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Sundar Pichai, CEO of Google
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Several hundred Google employees have signed and circulated a manifesto opposing the company’s vaccine mandate, posing the latest challenge for leadership as it approaches key deadlines for returning workers to offices in person.

The Biden administration has ordered U.S. companies with 100 or more workers to ensure their employees are fully vaccinated or regularly tested for Covid-19 by Jan. 4. In response, Google has asked its more than 150,000 employees to upload their vaccination status to its internal systems by Dec. 3, whether they plan on coming into the office or not, according to internal documents viewed by CNBC. The company has also said that all employees who work directly or indirectly with government contracts must be vaccinated — even if they are working from home.

“Vaccines are key to our ability to enable a safe return to office for everyone and minimize the spread of Covid-19 in our communities, wrote Chris Rackow, Google VP of security, in an email sent near the end of October.

Rackow stated the company was already implementing requirements, so the changes from Biden’s executive order were “minimal.” His email gave a deadline of Nov. 12 for employees to request exemptions for reasons such as religious beliefs or medical conditions, and said that cases would be decided on a case-by-case basis.

The manifesto within Google, which has been signed by at least 600 Google employees, asks company leaders to retract the vaccine mandate and create a new one that is “inclusive of all Googlers,” arguing leadership’s decision will have outsized influence in corporate America. It also calls on employees to “oppose the mandate as a matter of principle” and tells employees to not let the policy alter their decision if they’ve already chosen not to receive the Covid-19 shot.

The manifesto comes as most of the Google workforce approaches a deadline to return to physical offices three days a week starting Jan. 10. The company’s notably outspoken employees have previously debated everything from government contracts to cafeteria food changes. 

A spokesperson for Google said the company stands behind its policy. “As we’ve stated to all our employees and the author of this document, our vaccination requirements are one of the most important ways we can keep our workforce safe and keep our services running. We firmly stand behind our vaccination policy.”

The mandate dilemma

Vaccination is a dilemma not only for Google, but for corporate America in general. The Covid-19 virus has contributed to 772,570 deaths in the U.S., according to Johns Hopkins data. Despite proven effectiveness in providing a high level of protection against hospitalization and death, the country is struggling to persuade millions of people to get their first dose, as more than 60 million Americans remain unvaccinated.

In July, CEO Sundar Pichai announced the company would require vaccinations for those returning to offices. In October, Pichai said that the San Francisco Bay Area offices, near its headquarters, are up to 30% filled while New York is seeing nearly half of its employees back. He added at that time that employees who don’t want to get vaccinated would be able to continue working remotely. 

The company has taken other steps to convince employees to get vaccinated as well. For instance, Joe Kava, vice president of data centers at Google, announced a $5,000 vaccination incentive spot bonus for U.S. data center employees, according to the manifesto.

In an email cited in the manifesto and viewed by CNBC, Google VP of global security Chris Rackow said that because of the company’s work with the federal government, which “today encompasses products and services spanning Ads, Cloud Maps, Workspace and more,” all employees working directly or indirectly with government contracts will require vaccinations — even if they are working from home. Frequent testing is “not a valid alternative,” he added.

The authors of the manifesto strongly disagree.

“I believe that Sundar’s Vaccine Mandate is deeply flawed,” the manifesto states, calling company leadership “coercive,” and “the antithesis of inclusion.” 

In a subhead titled “Respect the User,” the authors write that the mandate of “barring unvaccinated Googlers from the office publicly and possibly embarrassingly exposes a private choice as it would be difficult for the Googler not to reveal why they cannot return.”

The author also argues the mandate violates the company’s principles of inclusiveness.

“Such Googlers may never feel comfortable expressing their true sentiments about a company health policy and other, unrelated sensitive topics. This results in silenced perspective and exacerbates the internal ideological ‘echo chamber’ which folks both inside and outside of Google have observed for years.”

The manifesto also opposes Google having a record of employees’ vaccination status.

“I do not believe Google should be privy to the health and medical history of Googlers and the vaccination status is no exception.” Google has asked employees to upload their vaccination proof to Google’s “environmental health and safety” team even if they already uploaded it to One Medical, one of Google’s benefits providers, according to internal documentation.

The author then tries to argue the vaccine mandate may be the start of a slippery slope, paving the way for other intrusive measures — a common line of argument among people opposed to the mandates.

“It normalizes medical intervention compulsion not only for Covid-19 vaccination but for future vaccines and possibly even non-vaccine interventions by extension. It justifies the principle of division and unequal treatment of Googlers based on their personal beliefs and decisions. The implications are chilling. Due to its presence as an industry leader, Google’s mandate will influence companies around the world to consider these as acceptable tradeoffs.”

The group has sent these concerns in an open letter to Google’s chief health officer Karen DeSalvo, the document states.

In Google’s most recent all-hands meeting, called TGIF, some employees attempted to bring more attention to the vaccine question by getting fellow employees “downvote” other questions in an internal system called Dory, according to an internal email chain viewed by CNBC. The goal was to ensure their questions would gain enough votes to qualify for executives to address them.

Google’s health ambitions

The pushback against vaccine mandates poses a new challenge for Google’s leadership at a time when it is trying to target the healthcare industry among its growing business ambitions — particularly for its cloud unit. 

In August, Google disbanded its health unit as a formalized business unit for the health-care sector and Dr. David Feinberg, who spent the past two years leading the search giant’s health care unit, left the company. Nonetheless, Google Cloud CEO Thomas Kurian has routinely mentioned healthcare sector as a key focus area and DeSalvo, an ex-Obama administrator whom Google hired as its first health chief in 2019, told CNBC’s “Squawk Box” last month the tech giant is “still all in on health.”

The company has tried to capitalize on the broader fight against Covid in several ways. In the first half of 2021, the company spent nearly $30 million on at-home Covid tests for employees from Cue Health, which went public in September at a $3 billion valuation. Shortly after, the company announced a separate partnership with Google’s cloud unit to collect and analyze Covid-19 data with hopes of predicting future variants. Google also teamed up with Apple for an opt-in contract tracing software in hopes of tracking Covid-19.

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OpenAI dissolves team focused on long-term AI risks, less than one year after announcing it

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OpenAI dissolves team focused on long-term AI risks, less than one year after announcing it

OpenAI has disbanded its team focused on the long-term risks of artificial intelligence just one year after the company announced the group, a source familiar with the situation confirmed to CNBC on Friday.

The person, who spoke on condition of anonymity, said that some of the team members are being re-assigned to multiple other teams within the company.

The news comes days after both team leaders, OpenAI co-founder Ilya Sutskever and Jan Leike, announced their departures from the Microsoft-backed startup. Leike on Friday wrote that OpenAI’s “safety culture and processes have taken a backseat to shiny products.”

The news was first reported by Wired.

OpenAI’s Superalignment team, announced last year, has focused on “scientific and technical breakthroughs to steer and control AI systems much smarter than us.” At the time, OpenAI said it would commit 20% of its computing power to the initiative over four years.

Sutskever and Leike on Tuesday announced their departures on X, hours apart, but on Friday, Leike shared more details about why he left the startup.

“I joined because I thought OpenAI would be the best place in the world to do this research,” Leike wrote on X. “However, I have been disagreeing with OpenAI leadership about the company’s core priorities for quite some time, until we finally reached a breaking point.”

Leike wrote that he believes much more of the company’s bandwidth should be focused on security, monitoring, preparedness, safety and societal impact.

“These problems are quite hard to get right, and I am concerned we aren’t on a trajectory to get there,” he wrote. “Over the past few months my team has been sailing against the wind. Sometimes we were struggling for compute and it was getting harder and harder to get this crucial research done.”

Leike added that OpenAI must become a “safety-first AGI company.”

“Building smarter-than-human machines is an inherently dangerous endeavor,” he wrote. “OpenAI is shouldering an enormous responsibility on behalf of all of humanity. But over the past years, safety culture and processes have taken a backseat to shiny products.”

Leike did not immediately respond to a request for comment, and OpenAI did not immediately provide a comment.

The high-profile departures come months after OpenAI went through a leadership crisis involving co-founder and CEO Sam Altman.

In November, OpenAI’s board ousted Altman, claiming in a statement that Altman had not been “consistently candid in his communications with the board.”

The issue seemed to grow more complex each following day, with The Wall Street Journal and other media outlets reporting that Sutskever trained his focus on ensuring that artificial intelligence would not harm humans, while others, including Altman, were instead more eager to push ahead with delivering new technology.

Altman’s ouster prompted resignations – or threats of resignations – including an open letter signed by virtually all of OpenAI’s employees, and uproar from investors, including Microsoft. Within a week, Altman was back at the company, and board members Helen Toner, Tasha McCauley and Ilya Sutskever, who had voted to oust Altman, were out. Sutskever stayed on staff at the time but no longer in his capacity as a board member. Adam D’Angelo, who had also voted to oust Altman, remained on the board.

When Altman was asked about Sutskever’s status on a Zoom call with reporters in March, he said there were no updates to share. “I love Ilya… I hope we work together for the rest of our careers, my career, whatever,” Altman said. “Nothing to announce today.”

On Tuesday, Altman shared his thoughts on Sutskever’s departure.

“This is very sad to me; Ilya is easily one of the greatest minds of our generation, a guiding light of our field, and a dear friend,” Altman wrote on X. “His brilliance and vision are well known; his warmth and compassion are less well known but no less important.” Altman said research director Jakub Pachocki, who has been at OpenAI since 2017, will replace Sutskever as chief scientist.

News of Sutskever’s and Leike’s departures, and the dissolution of the superalignment team, come days after OpenAI launched a new AI model and desktop version of ChatGPT, along with an updated user interface, the company’s latest effort to expand the use of its popular chatbot.

The update brings the GPT-4 model to everyone, including OpenAI’s free users, technology chief Mira Murati said Monday in a livestreamed event. She added that the new model, GPT-4o, is “much faster,” with improved capabilities in text, video and audio.

OpenAI said it eventually plans to allow users to video chat with ChatGPT. “This is the first time that we are really making a huge step forward when it comes to the ease of use,” Murati said.

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BlackRock funds are ‘crushing shareholder rights,’ says activist Boaz Weinstein

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BlackRock funds are ‘crushing shareholder rights,' says activist Boaz Weinstein

Boaz Weinstein, founder and chief investment officer of Saba Capital Management, during the Bloomberg Invest event in New York, US, on Wednesday, June 7, 2023. 

Jeenah Moon | Bloomberg | Getty Images

Boaz Weinstein, the hedge fund investor on the winning side of JPMorgan Chase’s $6.2 billion, “London Whale” trading loss in 2011, is now taking on index fund giant BlackRock

On Friday, Weinstein‘s Saba Capital detailed in a presentation seen by CNBC its plans to push for change at 10 closed-end BlackRock funds that trade at a significant discount to the value of their underlying assets compared to their peers. Saba says the underperformance is a direct result of BlackRock’s management.

The hedge fund wants board control at three BlackRock funds and a minority slate at seven others. It also seeks to oust BlackRock as the manager of six of those ten funds.

“In the last three years, nine of the ten funds that we’re even talking about have lost money for investors,” Weinstein said on CNBC’s “Squawk Box” earlier this week.

At the heart of Saba’s “Hey BlackRock” campaign is an argument around governance. Saba says in its presentation that BlackRock runs those closed-end funds the “exact opposite” way it expects companies to run themselves.

BlackRock “is talking out of both sides of its mouth” by doing this, Saba says. That’s cost retail investors $1.4 billion in discounts, by Saba’s math, on top of the management fees it charges.

BlackRock, Saba says in the deck, “considers itself a leader in governance, but is crushing shareholder rights.” At certain BlackRock funds, for example, if an investor doesn’t submit their vote in a shareholder meeting, their shares will automatically go to support BlackRock. Saba is suing to change that.

A BlackRock spokesperson called that assertion “very misleading” and said those funds “simply require that most shareholders vote affirmatively in favor.”

The index fund manager’s rebuttal, “Defend Your Fund,” describes Saba as an activist hedge fund seeking to “enrich itself.”

The problem and the solution

Closed-end funds have a finite number of shares. Investors who want to sell their positions have to find an interested buyer, which means they may not be able to sell at a price that reflects the value of a fund’s holdings.

In open-ended funds, by contrast, an investor can redeem its shares with the manager in exchange for cash. That’s how many index funds are structured, like those that track the S&P 500.

Saba says it has a solution. BlackRock should buy back shares from investors at the price they’re worth, not where they currently trade.

“Investors who want to come out come out, and those who want to stay will stay for a hundred years, if they want,” Weinstein told CNBC earlier this week.

Weinstein, who founded Saba in 2009, made a fortune two years later, when he noticed that a relatively obscure credit derivatives index was behaving abnormally. Saba began buying up the underlying derivatives that, unbeknownst to him, were being sold by JPMorgan’s Bruno Iksil. For a time, Saba took tremendous losses on the position, until Iksil’s bet turned sour on him, costing JPMorgan billions and netting Saba huge profits.

Saba said in its investor deck that the changes at BlackRock could take the form of a tender offer or a restructuring. The presentation noted that BlackRock previously cast its shares in support of a tender at another closed-end fund where an activist was pushing for similar change.

At the worst-performing funds relative to their peer group, Saba is seeking shareholder approval to fire the manager. In total, BlackRock wants new management at six funds, including the BlackRock California Municipal Income Trust (BFZ), the BlackRock Innovation and Growth Term Trust (BIGZ) and the BlackRock Health Sciences Term Trust (BMEZ).

“BlackRock is failing as a manager by delivering subpar performance compared to relevant benchmarks and worst-in-class corporate governance,” the deck says.

If Saba were to win shareholder approval to fire BlackRock as manager at the six funds, the newly constituted boards would then run a review process over at least six months. Saba says that in addition to offering liquidity to investors, its board nominees would push for reduced fees and for other unspecified governance fixes.

A BlackRock spokesperson told CNBC that the firm has historically taken steps to improve returns at closed-end funds when necessary.

“BlackRock’s closed-end funds welcome constructive engagement with thoughtful shareholders who act in good faith with the shared goal of enhancing long-term value for all,” the spokesperson said.

Weinstein said Saba has run similar campaigns at roughly 60 closed-end funds in the past decade but has only taken over a fund’s management twice. The hedge fund sued BlackRock last year to remove that so-called “vote-stripping provision” at certain funds and filed another lawsuit earlier this year.

BlackRock has pitched shareholders via mailings and advertisements. “Your dependable, income-paying investment,” BlackRock has told investors, is under threat from Saba.

Saba plans to host a webinar for shareholders on Monday but says BlackRock has refused to provide the shareholder list for several of the funds. The BlackRock spokesperson said that it has “always acted in accordance with all applicable laws” when providing shareholder information, and that it “never blocked Saba’s access to shareholders.”

“What we want is for shareholders, which we are the largest of but not in any way the majority, to make that $1.4 billion, which can be done at the press of a button,” Weinstein told CNBC earlier this week.

WATCH: CNBC’s full interview with Saba Capital’s Boaz Weinstein

Watch CNBC's full interview with Saba Capital's Boaz Weinstein

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As Tesla layoffs continue, here are 600 jobs the company cut in California

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As Tesla layoffs continue, here are 600 jobs the company cut in California

As part of Tesla’s massive restructuring, the electric-vehicle maker notified the California Employment Development Department this week that it’s cutting approximately 600 more employees at its manufacturing facilities and engineering offices between Fremont and Palo Alto.

The latest round of layoffs eliminated roles across the board — from entry-level positions to directors — and hit an array of departments, impacting factory workers, software developers and robotics engineers.

The cuts were reported in a Worker Adjustment and Retraining Notification, or WARN, Act filing that CNBC obtained through a public records request.

Facing both weakening demand for Tesla electric vehicles and increased competition, the company has been slashing its headcount since at least January. CEO Elon Musk told employees in a memo in April that the company would cut more than 10% of its global workforce, which totaled 140,473 employees at the end of 2023.

Previous filings revealed that Tesla would cut more than 6,300 jobs across California; Austin, Texas; and Buffalo, New York.

Musk said on Tesla’s quarterly earnings call on April 23 that the company had built up a 25% to 30% “inefficiency” over the past several years, implying the layoffs underway could impact tens of thousands more employees than the 10% number would suggest.

According to the WARN filing, the 378 job cuts in Fremont, home to Tesla’s first U.S. manufacturing plant, included people involved in staffing and running vehicle assembly. There were 65 cuts at the company’s Kato Rd. battery development center.

Tesla didn’t respond to a request for comment.

Among the highest-level roles eliminated in Fremont were an environmental health and safety director and a user experience design director.

In Palo Alto, home to the company’s engineering headquarters, 233 more employees, including two directors of technical programs, lost their jobs.

Tesla has also terminated a majority of employees involved in designing and improving apps made for customers and employees, according to two former employees directly familiar with the matter. The WARN filing shows that to be the case, with many cut from the team at Tesla’s Hanover Street location in Palo Alto.

Tesla faces reduced demand for cars it makes in Fremont, including its older Model S and X vehicles and Model 3 sedan. Total deliveries dropped in the first quarter from a year earlier, and Tesla reported its steepest year-over-year revenue decline since 2012.

An onslaught of competition, especially in China, has continued to pressure Tesla’s sales in the second quarter. Xiaomi and Nio have each launched new EV models, which undercut the price of Tesla’s most popular vehicles.

Tesla’s stock price has tumbled about 30% so far this year, while the S&P 500 is up 11%.

Musk has been trying to convince investors not to focus on vehicle sales and instead to back Tesla’s potential to finally deliver self-driving software, a robotaxi, and a “sentient” humanoid robot. Musk and Tesla have long promised customers self-driving software that would turn their existing EVs into robotaxis, but the company’s systems still require constant human supervision.

Other recent job cuts at Tesla included the team responsible for building out the Supercharger, or electric-vehicle fast-charging network, in the U.S.

Tesla disclosed plans in its annual filing for 2023 to grow and optimize its charging infrastructure “to ensure cost effectiveness and customer satisfaction.” Tesla said in the filing that it needed to expand its “network in order to ensure adequate availability to meet customer demands,” after other auto companies announced plans to adopt the North American Charging Standard.

Since cutting most of its Supercharger team, Tesla has reportedly started to rehire at least some members, a move reminiscent of the job cuts Musk made at Twitter after he bought the company and later rebranded it as X. Musk told CNBC’s David Faber last year that he wanted to rehire some of those he let go.

Read the latest WARN filing in California here:

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