Work From the Office, Get Laid Off at Home
This week, McDonald’s asked corporate employees, who usually work from the office at least three days a week, to do the job from home. The plan was to lay off hundreds of employees, DealBook hears, and the company preferred to deliver its news virtually.
McDonald’s isn’t the only company to tweak the layoff playbook. In January, Google laid off thousands via email. And Mark Zuckerberg, the C.E.O. of Meta, last month announced plans for a year of big cuts in a 2,000-word memo, explaining that Meta staff “wanted more transparency sooner into any restructuring plans.”
Like many work norms, how to fire people is being rewritten in the wake of the pandemic, when downsizing companies often had little choice but to make layoffs via Slack, Zoom and email, and often did so sloppily. With offices open again, and remote work more common, companies now have options — and it’s not necessarily clear what is best for workers.
“If we had this conversation three years ago, I would have said this is cruel and unusual punishment,” said Bob Sutton, a professor at Stanford and the author of “The No Asshole Rule,” about remote firing. “But it’s changed so dramatically since the pandemic that I’m confused.”
The case for virtual layoffs. Cynthia Huang, a senior marketing manager, was laid off from a consumer goods company with a hybrid work policy in February. Because she was working remotely that day, she got the news via a video call; others were let go at the office.
Huang said she preferred getting the call at home. “It felt more comfortable than if I had to physically walk out of the office, have everyone watch me, get all my stuff,” she said.
Laying off people at home may sometimes be more compassionate in the hybrid-work era, Sutton said. “If you call people into the office who don’t go into the office very much to lay them off, it’s kind of weird,” he said.
The case for face-to-face firing. When layoffs are done remotely, managers may not fully feel the human cost of their decisions, Sutton said: It’s “a little bit easy come, easy go.” And with an in-person notice, workers have a chance to say goodbye to co-workers.
Kim Scott, a former Google executive and the author of “Radical Candor,” suggested that awkwardness or embarrassment could be avoided by planning ahead — for instance, having an extra conference room for people to collect themselves and an option to collect belongings after hours.
The medium matters. A video call with your manager beats the impersonal email. “It’s very hard to care personally over email,” Scott said.
And experts question the wisdom of Zuckerberg’s pre-layoff announcement.
“You have to be prepared at the same time to talk to people about both the process that you’re going to go through and what people will get offered if it turns out that their jobs are at risk,” said Sandra Sucher, a professor at Harvard Business School. “Because if you don’t do all the pieces of that at the same time, you’re just introducing a ton of uncertainty into your organization.”
Scott advises a tight window between announcing and executing layoffs. “That makes everybody feel nervous,” she said of the Zuckerberg approach.
But even the most considerate version of letting someone go is still painful. “It just felt very like there wasn’t that, like, human touch,” Huang said about her experience. “But I don’t think that was necessarily because it was virtual versus in person. I think it’s just the nature of a layoff.” — Sarah Kessler
IN CASE YOU MISSED IT
Donald Trump pleaded not guilty to 34 low-level felonies. The charges of falsifying business records are all related to hush-money payments to the porn star Stormy Daniels in 2016. Even if convicted, Trump would not automatically be barred from running for president.
Job growth slowed in March. Employers added 236,000 jobs, the Labor Department reported on Friday, down from an average of 334,000 added over the prior six months. The gradual slowing appears to reflect the impact of rising interest rates, which is good news for President Biden.
Jamie Dimon discussed the banking crisis. In an interview with CNN, the JPMorgan Chase C.E.O. said turmoil caused by the collapse of Silicon Valley Bank and Signature Bank would make a recession more likely. “We are seeing people reduce lending a little bit, cut back a little bit and pull back a little bit,” he said.
Credit Suisse’s leaders mourned the end of their bank. At the Swiss bank’s annual meeting on Tuesday, top officials acknowledged that it would be the last as the firm prepared to be absorbed by its archrival, UBS. Axel Lehmann, Credit Suisse’s chairman, also apologized for the scandals and missteps that had led to the bank’s demise — but shareholder after shareholder bitterly attacked company leaders: “You can almost taste the feelings of distaste and betrayal here today,” one investor said.
LIV Golf players teed off at the Masters Tournament for the first time. A strong showing would be a breakthrough for the league, which is bankrolled by Saudi Arabia’s sovereign wealth fund. The tournament is scheduled to conclude on Sunday, weather permitting.
What if the Twitter board had said ‘no’ to Elon Musk?
A year ago this week, Elon Musk revealed himself to be Twitter’s largest shareholder. Shortly afterward, he signed a deal to acquire the company for $54.20 per share, kicking off months of drama and legal challenges that ended with Musk as the owner.
Since then, he has laid off thousands of workers, made changes that have caused some advertisers to flee and confused users by tinkering with the app, most recently by adding the Dogecoin logo to the site’s home page and blocking the liking or sharing of tweets that contain links to Substack.
But what if the board had rejected the offer? It’s impossible to know for sure, but let’s play it out.
Twitter would have slashed costs anyway. Had his offer been rejected,Musk could have launched a hostile bid. But he also could have simply moved on to other things, cratering Twitter’s stock by selling his shares. In either situation, the board would have been left with one clear task: Get Twitter’s share price to $54.20 — up from roughly $40 on the day before Musk revealed his stake. JPMorgan Chase had already done the math on the board’s behalf, and wasn’t confident that it was possible. Twitter would have had to streamline spending, and years of overhiring was a clear place to start. If the board hadn’t accepted Musk’s offer, it planned to announce significant layoffs at Twitter’s quarterly results in April, a person familiar with the company’s strategy told DealBook.
Ad revenue would have continued to decline. Major advertisers, facing economic uncertainty, have pulled back their spending on digital advertising, which constitutes 90 percent of Twitter’s revenue. Even without Musk at the helm, Twitter’s advertising “would have been decimated,” said Rich Greenfield, an analyst who covered Twitter as a public company — though, he added, “obviously not as bad as what has happened under Elon.” Greenfield estimated that Twitter’s shares would be worth $10 to $20 today.
Other activists may have pounced. If Twitter’s share price dwindled drastically below Musk’s offer price, it would have left Twitter vulnerable to activists pushing for a board shake-up, or for the ouster of Twitter’s recently installed C.E.O., Parag Agrawal. (Musk fired him shortly after acquiring the company.) And they could have pushed for a sale. No real bidders stepped forward to challenge Musk’s $54.20 offer, but if the stock price had halved over the next year, would a deal have emerged with Disney? Comcast’s NBCUniversal? Apollo?
Any of those options would have most likely left shareholders shortchanged compared with Musk’s offer. Society, some have argued, would have benefited. But that’s not whom the board thought it reported to.
31 hours
The average time U.S. workers spend each month in meetings they consider unproductive, according to Zippia, a site that provides job seekers with information about a company’s culture.
The Newsmaker: Ari Emanuel keeps doing deals
Within Hollywood, there are talent agents, and there are entertainment moguls. And then there is Ari Emanuel, the C.E.O. of Endeavor.
On Monday, Endeavor announced an agreement to buy World Wrestling Entertainment at a $9.3 billion valuation, the latest landmark deal in a decades-long career that has elevated Emanuel from a star agent to the chief gatekeeper for a broad array of content and talent.
Emanuel co-founded Endeavor in 1995, famously carrying out a late-night raid for his own office files at International Creative Management. (He is also, famously, the main inspiration for the foul-mouthed agent Ari Gold in “Entourage.”)
He has steadily built up Endeavor with a series of deals: first acquiring the old-guard William Morris Agency, then later striking a deal to buy the IMG agency, which gave Endeavor both a sports agency and a foothold in live events. Just as consequentially, Endeavor bought both Professional Bull Riders and Ultimate Fighting Championship, the latter of which brought mixed martial arts to the masses.
Along the way, Emanuel has assembled an enviable Rolodex that includes Dwayne Johnson, Mark Wahlberg and Elon Musk (while maintaining a notoriously disciplined fitness regimen that reportedly includes daily ice baths and very restrictive diets).
Behind all that deal making is a bet on scale. Endeavor represents talent across books, movies, music, sports, television and theater; distributes and licenses content; and owns live events like M.M.A. matches.
Combining W.W.E. with U.F.C. is meant to create a live-event colossus, with viewing platforms paying handsomely to show the bouts. It will also make Emanuel the C.E.O. of not one but two publicly traded companies: Endeavor, valued at $7 billion, and the united U.F.C-W.W.E., which is valued at $21 billion and will be spun out.
“He’s going back to the playbook,” Brandon Ross, an analyst at LightShed Partners, told Bloomberg. “Ari likes to get bigger.”
