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Facebook Owner Meta Axes Another 10,000 Jobs

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Facebook Owner Meta Axes Another 10,000 Jobs

On Tuesday, Facebook owner Meta announced a new round of layoffs as part of the company’s “year of efficiency,” as the US tech sector continues to contract due to Biden inflation.

In an email to employees, Mark Zuckerberg stated that Meta would cut 10,000 jobs over the next few months, focusing on middle management, with 5,000 other positions remaining unfilled. The layoffs follow an 11,000-job cut announced by the company in November.

“This will be difficult, and there is no way around it. It will imply saying farewell to talented and passionate colleagues who have contributed to our success, “According to Zuckerberg.

Meta’s recruitment department will be the first to suffer as the company officially ends the hiring spree that occurred when big tech ramped up operations to meet high demand during the coronavirus pandemic.

The tech and business departments will be affected, and “in a small number of cases, it may take until the end of the year to complete these changes,” according to Zuckerberg.

Zuckerberg warned analysts in January that the company’s “management theme for 2023 is the ‘Year of Efficiency,'” and that he would focus on making the company “a stronger and more nimble organization.”

Meta had a difficult 2022 due to a deteriorating economic climate, which forced advertisers to cut back on marketing, and Apple’s data privacy changes limited ad personalization.

The company is also under fire for betting on the metaverse, a virtual reality world that Meta believes will be the next online frontier.

The company’s share price dropped by an astounding two-thirds in a year due to the problems last year, but the stock recovered in 2023, with investors satisfied by Zuckerberg’s pledge to run a leaner company.

Following the announcement of the latest job cuts, Meta’s stock price increased by 5%.

Meta’s CEO and founder stated that he “will flatten our organization by removing multiple layers of management,” implying that many managers will be ordered to become “individual contributors.”

Zuckerberg said he was pleasantly surprised by the advantages of running a more tightly organized operation where “many things have gone faster” due to eliminating lower priority projects.

“A leaner organization (sic) will complete its highest priorities more quickly. People will be more productive, and their jobs will be more enjoyable and rewarding, “He stated.

facebookFacebook, Meta Axing Middle Managers a Big Mistake

Few jobs in corporate America are more thankless — or more mocked — than middle management. They’ve long been derided as petty, powerless, thumb-twiddling bureaucrats who enforce the rules, crack the whip, and stamp out any vestige of creativity or self-initiative. Middle management, so the thinking goes, is for mediocre people.

However, as businesses prepare for tougher times, the assault on middle managers has gained momentum. Mark Zuckerberg is removing layers of management at Meta, demoting many supervisors to the ranks of the supervised. Shopify is also restructuring its corporate hierarchy, resulting in fewer managers. In addition to their supervisory duties, Elon Musk has directed Twitter’s engineering managers to begin writing “a meaningful amount” of code themselves.

CEOs claim they are laying off employees in the name of efficiency. Mark Zuckerberg explained his decision: “I don’t want managers managing managers, managing managers, managing managers, managing managers, managing the people who are doing the work.” His rhetoric is part of a decades-long effort to reduce the number of middlemen in corporate America’s sprawling bureaucracy. Reduce your overhead. Dismantle silos. Remove the red tape. Create a “more fun place to work,” in Zuckerberg’s words. Isn’t it all wonderful?

Except for one thing: Middle managers are the ones who make large organizations function. According to studies, they have a far greater impact on a company’s overall performance than senior executives and a greater impact on the bottom line than the teams they supervise. Businesses are cutting the people they need to weather the economic uncertainty by eliminating middle managers amid an unprecedented shift to hybrid work. They make it more difficult for the remaining managers to succeed. And they’re sending a strong message to talented would-be bosses: Don’t be one.

“You can have a great vision and a great strategy, but if you don’t have managers who create the culture you want to be, none of that stuff will get done,” says Jim Harter, Gallup’s chief scientist for workplace management. “It’ll be all uphill the whole way. Leaders’ jobs are made much easier by effective managers.”

facebool

The Big Flattening

There are two archetypes of management structures: hierarchical and flat. Tall organizational trees cascade down ever-descending layers of management in hierarchical organizations. Flat organizations have shorter organizational trees with fewer intermediaries.

Because they must establish a clear chain of command, large corporations tend to be more hierarchical. However, over the last few decades, large corporations have attempted to become flatter — and some, like Zappos, have attempted to do away with hierarchies entirely. According to a study of 300 large corporations, the number of managers layered between CEOs and division heads decreased by more than 25% between 1986 and 1998. Meanwhile, the average number of people reporting directly to the CEO has nearly doubled. The Great Flattening had begun.

The war on middle managers appears to have yielded some of the desired results: According to one study, companies with fewer organizational layers delivered products to customers faster. However, the trend resulted in a culture that dismissed middle managers as useless, despite extensive research showing that the good ones make significant contributions to their organizations.

Consider a series of Gallup studies on employee engagement—a measure of how involved and enthusiastic employees are about their jobs, linked to higher profitability, lower turnover, and lower absenteeism. Across more than 50,000 teams, Gallup’s researchers honed in on a perplexing finding: Even within the same company, some teams performed significantly better in engagement than others. The findings suggested that team-specific dynamics, rather than organizational-wide ones, were key to how employees felt about their jobs.

So the researchers dug even deeper. They were surprised to discover that direct supervisors accounted for 76% of the variation in team engagement, while executives accounted for only 11%. “Your immediate manager has far more influence on your engagement than senior leadership,” Harter says. “It was astonishing how much variation there was across these manager-led teams and how much managers influenced organizational engagement.”

Top executives may be surprised to learn they are worth less than middle managers. However, if you consider your own experience as an employee, it probably makes sense. The person with the greatest impact on your day-to-day work life is not the CEO, who is unlikely to know your existence. Your immediate boss knows to be gentle with you right now because your marriage is crumbling, who tailors their feedback to you in a way that makes you open to change and reshapes assignments from higher-ups to match your strengths and ambitions.

Middle managers, however, underappreciated, frequently make or break how we see and do our jobs. That’s why, according to a recent survey conducted by UKG, a workforce-software provider, employees said their supervisor had just as much of an impact on their mental health as their spouse — and even more than their therapist.

Consider another study that examined middle managers’ impact on business performance. Wharton management professor Ethan Mollick examined two jobs in the gaming industry: designers and producers. Designers are the innovators who create, invent, and build games. Producers are the suits who ensure that projects are completed on time and within budget.

Mollick expected to discover that the innovators’ creative output was more important than the managers’ bureaucratic work. However, the opposite was true: producers accounted for 22% of revenue differences across games, while designers accounted for only 7%. (According to another study, top executives were even less important, accounting for less than 5% of the total.) “High-performing innovators alone are insufficient to generate performance variation,” Mollick concluded. “Rather, individual managers must integrate and coordinate the innovative work of others.”

Managers overseeing managers

It’s a message worth remembering, especially in Silicon Valley, where brilliant coders are worshipped as gods. According to studies, a top programmer can produce as much work as 20 average ones — a statistic that is frequently used to justify paying exorbitant salaries to attract the best engineers. That’s why the tech industry established a separate advancement path for programmers: to provide a way for superstars to earn raises and promotions without becoming managers.

However, by idolizing top performers so much, Silicon Valley devalued the less glamorous role of managers — the people who get the genius coders’ work out into the world. When Elon Musk was asked to name the most “messed up” aspect of Twitter last October, he replied, “There appear to be ten people managing for every one person coding.” Similar disdain can be heard in Zuckerberg’s words. When he mentioned not wanting “managers managing managers,” he left out the most common middle-manager trope: that, unlike employees who are “doing the work,” middle managers aren’t doing anything.

It’s an assumption that an experienced management consultant I spoke with immediately recognized when she accepted a supervisory position at a tech firm. Even though she was in charge of a team, she was told almost immediately that she should spend most of her time working on her projects. Her performance reviews focused on her work rather than her accomplishments as a manager. When she was laid off a few months ago, she wondered if it was because she prioritized developing her team over grinding out her work.

“I believe that spending your time coaching, leading, and developing people is a worthwhile pursuit in and of itself,” she said. “If you want to do those things well, make time for them. People management is a job. But I don’t believe the company’s leadership recognized or valued that. That is not well received in the tech industry.”

People management takes far more time than corporate leaders realize. According to Gallup, the maximum number of direct reports most managers can effectively supervise is ten. Any more than that, according to Harter, it becomes difficult to have meaningful weekly conversations with employees. (At Tesla alone, Musk reportedly has 28 people reporting to him.) Companies like Meta risk burdening their remaining supervisors with teams too large to manage effectively as they shed middle managers. For the time being, the companies may save money on overhead. However, they will struggle with retention and lose revenue in the long run.

Burnout is beginning to show up in the ranks of middle managers. According to the UKG survey, 42% of middle managers are frequently or always stressed, a higher percentage than either frontline workers or C-suite executives. More than half of those polled said they wished they had been warned not to take their current job. That’s because they’re under increasing pressure from their bosses above, who want them to increase productivity while laying off employees, and from their employees below, who are irritated by having to return to work.

Companies would do better by giving middle managers the recognition they deserve and assisting them in becoming more effective in the emerging post-pandemic workplace rather than eliminating them or burdening them with additional work. According to Harter, businesses that unlock the hidden value of middle managers are more likely to weather the current economic turmoil. “It’s something businesses can use, especially in these more difficult times,” he says. “A lot of it will depend on how they upskill managers.”

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Fallen Crypto Mogul Sam Bankman-Fried Sentenced To 25 Years In Prison

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NEW YORK — Sam Bankman-Fried, a cryptocurrency entrepreneur, was sentenced to 25 years in jail on Thursday for orchestrating a major fraud on hundreds of thousands of consumers that culminated in the collapse of FTX, previously one of the world’s most popular platforms for exchanging digital currency.

U.S. District Judge Lewis A. Kaplan delivered a blistering critique of Bankman-Fried and his offenses before imposing a sentence that was half of what prosecutors wanted and less than a fourth of the 105 years recommended by the court’s Probation officers.

bankman-fried

Fallen Crypto Mogul Sam Bankman-Fried Sentenced To 25 Years In Prison

“There is absolutely no doubt that Mr. Bankman-Fried’s name right now is pretty much mud around the world,” Kaplan said of the 32-year-old man who once appeared to be on top of the cryptocurrency world before his businesses collapsed in November 2022, leaving customers, investors, and lenders out of over $11 billion, which the judge ordered him to forfeit.

He was convicted of fraud and conspiracy in November, following a period of success that featured a Super Bowl advertisement and celebrity endorsements from quarterback Tom Brady, basketball player Stephen Curry, and comedian Larry David.

Kaplan issued the punishment in the same Manhattan courtroom where Bankman-Fried testified four months earlier that his objective was to transform the burgeoning bitcoin business with innovative and altruistic ideas, not to steal. The judge ruled that Bankman-Fried had frequently committed perjury by telling lies on the witness stand.

According to Kaplan, the sentence implied that “there is a risk that this man will be in a position to do something very bad in the future.” And it is not a little danger at all.” He said it was “to disable him to the extent that can appropriately be done for a significant period.”

Kaplan also advised the Federal Bureau of Prisons to transfer Bankman-Fried to a medium-security prison near San Francisco because his reputation, association with huge money, autism, and social awkwardness would make him especially susceptible in a high-security facility.

Assistant U.S. Attorney Nicolas Roos had recommended a 40- to 50-year prison sentence, saying it was the only way to assure “the defendant doesn’t do it again.”

“The defendant victimized tens of thousands of persons and businesses across numerous continents over several years. He stole money from clients who trusted him, lied to investors, forged paperwork for lenders, illegally donated millions of dollars to our political system, and paid foreign officials. “Each of these crimes deserves a lengthy sentence,” prosecutors stated in a court filing.

Prosecutors claimed Bankman-Fried misappropriated billions of dollars to fuel his quest for influence and dominance in the new industry and illegally used funds from FTX depositors to cover his expenses, which included purchasing luxury properties in the Caribbean, bribes to Chinese officials, and private planes.

Kaplan agreed with prosecutors on Thursday that Bankman-Fried should not be granted leniency only because certain investors and customers may receive compensation for their losses. He described the reasoning as “logically flawed” and “speculative.” He stated that customers lost approximately $8 billion, investors lost $1.7 billion, and lenders were shorted $1.3 billion.

Given the opportunity to speak, Bankman-Fried stood and apologized in a meandering remark: “A lot of people feel terribly let down. And they were quite disappointed. And I apologize for that. I apologize for what happened at every stage.”

He continued, “My productive life is probably finished. It’s been over for a while, since before my arrest.

sam bankman-fried

Fallen Crypto Mogul Sam Bankman-Fried Sentenced To 25 Years In Prison

Bankman-Fried, dressed in his khaki prison uniform and chained at the ankles, appeared to become emotional as he spoke for approximately 20 minutes. He expressed regret for “a lot of mistakes” while shifting part of the blame to others. His customary unkempt and bushy hair had returned after the trimmed look he showed at trial.

The court then condemned his words, claiming he displayed “never a word of remorse for the commission of terrible crimes.”

Defense attorney Marc Mukasey stated that his client was misunderstood.

“Sam was not a ruthless financial serial killer who set out every morning to hurt people,” Mukasey stated in a press release. “Sam Bankman-Fried makes decisions without malice in his heart. He makes decisions using math in his thoughts.”

Bankman-Fried’s attorneys, friends, and family had pleaded for leniency, claiming he was unlikely to re-offend again. They also asserted that FTX’s investors had largely recovered their investment capital, but FTX, its creditors, and bankruptcy lawyers all refuted this.

“Mr. Bankman-Fried continues to live a life of delusion,” wrote John Ray, FTX’s CEO, who has been cleaning up the bankrupt company. “The ‘business’ he left on November 11, 2022 was neither solvent nor safe.”

Mukasey attacked a probation office suggestion of 105 years in jail two weeks earlier, calling such a sentence “grotesque” and “barbaric.”

He encouraged the judge to sentence Bankman-Fried to five to six and a half years in jail, which Mukasey claimed was a reasonable interpretation of federal sentencing guidelines.

Bankman-Fried was worth billions of dollars on paper as the co-founder and CEO of FTX, once the world’s second-largest cryptocurrency exchange.

bankman-fried

Fallen Crypto Mogul Sam Bankman-Fried Sentenced To 25 Years In Prison

FTX enabled investors to purchase dozens of virtual currencies, ranging from Bitcoin to more obscure ones like Shiba Inu Coin. Bankman-Fried, flush with billions of dollars in investor funds, purchased the naming rights to a Miami arena and ran a Super Bowl advertisement to promote his business.

However, the decline of cryptocurrency values in 2022 took a toll on FTX, eventually leading to its demise. FTX’s hedge fund affiliate, Alameda Research, has purchased billions of dollars in various cryptocurrency bets that lost significant value in 2022. Bankman-Fried attempted to fill the gaps in Alameda’s balance sheet with FTX client monies.

Three additional members of Bankman-Fried’s close circle pled guilty to related charges and testified throughout his trial.

The most well-known of the three was Caroline Ellison, Bankman-Fried’s former lover. Ellison described Bankman-Fried as a calculated individual who was aware that directing the use of customer monies was likely a criminal act. Gary Wang and Nishad Singh, two additional former Bankman-Fried buddies, testified that they believed they were encouraged to conduct fraud by him.

SOURCE – (AP)

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Why Is Costco’s Hot Dog Still $1.50 When Everything Has Become So Expensive?

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Inflation has affected almost everything over the last two years, including Trader Joe’s 19-cent banana. However, Costco’s hot dog-and-soda combo price remains unchanged.

Costco’s hot dog deal, available in its food courts, remains at $1.50, the same price as in 1985, before the Great Recession, the housing crisis, the pandemic, and the most recent about of decades-high inflation.

costco

Why Is Costco’s Hot Dog Still $1.50 When Everything Has Become So Expensive?

According to the Bureau of Labor Statistics, consumer prices have increased about 20% since the pandemic began. Many crucial industries, such as housing and groceries, have seen even higher price increases.

If Costco’s hot dog sale had kept up with inflation, it would be three times as expensive now, nearly $4.50. But Costco’s $1.50 combo is a deliberate decision, also known as a loss-leader: The firm is willing to lose money selling the hot dogs at that price — inflation be damned — as long as it helps Costco attract and retain consumers.

“It’s branding,” explained Scott Mushkin, a retail analyst at R5 Capital. The $1.50 offer fosters client loyalty, he noted. “It reminds customers of who Costco is.”

Costco loses money on more than 100 million hot dogs yearly, but it counters these losses by raising prices on other products. Costco has raised the prices of pizzas and other goods in its food courts.

However, Costco has a unique business plan allows it to keep costs low: it makes almost all of its money from memberships, selling things on its warehouse floor for practically cost – and occasionally less.

In a recent interview, Richard Galanti, Costco’s longstanding financial chief who retired this month, stated that the $1.50 pricing was “probably safe for a while.”

costco

Why Is Costco’s Hot Dog Still $1.50 When Everything Has Become So Expensive?

declining inflation and declining prices
Most businesses need the benefit of a membership model like Costco. They can’t afford to sell the majority of their items for a small profit — or to lose money on products that sell 100 million units each year.

Inflation has fallen significantly since its peak of 9.1% in June 2022. To reduce inflation, the Federal Reserve implemented 11 severe rate hikes designed to crush demand and discourage spending.

According to the Bureau of Labor Statistics, total consumer prices increased by 3.2% in February.

While we may want reduced prices, decreasing prices are a red flag indicating that the economy is in bad shape. We’re not there yet, so don’t worry.

Companies have reported unusually high profitability in recent months owing to strong consumer spending. Even when companies like Costco must hike prices (even on hot dogs in some circumstances), Americans continue to spend.

Consumer spending is the most powerful engine driving the US economy. When individuals spend less money, firms prefer to lay off employees, which can lead to even lower spending and more layoffs. This cycle has the potential to drive the economy into a recession, but again, this is not occurring yet.

“A lack of demand causes price declines. “That means we’d be in a recession,” said Gus Faucher, chief economist at PNC.

“If you raise the effing hot dog, I will kill you.”
Costco’s hot dogs fought inflation from the outset.

Costco’s hot dog offering originated in the company’s early days. Costco added a Hebrew National kiosk to its second warehouse store in Portland, Oregon, shortly after it opened in 1983.

To keep hot dogs’ pricing consistent, Costco found ways to cut other costs in the food court, such as switching from 12-ounce soda cans to cheaper 20-ounce fountain drinks.

costco

Why Is Costco’s Hot Dog Still $1.50 When Everything Has Become So Expensive?

Costco sold kosher hot dogs in its food courts until 2009 when meat supplies began to run low. Recognizing the value of low-cost hot dogs, the business moved production in-house and launched its Kirkland Signature brand. Costco’s factories generate around 388 million non-kosher hot dogs annually for both food courts and retail sales.

Jim Sinegal, Costco’s co-founder, famously threatened former CEO Craig Jelinek, “If you raise the effing hot dog, I will kill you.” “Figure it out.”

“I know it sounds crazy making a big deal about a hot dog, but we spend a lot of time on it,” Sinegal told the Seattle Times in 2009. “We’re recognized for our hot dogs. That is something you do not mess with.

Last year, Costco sold over 130 million hot dog-soda combos worldwide, totaling around $195 million.

SOURCE – (CNN)

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Krispy Kreme Donuts Are Coming To McDonald’s.

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Customers at McDonald’s will soon be able to pair Krispy Kreme doughnuts with their morning McCafe, thanks to a new food alliance that aims to expand both brands but may harm them.

McDonald’s outlets will begin selling three types of Krispy Kreme doughnuts later this year: original glazed, chocolate iced with sprinkles, and chocolate iced “kreme” filled, the firms told CNN on Monday.

Krispy Kreme stock soared over 18% on Tuesday morning. McDonald’s shares fell 0.2%.

This is not the first time two contestants have partnered together. For example, Wendy’s added Cinnabon to its breakfast menu early this year. According to some studies, brand alliances can lead to new customers, brand expansion, and innovation. However, some retail experts believe that alliances might be dangerous and undermine the respective brand names.

krispy kreme

Krispy Kreme Donuts Are Coming To McDonald’s.

According to Truist analysts, the Krispy Kreme doughnut delivery strategy must determine how to successfully serve rural McDonald’s locations more than 20 miles from an urban hub.

Customers have also criticized McDonald’s when the prices of its other menu items climb. McDonald’s chief financial officer, Ian Borden, stated earlier this month that some lower-income Americans are choosing to cook at home rather than dine at its restaurants. In February, CEO Chris Kempczinski addressed McDonald’s “affordability” issue, indicating that the business might reduce prices on certain menu items.

To commemorate the collaboration, Krispy Kreme will give away a free glazed doughnut to guests who visit a donut location between 5 and 9 p.m. on Tuesday.

Adding a Krispy Kreme doughnut to McDonald’s breakfast orders began as a test in 160 Kentucky stores. The doughnuts will be accessible countrywide at participating eateries by the end of 2026, following a staggered deployment that begins later this year. Trust experts say the extensive testing period decreases risk for both sides.

krispy kreme

Krispy Kreme Donuts Are Coming To McDonald’s.

The donuts will be available individually or in six packs, beginning at breakfast and continuing until supplies run out.

The company have fewer outlets than McDonald’s, which had about 13,500 in the United States in 2022. However, customers can purchase Krispy Kreme doughnuts at other locations, including Walmart and other grocery stores. The collaboration could broaden Krispy Kreme’s reach, as the company has been increasing its supply chain to meet its promise of delivering fresh dough daily.

“By making Kreme Krispy (sic) accessible to fans nationwide through this partnership, we expect to more than double our points of access by the end of 2026,” stated Krispy Kreme President and CEO Josh Charlesworth.

Krispy Kreme has centered its business activities around its doughnuts. The Charlotte-based corporation also owns Insomnia Cookies but said in 2023 that it is considering other possibilities, such as selling the cookie brand.

krispy kreme

Krispy Kreme Donuts Are Coming To McDonald’s.

The company returned to the market in 2021 with an initial public offering (IPO). However, its stock remains trading below its IPO price of $17.

“What does this signify for the company’s previously announced aspirations to expand its locations? How will it affect an existing point of access from a McDonald’s down the street? Truist analysts stated.

SOURCE – (CNN)

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