‘Make money by denying care’: new US rules aim to curb use of approval by private health insurances

Jessica Glenza
Fri, February 2, 2024 

A pharmacy technician reaches for a bottle of medication in Miami, Florida, in 2020.Photograph: Joe Raedle/Getty Images

A new set of rules from the Biden administration seeks to rein in private health insurance companies’ use of prior authorization – a byzantine practice that requires people to seek insurance company permission before obtaining medication or having a procedure.

The cost-containment strategy often delays care and forces patients, or their doctors, to navigate opaque and labyrinthine appeals.

The administration’s newly finalized rules will require insurance companies who work in federal programs to speed up the approval process and make decisions within 72 hours for urgent requests. The regulations will also require companies to give a specific reason as to why a request was denied and publicly report denial metrics. The regulations will primarily go into effect in 2026.

Related: US surgeon general Vivek Murthy: ‘Loneliness is like hunger, a signal we’re lacking something for survival’

Patients, advocates and researchers welcomed the new regulations but also noted their limitations and argued the rules do not go nearly far enough to tackle the scale of the problem.

“First of all, we’re glad the Biden administration is doing something about this issue,” said Aija Nemer-Aanerud, a healthcare campaign director for People’s Action Institute, a grassroots organization that advocates for people who have been denied care by insurance companies.

“The private insurance industry has figured out a lot of ways to set up the processes – regarding prior authorizations and claim denials – in such a way that they can make a profit,” said Nemer-Aanerud. But without going further, the rules will still allow insurance companies to, in Nemer-Aanerud’s words, “make money through denying people care”.

The Biden administration’s new rules will cover companies who work with Medicare, Medicaid and individual insurance exchanges – that means the rules will impact about 105 million people. That still leaves out the largest pool of privately insured Americans – the 158 million who rely on insurance from their employer.

The new rules also exclude prior authorizations for medications, though the federal government has said it intends to work on a rule for medications in the future.

In a statement, America’s Health Insurance Plans, a trade organization, said that it supports the new rule: “It’s crucial that we all work towards ensuring patients have access to the information they need to make informed healthcare decisions. CMS took a step in the right direction by finalizing the Interoperability and Prior Authorization rule.”

Often, insurance companies argue prior authorization saves patients’ money by reducing unnecessary care. Notably, Americans see doctors less often than counterparts in other developed democracies (though Americans still spend more per person). And patients, providers and advocates argue insurance companies often use the process to delay and discourage patients from getting care, even when it’s needed.

“Do I think that that’s enough? No,” said Carly Morton, 30, of Beaver, Pennsylvania. “I think that’s a great step in the right direction because, yes, we need answers. Our medical issues are serious and seriously painful.”

Morton has a Medicare Advantage plan through United Healthcare. A recent Kaiser Family Foundation analysis found private companies who work with Medicare, in plans like Morton’s, denied 2m requests for prior authorization in 2021 or 6% of all claims. Only 11% were appealed.

Those that were appealed overwhelmingly succeeded (82%), leading researchers to question, “whether a larger share of the initial prior authorization requests should have been approved”, and pointing out that care was delayed by the requirement either way.

Morton was forced to mount a full blown public pressure campaign with People’s Action Institute to get her insurance to cover surgery for a rare vascular condition, called neurogenic median arcuate ligament syndrome. Her condition caused her near constant vomiting and “excruciating” pain that she likened to end-stage cancer. She felt stuck after she attempted to navigate appeals on her own – she estimates that she called her insurance company 50 times – before she went public with her story.

“It was very overwhelming,” said Morton, whose surgery was eventually approved, though only after multiple press releases, videos and even coaching by a health insurance attorney.

United Healthcare did not provide a comment on prior authorization and said it could not legally comment on Morton’s case.

Plans like Morton’s will be covered. But people like 34-year-old Megan Shirk of Harrisburg, Pennsylvania, will not. Shirk relies on private insurance connected to an employer, in this case Blue Cross Blue Shield. She suffers from complex regional pain syndrome, an excruciating condition sometimes called the “suicide disease”, because of the high rate of sufferers who end their lives.

“I feel like someone is kicking me while setting me on fire at the same time,” Shirk said, describing her symptoms.

Shirk and her doctors are seeking to treat her condition with ketamine infusions, but to date have had prior authorization requests denied. On two occasions, the denial came the day before she was scheduled to travel 200 miles to Pittsburgh for treatment.

“We had the appointment scheduled and ready to go,” said Shirk. “I was excited to start this new life where I wasn’t necessarily not in pain, but in manageable pain.” Shirk has been navigating the appeals process since October 2023.

Morton, reflecting on the lengths she went to to get a procedure covered, called the process, “taxing in a way that I could never put into words”. She added: “Someone who is sick like that should never, ever, ever have to be going through that, ever.”

• In the US, you can call or text the National Suicide Prevention Lifeline on 988, chat on 988lifeline.org, or text HOME to 741741 to connect with a crisis counselor. In the UK, the youth suicide charity Papyrus can be contacted on 0800 068 4141 or email pat@papyrus-uk.org, and in the UK and Ireland Samaritans can be contacted on freephone 116 123, or email jo@samaritans.org or jo@samaritans.ie. In Australia, the crisis support service Lifeline is 13 11 14. Other international helplines can be found at befrienders.org

HALT LIVE CARGO EXPORT

Thousands of sheep and cattle stranded at sea after Red Sea crisis turn back

Hilary Whiteman, CNN
Fri, February 2, 2024 

Concern is mounting for thousands of sheep and cattle stranded off the coast of Australia after authorities ordered the Israeli-owned ship transporting the live cargo to turn around over fears it could be targeted by Houthi rebels in the Red Sea.

More than 16,000 animals are aboard the MV Bahijah anchored off Western Australia, where sweltering heat is adding to pressure on the Australian government to decide whether to allow the ship to leave or offload the livestock following more than three weeks at sea.

The Department of Agriculture, Fisheries and Forestry said on Friday it was still considering an application from the exporter to re-export the animals. In the last two days, the ship has been cleaned and resupplied with fuel and fodder during temporary stays at Fremantle Port, near Perth, the government said.


No livestock have been offloaded, despite calls from animal welfare advocates to allow them off the ship as soon as possible.

Two independent veterinarians, engaged by the government, inspected the live cargo on Wednesday and found “no significant animal health or welfare issues,” the government said.

The Royal Society for the Prevention of Cruelty to Animals Australia (RSPCA) says a thorough examination of all the animals is impossible while they’re still on the ship.

Australia’s live export trade has long been a point of friction between the industry and those who say it prioritizes revenue over animal welfare.

The Australian government has pledged to end the live export of sheep but has yet to give a timetable about when that will happen.

More than 16,000 animals are on board the vessel. - Nine Network Australia

A long journey

The MV Bahijah left Fremantle on January 5 for the Middle East, according to a statement from the Australian government.

A crisis has enveloped the region’s vital Red Sea shipping lane in recent weeks, as Yemen’s Iran-backed Houthi rebels attack commercial vessels in what they say is retaliation against Israel for its military campaign in Gaza.

Fifteen days into the ship’s voyage, a request to divert the vessel around Africa, as other ships have done to evade Houthi missiles and drones, was rejected.

“To ensure the health and welfare of the livestock on the MV Bahijah, the department directed the exporter that the consignment be immediately returned to Australia,” said a government statement on January 20.

Earlier this week, the government said it was working with the exporter on a plan, but by Thursday, as summer temperatures rose, no decision had been made.

John Hassell, president of the Western Australian Farmers Federation (WAFarmers), which represents the state’s agricultural industry, said a decision should have been made days ago.

“I would have thought the department should have had its stuff sorted out well before it got here,” he said. “If the animals are in good nick, if there’s no disease if there’s plenty of space, we’ll (resupply the ship) and turn it away,” he said. “It should have been gone by now.”

Hassell said he’d been sent photos from the ship that show the animals in good condition, contrary to claims that conditions are deteriorating. The photos, shared with CNN, show cattle with tags on their ears, sitting and standing and sheep standing in a ventilated area.

“I’m comfortable that the sheep are in the shade sitting down, chewing their cud in the warm parts of the day and eating when it’s cooler, like they do on the farm,” Hassell said.

The MV Bahijah left Australia on January 5 with around 16,000 cattle and sheep on board. - WAFarmers

‘Grave’ concerns

However, Suzanne Fowler, Chief Science Officer with RSPCA Australia, said it’s a matter of urgency that all the animals are offloaded.

“These animals have now been on board the ship for a minimum of 26 days. The temperature in Perth is starting to touch 40 degrees (102 Fahrenheit),” she told CNN on Wednesday.

Temperatures in Perth hit a high of 41 degrees Celsius (105 Fahrenheit) on Thursday and it was almost as hot on Friday, according to the Australian Bureau of Meteorology.

“The evidence tells us that the welfare of the animals is only going to get worse and worse over the coming days due to the amount of time they’ve spent on the ship. So, it’s very urgent and we couldn’t be more gravely concerned,” Fowler said.

Hassell, from WAFarmers, said offloading the animals would only cause them more stress.

If allowed to disembark, the animals would be governed by Australia’s strict biosecurity system, which is designed to assure importing countries that the country’s livestock is disease-free.

Mark Harvey-Sutton, CEO of the Australian Livestock Exporters’ Council, said any animals taken off the boat would be placed into quarantine before being re-exported or killed in an Australian abattoir.

“They would essentially be in quarantine indefinitely until a market was found for them. There’s no two weeks quarantine and you’re out sort of thing.”

Hassell said the only reason some animals would be offloaded would be to create space for the return journey.

“If the animals have gotten bigger and fatter on the trip over and require more space, then that’s why they’ll be offloaded,” he said.

The RSPCA had requested permission for an independent veterinarian to board the ship to assess the animals.

Fowler said while the livestock may not be showing signs of illness now, it’s only a matter of time.

“The stress of the animals is only going to yield in the coming days and that sense of fatigue where they can’t cope anymore, will only worsen,” she said. “A lot of these diseases you won’t see until it’s too late.”

This story has been updated with additional information.

CNN’s Alex Stambaugh, Akanksha Sharma and Robert Shackelford contributed reporting.


16,000 livestock in month's limbo on Israel-bound ship

Reuters Videos
Updated Fri, February 2, 2024


STORY: It has been four weeks since this export ship set sail for Israel.

Yet the 16,000 livestock aboard remained in limbo at an Australian port on Friday (February 2).

It began its journey a month ago - only to abandon a passage through the Red Sea and be ordered home by the Australian government.

Biosecurity rules mean the animals, around 14,000 sheep and 2,000 cattle, can’t disembark without being quarantined.

Officials are yet to decide if they should be let off or sent back to sea…

On a 33-day voyage to reach Israel by going around Africa instead.

Australia’s agricultural secretary, Adam Fennessy.

“There should be no doubt that Australia’s biosecurity and the health and welfare of the livestock on board are our highest priorities. After standing offshore yesterday and yesterday evening and replacing the animal’s bedding, the vessel has returned to port and is birthed in Fremantle.“

Despite these assurances, some politicians and animal rights activists have branded these circumstances as cruel mistreatment -

Prompting calls for Canberra to bring forward a planned ban on live sheep exports.

The situation is a consequence of strikes by Yemen's Houthi militia on shipping in the Red Sea that have disrupted global trade.

The ship, MV Bahijah, abandoned its Red Sea route due to the threat of attack. It arrived on Monday (January 29) in Perth where there is currently a heatwave.

Australia's agriculture ministry said it’s still considering a request from the exporter, Israeli firm Bassem Dabbah, to unload some animals and re-export the rest.

Industry figures, dismissing claims the animals are suffering, asked why the government has taken so long to decide the ship's fate.

Reuters was unable to contact Bassem Dabbah - and the ship's manager did not respond to requests for comment.


A ship carrying thousands of livestock returns to Australia after month-long ordeal

Associated Press
Updated Fri, February 2, 2024



Australia Stranded Livestock
This image made from video shows MV Bahijah ship, with sheep and cattle on board, at a port in Fremantle, Australia, Friday, Feb. 2, 2024. The ship carrying thousands of livestock that has been stranded at sea for almost a month has finally docked in Australia, where welfare concerns mean some of the animals are expected to be offloaded.

 (Channel 10 via AP)


PERTH, Australia (AP) — A ship carrying thousands of livestock that has been stranded at sea for almost a month has finally docked in Australia, where welfare concerns mean some of the animals are expected to be offloaded.

About 16,500 sheep and cattle have been stowed on the MV Bahijah since Jan. 5, when it sailed for the Middle East from the western Australian port of Fremantle before it was ordered by the government, two weeks into its journey, to turnaround due to the ongoing Yemen Houthi rebels attacks in the Red Sea.

Since Monday the vessel had been sitting off the west Australian coast as concerns grew for the welfare of the animals on board. It finally docked at Fremantle on Thursday, 25 days after it had set off from the same port.

Authorities are now rushing to form contingency plans for how to safely offload and quarantine at least some of the livestock with heatwave conditions in the region adding to the challenge.

On Wednesday, authorities sent two veterinarians onto the vessel to inspect the animals, but they found no significant health or welfare issues among the livestock.

“That provides additional confidence that the livestock are in good condition and have appropriate care and supervision,” said Beth Cookson, Australia’s Chief Veterinary Officer. “It also confirmed that there were no signs of exotic disease present in the livestock on board the vessel.”

The reprieve for the animals may be short-lived as authorities currently assess an application to re-export the livestock. It will likely see them at sea for another month as the MV Bahijah avoids the Red Sea by sailing around Africa to access the Suez canal ports, adding thousands of miles and more than a week to the trip.

The MV Bahijah sails under the flag of the Marshall Islands and is carrying the livestock for Israeli-based export company Bassem Dabbah, according to the Australian Broadcasting Corporation.

CANADA
Federal court overturns American transgender woman's persecution-based refugee claim

CBC
Fri, February 2, 2024 

Daria Bloodworth is seen in bodycam footage from Colorado police filed into evidence as part of her bid to achieve refugee status in Canada based on a fear of persecution. (Daria Bloodworth - image credit)

Canada's Federal Court has overturned a decision granting refugee status to an American transgender woman who successfully argued that a combination of gun culture and rising transphobia left her at risk of persecution in the United States.

In a decision released this week, Judge Christine Pallotta said the Refugee Appeal Division erred in finding Colorado authorities were incapable of protecting Daria Bloodworth from a roommate she accused of stalking her — and that her safety couldn't be guaranteed elsewhere in the U.S.

Bloodworth — who now lives in Whitehorse — says she plans to appeal the ruling to the Federal Court of Appeal in the hopes of reinstating the October 2022 decision affirming her status as a convention refugee.

"It was made pretty clear from the get go that this was going to be an uphill battle — winning this thing, or even staying in Canada a little bit longer and not get murdered in the U.S.," Bloodworth told the CBC.

"I was incredibly happy that I won at the [Refugee Appeal Division] level. And it also increased my confidence in winning this case permanently, because I know, based on the evidence that I've submitted that I have a strong case."

'The general climate of anti-trans hatred'

Bloodworth came to Canada in 2019, seeking refugee protection in relation to claims that she was the target of threats and violence from a former roommate, her former landlord and a debt collection agency.

According to court documents, Bloodworth complained to police after her ex-roommate at Colorado State University threatened her with a gun. He was initially charged with menacing, and Bloodworth was given a protection order.

But the case against the roommate was dismissed a few months later and a judge declined to keep the protection order in place. Bloodworth claimed the ex-roommate continued to stalk her, and said police did not respond to her calls for action.

The 36-year-old's initial claim was unsuccessful, but in 2022 Refugee Appeal Division member Dilani Mohan concluded Bloodworth had a legitimate fear of persecution.

American Daria Bloodworth plans to appeal a Federal Court ruling overturning her claim to refugee status based on fear of persecution as a transgender woman.

American Daria Bloodworth plans to appeal a Federal Court ruling overturning her claim to refugee status based on fear of persecution as a transgender woman. (Daria Bloodworth)

While Mohan said the initial police response appeared reasonable, she faulted the Refugee Protection Division (RPD) — where claims are first heard — for failing to consider that Bloodworth was denied police protection for her subsequent complaints.

Mohan also surveyed a patchwork of U.S. state laws concerning the right to equal treatment before concluding that relocation within the U.S. was not an option.

She noted high rates of "discrimination and violence" in Maine, New Jersey, Illinois and Nevada and said that while New York City might be an option, the move would throw Bloodworth into poverty — which is a risk factor for violence in the U.S. itself.

"The RPD failed to consider how Colorado's open carry gun laws combined with the general climate of anti-trans hatred growing in the US could make [her] perpetually vulnerable and at risk to her life," Mohan wrote.

"I further find that [she] does not have an [internal flight alternative] in the U.S. because relocation for a person with her profile, in her circumstances, would be unreasonable."

'I honestly feel like this is home'

Bloodworth, who joked that she has become somewhat of a "jailhouse lawyer," has represented herself at all levels of proceeding to this point. Mohan commended her for doing "an impressive job in corralling evidence to support her claim."

Vancouver immigration lawyer Zool Suleman — who is not involved in the case — said Bloodworth's short-lived victory at the Refugee Appeal Division is noteworthy.

"It is unusual for cases from the United States to be approved as refugee cases in Canada. Generally speaking, the U.S. is not seen a refugee-producing country," he told the CBC.

"In this specific case, clearly the federal court felt that further thought needed to be placed upon the kinds of protections available to the claimant. And we would need to keep an eye on it to see if it is turning into an area of growing persecution claims from the United States."

Mohan noted the Minister of Citizenship and Immigration didn't intervene in the Refugee Appeal Division proceedings "in any way."

But that changed with the granting of refugee status.

The minister argued in federal court that Mohan had erred in "imposing a standard of perfect state protection" and by failing to identify "any gap in Colorado's laws, which include state-level laws to protect transgender individuals."

Pallotta agreed, finding that Mohan had failed to assess whether Bloodworth had "demonstrated with clear and convincing evidence that she exhausted the course of action reasonably available to her, without success."

The federal court ruling also says the appeal division failed to determine that internal flight was impossible — saying that "more than evidence demonstrating hardship and disadvantage" was needed to take New York City off the list.

Bloodworth — who is now studying biological sciences at Yukon University — said she hopes to stay in Canada, either by convincing the Federal Court of Appeal to overturn Pallota's decision or by making her case for refugee status before a new Refugee Appeal Division tribunal.

"I honestly feel like this is home. I'm not going to say Canada's perfect, but at least since I've moved here I haven't been threatened with a gun or threatened with a knife. I haven't been discriminated against because I'm transgender," she said.

"I feel like I could actually live here — if I was allowed to live here."

Kentucky's first transgender elected official wants you to get involved in local politics

Ryan Adamczeski
Fri, February 2, 2024

rebecca blankenship kentucky transgender politician

Kentucky legislators passed some of the nation’s worst anti-LGBTQ+ laws in 2023.

Alongside bans on gender-affirming care for minors and bans on teaching LGBTQ+ topics in public schools, the state enacted a law that also requires school districts to “at a minimum” prohibit trans students from using restrooms that align with their gender identity, and mandates that schools staff out LGBTQ+ students to their guardians.

But something else significant happened in Kentucky in 2023: The state swore in its first-ever transgender elected official. Even more significant, she was sworn in to her local school board.

Rebecca Blankenship has been a member of the Berea Independent School District's board of education for one year now and is still the only out transgender person who's ever been elected to any office in Kentucky. Moreover, during her time in the position, the state legislature has “forced us to implement policies that turn our stomachs,” she says.



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While this may seem like a cause for despair, Blankenship isn’t losing focus. Despite the anti-LGBTQ+ legislation being pumped out by state lawmakers, there are pro-LGBTQ+ measures she believes are capable of passing in the state. More importantly, there is no law the Kentucky Legislature can pass that bans basic kindness.

“Our Berea board would have loved to stand up for LGBT kids. Our state legislature, though, which is completely power mad, completely out of control, wants to come into small communities and dictate how we are going to treat each other,” Blankenship tells The Advocate. “They have forced us to implement policies that turn our stomachs, but what they cannot do is force teachers, and school staff, and bus drivers, and everybody who does their job because of the kids, to start treating those kids with cruelty or disrespect.”

“The legislature cannot ban their kindness,” she adds.

While a spate of anti-LGBTQ+ laws has gone through in the state – the majority of which target transgender minors – there’s one policy Blankenship is pushing for that could protect trans kids, and its approval is showing “early promise.” The initiative? Ban conversion therapy within the state of Kentucky. The strategy? Highlight anti-transgender hypocrisy.

Three local governments in the state have passed ordinances banning the draconian practice, but none have enforced them, Blankenship claims. This has helped “increase the pressure on the state legislature [to say] that they need to take action, so that they can't just leave this to somebody else.”

“Another thing that has helped us increase interest in doing this bill is that the legislature banned gender-affirming care for minors last year,” Blankenship notes. “They spent the whole year talking about how they wanted to ban unethical experimental medical treatments for LGBT youth. Well, here's one. … I think that we're really turning some heads with the idea that we need to be consistent.”

The Kentucky Legislature’s attacks on LGBTQ+ people have significant consequences, but they have also fostered a greater sense of community among queer people in the state. Blankenship says that lately more and more people have been inspired to get involved in local politics and even to run for office – particularly transgender people. In fact, the state may soon have its second transgender elected official and first trans representative if Emma Curtis wins her bid for the 93rd House District in Lexington.

Those are two of the biggest steps Blankenship believes people can take to support the trans community in a time where they’re under attack: run for office, and donate to those running for office who are LGBTQ+, or at least supportive of queer people. The third step is to “push their local party establishments and democratic powerhouses to do the same things: to endorse these candidates, to put money behind these candidates, to put effort behind these candidates.”

“The City Council and the school board are more important than the president,” Blankenship says. “Our local governments affect our lives so, so profoundly, and LGBT people have the same basic needs as everybody else. We pay rent, we drive on roads, we send our kids to school. … If we can all uplift each other, we can achieve a new kind of power. We can achieve a new kind of community and a new kind of politics that works for everybody.”

Enfranchising such candidates won’t just change policy nationally, she explains, but it will also “change hearts and minds locally,” as it “demonstrates that we have so much more in common with regular people, working people, than we have differences.”

“It's not regular people who want to hurt us, it's national organizations that try to co-opt religion to build power through hate,” Blankenship continues. “The fact that Kentucky's first openly trans elected official didn’t come from a city, but from a little bitty mountain town, proves that the stereotype of queerphobic rural conservatives is just not the reality.”

She adds: “My election showed that this is something that can happen. … If a trans person can win here in Appalachian State hills, they can win anywhere.”

Thousands of employees at tech giant SAP signed a petition saying they felt 'betrayed' by the company's 'radical' return-to-office U-turn

Sawdah Bhaimiya
Updated Fri, February 2, 2024


Employees at the German software giant SAP are revolting against its return-to-office policies.


Thousands of staff signed an internal letter saying they felt "betrayed" by the "radical" pivot.


But SAP's CEO recently said he didn't believe virtual meetings could foster workplace culture.

The German software giant SAP recently announced a return-to-office mandate, which has been met with backlash by thousands of employees, Bloomberg reported Wednesday.

More than 5,000 SAP employees have signed a letter posted internally — and viewed by Bloomberg — criticizing the company's RTO policies and have threatened to quit as a result.

"We feel betrayed by a company that until recently encouraged us to work from home, only to ask for a radical change in direction," the letter from SAP's European works council said.

The company ordered its more than 100,000 global staff in January to return to the office or work on-site three days a week from April. This is a pivot from its flexible working policies introduced in June 2021, which allowed staff to work from home, remotely, or in the office.

The council further outlined in the letter that "the absence of significant salary increases" over the years had forced staff to find ways to adapt.

"To compensate for this, we took advantage of the remote work possibility and moved where living costs were lower, away from expensive metropolises," it wrote.

SAP CEO Christian Klein said last week that he didn't think a good work culture could be fostered via virtual meetings.

"I'm not a big believer that on a video conference platform, you can understand our culture, you can get educated, and you can get enabled to do your job best," Klein said, per Bloomberg.

Business Insider contacted SAP for comment but didn't immediately hear back.

There's been a significant push to bring workers back to the office in the past year. A number of major firms have put in place strict return-to-office policies and are even tracking workers' attendance, including Google, Amazon, Citigroup, and JPMorgan.

Tech staff rebel over flexible working ‘betrayal’
Matthew Field
Thu, February 1, 2024



Germany’s biggest technology company has suffered a staff rebellion over plans to force employees back into the office three days a week.

As many as 5,000 employees at SAP, the accounting software giant, have signed a petition claiming they have been “betrayed” by management.

SAP promised a “100pc flexible and trust-based workplace as the norm” in June 2021 and said it would allow staff to “decide when they work aligned with business needs”. Chief executive Christian Klein said in a blog post at the time that employees could “work from home, at the office, or remotely”.

However, the company changed its policies last month, saying SAP’s more than 100,000 staff would be required to be in the office at least three days a week.

Mr Klein has pushed back against working from home in recent weeks, telling investors he was “not a big believer that in a video conference platform you can understand our culture”.

The change in policy has prompted a backlash from a significant minority of staff. The petition signed by employees said: “We feel betrayed by a company that until recently encouraged us to work from home, only to ask for a radical change in direction.”

Workers have threatened to look for jobs elsewhere rather than be forced back to their desks, Bloomberg reported.

The staff letter accused SAP of trying to drive away employees by ordering them back to the office in what it claimed was a “zero-cost staff reduction strategy”.

SAP said last month it would cut up to 8,000 jobs as it sought “AI-driven efficiencies”.

Technology companies have struggled to coax staff back to the office after working from home during the pandemics, prompting internal protests and resignations across the sector.

Demand for home working has also remained high in Germany, with around 25pc of the workforce embracing “Das Homeoffice”.

SAP is one Germany’s biggest employers and, with a market capitalisation of just under €200bn (£170bn), its most valuable listed business.

A spokesman for SAP said: “We’re evolving our flexible work policy to align with best practices in the market and our own experience as a front runner in hybrid work.”

A study by the European Central Bank last year found that a third of eurozone workers wanted to work from home more than their employers allowed and were willing to quit if they found a better deal.

Media layoffs: Google, Paramount, Disney, and others commit to job cuts in 2024


Alexandra Canal
·Senior Reporter
Fri, February 2, 2024 


The media and entertainment industry's reckoning will continue in 2024 with more layoffs as rising costs and debt-ridden balance sheets continue to weigh on the embattled sector.

Partly in an attempt to appease Wall Street, these companies over the past year have slashed billions of dollars' worth of costs. In addition, under profit pressure, they rolled out ad-supported tiers, bundled their offerings, and raised the monthly prices of subscription plans.

But all of that wasn't enough to satisfy investors.

Valuation levels remain depressed. And streaming profitability still has a long way to go, with virtually all media companies (with the exception of Netflix) losing money on that business. The bottom line: more job cuts.

Here's what top media and entertainment companies have in mind when it comes to layoffs in 2024:

Media layoffs: Google's YouTube, Paramount, Disney, and others others commit to layoffs in 2024 (Nikolas Kokovlis/NurPhoto via Getty Images) (NurPhoto via Getty Images)

Paramount Global

As M&A rumors swirl about the future of the Paramount Global (PARA), CEO Bob Bakish announced layoffs in an internal memo obtained by Yahoo Finance on Thursday.

The executive cited the need to "operate as a leaner company and spend less."

"As it has over the past few years, this does mean we will continue to reduce our workforce globally. These decisions are never easy, but are essential on our path to earnings growth," the memo read.

No specific numbers or timeline were provided. Paramount reports quarterly results on Feb. 28.

YouTube

Not even tech giant Alphabet (GOOG, GOOGL) has been immune to layoffs.

In mid-January, the company cut 100 YouTube employees from its creator management and operations divisions, a spokesperson confirmed to Yahoo Finance — its first corporate restructuring in a decade. YouTube has 7,173 employees worldwide.

According to an internal memo viewed by Yahoo Finance, the cuts will effect YouTube’s creator management and operations teams.

The workforce reduction comes after Alphabet slashed thousands of jobs across its engineering, hardware, and advertising teams in an effort to reduce head count.

Meanwhile, Alphabet CEO Sundar Pichai said in a widely cited internal memo that more layoffs were likely needed across the entire company in 2024 in order for the company to reach its goals.

Universal Music Group

Universal Music Group (UMG), one of the industry's most prominent record labels, plans to lay off hundreds of employees later this quarter, according to Bloomberg.

The layoffs, part of a broader restructuring, will supposedly be the largest since the company went public in 2021, Bloomberg noted.

While UMG wouldn't fully confirm the report, a spokesperson hinted at the cuts in a company statement provided to Yahoo Finance: "We are creating efficiencies in other areas of the business so we can remain nimble and responsive to the dynamic market, while realizing the benefits of our scale."

Pixar

Disney's (DIS) animation unit will reportedly lay off as much as 20% of its 1,300 employees, according to TechCrunch. The cuts come as streaming profitability lags while the company's box office has struggled.

Disney did not immediately respond to Yahoo Finance's request for confirmation on the report.

Pixar Animation Studios in Emeryville, Calif. (Alamy) (JHVEPhoto via Getty Images)

The Messenger

Digital news startup The Messenger will shut down after less than a year since its May 2023 launch.

The company, which hired about 300 journalists at the time of its debut, was founded by media entrepreneur Jimmy Finkelstein.

Employees did not know the shutdown was coming, which triggered a proposed class-action lawsuit against the company from its former employees — just one day after its folding.

In a memo to staff, cited by multiple outlets, Finkelstein blamed "economic headwinds" that have plagued media companies at large, writing, "Unfortunately, as a new company, we encountered even more significant challenges than others and could not survive those headwinds."

The New York Times first reported the closure. The Messenger did not immediately respond to Yahoo Finance's request for comment.

Sky Group

British media company Sky Group, which is owned by Comcast (CMCSA), plans to slash 1,000 jobs over the next year, with a significant proportion of job losses within its engineering division. That represents about 4% of the business.

The news comes after the company cut hundreds of jobs last year as it plans a shift from satellite to internet-based TV.

"The launch of Sky Glass and Sky Stream represents a shift in our business to deliver TV over IP (an internet connection) rather than satellite," a Sky spokesperson told Yahoo Finance. "Increasingly, customers are choosing Sky Glass and Sky Stream which don’t require specialist installation, and that has led us to change the number of roles we need to deliver our services."

The Wall Street Journal

The newspaper plans to lay off a small number of workers within its Washington bureau amid a broader restructuring effort, according to a source familiar with the matter.

The move, first reported by Axios, will relocate some Washington-based economics coverage to New York. Those who have their jobs eliminated will be able to apply for new jobs.

Business Insider

The online publication, a subsidiary of German publisher Axel Springer SE, said Thursday it will cut "about 8%" of its staff — a recent trend that's permeated across major news organizations throughout the country. (See Los Angeles Times next.)

"We closed out last year with a plan in place, a clear target audience, and a vision," Business Insider CEO Barbara Peng wrote in a memo to staff. "This year is about making it happen and focusing our company and efforts towards this future. Unfortunately, this also means we need to scale back in some areas of our organization."

The exact number of impacted employees was not immediately clear, but the cuts do represent the second round of layoffs in less than a year.

Los Angeles Times

The Los Angeles Times announced sweeping layoffs on Tuesday that eliminated the jobs of at least 115 staff members, or roughly 20% of its newsroom.

The workforce reduction was the largest in the newspaper's 142-year history, according to the Times.

The paper's owner, Dr. Patrick Soon-Shiong, said the cuts were necessary in order to account for the loss of as much as $40 million a year due to a bleak advertising environment.

Sports Illustrated

One of the most storied sports publications laid off most (or possibly all) of its staff last week after its publisher, Arena Group Holdings, had its license to operate the publication revoked.

Arena Group failed to make a $3.8 million quarterly licensing payment to Authentic Brands Group, which has owned the magazine since 2019. Authentic Brands Group sold the publishing rights to Arena Group in a 10-year deal that same year.

"This is another difficult day in what has been a difficult four years for Sports Illustrated under Arena Group," the publication's union wrote in a statement following the news.




Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.

Meta spent billions to close offices and lay people off. Now we know why.

Peter Kafka
Updated Fri, February 2, 2024 



Meta lost an astonishing $16 billion on the Metaverse last year.


But Wall Street loves Meta as of late Thursday: Its stock is up another 12%.


One big reason: Even with the Metaverse losses, Meta's margins are way better.

Remember when investors were worried that Mark Zuckerberg was incinerating money on the Metaverse and virtual reality?

Well, that's still happening: Last year, Meta lost $16.1 billion on its "Reality Labs" division, which brings you Oculus goggles. That's up from a loss of $13.7 billion in 2022.

Those losses are accelerating, too: In the last quarter of 2023, Meta lost $4.6 billion on the Metaverse.


Zuckerberg is promising investors there's more to come: "For Reality Labs, we expect operating losses to increase meaningfully year-over-year due to our ongoing product development efforts in augmented reality/virtual reality and our investments to further scale our ecosystem," Meta said in its most recent earnings release.

But this time around, investors seem cool with Zuckerberg's Metaverse investments. Meta's stock, already at an all-time high, has shot up by some 12% on the news.

What gives?

Here's an easy answer: Meta says it will continue to buy back its stock — something Wall Street always loves — and, for the first time in its history, it will start rewarding shareholders with dividends.

But the bigger picture is that Meta has spent the last couple of years pushing people out the door and getting out of leases, among other things. And that has improved the company's bottom line — even while Meta is bleeding red ink on the future.

Last year, Meta spent $3.5 billion shrinking itself: $2.5 billion came from "facilities consolidation" — closing and combining offices — and another $1 billion from "severance and other personnel costs" — that is, firing people. The company operates with 67,300 employees, a staggering 22% decrease over the last year.

And all of that means Meta's profit margins are way better: While its revenues increased by 16% — a number most Big Tech companies would be very happy with these days — its operating income increased by 62%, and its profits increased by 69%.

And while Zuckerberg and other Big Tech leaders have said they've been cutting to make their companies more efficient and dynamic, those bottom-line results are the point: They want to show Wall Street they can still increase profits — even if their go-go growth days are behind them, and even if they're still plowing money into new stuff.

Mark Zuckerberg made more than $28 billion this morning after Meta stock makes record surge

Eva Rothenberg, CNN
Fri, February 2, 2024 



Mark Zuckerberg’s net worth increased by more than $28 billion between your morning coffee and your lunch break.

The Meta founder and CEO — who is already worth more than $140 billion, according to Bloomberg’s billionaire index — has cleaned up from Meta’s share price skyrocketing over the past day, after the company announced its first-ever cash dividend program.

On Friday, shares of Meta (META) jumped more than 20% on the news of a quarterly dividend of $0.50 per share to be paid out on March 26 to shareholders of record as of February 22.

Zuckerberg owns about 350 million shares of the company, according to the US Securities and Exchange Commission

Unless he sells or buys more shares of company stock, and assuming the quarterly dividend remains at the same level, Zuckerberg will also gain off of the company’s dividend payouts to the tune of approximately $700 million per year.

While dividends excite shareholders because they reward investors for just holding the stock, they’re also widely criticized for artificially inflating the stock price without spending on employees or improvements to the underlying business.

This upswing plasters over potential harm to Meta stock after Zuckerberg, alongside other social media company heads, testified Wednesday before the Senate Judiciary Committee about the risks their products pose to young people.

Zuckerberg was pressed about internal Meta documents that suggested the company estimates the lifetime value of a teen user at $270, as well as Meta’s transparency regarding how its monetizes user data.

Zuckerberg apologized to the parents in attendance, who say their children were victims of social media.

“I’m sorry for everything you have all been through,” he said. “No one should go through the things that your families have suffered and this is why we invest so much and we are going to continue doing industry wide efforts to make sure no one has to go through the things your families have had to suffer.”

The story has been updated with additional information.

CNN’s Clare Duffy and Brian Fung contributed to this reporting.

Meta Soundly Tops Q4 Revenues Estimates as Company Doubles-Down on AI Development

Natalie Korach
Thu, February 1, 2024 


Meta, bucking broader industry struggles with digital advertising, rode stronger advertising results and restructuring savings to report higher-than-expected earnings of $14 billion for the fourth quarter of 2023, as the company said it was accelerating a rapid pivot towards AI development initiatives while continuing to pour investment into metaverse research.

Here are the top-line results:

Revenues: $40.11 billion, rose 25% from the year-ago period

Net income: $14.02 billion, a 201% increase over $4.7 billion in Q4 of 2022

Daily active users: Grew by 8% to 3.19 billion on average

Meta’s revenues of $40.11 billion, and diluted earnings of $5.33 per share for its fourth quarter of 2023, beat Wall Street expectations, results the company attributed in part to advancing AI technology.

Meta shares jumped over 14% in after-hours trading on Thursday.

“We’ve made a lot of progress on our vision for advancing AI and the metaverse,” Meta founder and CEO Mark Zuckerberg said in the shareholder statement.

Meta’s net income for the quarter marked a massive 201% increase from the same period a year ago. Daily active user numbers across its family of apps, which include Facebook, WhatsApp, and Instagram, climbed to an average of 3.19 billion, up by 8% compared to last year.

Driving that quarterly growth, in part, was a 21% jump in ad impressions across Meta’s family of apps, with the average price paid per ad ticking up by 2%. For the full year, however, ad impressions rose 28% while the price per ad fell 9%.

If foreign exchange rates remained constant with the Q4 of 2022, revenue would have been $816 million and $374 million lower, an increase of 22% and 15% on a constant currency basis for the fourth quarter and full year 2023, respectively, the company said Thursday.

Analysts surveyed by Zacks Investment Research were expecting Meta to report earnings of $4.83 per share and revenue of $38.99 billion.

In the fourth quarter of 2022, Meta reported revenues of $32.17 billion which was down 4% from the same period in 2021. Net income fell 55% to $4.7 billion for the fourth quarter of 2022, compared to the year prior.

On Thursday’s shareholders call, Zuckerberg emphasized the company’s intentions to improve and develop AI technology, saying “Overall, we’re playing to win here.”

Zuckerberg noted that Meta’s efforts to slim down the company in the “year of efficiency,” have been successful, “making Meta a stronger technology company, and improving our business to give us the stability to deliver our ambitious long-term vision for AI and the metaverse.”

Meta saw a revenue bump from facilities consolidation, more so than from cutting staffers. Overall restructuring costs totaled $1.15 billion in the quarter, with $1.1 billion of that coming from facilities. Meta decreased its headcount 22% year-over-year. The company said that at year-end it had completed its data center initiatives and planned employee layoffs, and “substantially completed the facilities consolidation initiatives.”

Zuckerberg’s efforts to slim down Meta are connected to his desire to pursue more ambitious AI development. “We’ve been working on general intelligence research for more than a decade,” Zuckerberg said. “But now, general intelligence will be the theme of our product work as well.”

The Meta CEO also highlighted the performance of social media platform Threads, with the platform currently boasting more than 130 million monthly active users, more people actively using it than when it launched in July. “So that one’s I think on track to be a major success,” Zuckerberg said.

Looking ahead, Meta expects the first quarter of 2024 total revenue to be in the range of $34.5 to $37 billion. The company is also anticipating higher infrastructure-related costs during 2024, as Meta continues to increase capital investments.

Meta is expecting AI and non-AI hardware to drive growth in 2024, as well as further investment in new data center architecture. The company reiterated that its efforts will increasingly focus on AI research and product development, which will require consistent investment beyond a one-year period.

Even as Meta doubles down keeping up with its Big Tech rivals in AI development, the company is still pouring investment into the metaverse. Meta’s Reality Labs unit saw a Q4 operating loss of $4.6 billion, due to higher headcount expenses and research and development spending. Reality labs expenses were $5.7 billion, up 14% year over year.

The company is anticipating more losses for Reality Labs in 2024, as investment into AI development grows. “We expect Reality Labs operating losses to increase meaningfully year over year,” Meta CFO Susan Li said Thursday.


Meta revenue soars as it pivots to AI and announces dividends for investors

Kari Paul

THE GUARDIAN
Thu, February 1, 2024

The Meta logo in Brussels, Belgium

Photograph: Yves Herman/Reuters


Meta shares soared 15% in after-hours trading following a strong fourth-quarter earnings report released the day after Mark Zuckerberg was roundly condemned in a contentious congressional hearing.

The company also announced it will pay a 50¢-per-share dividend to investors for the first time, and has authorized a $50bn share buyback program.

Overall, Meta reported fourth-quarter revenue of $40.1bn, beating the predicted $39.18bn and up 25% year-over-year. The report comes as Meta, like many of its big tech peers, is seeking to integrate artificial intelligence tools into its core products. In a statement accompanying the report, Zuckerberg said Meta has “made a lot of progress on our vision for advancing AI and the metaverse”.

“We expect our ambitious long-term AI research and product development efforts will require growing infrastructure investments beyond this year,” the company’s press release read.

Related: ‘It was forced’: grieving parents unfazed by sorry tech CEOs at US Senate hearing

In the previous quarter’s earnings call, Zuckerberg touted Meta’s plans to invest in AI, stating that it would be the company’s biggest investment area in 2024. Zuckerberg said in a video shared to Instagram earlier in January that the company would be acquiring $9bn worth of Nvidia chips to support its push to scale AI

AI will be used to enhance advertising campaigns and fuel advertising revenue as well as support new Meta products, including AI chatbots, Zuckerberg has said. Revenue from advertising, the company’s core business, was $38.7bn, compared with $31.25bn for the same time period the prior year. Meta’s hardware products such as the Quest 3 VR headset have yet to contribute any sizable percentage of the company’s revenue. Zuckerberg said on Thursday’s call he expects Meta to begin rolling out AI services more widely in coming months.

Meta laid off more than 20,000 workers in 2023 as part of what Zuckerberg branded a “year of efficiency”, focusing on cost-cutting measures. Those efforts appeared to have paid off, with Meta’s operating margin doubling to 41% from 20% in the same quarter of 2022. Meanwhile, expenses decreased 8% year over year to $23.73bn. Chief financial officer Susan Li stated on the call that Meta had more than 67,300 employees at the end of quarter four, down 22% from the same time a year prior but up 2% from quarter three after “hiring efforts have resumed”.

Regulatory headwinds appear to be top of mind for investors following Meta’s public browbeating at a congressional hearing on Wednesday, which was convened to interrogate Zuckerberg and other tech executives over their platforms’ impact on young users. He offered condolences to parents in the crowd whose children had died after online exploitation.

Throughout the hearing, Congress members touted legislation that could strip Meta and other platforms of legal immunity for content posted on its platforms and comes months after Meta was hit with a massive lawsuit by attorneys general of 41 states suing the company over its impact on young users. New Mexico’s attorney general has additionally sued the company for allegedly failing to prevent child sexual exploitation and trafficking.

As a result of regulatory concerns, Meta has sought to diversify its core business – which has historically relied on advertising by way of collecting huge amounts of user data. Reality Labs, the segment responsible for developing its virtual reality products, faced losses of $4.65bn in the fourth quarter, up from $4.28bn for the same period the previous year and contributing to an overall loss of $16.12bn for the year of 2023. In a press release, Meta said it expected operating losses for Reality Labs to “increase meaningfully year-over-year” as it continues to try to scale the ecosystem.

In addition to regulatory concerns, Meta has seen a squeeze on user numbers for its platforms as young users in particular defect to newer platforms like TikTok. The company’s platforms are seeing more rapid growth outside of the US, said Insider Intelligence principal analyst Jasmine Enberg.

“On the usage front, Facebook continued to squeeze user growth, but as expected, most new users came from outside of North America,” she said. “In the US, popularity among teens has become a liability in the eyes of lawmakers, which could hamper both Facebook’s and Instagram’s growth efforts there.


Meta's Reality labs had its best quarter, but still lost more than $4 billion

Meta will also no longer report on how many people use Facebook.

Karissa Bell
·Senior Editor
Thu, February 1, 2024

JOSH EDELSON via Getty Images

Reality Labs, Meta’s division for AR, VR and the metaverse, just had its best quarter yet despite continuing its multibillion-dollar losing streak. Reality Labs generated more than $1 billion in revenue during the final quarter of 2023 thanks to its Quest headsets and the Ray-Ban Meta smart glasses.

While crossing $1 billion in revenue is a new milestone for the company’s metaverse group, it’s still expected to continue racking up massive losses for the foreseeable future. Reality Labs lost $4.6 billion in the quarter, and more than $16 billion in 2023. Meta CFO Susan Li said that these losses are expected to “increase meaningfully year-over-year due to our ongoing product development efforts in augmented reality/virtual reality and our investments to further scale our ecosystem.”

The fourth-quarter, which encompasses the holiday shopping season, has typically been when reality does the best. During a call with analysts, Mark Zuckerberg suggested that the company’s smart glasses had done particularly well, saying that Ray-Ban maker EssilorLuxottica was “planning on making more [smart glasses] than we'd both expected due to high demand.” He added that both Quest 2 and Quest 3 were “performing well,” calling Quest 3 the “most popular mixed reality device.”

Reality Labs aside, Meta had a strong quarter, reporting $40.1 billion to close out 2023, bringing its total revenue for the year to just under $135 billion. Facebook’s user base also grew to 2.1 billion daily active users (DAUs). Meta CFO Susan Li said that the company was “transitioning away” from sharing the metric and would no longer report on Facebook’s daily or monthly active users or its “family monthly active people.”

The company had shared that it would eventually stop reporting user numbers back in 2019 as Facebook’s growth began to slow. But the change shows how Facebook’s position in the company’s “family of apps” has changed in recent years. A report from Pew Research earlier this week found that Instagram is continuing to grow in the US while Facebook use remains flat.

Meta’s newest app, Threads, is still growing, however. Zuckerberg said the service has 130 million monthly users, up from “just under” 100 million last fall. “Threads now has more people actively using it today than it did during its initial launch peak," Zuckerberg said, referring to the app’s initial, but short-lived, surge in growth.

Zuckerberg also talked more about his newly-stated ambition to create artificial general intelligence, or AGI at Meta, saying it would be the “theme” of the company’s product work going forward. “This next generation of services requires building full general intelligence,” he said. “It's clear that we're going to need our models to be able to reason, plan, code, remember and many other cognitive abilities in order to provide the best versions of the services that we envision.”

The Meta CEO also indicated the company would be unlikely to offer any of its apps in alternative app stores in Europe, following Apple's controversial new developer policies. "The way that they've implemented it, I would be very surprised if any developer chose to go into the alternative app stores," he said. "They've made it so onerous, and I think so at odds with the intent of what the EU regulation was, that I think it's just going to be very difficult for anyone, including ourselves, to really seriously entertain."


Meta's soaring profits just paid for its first-ever dividend

Sarah Jackson
Updated Fri, February 2, 2024 

Meta's soaring profits just paid for its first-ever dividend


Mark Zuckerberg's Meta announced its first-ever dividend in its earnings release Thursday.BRENDAN SMIALOWSKI / Getty Images

Meta says it's going to start paying its first-ever dividend.


The company's earnings blew expectations out of the water on Thursday.


Mark Zuckerberg's social media giant also announced a $50 billion stock buyback.

With profits soaring and its shares hitting record highs, Meta has announced its first-ever dividend.

The company declared a dividend of $0.50 per share in its earnings report Thursday for the fourth quarter and fiscal year of 2023.

The cash dividend will be paid quarterly "subject to market conditions and approval by our board of directors," the earnings release said.

Meta CFO Susan Li said in an earnings call Thursday that the payouts would be regular dividends, pending board approval.

It'll be paid on March 26 to stockholders of record as of the close of business on February 22.

Meta joins other tech firms like Microsoft, Apple, and Oracle in paying a dividend. The company also announced it has authorized a $50 billion buyback boost.

Last February, Meta said it would buy back another $40 billion worth of shares from investors.

Meta's stock was up nearly 14% after-hours Thursday, cruising to a new all-time high.

The company reported $134.9 billion in revenue for the year, up 16% from 2022, and $39.1 billion in net income, up 69% year-over-year.

"We had a good quarter as our community and business continue to grow," CEO Mark Zuckerberg said in the earnings release.