Weekend Box: Big Tech Layoffs & AI Payoffs, BRITs Hit the Fan & more
Welcome to the Weekend Box, Audley’s weekly round-up of interesting or obscure political, business and cultural news from around the world.
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PRES MACRON’S RENDEZVOUS WITH CHANCELLOR
At the end of last week, French President Emmanuel Macron and German Chancellor Olaf Scholz held a summit to pay tribute to the Élysée Treaty, a historic treaty that has underpinned six decades of cooperation between their two countries. To mark the occasion, the two world leaders were joined by the French and German cabinets, the heads of both countries’ parliaments and about 300 lawmakers in Paris.
This meeting has come amid strained relations between the two countries. From energy to defence to foreign policy, Macron and Scholz have struggled to see eye to eye over the past few months. Cracks emerged in October when a €200bn-euro energy package was unveiled by Berlin to help citizens and businesses cushion the pain from soaring gas bills. Germany’s decision to go it alone was seen to be undermining the EU’s unity and French Economy Minister Bruno Le Maire warned that Germany was in danger of creating an unfair advantage for its industry over poorer EU countries. There has been reported frustration on the lack of progress on defence cooperation, for instance, with Germany deciding to design a deal with 14 other NATO countries and Finland on a new air defense system called the European Sky Shield Initiative (ESSI). France was not included.
However, at the Summit, Macron and Scholz glossed over the reported tensions, with commitments to forge “strong European foreign and security policy.” They appeared to be united by a common competitor: the United States. High on the agenda was President Joe Biden’s Inflation Reduction Act which has been designed to boost the US’s green economy, but has also been seen by the EU as a thinly-disguised attempt to grab a share of Europe's high-tech manufacturing sector. Brought together in a need for a joint response, Macron and Scholz announced a communiqué, which included commitments to reinforce Europe’s energy independence and an agreement to extend to Germany a future hydrogen pipeline that is to be built between Spain and France, known as H2Med. For now, Europe’s two largest powers are back together and as the war in Ukraine wages on, this is no bad thing.
Image credit/Hudson Institute/License/Image cropped
BAD NEWS FOR NEWS CORP MERGER
A proposed merger to reunite Murdoch family businesses News Corp and Fox Corp has been abandoned this week. The deal was “not optimal for shareholders of News Corp and Fox at this time,” according to a statement issued by News Corp.
So, what was driving the merger plan and what caused its demise?
The two companies were split in 2013, in the aftermath of News Corp’s UK phone-hacking scandal, separating Fox’s entertainment arm, then called 21st Century Fox, from the news arm, under the leadership of Murdoch’s son Lachlan, 51. Those distinctions are however somewhat blurred: Fox Corp’s US channels include Fox News, something of a hybrid, with an unashamedly populist right-wing agenda. This led it and its owners into a defamation lawsuit brought by Dominion, maker of US voting machines, after Fox News amplified false claims about the 2020 US election result and Dominion’s machines’ part in allegedly false results. Both Murdochs were deposed to give evidence in the case and a trial is scheduled for April. Fox News has rejected the claims.
A decade or so on from the split, a reunifying merger was proposed, apparently to restore greater scale in delivering news, live sports and information. With Rupert Murdoch now 91, some saw a succession move to consolidate Lachlan’s power, which his company dismissed as “absurd.”
Whatever the true motivation, the idea hit resistance from some of News Corp’s larger shareholders, who cited a mismatch in respective valuations after News Corp shares rallied recently and feared that the merged company would be worth less on the stock market than the individual groups. Activist investment firm Irenic Capital’s chief investment officer called the cancellation “the right decision.” It leaves Fox News and Fox Corp’s TMZ assets separate from News Corps news operations, which include the Times and Sun newspapers in the UK, the Journal and New York Post in the US, and the Australian group of newspapers. News Corps editorial teams may be relieved, given Fox News’ impending case.
BIG TECH LAYOFFS, AI PAYOFFS
Alphabet, Amazon, Meta, Microsoft, Stripe, Spotify, Netflix, and Twitter. These are just a few of the Big Tech players who have laid off thousands of staff in recent months. In the last year, the industry has let over 70,000 people go.
Amazon were responsible for 18,000 of those layoffs. 18,000 is a big number, but to put it in perspective, Amazon employs around 1.6 million people around the world. Firing 18,000 is the equivalent of 0.01125% of the workforce, which for a 250-strong business would be 0.02% of a person.
While this statistic will be of little comfort to those on the receiving end of a termination letter or finding themselves locked out of the office, there is some comfort in the knowledge that this wave of redundancies is likely a reflection of caution exercised in a bearish environment rather than fundamental flaws within the organisations.
Of less comfort, however, is the arrival of OpenAI’s ChatGPT, the most sophisticated AI interface yet, which has the potential to replace 20% of all jobs within 5 years.
Since its launch late last year, ChatGPT has shown it can apply for jobs, offer mental health support, explain complex problems, do student homework, and even pass a Wharton business school exam and the US Medical Licensing Exam.
This week Microsoft confirmed a ‘multibillion-dollar investment’ in OpenAI, rumoured to be in the region of $10bn at a $29bn valuation. ChatGPT will not only improve the company’s Office software, but could help them challenge Google’s dominance in online search. The theory: why trawl through pages of results when ChatGPT will do it for you? In response, Google is said to have issued a ‘code red’, which licenses managers to deploy resource however they see fit to combat the threat.
So, while big tech employees might be able to relax in the knowledge this recession won’t last forever, are we missing the real threat? If ChatGPT can do our jobs as well as us, will there be any need for a human workforce in 5 years?
For the moment, ChatGPT still has limitations. For example, it couldn’t have written this.
Or could it?
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THE BRITS HIT THE FAN
Stormzy and Lizzo have been announced as two more performers joining the star-studded line-up for the BRIT Awards 2023, building anticipation for the ceremony in two weeks’ time. However, it may not be enough to quell the ongoing controversy surrounding the Artist of the Year nominees.
The organisers will reportedly review the nomination procedure for Artist of the Year after this year’s nominees were revealed to be all men: rappers Central Cee and Stormzy, singers Harry Styles and George Ezra, and producer Fred Again.. A spokesperson for the BRITs said that while the lack of diversity in the list was regrettable, “2022 saw fewer high profile [sic] women artists in cycle with major releases.” However, the BBC has produced a list of women artists who were technically eligible for the award, including Florence + the Machine, Charli XCX, and Rina Sawayama.
The Artist of the Year category was introduced for the 2022 BRITs, replacing both the Female and Male Artist of the Year categories to “celebrate the achievements of artists for the music that they create, and the work that they do, irrespective of gender” in the words of Chair Tom March. This change followed an incident in 2021 where non-binary artist Sam Smith was excluded from the categories for artist of the year.
BBC Music Correspondent Mark Savage has previously observed a trend wherein disproportionately low numbers of women artists were longlisted for awards compared to men, and commenting on this year’s controversy he has highlighted that “[o]nly 20% of the artists signed to a major UK record label are female,” suggesting men have an unfair advantage when longlists for awards are compiled.
Let us hope the review will provide a pathway for the BRITs to prevent this year’s controversy from happening again while upholding its ideals of inclusivity in time for 2024.
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US SECRETARY’S FONT-TASTIC NEWS
Consternation and concern in Foggy Bottom this week.
A missive sent by US Secretary of State Antony Blinken announced that all official documents and diptels – the intelligence readouts circulated by US Embassies around the world – would now be produced in Microsoft’s Calibri typeface. The edict brings to an end the long reign of the Times New Roman font that has adorned State Department documents for decades and marks a decisive shift from the serif to the sans-serif font family.
The Department’s team of diplomats may be accustomed to defusing international conflicts, but surely little will have prepared them for the blowback caused by wading into the long-running argument between those who prefer a curly serif font to its more digital-friendly sans-serif cousin. For font fanatics, few issues arouse such passion. And as many were quick to point out, the decision is somewhat odd given that two years ago Microsoft itself announced that Calibri, which took over as the software giant’s default font back in 2007, would now be replaced as part of a modernisation plan. Blinken’s announcement therefore did little to dispel the impression that governments are often some way behind the curve.
There is a serious point behind the (occasionally faux) outrage that’s been playing out online however. Sans-serif typefaces such as Calibri are widely thought to be more accessible – particularly for those with visual impairments or reading difficulties. The Secretary of State’s decision sends an important message about sensitivity and inclusion, as well as having a very practical benefit of course.
That didn’t stop it from becoming a major talking point around the water coolers of the State Department but those outraged by the decision might reflect that it could have been worse. A few months ago the then-UK Health Secretary Therese Coffey angered many by issuing guidance to her department banning the use of the Oxford comma in official documents. An argument over a font frankly pales into insignificance by comparison to that incendiary instruction.
And that’s it for this week. I hope you found something of interest that you might want to delve into further. If so, please get in touch at cwilkins@audley.uk.com.
For now, that’s the weekend box officially closed.