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Crisis-hit CBI plans job cuts to reduce costs after misconduct allegations


The Confederation of British Industry (CBI) is set to lay off a significant number of employees in an effort to reduce its wage bill by a third.

The decision comes as the organization – the leading business lobby group in the UK – faces a crisis stemming from multiple allegations of sexual misconduct.

At an all-hands meeting on Thursday morning, staff members were informed of the need to cut costs, with voluntary redundancies being initially considered.

Read More: CBI to search for new president as it plans to overhaul working culture

A spokesperson for the CBI, which currently employs 300 people, said the organisation needed to make“difficult decisions.”

These include cutting its salary base by a third, along with other “cost-saving measures”.

They said: “It will be a smaller and refocussed organisation in the future.”

“With our prospectus for a renewed CBI now published, we will work with our staff and members on our core mission to help UK business succeed.

“We believe there is a strong basis for our members to continue to back us at our EGM.”

The lobby group recently opened a confidence vote on its future and released a prospectus outlining plans for a reformed culture and governance.

Read More: CBI sacks its director general after investigation into misconduct allegations

The result of the vote is expected to be announced shortly after an extraordinary general meeting with members on June 6.

Rain Newton-Smith, the CBI’s new director general, expressed awareness of the necessary lessons to be learned and emphasized the importance of establishing a strong environment for reporting misconduct.

However, the CBI faces an uncertain future as more than 50 of its high-profile business members have already terminated or suspended their ties with the organization following the allegations of sexual misconduct.

Read More: Audit giant Ernst & Young pulls secondee out of crisis-hit CBI business

Membership fees constitute a significant portion of the CBI’s income, with £22 million out of the total income of £25 million in 2021 coming from memberships.

While some staff members anticipated cost-cutting measures due to the loss of members, the scale and pace of the redundancies have surprised many.

Sources within the organization revealed that employees have been demoralized by the handling of the misconduct scandal, which involved incidents of sexual harassment, assault, and drug use.

Read More: Tesco chairman John Allan resigns after conduct allegations

The impact of individuals’ actions affecting innocent employees has been described as unfair.

Rebuilding support for the CBI, particularly in terms of regaining the government’s attention, is considered a challenging task.

The suspension of engagement from government entities and the Labour party due to the misconduct allegations has made it difficult for the CBI to regain trust.

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However, there remains a business community that may require a platform to voice their concerns and opinions, presenting an opportunity for the CBI to reinvent itself.

The CBI’s board has sought legal advice on restructuring options, including the possibility of insolvency, in recent weeks.

The spokesperson for the organization emphasized the need for the CBI to become smaller and more focused, with the board responsibly considering restructuring options.

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Disney vs DeSantis case judge alleges ‘rank judge shopping’ as he stands aside

Ron DeSantis

A federal judge in Florida has stepped aside from a court case involving Disney and Governor Ron DeSantis.

However, he strongly criticized the governor’s legal team for engaging in “rank judge shopping.”

Chief Judge Mark E. Walker of the US District Court for the Northern District of Florida announced his decision in a ruling on Thursday, June 1. 

Read More: Ron DeSantis wants judge removed in Disney lawsuit

The case, filed by Disney last month, alleges that Governor DeSantis and a government services board at Disney World have engaged in targeted retaliation.

The case has been reassigned to Judge Allen C. Winsor, appointed by former President Donald Trump in 2019. 

Gov. DeSantis’s lawyers had sought to disqualify Judge Walker, who was appointed by President Barack Obama.

They cited remarks he made in unrelated cases regarding DeSantis’s actions against Disney last year. 

They argued that these remarks could create doubts about the judge’s impartiality.

Read More: Disney seeks lawsuit dismissal in ongoing feud with Florida Governor Ron DeSantis

Disney’s lawyers opposed the disqualification request, and Judge Walker agreed with them, ruling that the cited remarks did not raise doubts about his impartiality. 

However, in an unexpected development, Judge Walker recused himself after learning that a relative of his owned 30 shares of Disney stock. 

He said he had no choice but to step aside due to the potential impact on his relative’s financial interest.

Read More: Disney still plans to invest in Florida which could create 13,000 new jobs

DeSantis appointed Charbel Barakat, a Tampa lawyer, and former “Jeopardy!” champion, to fill a vacancy on the board that oversees government services at Disney World. 

The appointment comes amid the ongoing conflict between the governor and Disney. 

The clash began in March 2022 when Disney criticized a Florida education law limiting classroom instruction on gender identity and sexual orientation. 

Since then, Florida legislators, influenced by Governor DeSantis, have targeted Disney with various measures. 

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In February, they granted the governor control over government services at Disney World, ending the company’s self-governance.

The board members appointed by Governor DeSantis discovered that the previous Disney-controlled board had approved contracts that locked in a growth plan for the resort. 

Attempts to void these agreements have led to lawsuits, with Disney suing Governor DeSantis and his allies in federal court, while the governor’s appointees have responded in state court.

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