| From: elmatador | 11/14/2022 10:10:07 AM | | | | | | Let’s put the myth of the billionaire genius to rest
 By Helaine Olen
Columnist|Follow
November 11, 2022 at 1:32 p.m. EST
It seems like just last month — because it was just last month — that everyone from Washington insiders to Twitter fanboys were fawning over the pronouncements of billionaire crypto investor Sam Bankman-Fried. He was a “ wunderkind,” the successor to banker J.P. Morgan. Stepping in to save one insolvent crypto company after another, he was feted by VIPs and sought after for his political donations and philanthropic thoughts.
Instead of a prophet of the blockchain future, Bankman-Fried, whose crypto exchange FTX filed for bankruptcy Friday, is increasingly looking like Ozymandias 2.0. From a $32 billion valuation earlier this year, his empire is in a free fall following an exposé of its finances by CoinDesk. (The matter is complicated, but essentially they had the goods showing that Alameda Research, Bankman-Fried’s trading firm, was holding a significant number of crypto coins issued by FTX. This undermined faith in both companies and ultimately led to a run on the crypto bank.)
Rival Binance, which initially said it would take over FTX, his crypto exchange, quickly changed its mind, saying things looked sketchy. A source told the Wall Street Journal that FTX had used customer funds to speculate, and depositors fear they won’t get their money back. Washington regulators ranging from the Securities and Exchange Commission to the Justice Department are sniffing around.
But if the warp speed of what went wrong is unique, one part of this saga is not. Time and time again, Americans fall prey to the myth of the billionaire genius, the man (because it is almost always a man) who is better than us mere mortals, able to solve any business or political or philanthropic problem that comes his way — till, suddenly, he is not.
There’s the ongoing spectacle of Elon Musk, the world’s wealthiest man, who with his seemingly impulsive purchase of Twitter, as my colleague Catherine Rampell memorably put it, set $44 billion on fire.
Musk acolytes insist he knows what he’s doing, but I must say things do not look promising. Musk, the chief executive of SpaceX and Tesla, is seemingly grasping at virtual straws, firing and then un-firing people as he realizes the company needs them, coming up with a head-spinning number of plans to profit from check-mark subscriptions, promoting a plan to turn the service into a fintech, and threatening bankruptcy. High-level staffers are mostly gone, and the Federal Trade Commission is expressing concerns.
Or take Mark Zuckerberg, who was once talked about as a future president — before it became clearer that his company was raking in money by offering a platform for fake news, hate speech and extremist organizing, fomenting political and sometimes literal conflict worldwide.
He’s now also setting money on fire, pouring Facebook funds into a metaverse few want to inhabit. Zuckerberg’s idea of a rethink is to tell his employees “ there are probably a bunch of people at the company who shouldn’t be here,” before axing 11,000 mostly non-metaverse-oriented employees this week.
As for Bankman-Fried, the now 30-year-old former billionaire went from anonymity to celebrity seemingly overnight, with his halo of unruly hair recently gracing the cover of Fortune. “The next Warren Buffett?” the tagline read. He became a political megadonor, pouring millions of dollars into mostly Democratic campaigns, till, suddenly, his wallet snapped shut. He claimed, when asked, “ I think primaries are more important.” It now seems possible something more was going on.
I’m not denying that some billionaires are brilliant entrepreneurs. But they are way less special than they are frequently told. (Some are just heirs, or lucky Powerball winners.) As our men of business become more prominent and wealthier, they enter a feedback loop.
Sycophants flatter instead of challenging them. This impacts their ability to hear criticism. And that leaves them more likely to cling to toadies who feed their now inflated self-image. All too often, the end result is ever larger mistakes and more ethically dubious behavior.
Nonetheless, it remains as American as apple pie to look up to these titans of wealth. The period before the Great Recession saw CEOs and bankers anointed as voices of wisdom. (This year brought not one but two books on late General Electric CEO Jack Welch, once celebrated, now thought to have led his company — and our economy — over a financial cliff.)
The financial catastrophe of 2008, which you might have thought would have put an end to this peculiarly American form of worship, just gave us a new round of would-be saviors. Heck, we even elected a billionaire — or a man who claimed to be one — as president. He has gone on to wreak political havoc every day since.
It would be nice to think that Bankman-Fried’s sorry tale would finally put an end to this once and for all. But I wouldn’t, er, bank on it. We lack hereditary kings in this country, but celebrity worship combined with our admiration for money-making frequently leads us astray — even when, as in the FTX case, the billionaires’ real superpower is turning your cash into fool’s gold. |
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| From: elmatador | 11/14/2022 12:56:06 PM | | | | | | Amazon Set to Lay Off 10,000 Employees (Report)
By Todd Spangler
Facing a slowdown in sales, Amazon plans to lay off about 10,000 employees in corporate and technology positions, starting as soon as this week, the New York Times reported.
Citing anonymous sources, the Times reported that the layoffs will be concentrated on Amazon’s devices group, including the Alexa voice assistant, along with its retail and HR groups.
The job cuts — which would be the largest in Amazon’s history — would represent about 3% of corporate headcount.
The layoffs would represent less than 1% of Amazon’s total employee base of more than 1.5 million, mostly comprised of hourly workers.
Amazon did not respond to a request for comment. The reported job cuts at Amazon come after other tech companies have axed their workforces, including Meta, Snap and Twitter.
Even with the layoffs in corporate jobs, Amazon last month said it intends to hire 150,000 employees throughout the U.S. in full-time, part-time and seasonal roles across its operations network to handle the expected 2022 holiday-shopping surge. The ecommerce giant expects revenue growth to slow down considerably in Q4, projecting net sales for the year-end quarter to be between $140 billion and $148 billion, or to grow between 2% and 8% compared with Q4 2021.
Per the Times report, Amazon two weeks ago froze corporate hiring across the company including the AWS cloud computing division for the next few months.
In announcing Q3 earnings, Amazon CEO Andy Jassy said the company has “a set of initiatives that we’re methodically working through that we believe will yield a stronger cost structure for the business moving forward.“
“There is obviously a lot happening in the macroeconomic environment, and we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets,” Jassy said |
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| To: DinoNavarre who wrote (9918) | 11/15/2022 8:36:24 AM | | From: elmatador | | | | Tech lay-offs teach us a lesson about the ‘war for talent’
Benevolent workplace dictatorships can seem fine until they’re not so benevolent any more
Sarah O’Connor
Tue Nov 15 2022 - 11:42
Once upon a time, young graduates thought they had a choice to make: they could become rich but miserable in an investment bank or law firm, or they could live without a huge salary but do something more fun.
Then the big technology companies came along. Suddenly, it was possible for someone with a certain set of skills to have fun and get rich at the same time.
The tech firms seemed to represent a less hierarchical world of work where everyone wore jeans and T-shirts and merit was what mattered most. The salaries were high and the stock options plentiful.
If you were lucky, your employer would also take care of the boring parts of life, doing your laundry for you, cooking you meals and taking you home at night. This year, tech companies accounted for five of the top 10 places to work in the US based on employee reviews on Glassdoor.
Policymakers and economists soon came to see tech workers as the archetypal winners of the 21st century economy: firmly at the “lovely” end of the growing gap between “lovely” and “lousy” jobs.
When some employees in the sector tried to unionise, the response from companies and investors was often to argue these were already dream jobs, so what was the point?
As one investor put it, tech workers trying to unionise were “appropriating the language of exploited coal miners while enjoying the most privileged, white-collar work experience in human history”.
Tech companies might have offered amazing perks, but people don’t need dream jobs as much as they need jobs that treat them decently
That story has been punctured by a series of mass lay-offs by tech companies in recent weeks. Meta has sacked 11,000 workers or 13 per cent of its workforce.
Elon Musk, Twitter’s new owner, has reduced the group’s headcount by half. Amazon plans to cut about 10,000 jobs, while Stripe, a private payments company, culled 14 per cent of workers. It has been a brutal experience for staff.
In most cases (Twitter is a somewhat different story) the job cuts are the reversal of a recent hiring binge. Tech companies had bet on the continuation of an unusual macroeconomic environment that was in fact about to end.
Consumers are no longer confined to their homes with only ecommerce to spend their money on. Interest rates are no longer at rock bottom.
Elmat NOTE: Covid kept people at homes WITH MONEY to spend !
It’s hardly the end of these companies. Meta still has more staff than it did last year. But the mass lay-offs do offer a couple of lessons.
The first is that, whether or not everyone is wearing jeans, many tech companies are highly autocratic. It was striking – and refreshing – to see chief executives take personal responsibility for the lay-offs. But it was also a reminder of how much power they have.
At Meta, for example, investors have been increasingly frustrated by how much money chief executive Mark Zuckerberg was sinking into the “metaverse”. But Meta’s dual share structure allows him, with 13 per cent of the equity, to control more than half the votes.
“I made the decision to significantly increase our investments,” Zuckerberg wrote in a memo to staff last week. “I got this wrong, and I take responsibility for that.”
The speed of the lay-offs by these global companies has also crashed into the spirit of employment law in the UK and Europe.
For employees, the experience underlines the fact that benevolent dictatorships can seem fine until they’re not so benevolent any more
“In many countries around Europe, you need to give warnings to public administrations or works councils or trade unions, even if the company is not unionised, you have to have a plan that mitigates the social impact of your choices,” says Valerio De Stefano, a professor at Osgoode Hall Law School in Toronto.
The idea of these laws is not to prevent companies from making lay-offs, he says, but to make sure they happen fairly and with due warning. “We have a very rude awakening now, it is happening without any control or consultation, just someone who says: ‘Sorry, it’s my fault’.”
For employees, the experience underlines the fact that benevolent dictatorships can seem fine until they’re not so benevolent any more. Even people who have kept their jobs are seeing some benefits change.
At Twitter, Musk has announced that everyone must work at least 40 hours in the office, upending life for people who had planned on remote work.
Trade unions hope the lay-offs will help them to make the argument that unions are not just about trying to improve poor working conditions, but also about having a real voice and a seat at the table.
Mike Clancy, the general secretary of UK union Prospect, says the union has some members at Twitter and hopes to recruit more in the tech sector. “There’s often a progressive veneer – we’re all techies together,” he says. “[The] whole ambience is one of ‘we offer a different employment proposition’ – no, you don’t when it comes to jettisoning labour, do you?”
The other lesson is not to get too carried away with self-regarding language about the “war for talent”, which was ubiquitous in the tech sector until recently.
There are talented people in all walks of life. What matters for pay is supply and demand. Low-paid workers in the US have been getting big pay rises in nominal terms this year. No one is calling that a “war for talent”; they are calling it a “labour shortage”.
Tech companies might have offered amazing perks, but people don’t need dream jobs as much as they need jobs that treat them decently. The thing about dreams is that they disappear when you wake up.
– Copyright The Financial Times Limited 2022 |
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