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Column: Business leaders bow to anti-DEI activists — except at Costco

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Column: Business leaders bow to anti-DEI activists  — except at Costco

It has long been clear that relying on corporate leaders to stand fast for social and economic progress is a mug’s game.

Big business talks the talk, of course. As I’ve written before, after the insurrection of Jan. 6, 2021, many corporate leaders pledged publicly to oppose the assaults from the political right wing on democracy.

Leading corporations said they would cease making campaign contributions to lawmakers who voted against certifying Joe Biden’s election or played a role in the insurrection in Washington.

Our efforts at diversity, equity and inclusion remind and reinforce with everyone at our Company the importance of creating opportunities for all.

— Costco responds to anti-DEI agitators

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Some made similar promises about state laws restricting abortion or voting rights, or talked openly about reducing their activities in states enacting such measures. They promoted their commitment to programs fostering diversity, equity and inclusion, known as DEI.

When push comes to shove, however, most of these companies folded like a poker player with a bad hand. That’s been especially evident on DEI, which became a target in the “anti-woke campaign” waged by right-wing culture warriors such as Florida GOP Gov. Ron DeSantis during the late presidential campaign.

Anti-DEI activism on the right gathered steam after the Supreme Court struck down college affirmative action admission policies in June 2023.

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Throughout this year, big corporations have retreated from the DEI landscape. The largest to do so is Walmart. In November, the company said it wouldn’t renew the five-year, $100-million commitment it made in establishing its Center for Racial Equity in the wake of the George Floyd killing, would cease using the term DEI and would end other diversity initiatives.

“We’ve been on a journey and know we aren’t perfect, but every decision comes from a place of wanting to foster a sense of belonging, to open doors to opportunities for all our associates, customers and suppliers and to be a Walmart for everyone,” the company said.

Ford, Harley-Davidson, Lowe’s and other companies said they would no longer provide workplace data to the Human Rights Campaign, a gay rights group, in part because the campaign’s widely published index of corporate progress enabled anti-LGBTQ+ activists to mount a backlash against participating companies.

That brings us to Costco. Almost uniquely among major public companies, Costco’s board has explicitly rejected the anti-DEI backlash.

The response from Issaquah, Wash.-based Costco came in the Dec. 11 proxy statement for its annual shareholder meeting, scheduled for Jan. 23. The meeting agenda includes a shareholder resolution proposed by the right-wing National Center for Public Policy Research, insinuating that Costco’s DEI program “holds litigation, reputational and financial risks to the Company, and therefore financial risks to shareholders.”

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The resolution calls on the board to report on “the risks of the Company maintaining its current DEI … roles, policies and goals.”

The Costco board unanimously advised shareholders to vote against the resolution. “Our commitment to an enterprise rooted in respect and inclusion is appropriate and necessary,” it said in its response. “Our efforts at diversity, equity and inclusion remind and reinforce with everyone at our Company the importance of creating opportunities for all. We believe that these efforts enhance our capacity to attract and retain employees who will help our business succeed.”

The board took direct aim at the center, the resolution proponent, which it accused of hiding its true goal. Although the center “professes concern about legal and financial risks to the Company and its shareholders associated with the diversity initiatives,” the board stated, “it is the proponent and others that are responsible for inflicting burdens on companies with their challenges to longstanding diversity programs. The proponent’s broader agenda is not reducing risk for the Company but abolition of diversity initiatives.”

That swipe seems to have hit home. “The recent wave of companies walking back their DEI in response to no greater threat than merely having the truth about their DEI programs exposed,” center staff member Stefan Padfield told me by email, “makes clear that any related burden[s] these companies are experiencing are of their own making as they seek to misuse shareholders’ money to advance neo-Marxist and neo-racist ‘equity’ agendas.”

Costco says it doesn’t have any comment about the shareholder resolution beyond the board statement.

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Although the Costco board didn’t go into detail, the center has assembled quite a record as a culture warrior. It’s a “partner” of the Stop Corporate Tyranny coalition, which describes itself as “a one-stop shop for educational resources exposing the Left’s nearly completed takeover of corporate America.” It has opposed initiatives to combat global warming, asserting that global warming isn’t happening, and it promotes cryptocurrency.

Costco’s straightforward response to the center’s proposed resolution may not be that much of a surprise. The company is generally known as employee-friendly, with favorable ratings from workers posting on Glassdoor. Among its benefits, health coverage with low co-pays is available to workers employed for at least 23 hours a week for 180 days.

Its approach to union organizing activity may not be entirely welcoming, but seems to lack the truculence and hostility shown by retailers such as Starbucks and Amazon.

Of Costco’s roughly 219,000 employees, about 18,000 are represented by the Teamsters. Remarkably, when 238 Costco workers in Norfolk, Va., voted to affiliate with the Teamsters a year ago, Chief Executive Ron Vachris and his immediate predecessor, W. Craig Jelinek, issued a joint statement blaming themselves.

They said they were “not disappointed in our employees; we’re disappointed in ourselves as managers and leaders…. The fact that a majority of Norfolk employees felt that they wanted or needed a union constitutes a failure on our part,” they wrote in a memo dated Dec. 29 and sent to all U.S. employees. CNN obtained a copy of the memo.

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That doesn’t mean that labor relations are free of conflict: Early in December, the Teamsters union filed unfair labor practice charges with the National Labor Relations Board against the company for what it called the company’s “calculated effort to undermine workers’ rights and disrupt the collective bargaining process.”

Asserting that the company’s worker-friendly reputation is undeserved, the Teamsters said Costco had “expelled union representatives from stores, harassed and intimidated workers for wearing Teamsters buttons and attire, sent employees home, and even changed locks on union bulletin boards” to prevent the union from disseminating information to workers. Costco said it has no comment on the charges.

A few words about shareholder resolutions are appropriate here. Following the Supreme Court’s decision on college affirmative action, the number of resolutions about DEI programs receiving a vote at corporate annual meetings rose appreciably, to 25 through May this year from 13 in 2023, according to the Conference Board.

To be fair, that’s still a small number among the roughly 3,000 public companies in the Russell 300 index. More notable, however, is that anti-DEI proposals remained deeply unpopular. Resolutions opposing workplace diversity programs garnered support from less than 2% of shareholders, on average; those favoring such programs received support from an average of 21% of shareholders, however. (Shareholder resolutions proposed by almost anyone other than corporate managements seldom get anywhere near majority support.)

The Conference Board, a nonprofit corporate research consultancy, has found that diversity programs aimed at managers and the rank and file enhance corporate fortunes. Companies with diverse management teams “demonstrate 19% higher revenues due to innovation,” the board says.

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Those with “higher racial and ethnic diversity [are] 35% more likely to have financial returns above their industry medians.” Commitments to diversity appeal to job applicants and tend to improve productivity.

On the other side of the coin are what the center’s Padfield claimed is “the wave of customer backlash we’ve seen against DEI.” He added, “rather than doing the right thing and evaluating the relevant risks … Costco is apparently doubling down on divisive and value-destroying DEI.”

The center told me by email that “one day, Costco will no longer have a DEI program. We hope for the sake of shareholders that it’s sooner rather than later.” Shareholders, workers and customers may hope for their own sake that the opposite is true — and that other businesses follow Costco’s example.

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U.S. Space Force awards $1.6 billion in contracts to South Bay satellite builders

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U.S. Space Force awards .6 billion in contracts to South Bay satellite builders

The U.S. Space Force announced Friday it has awarded satellite contracts with a combined value of about $1.6 billion to Rocket Lab in Long Beach and to the Redondo Beach Space Park campus of Northrop Grumman.

The contracts by the Space Development Agency will fund the construction by each company of 18 satellites for a network in development that will provide warning of advanced threats such as hypersonic missiles.

Northrop Grumman has been awarded contracts for prior phases of the Proliferated Warfighter Space Architecture, a planned network of missile defense and communications satellites in low Earth orbit.

The contract announced Friday is valued at $764 million, and the company is now set to deliver a total of 150 satellites for the network.

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The $805-million contract awarded to Rocket Lab is its largest to date. It had previously been awarded a $515 million contract to deliver 18 communications satellites for the network.

Founded in 2006 in New Zealand, the company builds satellites and provides small-satellite launch services for commercial and government customers with its Electron rocket. It moved to Long Beach in 2020 from Huntington Beach and is developing a larger rocket.

“This is more than just a contract. It’s a resounding affirmation of our evolution from simply a trusted launch provider to a leading vertically integrated space prime contractor,” said Rocket Labs founder and chief executive Peter Beck in online remarks.

The company said it could eventually earn up to $1 billion due to the contract by supplying components to other builders of the satellite network.

Also awarded contracts announced Friday were a Lockheed Martin group in Sunnyvalle, Calif., and L3Harris Technologies of Fort Wayne, Ind. Those contracts for 36 satellites were valued at nearly $2 billion.

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Gurpartap “GP” Sandhoo, acting director of the Space Development Agency, said the contracts awarded “will achieve near-continuous global coverage for missile warning and tracking” in addition to other capabilities.

Northrop Grumman said the missiles are being built to respond to the rise of hypersonic missiles, which maneuver in flight and require infrared tracking and speedy data transmission to protect U.S. troops.

Beck said that the contracts reflects Rocket Labs growth into an “industry disruptor” and growing space prime contractor.

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California-based company recalls thousands of cases of salad dressing over ‘foreign objects’

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California-based company recalls thousands of cases of salad dressing over ‘foreign objects’

A California food manufacturer is recalling thousands of cases of salad dressing distributed to major retailers over potential contamination from “foreign objects.”

The company, Irvine-based Ventura Foods, recalled 3,556 cases of the dressing that could be contaminated by “black plastic planting material” in the granulated onion used, according to an alert issued by the U.S. Food and Drug Administration.

Ventura Foods voluntarily initiated the recall of the product, which was sold at Costco, Publix and several other retailers across 27 states, according to the FDA.

None of the 42 locations where the product was sold were in California.

Ventura Foods said it issued the recall after one of its ingredient suppliers recalled a batch of onion granules that the company had used n some of its dressings.

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“Upon receiving notice of the supplier’s recall, we acted with urgency to remove all potentially impacted product from the marketplace. This includes urging our customers, their distributors and retailers to review their inventory, segregate and stop the further sale and distribution of any products subject to the recall,” said company spokesperson Eniko Bolivar-Murphy in an emailed statement. “The safety of our products is and will always be our top priority.”

The FDA issued its initial recall alert in early November. Costco also alerted customers at that time, noting that customers could return the products to stores for a full refund. The affected products had sell-by dates between Oct. 17 and Nov. 9.

The company recalled the following types of salad dressing:

  • Creamy Poblano Avocado Ranch Dressing and Dip
  • Ventura Caesar Dressing
  • Pepper Mill Regal Caesar Dressing
  • Pepper Mill Creamy Caesar Dressing
  • Caesar Dressing served at Costco Service Deli
  • Caesar Dressing served at Costco Food Court
  • Hidden Valley, Buttermilk Ranch
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They graduated from Stanford. Due to AI, they can’t find a job

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They graduated from Stanford. Due to AI, they can’t find a job

A Stanford software engineering degree used to be a golden ticket. Artificial intelligence has devalued it to bronze, recent graduates say.

The elite students are shocked by the lack of job offers as they finish studies at what is often ranked as the top university in America.

When they were freshmen, ChatGPT hadn’t yet been released upon the world. Today, AI can code better than most humans.

Top tech companies just don’t need as many fresh graduates.

“Stanford computer science graduates are struggling to find entry-level jobs” with the most prominent tech brands, said Jan Liphardt, associate professor of bioengineering at Stanford University. “I think that’s crazy.”

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While the rapidly advancing coding capabilities of generative AI have made experienced engineers more productive, they have also hobbled the job prospects of early-career software engineers.

Stanford students describe a suddenly skewed job market, where just a small slice of graduates — those considered “cracked engineers” who already have thick resumes building products and doing research — are getting the few good jobs, leaving everyone else to fight for scraps.

“There’s definitely a very dreary mood on campus,” said a recent computer science graduate who asked not to be named so they could speak freely. “People [who are] job hunting are very stressed out, and it’s very hard for them to actually secure jobs.”

The shake-up is being felt across California colleges, including UC Berkeley, USC and others. The job search has been even tougher for those with less prestigious degrees.

Eylul Akgul graduated last year with a degree in computer science from Loyola Marymount University. She wasn’t getting offers, so she went home to Turkey and got some experience at a startup. In May, she returned to the U.S., and still, she was “ghosted” by hundreds of employers.

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“The industry for programmers is getting very oversaturated,” Akgul said.

The engineers’ most significant competitor is getting stronger by the day. When ChatGPT launched in 2022, it could only code for 30 seconds at a time. Today’s AI agents can code for hours, and do basic programming faster with fewer mistakes.

Data suggests that even though AI startups like OpenAI and Anthropic are hiring many people, it is not offsetting the decline in hiring elsewhere. Employment for specific groups, such as early-career software developers between the ages of 22 and 25 has declined by nearly 20% from its peak in late 2022, according to a Stanford study.

It wasn’t just software engineers, but also customer service and accounting jobs that were highly exposed to competition from AI. The Stanford study estimated that entry-level hiring for AI-exposed jobs declined 13% relative to less-exposed jobs such as nursing.

In the Los Angeles region, another study estimated that close to 200,000 jobs are exposed. Around 40% of tasks done by call center workers, editors and personal finance experts could be automated and done by AI, according to an AI Exposure Index curated by resume builder MyPerfectResume.

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Many tech startups and titans have not been shy about broadcasting that they are cutting back on hiring plans as AI allows them to do more programming with fewer people.

Anthropic Chief Executive Dario Amodei said that 70% to 90% of the code for some products at his company is written by his company’s AI, called Claude. In May, he predicted that AI’s capabilities will increase until close to 50% of all entry-level white-collar jobs might be wiped out in five years.

A common sentiment from hiring managers is that where they previously needed ten engineers, they now only need “two skilled engineers and one of these LLM-based agents,” which can be just as productive, said Nenad Medvidović, a computer science professor at the University of Southern California.

“We don’t need the junior developers anymore,” said Amr Awadallah, CEO of Vectara, a Palo Alto-based AI startup. “The AI now can code better than the average junior developer that comes out of the best schools out there.”

To be sure, AI is still a long way from causing the extinction of software engineers. As AI handles structured, repetitive tasks, human engineers’ jobs are shifting toward oversight.

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Today’s AIs are powerful but “jagged,” meaning they can excel at certain math problems yet still fail basic logic tests and aren’t consistent. One study found that AI tools made experienced developers 19% slower at work, as they spent more time reviewing code and fixing errors.

Students should focus on learning how to manage and check the work of AI as well as getting experience working with it, said John David N. Dionisio, a computer science professor at LMU.

Stanford students say they are arriving at the job market and finding a split in the road; capable AI engineers can find jobs, but basic, old-school computer science jobs are disappearing.

As they hit this surprise speed bump, some students are lowering their standards and joining companies they wouldn’t have considered before. Some are creating their own startups. A large group of frustrated grads are deciding to continue their studies to beef up their resumes and add more skills needed to compete with AI.

“If you look at the enrollment numbers in the past two years, they’ve skyrocketed for people wanting to do a fifth-year master’s,” the Stanford graduate said. “It’s a whole other year, a whole other cycle to do recruiting. I would say, half of my friends are still on campus doing their fifth-year master’s.”

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After four months of searching, LMU graduate Akgul finally landed a technical lead job at a software consultancy in Los Angeles. At her new job, she uses AI coding tools, but she feels like she has to do the work of three developers.

Universities and students will have to rethink their curricula and majors to ensure that their four years of study prepare them for a world with AI.

“That’s been a dramatic reversal from three years ago, when all of my undergraduate mentees found great jobs at the companies around us,” Stanford’s Liphardt said. “That has changed.”

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