raises worker concerns
Net migration to the U.K. has nearly halved, with 431,000 more people arriving than leaving in the year to December 2024, down from 860,000 the previous year, according to the Office for National Statistics (ONS). This significant decline is attributed to a drop in non-E.U. workers and students, marking the largest fall on record. Nadra Ahmed, chair of the National Care Association, expressed concern, stating: "The statistics have been dropping now for some months, and yet we do not see any increase in a domestic workforce taking on the roles required." The construction sector is also feeling the strain, with Daniel Austin, chief executive of ASK Partners, warning that tighter immigration rules could worsen the housing crisis. The government aims to reduce reliance on overseas labor while training the domestic workforce, but critics argue this could exacerbate existing shortages in key sectors.
 


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