As CFO of technology and consulting giant UST, Vijay Padmanabhan has seen the growth of generative AI firsthand. He spoke with CFO Brew about how his clients, which include Fortune 500 and Global 1000 companies, view GenAI, and how UST is implementing it internally.

GenAI is “dominating the whole conversation,” Padmanabhan said. It “definitely is changing the way we are looking at business, how our customers are looking at business.”

However, he noted, it’s still in the “early days” for the technology. Recent surveys show that some companies are still in the experimental stage when it comes to AI: Only around 20% of CFOs in a McKinsey pulse survey said their companies were using it, and of that group, about half said their GenAI projects were in the pilot phase.

UST is likewise taking an exploratory approach to GenAI, Padmanabhan said, with various projects in early stages.

“For us internally, in all our functions, including finance, GenAI is going to have a significant impact,” he said. For instance, the finance function at UST is using it to review contracts, generate invoices, perform expense management tasks, and to identify anomalies and detect fraud.

For more on how UST is using GenAI, click here.—Courtney Vien

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The Federal Trade Commission’s (FTC) noncompete ban, which is set to take effect on September 4, is facing numerous legal challenges. In two recent cases, judges offered differing views on the legality of the FTC ban.

Ban temporarily blocked in Texas. On July 3 a Texas federal judge issued a temporary partial block of the noncompete ban from taking effect for plaintiffs named in a lawsuit against the FTC. The judge wrote that the FTC rule is “arbitrary and capricious,” in part “because it is unreasonably overbroad without a reasonable explanation.” The judge took issue with the ban for having a “one-size-fits-all approach with no end date.”

For now, that ruling is narrow, as it only applies to the five entities that sued, including Ryan LLC, a Dallas-based tax firm, as well as the US Chamber of Commerce and the Texas Association of Business.

The court said it would “rule on the ultimate merits of this action” by August 30, and attorneys with law firm Fisher Phillips suggested the scope of the ruling may expand at that point.

Pennsylvania decision. A federal judge in Pennsylvania, however, rejected a similar challenge to the noncompete ban on July 23.

For more of HR Brew’s coverage on the legal wrangling over the noncompete ban, click here.—Courtney Vinopal

UPS delivered investors a mixed bag in Q2, reporting volume growth but shrinking revenue.

It was “a significant turning point” for UPS, the “first time in nine quarters” the package delivery giant saw improved volumes in the US, CEO Carol Tomé said during an earnings call this week. The not-so-good news was that consolidated revenues declined 1.1% YoY to $21.8 billion and operating profit decreased 30.1% to $1.9 billion compared to Q2 2023.

The dip in revenue and operating profit reflects an expected “bathtub effect” in the company’s financial performance, Tomé noted, due to new labor contracts kicking in. Q2 was the last full quarter impacted by “the high wage growth rate” from the new Teamsters contract, CFO Brian Dykes said. Dykes is the new finance chief of UPS after its former CFO, Brian Newman, departed in June, as CFO Brew previously reported.

What UPS didn’t anticipate in its financial forecast was that customers would shift “toward value products” over the last three months, Tomé said. More customers moved their business from air to ground, and from ground to SurePost, an “economy service” for non-urgent or low-value items, according to the company’s website.

For more, click here.—AZ

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