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9th May 2025
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THE HOT STORY
Workday wins agency contract without competition
HR platform Workday has secured a contract from the Office of Personnel Management without competitive tender. A sole-source award to Workday is required due to "an urgent confluence of operational failures and binding federal mandates that require immediate action," the agency that is key to billionaire Trump advisor Elon Musk's efforts to slash the federal workforce said in a memo, citing strict Trump administration deadlines for workforce restructuring and hiring reforms. "OPM's fragmented and outdated HR systems have reached a critical failure point, resulting in payroll errors, benefits disruptions, and a manual workload that is no longer sustainable," said the memo.
MENTAL HEALTH
UKG on Mental Health and Finding Purpose at Work

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ECONOMY
U.S. productivity declines for first time since 2022
US labor productivity fell in the first quarter for the first time since the second quarter of 2022, resulting in a surge in labor costs that could squeeze margins for businesses at a time when they are facing rising costs from tariffs. Nonfarm productivity, which measures hourly output per worker, fell at a 0.8% annualized rate last quarter, the Labor Department's Bureau of Labor Statistics said on Thursday. Because of the decline in productivity, unit labor costs — what businesses pay employees to produce one unit of output — jumped 5.7% in the January-March period, the most in a year. Labor costs increased at a 1.3% rate from a year ago. Hourly compensation shot up at a 4.8% rate after advancing at 3.7% pace in the prior quarter. It grew at a 2.7% rate from a year ago.
WORKFORCE
Jobless claims drop after brief Spring spike
The number of people newly filing for unemployment benefits declined last week, the Labor Department reported on Thursday, to levels consistent with a stable labor market following a short-term spike coinciding with spring recess and the Easter holiday at the end of April. Initial claims in the seven days to May 3rd fell 13,000 from a week earlier to 228,000. Economists polled by the Wall Street Journal had expected to see 230,000 new filings. The four-week moving average inched up 1,000 to 227,000, while continuing claims, reported with a one-week lag, fell by 29,000 to 1.879m. "The previous week's jump in claims was reversed in the week ended May 3rd, and there is little in the incoming data to challenge the Federal Reserve's assessment that labor market conditions remain solid," said Michael Pearce, deputy chief U.S. economist at Oxford Economics. "Cutting through the noise, both initial and continued claims remain stable, and claims by federal workers have declined over the past month. We expect the latter to rebound towards the end of this month as a renewed wave of layoffs picks up steam, and we anticipate initial jobless claims will rise gently into the second half of the year as the economy slows."
WORKPLACE
BlackRock demands full office return
Investment management giant BlackRock has mandated that its approximately 1,000 senior managers return to the office five days a week. The directive follows a previous requirement for all staff to work in the office at least four days a week. Larry Fink, BlackRock's co-founder and chairman, has previously voiced concerns about maintaining company culture, saying: "Cultures were not meant to be done in a remote fashion." The shift back to in-office work reflects a broader trend among major companies, including JP Morgan and Goldman Sachs, as the hiring market tightens.
TECHNOLOGY
Microsoft 'does not allow its staff to use China's Deepseek'
During a Senate hearing on the AI race with China, Microsoft President Brad Smith said that the U.S. tech giant prohibits its employees from using the Deepseek AI application, which has been developed by a Chinese start-up. He cited concerns over data security and the potential for the app to disseminate Chinese propaganda. Microsoft also does not offer Deepseek's application in its app store due to these risks, Smith said.
French start-up Mistral launches chatbot for companies
Paris-based start-up Mistral AI has launched its Le Chat chatbot for corporate use. The open source version of the assistant was launched in February; the enterprise version now connects with content management systems including Microsoft's SharePoint and Google Drive. Mistral operates its own compute capabilities and is reducing its dependency on cloud providers to allow it to offer customers a service that does not depend on the U.S. companies, CEO Arthur Mensch said. "In the last 100 days we have tripled our business, in particular in Europe and outside of the U.S.," he said, adding "We've been . . .  growing in the U.S. quite fast as well."
LEGAL
Union opposes proposed JetBlue partnership
JetBlue Airways is facing opposition from its pilot union regarding a proposed domestic partnership with another airline, which the union claims could "fundamentally reshape" the carrier and jeopardize job protections outlined in their existing contract. The union's chair, Wayne Scales, expressed concerns that JetBlue has not adequately consulted them on the partnership, saying: "This is not a company operating with the best interests of its pilots in mind – at all."
INTERNATIONAL
Spanish workers may soon have 2.5 more hours of weekly rest
Spain's government has approved a bill to reduce the workweek from 40 hours to 37.5 hours, potentially granting workers an additional 2.5 hours of rest each week. The change, which will benefit 12.5m private sector workers, aims to enhance productivity and decrease absenteeism. Labor Minister Yolanda Díaz said: “Today, we are modernizing the world of labor and helping people to be a little happier.” The bill, proposed by the left-wing party Sumar (Joining Forces), must now pass through parliament, where it faces scrutiny from various political factions, including concerns from the Catalan nationalist party Junts regarding its impact on small businesses. Spain has maintained a 40-hour workweek since 1983.
Heftier U.S. tariffs on China and Bangladesh make India competitive
Reuters reports on how Indian textile manufacturers are responding to an increase in queries from retailers including Walmart and Costco as heftier U.S. tariffs on China and Bangladesh make the country more competitive. But the city of Tiruppur in the southern state of Tamil Nadu faces a big labor challenge. "Even if orders come, we need labor. We don't have sufficient labor," said the managing director of Raft Garments, which supplies items priced as low as $1 to U.S. brands. "We need at least 100,000 workers," said Kumar Duraiswamy of the exporters association in Tiruppur, where he said more than 1 million people currently work. India emerged as the most popular sourcing hub in 2024, with nearly 60% of respondents planning to expand sourcing from there, according to a poll of 30 leading U.S. apparel brands by the United States Fashion Industry Association.
Foreign workers are 'a key driver of euro zone growth'
A European Central Bank study says foreign workers are a key driver of growth in the euro zone. Foreign workers have accounted for half of the bloc's labor force growth over the past three years, the ECB said in a blog post written by some of its most senior economists, and are helping to alleviate labor shortages and beginning to make a greater contribution in higher skills jobs as their education levels improve. "The influx of foreign workers in recent years has secured a robust growth in the euro area labor force, which has somewhat offset the negative demographic trends," the blog post argued.
South Africa's DA challenges new labor law
The Democratic Alliance (DA), South Africa's second-largest political party, has launched a legal challenge against the Employment Equity Amendment Act, which aims to boost the hiring of majority Blacks and other groups. The DA argues that the law is unconstitutional and detrimental to foreign investment. Helen Zille, the DA's federal chairperson, criticized the law as “totalitarian,” and claimed it could exacerbate the country's unemployment rate, which currently stands at over 32%. “Jobs are created by companies that invest in South Africa. The draconian labor regime created by the Employment Equity Amendment Act will continue to drive away investment and predictably increase unemployment,” Zille said. The African National Congress (ANC) has defended the law, saying that it is about justice and correcting economic imbalances.
OTHER
The pope who showed support for workers
Chicago-born Cardinal Robert F. Prevost was on Thursday named the 267th pontiff of the Roman Catholic Church and the first American pope, taking the name Leo XIV. Writing for the Los Angeles Times, Matt Hamilton takes a look at the life of Pope Leo XIII, who served as pontiff from 1878 to 1903. In 1891, he used his platform to defend union organizing and the rights of workers in his encyclical, “Rerum Novarum.” He condemned “wealthy owners and all masters” who sought to profit off “the indigent and destitute.” His writing launched a latter-day focus by successive popes on the underclasses, capitalism and the concentration of wealth and power in the hands of the few, Hamilton writes.
 


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