Slash-and-burn CEOs will find that layoffs backfire

You can’t treat workers like printer cartridges! [Bloomberg]( This is Bloomberg Opinion Today, a bunch of warm bodies surrounding Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - [Layoffs]( are not a game. - LA [rain](? Warming’s to blame. - [Water]( is Tyla’s [claim to fame](. - [Credit card points]( are kinda lame. [It’s Time to Go]( Did you know that mass layoffs weren’t really a thing until [relatively recently](? When my parents and my grandparents joined the workforce, they had few worries about getting told to [pack their bags]( via a generic staff memo. That’s because 50 years ago, if a CEO slashed staff numbers, it was a sign that the company was [in grave danger](. But nowadays, periodic downsizing is as routine a management practice as restocking the printer room. Consider that in 1979, Sarah Green Carmichael says, [less than 5%]( of Fortune 100 companies announced layoffs. By 1994, that figure was [almost 45%](. Sarah’s quick tally of job cuts suggests 58% of companies announced layoffs in 2023, including Citigroup, Goldman Sachs and tech giants Meta, Microsoft and Alphabet. And another 5% have already announced job cuts in the [first month of 2024](. Today, two more major companies joined the fray: [Snap]( announced that it’s laying off 10% of its global workforce, or around 500 employees, and [Estée Lauder]( shares jumped as much as 19% — the most since November 2011 — on the news that it’s slashing as many as 3,000 positions. “The ubiquity of layoffs has convinced a generation of managers that there’s no other way to do business,” Sarah [writes](. But that’s just not true, she explains: “Regular layoffs are a perfect example of a widespread yet deeply corrosive business practice. They hurt people, companies and society.” This time last year, Salesforce’s Marc Benioff was driving a stake through the heart of his so-called “happy work family.” And he dared to [do it again]( this year! There’s seemingly little rationale to these layoffs. Instead, they come around like an annual physical. And despite Big Tech looking healthier than ever, having gained $3.5 trillion [in market value]( in the last year alone, the companies are still determined to shed some extra weight. Sarah says there’s a clear cost to organizations that regularly lay people off. “Managers become lazier about the difficult work of hiring, coaching and giving feedback — just bring on a bunch of warm bodies and let HR cut anyone who doesn’t work out.” And the economy itself grows numb to the practice, leading to a decline in [trust]( between job seekers and corporate America. It doesn’t have to be this way: Listen, I don’t want to write the same exact newsletter a year from now. If my wish comes true, I hope that means the bosses of this world have actually changed their ways. Either that, or the corporate killer came for my job, too. Bonus Work-Life Reading: - The new work-life balance: [Don’t have kids](. How come a growing number of young adults can’t see a way to manage both careers and the demands of parenting? — Sarah Green Carmichael - Scammers used AI to disguise themselves on a workplace Zoom call and swipe $25 million. Here’s [how to avoid the same fate](. — Parmy Olson [Who’ll Stop the Rain]( Source: @evanrosskatz via Instagram In case Miley Cyrus’s [acceptance speech]( at the Grammys wasn’t enough to convince you that the [rainfall]( in Los Angeles was serious, Mark Gongloff [says]( “the clouds outside were dumping more than 4 inches of rain on the city in 24 hours. That’s more than the city usually gets in an entire February.” The [torrential rain]( is being caused by California’s third “atmospheric river” in roughly two weeks. Mark says these “giant firehoses” can hold up to 15 times as much water as the Mississippi — a remarkable amount of precipitation for a state that’s normally in the headlines for droughts, not downpours. Meanwhile, the Eastern Tropical Pacific is experiencing its worst [megadrought]( in a millennium. In Chile alone, [deadly forest fires]( have caused more than 100 deaths. All around the world, the bill for climate disasters is mounting. In 2023, wildfires ravaged Canada, Hawaii and Greece; flooding swallowed Libya and Vermont; and cyclones hit Malawi and Myanmar. “Nature is reminding us that every tenth of a degree of heat we can avoid will be precious,” Mark writes. Earth is about 1.2 degrees Celsius above preindustrial averages, and world leaders at the United Nations want to limit warming to 2C. “At the moment, we’re failing: Current policies have the world on pace for about 2.7C of warming by the end of this century,” Mark warns. Although Miley’s [album]( is called [Endless Summer Vacation]( and she has a track called [River](, I don’t think she meant it literally. [Water]( (Pt. 2) Speaking of the Grammys, did you think I was going to make it through this entire newsletter without mentioning Taylor Swift?! Haha no, of course not. (Although, I will spare you the details of me screaming at the top of my lungs when I heard her announce her [upcoming album](, The Tortured Poets Department.) Nobody knows for sure how many Swifties tuned into the awards show last night, but the [power of her fandom]( is undeniable. Viewership was up +34% from last year, averaging 16.9 million viewers, the largest Grammys audience since 2020. But it wasn’t just the pop star that stole the show. Tracy Chapman received a [standing ovation]( after her heartwarming performance of [Fast Car]( with Luke Combs. The legendary Joni Mitchell [transfixed]( the audience as she sang and thumped her cane on the stage. And 22-year-old Tyla made history as the first-ever winner of the “Best African Music Performance” for her song [Water](. Tyla, who specializes in a [SouthÂ](African dance music form [known as Amapiano](, “has emerged as the face of the genre for non-African audiences,” Bobby Ghosh [writes](. “Months after it was first released, Water — thanks to its popularity on TikTok — was listed on [Billboard’s US Afrobeats Songs]( chart, the only chart for popular African music, where [it is still No. 1](. But it quickly broke out of the category to become a bona fide mainstream hit: It peaked at [No. 7 in the Billboard Hot 100]( in mid-January, and may well get another boost in the chart from Tyla’s Grammy award.” Her success on social media speaks to a larger trend in the music industry. More and more often, new artists will get their “big break” not on stage, but on TikTok. Although a lot of the [dispute]( between the social media platform and Universal Music Group has focused on the catalogs of big artists — hello again, Taylor Swift — musicians with a less robust fanbase have more to gain from viral moments, and Jewel Wicker [says]( they will likely suffer the most. “In recent years, many musicians have found themselves relying on the hope that a calculated or unintentional TikTok trend will catapult their songs into mainstream consciousness when other promotional efforts have grown stagnant or their labels have failed to fund other marketing initiatives,” she writes. Such was the case with Tyla, whose hip-shaking [water bottle dance challenge]( caught the attention of TikTokers around the world. Telltale Charts A lot of people have heard of Brian Kelly, AKA [The Points Guy](. What they probably don’t know that he’s six-foot-seven, which is taller than [the average NBA player](. But it makes so much sense! His entire business — helping people leverage credit cards to get free stuff — was founded on his desire to always fly business class. But do credit-card rewards programs actually pay off? “Points are funded by so-called interchange fees, which are set by networks like Visa or Mastercard and are paid to the bank that issues your credit card out of the sticker price of the thing you are buying,” Paul J. Davies [explains](. The difference between swipe fees and the cost of rewards is worth up to $20 billion each year for American Express and JPMorgan alone. Senator [Dick Durbin]( says these fees hurt small shops and raise prices for consumers. While “Durbin’s main hope of helping ordinary consumers cope with rising costs of living is probably misguided,” Paul says, “rewards, no matter how much you love them, are probably a bad deal for most people.” Whatever happened to the Elon Musk-Mark Zuckerberg cage fight [brouhaha](? Although the two billionaires have yet to step into a ring together, [this chart of their companies]( from John Authers and Isabelle Lee is the second-best thing. “The fight never happened, but financially, Zuckerberg has been inflicting a bruising ever since. Suddenly, the market says Meta is worth more than twice as much as Tesla,” they write. But neither CEO has maintained a perfect image. Sure, Zuckerberg’s tech empire is making investors happy, but Matthew Yglesias [thinks]( his apology to the families of children victimized by sexual predation last week fell short. Musk, meanwhile, is looking distracted. F.D. Flam [says]( his brain-chip startup Neuralink deserves far more scrutiny, and Liam Denning [says]( Tesla’s newly unveiled Cybertruck “may well monetize the odd midlife crisis but seems unlikely to spur an EV revolution.” Further Reading A culture of denial at the UK Post Office created [two decades of misery]( for workers. — Bloomberg’s editorial board Every recent president gets their [Middle Eastern war](, whether they want it or not. — Hal Brands Biden is gonna need more than [barbershops and churches]( to win over Black voters. — Nia-Malika Henderson Mark Zuckerberg’s lawyers may have read Money Stuff and were like “[oh, great idea](.” — Matt Levine The real scandal over the Chevron doctrine is Congress’ [leading role]( in its own disempowerment. — Clive Crook Turkey is on the verge of becoming [investible again]( for foreign investors. — Marcus Ashworth Lionel Messi got [a superstar’s welcome]( in Hong Kong this weekend. — Shuli Ren India’s companies are still run via [a system]( that dates back to British colonial rule. — Andy Mukherjee China’s [surveillance state]( is so powerful not because of technology, but because of people. — Minxin Pei ICYMI King Charles got [diagnosed]( with cancer. The internet [hates]( Southwest Airlines’ [new seats](. Here’s why this [iconic NYC lunch]( now costs $10. This [91-year-old Republican]( wants Trump off the ballot. The 2026 World Cup final is coming to “[New York](.” Kickers The next Stephen Sondheim might be [this TikToker](. Jacob Elordi [allegedly]( had an [altercation]( with a radio producer. Iowa’s [Caitlin Clark]( is college basketball’s biggest star. DoorDash is giving away [EVERYTHING]( advertised during the Super Bowl. Can AI [unlock]( the secrets of the ancient world? Notes: Please send chicken over rice and feedback to Jessica Karl at jkarl9@bloomberg.net. [Sign up here]( and follow us on [Threads](, [TikTok](, [Twitter](, [Instagram]( and [Facebook](. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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