Philips cuts 6,000 more jobs after sleep device recall
Embattled Dutch medical tech maker Philips said on Monday it will slash 6,000 more jobs worldwide after fresh losses caused by a massive recall of faulty sleep respirators.
Chief Executive Roy Jakobs announced the “difficult, but necessary further reduction of our workforce” by 2025, which comes just three months after it announced another 4,000 cuts.
“2022 has been a very difficult year for Philips and our stakeholders, and we are taking firm actions to improve our execution and step up performance with urgency,” Jakobs said in a statement.
The Amsterdam-based firm unveiled net losses of 105 million euros ($114 million) for the fourth quarter of 2022 and 1.6 billion euros for last year as a whole, largely due to the recall.
Philips announced a global recall in 2021 of its appliances to treat people suffering from sleep apnoea.
This followed concerns patients risked “possible toxic and carcinogenic effects” if they inhaled or swallowed pieces of degraded sound-dampening foam on the machines.
Jakobs, who took over in October, said Philips needed to “improve performance and simplify our way of working to improve our agility and productivity.”
“This includes the difficult, but necessary further reduction of our workforce by around 6,000 roles globally by 2025,” he added.
A total of 3,000 of the new job cuts would be made in 2023.
– US investigation –
Starting off as a lighting company more than 130 years ago, Philips has undergone major changes in recent years, selling off assets to focus on making high-end electronic healthcare products.
But that shift has been called into question by the giant recall that has pushed it into loss and seen the previous CEO step down.
The company is now under investigation by the US Department of Justice, is negotiating with US authorities over a financial settlement, and is the defendant in several class-action lawsuits in the US.
Jakobs said Philips would focus on “strengthening our patient safety and quality management and completing the Respironics recall.”
The firm has produced around 90 percent of the replacement devices it needs to shop to patients, the company said.
But it is also increasing the number of replacements, requiring the company to set aside a further 85 million euros.
Philips said it had not yet included possibly US payouts in its accounts due to the “uncertain nature” of the eventual amounts.
In December Jakobs told AFP that testing on the recalled respirators showed they were “within safety limits” for use but that a final verdict rested with global regulatory authorities.
Threat of US ban surges after TikTok lambasted in Congress
A US ban of Chinese-owned TikTok, the country’s most popular social media for young people, seems increasingly inevitable a day after the brutal grilling of its CEO by Washington lawmakers from across the political divide.
But the Biden administration will have to move carefully in denying 150 million young Americans their favorite platform over its links to China, especially after a previous effort by then president Donald Trump was struck down by a US court.
TikTok CEO Shou Zi Chew endured a barrage of questions — and was often harshly cut off — by US lawmakers who made their belief quite clear that the app best known for sharing jokes and dance routines was a threat to US national security as well as being a danger to mental health.
In a tweet, TikTok executive Vanessa Pappas deplored a hearing “rooted in xenophobia”.
With both Republicans and Democrats against him at Congress, Chew must now confront a White House ultimatum that TikTok either sever ties with ByteDance, its China-based owners, or get banned in America.
A ban will depend on passage of legislation called the RESTRICT ACT, a bipartisan bill introduced in the Senate this month that gives the US Commerce Department powers to ban foreign technology that threatens national security.
When asked about Chew’s tumultuous hearing, spokeswoman Karine Jean-Pierre repeated the White House’s support of the legislation, which is just one of several proposals by Congress to ban or squeeze TikTok.
– ‘Prove a negative’ –
The sell-or-get banned order tears up 2.5 years of negotiations between the White House and Tiktok to find a way for the company to keep running under its current ownership while satisfying national security concerns.
Those talks resulted in a proposal by TikTok called Project Texas in which the personal data of US users stays in the United States and would be inaccessible to Chinese law or oversight.
But the White House turned sour on the idea after officials from the FBI and the Justice Department said that the vulnerabilities to China would remain.
“It’s hard for TikTok to prove a negative ‘No, we’re not turning over any data to the Chinese government.’ Look at how skeptical our European partners are about US companies where we have a strong legal system,” said Michael Daniel, executive director of the Cyber Threat Alliance, a non-governmental organization dedicated to cybersecurity.
Presently, the White House’s preferred solution is that TikTok sever ties with ByteDance either through a sale or a spin-off.
“My understanding is that what has been… insisted on is the divestment of Tiktok by the parent company,” US Secretary of State Antony Blinken said on Thursday.
But that option is riddled with difficulties, with many experts saying that Tiktok cannot function without ByteDance, which develops the app’s industry-leading technology.
“ByteDance’s ownership of TikTok and the golden jewel algorithm at the center of this security debate is a hot button issue that will not necessarily be solved just by a spin-off or sale of the assets,” said Dan Ives of Wedbush Securities.
Proving the point, China has ruled out giving the go-ahead for a TikTok sale, citing its own laws to protect sensitive technology from foreign buyers.
That leaves a ban which would see the full might of the US government crush TikTok to the undeniable benefit of domestic rivals Instagram, Snapchat and YouTube.
They currently trail TikTok, which is the most popular social media in the United States.
– Snapchat wins –
TikTok’s demise “will clearly benefit Meta and Snapchat front and center in the eyes of Wall Street,” said Ives, who believes the saga will play out for the rest of the year.
One unknown is whether a death sentence for TikTok will cost Washington politically among young voters.
Through a ban, “a democracy will be taking steps that impede the ability of young Americans to express themselves and earn a livelihood,” said Sarah Kreps, professor of government at Cornell University.
The lawmakers putting the Tiktok CEO over the coals minimized the danger of political blowback.
“I want to say this to all the teenagers… who think we’re just old and out of touch,” said representative Dan Crenshaw, a Republican.
“You may not care that your data is being accessed now, but there will be one day when you do care about it,” he said.
US state to require parental consent for social media
Utah on Thursday became the first US state to require social media sites to get parental consent for accounts used by under-18s, placing the burden on platforms like Instagram and TikTok to verify the age of their users.
The law, which takes effect March 2024, was brought in response to fears over growing youth addiction to social media, and to security risks such as online bullying, exploitation, and collection of children’s personal data.
But it has prompted warnings from tech firms and civil liberties groups that it could curtail access to online resources for marginalized teens, and have far-reaching implications for free speech.
“We’re no longer willing to let social media companies continue to harm the mental health of our youth,” tweeted Spencer Cox, governor of the western US state, who signed two related bills at a ceremony Thursday.
The bills also require social media firms to grant parents full access to their children’s accounts, and to create a default “curfew” blocking overnight access to children’s accounts.
They set out fines for social media companies if they target users under 18 with “addictive algorithms,” and make it easier for parents to sue social media companies for financial, physical or emotional harm.
“We hope that this is just the first step in many bills that we’ll see across the nation, and hopefully taken on by the federal government,” said state representative Jordan Teuscher, who co-sponsored the bill.
Michael McKell, a Republican member of Utah’s Senate who also sponsored the bill, said it was a “bipartisan” effort, and praised President Joe Biden’s recent State of the Union address, in which he raised the issue.
Biden last month called on US lawmakers to restrict how social media companies advertise to children and collect their data, as he accused Big Tech of conducting a “for profit” experiment on the nation’s youth.
California has already introduced online safety laws including strict default privacy settings for minors, but the Utah law goes further.
Lawmakers in states such as Ohio and Connecticut are working on similar bills.
Platforms including Instagram and TikTok have introduced more controls for parents, such as messaging limits and time caps.
At Thursday’s ceremony in Utah, McKell pointed to data from the federal Centers for Disease Control and Prevention which he said highlighted the toll social media apps can have on young minds.
“The impact on our daughters — and I have two daughters — it was incredibly troubling,” he said.
“Thirty percent of our daughters from ninth grade to 12th grade had seriously contemplated suicide. That’s startling.”
Google opens chatbot Bard for testing in US and UK
Google on Tuesday invited people in the United States and Britain to test its AI chatbot, known as Bard, as it scrambles to catch up with Microsoft-backed ChatGPT.
Bard, ChatGPT and other similar apps churn out essays, poems or computing code on command, though they come with warnings that the information they create can be incorrect or inappropriate.
People wishing to play with Bard can sign up on a waiting list at bard.google.com website, distinctly separate from the tech giant’s search engine.
Google CEO Sundar Pichai said in a tweet that the move is an “early experiment” allowing people to collaborate with generative artificial intelligence (AI).
“We’ve learned a lot so far by testing Bard, and the next critical step in improving it is to get feedback from more people,” Google vice presidents Sissie Hsiao and Eli Collins said in a blog post.
“We continue to see that the more people use them, the better LLMs (large language models) get at predicting what responses might be helpful.”
As exciting as chatbots are, they have their faults, Hsiao and Collins cautioned.
They can incorporate real-world biases, stereotypes or inaccuracies in responses, according to the vice presidents.
Google has adopted a more cautious rollout of generative AI in contrast to Microsoft that has chosen to swiftly make the products available to consumers despite reports of problems.
ChatGPT’s OpenAI is backed by Microsoft, which earlier this year said it would finance the research company to the tune of billions of dollars.
OpenAI recently released a long-awaited update of its AI technology that it said would be safer and more accurate than its predecessor.
Much of the new model’s firepower is now available to the general public via ChatGPT Plus, OpenAI’s paid subscription plan and on an AI-powered version of Microsoft’s Bing search engine.
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