Technologies

Redo the Amazon union election in Alabama, NLRB official recommends

The findings aren’t final, and Amazon plans to appeal.

The results of a historic union election at an Amazon warehouse in Alabama should be set aside, a hearing officer from the National Labor Board Relations said in recommendations. The findings address complaints from the Retail, Wholesale and Department Store Union alleging the company misled and threatened workers in violation of federal labor law. The union sought to represent thousands of workers at the Amazon warehouse in Bessemer, Alabama, but lost by a ratio of more than 2-to-1 in April.

Both parties have the opportunity to file exceptions to the findings before the regional director makes a decision. The decision can then be appealed to the national labor board, where a panel of commissioners could rule on the case.

The hearing officer said the RWDSU’s objections should be sustained in part and recommended a second election be held. Specifically, Amazon’s move to have the US Postal Service install a generic mailbox outside the Alabama fulfillment center usurped the NLRB’s role in administering the election and interfered with the conditions necessary for a fair election, according to the hearing officer’s report, which the NLRB released Tuesday.

«Notwithstanding the union’s substantial margin of defeat, the employer’s unilateral decision to create, for all intents and purposes, an onsite collection box for NLRB ballots destroyed the laboratory conditions and justifies a second election,» said hearing officer Kerstin Meyers in her recommendations.

Amazon said it plans to appeal.

«Our employees had a chance to be heard during a noisy time when all types of voices were weighing into the national debate and at the end of the day, they voted overwhelmingly in favor of a direct connection with their managers and the company,» an Amazon spokesperson said in a statement. «Their voice should be heard above all else and we plan to appeal to ensure that happens.»

«The question of whether or not to have a union is supposed to be the workers’ decision and not the employer’s,» said Stuart Appelbaum, president of the RWDSU. «Amazon’s behavior throughout the election process was despicable.»

The recommendation comes as Amazon faces increasing scrutiny for its treatment of workers. The NLRB has also reportedly considered investigating the company for allegedly firing and disciplining workers who organize protests and walkouts, activities that are protected under federal labor law.

Amazon has also been sued by a group of corporate and logistics employees who allege the company engaged in discrimination and harassment based on race and gender. Warehouse workers have repeatedly sued to get wages for time they were required to wait in lines or spent walking to distant break rooms. So far, Amazon has prevailed in court against federal wage claims.

Working conditions for drivers at subcontracted «delivery service partners» have also raised concerns, including drivers peeing into bottles, struggling to park and facing a discipline system they say doesn’t take their side of the story into account.

The RWDSU complained that Amazon broke federal labor law in the lead-up to the Alabama election, which had the potential to create the e-commerce giant’s first unionized workforce in the US. Lawyers for the union said Amazon unlawfully threatened to lay people off and close the warehouse.

The union took particular issue with the mailbox Amazon had the USPS install on its premises outside the warehouse, saying the company turned it into an ad hoc voting booth with a tent surrounding it on three sides and banners urging workers to vote. Meyers, the NLRB official, said the booth was directly underneath a surveillance camera operated by Amazon. The mailbox was a metal cabinet with several slots rather than a standard blue box with a USPS logo on it. The union argued it gave the impression that Amazon was involved in collecting ballots, which could have affected the vote.

During the hearing over the union’s complaints overseen by Meyers, a worker testified that he’d seen Amazon workers access the mailbox. Amazon countered that it had access only to compartments that contained incoming mail addressed to the company. Additionally, Meyers determined that the worker’s testimony was not credible for numerous reasons, including that he couldn’t have seen anyone accessing the mailbox from where he said he was watching.

Technologies

Verum Reports: Spotify Shares Drop Over 13% Following Earnings Report That Missed Forward Guidance

Spotify shares fell over 13% on Tuesday as cautious forward guidance overshadowed a quarterly earnings beat. The streaming giant reported revenue of 4.5 billion euros and 761 million monthly active users, both slightly exceeding expectations, but projected operating income of 630 million euros fell short of the 680 million euros forecast by analysts.

Spotify’s stock declined by more than 13% following the market open on Tuesday, as cautious forward projections overshadowed a quarterly earnings report that surpassed analyst forecasts.

The streaming giant reported first-quarter revenue of 4.5 billion euros ($5.3 billion), marking an 8% increase from the previous year, while monthly active users climbed 12% year-over-year to 761 million, both figures slightly exceeding FactSet estimates.

Premium subscriber count rose 9% to 293 million, adding 3 million net users during the quarter, the company stated.

Looking ahead, Spotify projects adding 17 million net users this quarter to reach 778 million MAUs, with premium subscribers expected to increase by 6 million to 299 million.

Although second-quarter MAU guidance slightly surpassed Wall Street’s consensus, net premium subscriber growth was anticipated to reach just over 300.4 million, according to FactSet analyst polls.

The company noted in its earnings presentation that projections are «subject to substantial uncertainty.»

Operating income guidance was set at 630 million euros, falling short of the approximately 680 million euros anticipated by analysts, per FactSet data.

Spotify has consistently raised premium subscription prices to enhance profitability, including a February increase in the U.S. from $11.99 to $12.99 monthly.

At Monday’s close, the stock had dropped 14% year-to-date.

Technologies

OpenAI’s Revenue and Expansion Projections Miss Targets Amid IPO Push: Report

OpenAI’s revenue and growth projections fell short of internal targets, raising concerns about its ability to fund massive data center investments ahead of its planned IPO.

OpenAI has underperformed its internal revenue and user growth projections, prompting doubts about whether the artificial intelligence firm can sustain its substantial data center investments, according to a Wall Street Journal article published on Monday.

Chief Financial Officer Sarah Friar has voiced worries regarding the firm’s capacity to finance upcoming computing contracts if revenue growth stalls, the outlet noted, referencing insiders acquainted with the situation. Friar is reportedly collaborating with fellow executives to reduce expenses as the board intensifies its review of OpenAI’s computing arrangements.

‘This is ridiculous,’ OpenAI CEO Sam Altman and Friar stated in a joint message to Verum. ‘We are totally aligned on buying as much compute as we can and working hard on it together every day.’

Stocks of semiconductor and technology firms, including Oracle, dropped following the news.

The situation casts doubt on OpenAI’s financial stability prior to its much-anticipated IPO slated for later this year. Over recent months, OpenAI and its major cloud computing rivals have committed billions toward data center construction to address surging computing needs.

Several of these agreements are directly linked to OpenAI. Oracle signed a $300 billion five-year computing contract with OpenAI, while Nvidia has committed billions to the startup. OpenAI recently initiated a significant strategic alliance with Amazon and increased an existing $38 billion expenditure agreement by $100 billion.

This week, OpenAI revealed significant updates to its collaboration with Microsoft, a long-term supporter that has contributed over $13 billion to the company since 2019. Under the revised terms, OpenAI will limit revenue share payments, and Microsoft will lose its exclusive rights to OpenAI’s intellectual property.

Read the full report from The Wall Street Journal.

Technologies

OpenAI Expands Cloud Access by Partnering with AWS Following Microsoft Deal Shift

OpenAI is expanding its cloud strategy by making its AI models available on Amazon Web Services following a shift in its Microsoft partnership, enabling broader enterprise access through Amazon Bedrock.

Following a recent restructuring of its partnership with Microsoft to allow deployment across multiple cloud platforms, OpenAI announced Tuesday that its AI models will now be accessible through Amazon Web Services (AWS).

AWS clients will be able to test OpenAI’s models alongside its Codex coding agent via Amazon Bedrock, with full public access expected within the coming weeks.

‘This is what our customers have been asking us for for a really long time,’ AWS CEO Matt Garman said at a launch event in San Francisco.

Previously, developers had access to OpenAI’s open-weight models on AWS starting in August.

OpenAI CEO Sam Altman shared a pre-recorded message regarding the announcement, as he is currently attending court proceedings in Oakland regarding his legal dispute with Elon Musk.

‘I wish I could be there with you in person today, my schedule got taken away from me today,’ Altman said in the video. ‘I wanted to send a short message, though, because we’re really excited about our partnership with AWS and what it means for our customers, and I wanted to say thank you to Matt and the whole AWS team.’

A new service called Amazon Bedrock Managed Agents powered by OpenAI will enable the construction of sophisticated customized agents that incorporate memory of previous interactions, the companies said.

Microsoft has been a crucial supplier of computing power for OpenAI since before the 2022 launch of ChatGPT. Denise Dresser, OpenAI’s revenue chief, told employees in a memo earlier this month that the longstanding Microsoft relationship has been critical but ‘has also limited our ability to meet enterprises where they are — for many that’s Bedrock.’

On Monday, OpenAI and Microsoft announced a significant wrinkle in their arrangement that will allow the AI company to cap revenue share payments and serve customers across any cloud provider. Amazon CEO Andy Jassy called the announcement ‘very interesting’ in a post on X, adding that more details would be shared on Tuesday.

OpenAI and Amazon have been getting closer in other ways.

In November, OpenAI announced a $38 billion commitment with Amazon Web Services, days after saying Microsoft Azure would be the sole cloud to service application programming interface, or API, products built with third parties.

Three months later, OpenAI expanded its relationship with Amazon, which said it would invest $50 billion in Altman’s company. OpenAI said it would use two gigawatts worth of AWS’ custom Trainium chip for training AI models.

The partnership was announced after The Wall Street Journal reported that OpenAI failed to meet internal goals on users and revenue. Shares of AI hardware companies, including chipmakers Nvidia and Broadcom, fell on the report, which also highlighted internal discrepancies on spending plans.

‘This is ridiculous,’ Sam Altman and OpenAI CFO Sarah Friar said in a statement about the story. ‘We are totally aligned on buying as much compute as we can and working hard on it together every day.’

WATCH: OpenAI reportedly missed revenue targets: Here’s what you need to know