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North American Edition
6th November 2024
 
THE HOT STORY
Amazon CEO denies full in-office mandate is 'backdoor layoff'
Amazon CEO Andy Jassy says the company's controversial plan mandating workers to come to Amazon offices every day starting next year, up from three days now, is not designed to facilitate attrition, as many employees have suggested.  The plan to require staff to be in-office five days per week is said by employees to be stricter than other tech companies' and will hinder efficiency because of commute times. Amazon employees who are found to be consistently not in compliance with the mandate have been told they will be "voluntarily resigning" and locked out of company computers. "A number of people I've seen theorized that the reason we were doing this is, it's a backdoor layoff, or we made some sort of deal with city or cities," Jassy said at an all-hands meeting on Tuesday. "I can tell you both of those are not true. You know, this was not a cost play for us. This is very much about our culture and strengthening our culture," he said.
HIRING
ISM services index rises at fastest pace in over two years
The U.S. service sector expanded in October at the fastest pace in over two years, driven by a pickup in hiring. The Institute for Supply Management's (ISM) services index edged up to 56 in October, rising from 54.9 in September and signaling the sector is still in expansionary territory. The group's measures of new orders and business activity increased to 57.4 and 57.2 respectively, while the employment index climbed nearly five points, to 53. Fourteen industries reported growth in October, led by retail trade, information, transportation and warehousing, while two reported declines.
ECONOMY
What Trump's win could mean for the economy
The Wall Street Journal's Greg Ip says President-elect Donald Trump plans tariffs and tax cuts, like in his first term, "But there’s a difference . . . The tariffs he’s planning will be broader and higher, and the tax cuts more narrowly targeted." Trump can act on tariffs without asking Congress’s permission, but Ip notes that administrative procedures and negotiations could delay implementation. Although Trump has proposed tariffs that are much higher than those in his first term - at least 60% on China, and 10% to 20% on the rest of the world - Goldman Sachs economists believe he would raise tariffs on China by 20, not 60, percentage points, and will not impose an across-the-board tariff on other countries. Meanwhile, Ip notes that some of Trump’s tax proposals, which have at times included lower corporate tax rates, and exempting tips, Social Security benefits and overtime pay from taxes, would, the Committee for a Responsible Federal Budget  estimates, add about $4 trillion to the deficit over 10 years. The author also thinks that Trump's proposals for lighter regulation ought to boost growth and business confidence and hold down inflation, but economists think the effects are too difficult to identify in the broader economy.
REGULATION
Tensions erupt over U.S. audit quality
A public dispute over audit quality has emerged between officials at the Public Company Accounting Oversight Board (PCAOB) and U.S. senators, highlighting differing views on audit deficiencies and their implications for financial reliability. PCAOB member Christina Ho publicly criticized Sens. Elizabeth Warren (D-MA) and Sheldon Whitehouse (D-RI) for singling her out regarding audit failures. In a LinkedIn post, she referenced their letter urging the PCAOB to enhance accountability after a report revealed that 46% of audits had significant errors. Ho defended her position, saying "the sky is not falling," and adding that the deficiency rate should be contextualized. She expressed concern over the senators' letter, which she perceived as a threat to her freedom of speech and professional integrity. Ho, who has over 30 years of experience, argued that promoting audit quality through innovation is more effective than regulatory enforcement. She also highlighted the importance of financial restatements as a better measure of audit quality.
LEGAL
DOJ rebuked over money-laundering settlement with TD Bank
Sen. Elizabeth Warren (D., Mass.) has rebuked the U.S. Justice Department over a $3bn money-laundering settlement with Toronto-based TD Bank that did not include the prosecution of bank executives. In a letter sent last week to Attorney General Merrick Garland and Deputy Attorney General Lisa Monaco, Warren criticized DOJ for not charging the bank with money laundering and for shifting some legal liability to its U.S. holding company, which she said allowed it to evade the full scope of penalties. “These charging decisions represent absurd legal gymnastics by DOJ that ultimately have allowed the bank and its top executives to avoid full responsibility for their actions. This is not an acceptable outcome,” Warren wrote. TD Bank is to pay around $3bn in penalties, and accept limits on its growth in the U.S., as part of the settlement with regulators and prosecutors over charges it failed to properly monitor money laundering by drug cartels. The lender’s failures enabled a Chinese money-laundering syndicate in New York and other criminals to funnel more than $670m in drug funds through the bank, federal prosecutors said.
TECHNOLOGY
EY forms Global AI Advisory Council
EY has announced the formation of its new EY.ai Global AI Advisory Council, in support of EY.ai, the unifying artificial intelligence platform that launched in September 2023. The council, which will be led by Raj Sharma, EY global managing partner of growth and innovation, as well as Gil Forer, EY digital and business disruption leader, will act as a sounding board for the organization as it manages the extensive scale of AI deployments and constant rate of the technology's advancement. "The astonishing pace of change being driven by AI demands that organizations proactively collaborate with a wide variety of AI leaders to stay ahead of the curve and shape their future with confidence," said Mr. Sharma. "The EY organization is no different — being guided by focused knowledge from different backgrounds is essential for leading-edge innovation and helping clients manage ethical and security risks, regulatory compliance and responsible leading practices."
INTERNATIONAL
Most Singapore employers will not implement four-day work week, poll suggests
According to a recent poll by the Singapore National Employers Federation (SNEF), almost all (95%) of employers in Singapore will not implement a four-day work week. The survey, conducted from September 30 to October 7, involved 330 employers, revealing that 79% outright oppose the idea, while 16% say they are open to considering it. Sim Guan Guan, executive director at SNEF, observed: “These results reflect the realities many employers face in today's tight labor market and competitive business environment.” The primary concerns include the need for continuous business operations, potential productivity losses, and increased costs.
Migrant workers in Korea rally against brokers
Migrant workers recently held a rally in Seoul, urging the Korean government to implement stronger measures against brokers who exploit seasonal foreign laborers. The National Human Rights Commission of Korea highlighted the lack of oversight, stating that the current system "lacks a legal basis as well as central oversight" to protect these workers from abuse. A Filipino worker's petition revealed severe exploitation, including forced labor and illegal commissions. The commission noted that local officials failed to safeguard these vulnerable workers, who are often at the mercy of brokers. Lee Choon-ki, head of a support center for migrant workers, emphasised that local authorities rely on brokers due to the absence of a reliable system in sending countries. The commission called for legislative action to improve the management of the seasonal labor scheme, which aims to assist Korean farmers and fishermen facing labour shortages.
VW cost cutting necessary after 'decades of structural problems', CEO says
Volkswagen CEO Oliver Blume has told newspaper Bild am Sonntag that the German carmaker's planned cost-cutting program was unavoidable in order to remedy "decades of structural problems" at the business. "The weak market demand in Europe and significantly lower earnings from China reveal decades of structural problems at VW," Blume said, adding that the cost of operating in its home market was a major drag on competitiveness, and telling Bild am Sonntag that "our costs in Germany must be massively reduced."
Western brands are paying less for clothes manufactured in Bangladesh
NPR reports on how garment workers in Bangladesh are being affected by Western buyers paying less for clothes. The report profiles Ayesha Begum, who is one of four million garment workers making clothes for American and European markets - brands including Michael Kors, Calvin Klein, Zara and others. She works at Beximco, one of the largest garment factories in Bangladesh, employing 23,000 workers. It's noted that Western buyers are paying less for the clothes, and food prices are up by around 10% since last year, making it hard for Ayesha and others to make ends meet.
OTHER
Dentists are pulling healthy teeth for profit, report claims
A report by CBS News and KFF Health News claims dentists are removing healthy teeth to boost profits through unnecessary implant procedures. The American Association of Endodontists (AAE) responded by releasing a statement to warn against the practice of unnecessary implants. Dental practitioners engaging in this activity are not only betraying patients' trust but also violating ethical standards, the AAE said. "Every patient deserves comprehensive information about all treatment options, especially those that preserve their natural teeth, which offer a superior foundation for lifelong oral health," The AAE said. "We urge patients to seek second opinions and to be fully informed before agreeing to any irreversible dental procedure . . . We encourage all dental practitioners to remember that their responsibility is to their patients' health above all else, and to practice guided by the ethical principles of patient autonomy, nonmaleficence, beneficence, justice, and veracity."
 


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