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Business

Here are the companies that have laid off employees this year

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New York
CNN
 — 

Just this week, Alphabet, Google’s parent company, Microsoft

(MSFT) and Vox Media announced layoffs that will affect more than 22,000 workers.

Their moves follow on the heels of job cuts earlier this month at Amazon, Goldman Sachs and Salesforce. More companies are expected to do the same as firms that aggressively hired over the last two years slam on the brakes, and in many cases shift into reverse.

The cutbacks are in sharp contrast to 2022, which had the second-highest level of job gains on record, with 4.5 million. But last year’s job numbers began falling as the year went on, with December’s job report showing the lowest monthly gains in two years.

The highest level of hiring occurred in 2021, when 6.7 million jobs were added. But that came on the heels of the first year of the pandemic, when the US effectively shut down and 9.3 million jobs were lost.

The current layoffs are across multiple industries, from media firms to Wall Street, but so far are hitting Big Tech especially hard.

That’s a contrast from job losses during the pandemic, which saw consumers’ buying habits shifting toward e-commerce and other online services during lockdown. Tech firms went on a hiring spree.

But now, workers are returning to their offices and in-person shopping is bouncing back. Add in the increasing likelihood of a recession, higher interest rates and tepid demand due to rising prices, and tech businesses are slashing their costs.

January has been filled with headlines announcing job cuts at company after company. Here is a list of layoffs this month – so far.

Google

(GOOGL)’s parent said Friday it is laying off 12,000 workers across product areas and regions, or 6% of its workforce. Alphabet added 50,000 workers over the past two years as the pandemic created greater demand for its services. But recent recession fears has advertisers pulling back from its core digital ad business.

“Over the past two years we’ve seen periods of dramatic growth,” CEO Sundar Pichai said in an email to employees. “To match and fuel that growth, we hired for a different economic reality than the one we face today.”

The tech behemoth is laying off 10,000 employees, the company said in a securities filing on Wednesday. Globally, Microsoft has 221,000 full-time employees with 122,000 of them based in the US.

CEO Satya Nadella said during a talk at Davos that “no one can defy gravity” and that Microsoft could not ignore the weaker global economy.

“We’re living through times of significant change, and as I meet with customers and partners, a few things are clear,” Nadella wrote in a memo. “First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less.”

The publisher of the news and opinion website Vox, tech website The Verge and New York Magazine, announced Friday that it’s cutting 7% of its staff, or about 130 people.

“We are experiencing and expect more of the same economic and financial pressures that others in the media and tech industries have encountered,” chief executive Jim Bankoff said in a memo.

Layoffs are also hitting Wall Street hard. The world’s largest asset manager is eliminating 500 jobs, or less than 3% of its workforce.

Today’s “unprecedented market environment” is a stark contrast from its attitude over the last three years,, when it increased its staff by about 22%. Its last major round of cutbacks was in 2019.

The bank will lay off up to 3,200 workers this month amid a slump in global dealmaking activity. More than a third of the cuts are expected to be from the firm’s trading and banking units. Goldman Sachs

(FADXX) had almost 50,000 employees at the end of last year’s third quarter.

The crypto brokerage announced in early January that it’s cutting 950 people – almost one in five employees in its workforce. The move comes just a few months after Coinbase laid off 1,100 people.

Though Bitcoin had a solid start to the new year, crypto companies were slammed by significant drops in prices of Bitcoin and other cryptocurrencies.

McDonald’s

(MCD), which thrived during the pandemic, is planning on cutting some of its corporate staff, CEO Chris Kempczinski said this month.

“We will evaluate roles and staffing levels in parts of the organization and there will be difficult discussions and decisions ahead,” Kempszinski said, outlining a plan to “break down internal barriers, grow more innovative and reduce work that doesn’t align with the company’s priorities.”

The online personalized subscription clothing retailer said it plans to lay off 20% of its salaried staff.

“We will be losing many talented team members from across the company and I am truly sorry,” Stitch Fix

(SFIX) founder and former CEO Katrina Lake wrote in a blog post.

As the new year began, Amazon

(AMZN) said it plans to lay off more than 18,000 employees. Departments from human resources to the company’s Amazon

(AMZN) Stores will be affected.

“Companies that last a long time go through different phases. They’re not in heavy people expansion mode every year,” CEO Andy Jassy said in a memo to employees.

Amazon boomed during the pandemic, and hired rapidly over the last few years. But demand has cooled as consumers return to their offline lives and battle high prices. Amazon says it has more than 800,000 employees.

At The New York Times DealBook summit In November, Jassy said he believes Amazon “made the right decision” regarding its rapid infrastructure build out but said its hiring spree is a “lesson for everyone.”

Even as he spoke, Amazon warehouse workers who helped organize the company’s first-ever US labor union at a Staten Island facility last year were picketing Jassy’s appearance outside the conference venue.

“We definitely want to take this opportunity to let him know that the workers are waiting and we are ready to negotiate our first contract,” Amazon Labor Union President Chris Smalls said, calling the protest a “welcoming party” for Jassy.

Salesforce

(CRM) will cut about 10% of its workforce from its more than 70,000 employess and reduce its real estate footprint. In a letter to employees, Salesforce

(CRM)’s chair and co-CEO Marc Benioff admitted to adding too much to the company’s headcount early in the pandemic.

– CNN’s Clare Duffy, Matt Egan, Oliver Darcy, Julia Horowitz, Catherine Thorbecke, Paul R. La Monica, Nathaniel Meyersohn, Parija Kavilanz, Danielle Wiener-Bronner and Hanna Ziady contributed to this report.

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Technology

Giant Bomb And GameSpot Face Layoffs Months After Fandom Sale

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Image: Fandom

Two of the biggest outlets in games media are the latest to face layoffs. A number of editorial staff across both Giant Bomb and GameSpot revealed they’d been let go on Thursday, just months after the sites were purchased by the Fandom wiki network.

The layoffs were announced during a surprise all-hands meeting with Fandom CEO Perkins Miller, according to two sources familiar with the event. Roughly 40 to 50 employees were affected across the company, with at least some managers caught completely off guard by the cuts to their teams. Miller told staff that the Fandom network remained profitable despite the cuts, but declined to answer any questions, sources said.

Previously owned by Viacom CBS, Giant Bomb and GameSpot were both sold to Red Ventures in 2020, which then turned around and sold them again to Fandom last October, along with Metacritic, TV Guide, and other sites. “We’re thrilled to add these powerful, authoritative brands into the Fandom platform, which will expand our business capabilities and provide immersive content for our partners, advertisers and fans,” Miller said at the time. Fandom, whose business model revolves around plastering ads over free, user-generated content, is itself owned by private equity firm TPG Capital.

Fandom declined to comment.

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Giant Bomb in particular has faced a number of shakeups recently. Co-founder Jeff Gerstmann left last summer to start a solo Patreon-funded podcast and former co-host Dan Ryckert returned to take his spot. Since then, the show has expanded its roster and included more crossover with GameSpot talent. Jess “Voidburger” O’Brien, who became a full-time Giant Bomb member in 2021, and Jason Oestreicher, who began back in 2014, were two of the people laid off today.

The latest gaming media cuts come just a month after IGN faced its own surprise layoffs as its team was preparing to cover the 2022 Game Awards. Before that, Comcast shutdown its recently revived gaming network G4, Tencent gutted the staff at Fanbyte, and other sites like Game Informer, Polygon, and TechRadar cut staff numbers, too.

While the layoffs come at a time when companies from Microsoft to Amazon are reducing staff and advertisers are slashing budgets ahead of a recession manufactured by the Federal Reserve, not everyone is feeling pain. The CEO of IGN’s parent company, Vivek Shah, made roughly $16 million in 2021. TPG CEO Jon Winkelried, meanwhile, earned over $80 million that same year, in addition to the hundreds of millions he raked in during his decades long career at Goldman Sachs.

Update 1/19/23 5:01 p.m. ET: Added more information about the extent of the cuts and the all-hands where there were announced.

         

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Business

Goldman To Cut About 3,200 Jobs This Week After Cost Review

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The firm is expected to start the process mid-week.

Goldman Sachs Group Inc. is embarking on one of its biggest round of job cuts ever as it locks in on a plan to eliminate about 3,200 positions this week, with the bank’s leadership going deeper than rivals to shed jobs.

The firm is expected to start the process mid-week and the total number of people affected will not exceed 3,200, according to a person with knowledge of the matter. More than a third of those will likely be from within its core trading and banking units, indicating the broad nature of the cuts. The firm is also poised to unveil financials tied to a new unit that houses its credit card and installment-lending business, which will record more than $2 billion in pretax losses, the people said, asking not to be identified discussing private information.  

A spokesperson for the New York-based company declined to comment. The cuts in its investment bank are elevated by the inclusion of the non front-office roles that were added to divisional headcount in recent years. The bank still has plans to continue hiring, including inducting the regular analyst class later this year. 

Under Chief Executive Officer David Solomon, headcount has jumped 34% since the end of 2018, climbing to more than 49,000 as of Sept. 30, data show. The scale of firings this year is also affected by the firm’s decision to mostly set aside its annual cut of underperformers during the pandemic.

Slowdowns in various business lines, an expensive consumer-banking foray, and an uncertain outlook for markets and the economy are prompting the bank to batten down costs. Merger activity and fees from raising money for companies have taken a hit across Wall Street, and a slump in asset prices has eliminated another source of big gains for Goldman from just a year ago. Those broader industry trends have been compounded by the bank’s mistakes in its retail-banking foray where losses piled up at a much faster rate than forecast through the year.

That’s left the bank facing a 46% drop in profits, on about $48 billion of revenue, according to analyst estimates. Still, that revenue mark has been buoyed by its trading division that will post another jump this year, helping the firmwide figure notch its second-best performance on record. 

The final job reductions figure is significantly lower than earlier proposals in management ranks that could have eliminated nearly 4,000 jobs. 

The last major exercise of this scale came after the collapse of Lehman Brothers in 2008. Goldman had embarked on a plan to cut more than 3,000 jobs, or nearly 10% of its workforce at the time, and top executives elected to forgo their bonuses. 

Sharing the Pain

The latest cuts represent an acknowledgment that even businesses that outperformed this year will have to take the pain as well for a firm-wide performance that’s going to miss targets set for shareholders in a year of expense bleed.

That performance miss was particularly evident in the new unit called Platform Solutions, whose numbers stand out in the divisional breakdown. The more than $2 billion hit there is magnified by lending-loss provisions, exacerbated by new accounting rules that force the firm to set aside more money as loan volumes grow as well as ballooning expenses.

“There are a variety of factors impacting the business landscape, including tightening monetary conditions that are slowing down economic activity,” Solomon told staff at year-end. “For our leadership team, the focus is on preparing the firm to weather these headwinds.”

The cuts also come a week before the bank’s traditional year-end compensation discussions. Even for those who remain at the firm, compensation figures are expected to tumble, especially within investment banking.

It’s a stark contrast from last year, when staffers were getting showered with big bonus increases and a select few were even granted special payouts. At the time, Solomon’s $35 million compensation for 2021 put him alongside Morgan Stanley’s James Gorman as the highest paid CEO for a major U.S. bank.

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World

Saudi Conference Draws Wall Street Executives Amid Strained Ties With U.S.

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RIYADH, Saudi Arabia—International business leaders brushed aside a diplomatic spat between the U.S. and Saudi Arabia, converging on the Saudis’ flagship investment conference in a kingdom riding high on an oil-price boom and trying to flex its geopolitical power.

Some 400 American executives descended on Riyadh’s Ritz-Carlton Hotel for the Future Investment Initiative, an annual event sometimes dubbed “Davos in the Desert,” along with European and Asian business leaders. Among them: JPMorgan Chase & Co. Chief Executive

Jamie Dimon,

David Solomon,

head of

Goldman Sachs

Group Inc., and

Blackstone Inc.’s

Stephen Schwarzman.

The large American presence—over 150 U.S. companies were represented—came three months after President Biden visited Saudi Arabia in a bid to reset relations that were badly damaged following the 2018 murder of dissident journalist Jamal Khashoggi by Saudi operatives. Many international firms had already turned the page on the outrage over Mr. Khashoggi’s death, which hung over subsequent runnings of the event. But for those that hadn’t, this year’s conference offered a chance to come back.

“Nobody is being told not to come to the kingdom,” said Tarik Solomon, a former chairman of the American Chamber of Commerce in Saudi Arabia. He said U.S. companies were unfazed by the political situation between Washington and Riyadh.

The executives arrived amid a low point in relations between the Biden administration and Saudi leadership, including Crown

Prince Mohammed

bin Salman, who The Wall Street Journal reported Monday has mocked the U.S. president in private. The Saudis frustrated the Biden administration by orchestrating an oil-production cut earlier this month with the Organization of the Petroleum Exporting Countries and its Russia-led allies, prompting the U.S. to threaten retaliatory measures.

The U.S. perceived the production cut as supporting Russia’s war effort in Ukraine by allowing Moscow to sell oil at inflated levels. Riyadh has said the move was a technical decision that was needed to prevent a drop in crude prices amid gloomy economic predictions.

Messrs. Dimon and Schwarzman were two of the executives who backed out of the 2018 event in Saudi Arabia. JPMorgan and Goldman are among the Western banks that have profited from a buoyant Saudi initial-public-offerings market at a time when IPOs globally have stagnated. Citigroup Inc., JPMorgan and Goldman also were among the banks that helped PIF with a debut bond sale earlier this month, which raised $3 billion for the fund.

Mr. Dimon said he believed the problems between the U.S. and Saudi Arabia were overblown and would eventually be worked out. “I can’t imagine every ally agreeing on everything all the time,” he said.

“American policy doesn’t have to be everything our way,” Mr. Dimon added later. “You can learn from the rest of the world.”

High-level U.S. officials were missing from the conference, which promoted the slogan: “A New Global Order.” Throughout the first morning of the conference, Saudi officials stressed the importance of building relations with powers around the world while saying the U.S. relationship remained important.

Khalid al-Falih,

the Saudi minister responsible for luring foreign investment, said the dispute with Washington was “a blip.”

“We’re very close and we’re going to get over this recent spat that I think was unwarranted but it was a misunderstanding hopefully,” he said on a panel.

The Saudi energy minister,

Prince Abdulaziz bin Salman,

struck a more defiant note, defending the oil-production cut as a necessary move—not only to stabilize the oil market as the global economy cooled but also to keep the kingdom on track to meet its economic goals.

President Biden met with Crown Prince Mohammed bin Salman in Saudi Arabia, as the U.S. looks to reset relations and prod the kingdom to help control oil prices. Biden said he confronted the crown prince about the killing of journalist Jamal Khashoggi. Photo: Bandar Aljaloud/EPA/Shutterstock

“We keep hearing, you are with us or you are against us,”

Prince Abdulaziz

said. “Is there any room for: ‘We are for Saudi Arabia and for the people of Saudi Arabia?”

The kingdom is flush with cash from high oil prices and is intent on seeing through Prince Mohammed’s transformational economic plans. The conference is organized by the Saudi Public Investment Fund, a sovereign-wealth vehicle that has grown from a sleepy holder of state-owned companies to a $600 billion global investment powerhouse that is increasingly a source of capital for Wall Street.

Saudi Arabia, in recent years, has tried to use the conference as an annual marker of the progress of economic and social changes first announced by Prince Mohammed in 2016. The summit has often been overshadowed by geopolitical events, most notably in 2018 when Western senior executives canceled participation following Mr. Khashoggi’s killing.

Former President

Donald Trump

stood by Prince Mohammed even after the U.S. intelligence community said he likely ordered the killing—a charge he denies. Mr. Trump’s son-in-law,

Jared Kushner,

developed a strong tie with the prince and this year received a $2 billion injection from PIF. Mr. Kushner spoke Tuesday at the conference in remarks full of praise for the Saudi leadership.

The U.S.-Saudi tensions are a reason for companies to be concerned, said Hasnain Malik, a Dubai-based equities analyst at Tellimer Research, citing businesses that fell out of favor because of disagreements between the American government and Russia and China.

Share Your Thoughts

What are you watching for in Saudi Arabia’s flagship investment conference? Join the conversation below.

“Foreign financial actors still regard Saudi as an opportunity for taking capital out of Saudi and putting it into the rest of the world, rather than looking at Saudi as an interesting opportunity,” Mr. Malik said.

Foreign investment in Saudi Arabia has remained stubbornly low in recent years, despite Prince Mohammed’s efforts to restructure his economy. International firms have complained about slow payment from government contractors, retroactive tax bills and archaic bureaucracy.

Domestically, PIF has launched dozens of projects, including plans to build a futuristic city in the northwest of the kingdom that will require billions of dollars of outside capital alongside investment from the sovereign-wealth fund. The government announced national strategies in the past week aimed at attracting billions of dollars in investments from the industrial and supply-chain sectors by offering companies massive incentives. With one of the fastest-growing economies in the world, the Saudi government is racing to achieve its goals now.

One bright spot, so far, is PIF’s attempts to support car manufacturing in the kingdom: An investment in electric-vehicle maker Lucid Motors has resulted in plans to set up a factory domestically to reassemble the company’s luxury sedan that is pre-manufactured in its Arizona plant. The company aims eventually to produce complete vehicles in Saudi Arabia, and the government hopes it will draw in other industrial firms to create a domestic supply chain.

Lucid opened a Riyadh showroom on Monday. “It’s a chicken and egg problem, isn’t it? If we haven’t got suppliers, we haven’t got a car company, so we’re gonna break that,” said Lucid Chief Executive

Peter Rawlinson.

Write to Rory Jones at rory.jones@wsj.com, Stephen Kalin at stephen.kalin@wsj.com and Summer Said at summer.said@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

Cruel winter ahead for Wall Street as pandemic debts come due

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A banker recently told me that CEOs “would have to do something pretty special to fall into bankruptcy” the last couple of years as government pumped massive liquidity into the market, on top of the pandemic handouts.

That’s now changing, possibly quickly, with the Fed raising interest rates and reducing the size of its balance sheet.

A cruel winter is likely for Wall Street as markets remain choppy and their biggest clients scale back. Traditional deal-making such as IPOs has dropped significantly. At every major investment house, management is quietly planning layoffs (and some, like Goldman Sachs, not so quietly).

One area of potential growth: Wall Street restructuring departments. They’re eyeing expansion to provide advice to companies so burdened by high debt load they need to sell stuff or “restructure” in Chapter 11 bankruptcy.

Recession looms

Sources tell me investment banking firm Morgan Stanley is weighing a big expansion of its restructuring team (Morgan Stanley wouldn’t deny the matter). Other banks are likely to follow because none of this is really rocket science.

Morgan Stanley CEO and Chairman James Gorman is reportedly weighing a big expansion of its restructuring team.
AP

If you think the Fed needs to raise rates by a lot (which, given the latest inflation number, it does) the economy will suffer. Recession looms. The likelihood is that some segments of corporate America loaded up on cheap debt and will need help avoiding bankruptcy — or navigating a way out of it. That becomes a big business for Wall Street.

The unwinding of the credit cycle to tighter lending standards is always pretty tough on corporate balance sheets, but it could be particularly brutal this time given the monetary policy experiment — and corporate debt binge — of the past two-plus years, bankers tell me.

Since the pandemic, even the most troubled companies had access to credit. So-called leveraged deal-making exploded. M&A often leaned heavily on borrowing because the Fed provided so much easy money the banks were virtually giving loans away.

What goes up ultimately comes down on Wall Street. The easy money of the early 2000s paved the way for the financial crisis of 2007-2008 with mortgage debt at the center of the deleveraging.

The easy money of the pandemic economy has led to similar risk-taking among companies and investors. An unwind is guaranteed even if it is still unclear if it will reach such cataclysmic levels.

In previous years, the government pumped massive liquidity into the market.
Getty Images

Consider the $1.4 trillion-plus leveraged loan market, which comprises borrowings of the most indebted companies. Such debt has doubled in just seven years. More troubling, the biggest share of the market compromises loans to the riskiest credits. “Junk” credits now make up more than 28% of such loans, according to the data trackers at Morningstar.

You see where I’m going with this: As rates continue to spike, these borrowers will find it more difficult — maybe impossible — to refinance debt. Profit margins (if the companies are profitable) get squeezed as the economy slows. This Gordian knot translates into lower stock prices, layoffs, etc. Companies shed assets, and file for Chapter 11. Bondholders will be owners of chunks of corporate America because they have first lien on deteriorating assets, which means losses for major money managers and pensions.

In the middle of this mess will be the restructuring departments of the big banks dispensing advice and earning fees for their time.

The good news

Some caveats to the doom-and-gloom scenario. Restructurings are beginning to pick up (See Revlon and Bad Bath & Beyond) but they’re not dominating the headlines because default rates remain low. The St. Louis Fed’s index of all commercial bank loan delinquencies are well off the highs reached just after the banking crisis.

But bankers say the trouble looms when loan terms reach their end stages and so-called balloon principal payments come due. Those big numbers begin next year when more than $200 billion in leveraged loans will need refinancing, and will rise yearly by multiples until around $1 trillion is due in 2028, a banker tells me.

That’s a lot of debt to refinance in the face of tighter credit conditions. It’s a recipe for recession, but also for money to be made by Wall Street restructuring shops.

Inflation spiral

As bad as inflation is, there’s a good chance it’s going to get a lot worse. A serious nightmare scenario is starting to circulate among top Wall Street investors.

It began with BlackRock CEO Larry Fink’s grim assessment, explained in this column last week, that the Biden administration stoked significant inflation through reckless spending. It’s now nearly impossible for the Fed to engineer a “soft landing” of the economy with inflation at 8.3%.

Yet it could get worse. Global droughts and the continued war in Ukraine translate into declining crop yields and higher food prices. Gas prices might be coming down, but the administration appears intent on keeping them high by canceling drilling permits. As workers demand higher wages (and railroad workers got one last week by threatening a strike) Fed Chair Jerome Powell cranks up interest rates until the economy lands in a crash.

Dark stuff that some experts dispute, many of the same geniuses who said inflation was “transitory.” 

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Business

Finger-pointing among execs begins at Goldman Sachs

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Talk about passing the buck.

With Goldman Sachs in something of a pinch, the finger-pointing between top execs has begun — and, unsurprisingly, it has turned nasty almost immediately.

The Wall Street giant announced this week that it would slash jobs with earnings in a slump — and even said that it is taking away free office coffee.

Some c-suite sourpusses say that the company under the leadership of CEO David Solomon is too focused on flashy executives with “personal brands,” rather than knuckling down to the good old-fashioned hard work of making rich people richer with very little effort.

Insiders seem to be having a harder time seeing the fun side of Solomon’s own DJing career as DJ D-Sol now that the economy is in a spin.

We’re told that top execs are less tickled by Solomon’s sideline as a DJ now that the economy is looking more grim.
FilmMagic for Sports Illustrated

Meanwhile there’s much grumbling about Solomon’s soft spot for rock star bankers  — for example Kim Posnett, who has rocketed through the ranks in recent years, and is often to be seen speaking on panels, attending galas and sitting for interviews, while — the (ahem, male, ahem) insiders claim — many of her actual deals have fallen flat. (We should note that for all her alleged “personal branding,” Posnett has all of about 1500 Instagram followers, so Charli d’Amelio probably isn’t sweating it just yet).

The Wall Street giant has this week announced company-wide layoffs.
Getty Images

According to the New York Times, the firm reported second quarter earnings of  $2.93 billion, nearly half as much as the same quarter last year. The investment division where Posnett works — though, we hasten to add, not just Posnett works — was responsible for much of the downturn, earning 41% less in that time than the previous year. (We would be remiss if we didn’t note that Goldman Sachs’ executive team is reportedly around 80% male, so you’d think the number crunching know-it-alls over there would figure out that if something’s amiss, the raw data suggests its overwhelmingly likely to be the guys’ fault.)

Some insiders have even been making a racket because Posnett spent much of last week in a suite at the US Open as the company was preparing to announce the  layoffs, rather than, say, at her desk trying to make the balance sheet look a little more rosy next quarter. (For the record, though, Page Six has seen a deal or two go down over $15 beers between sets out at Arthur Ashe Stadium so let’s not rule out an, er, net profit from those outings just yet).

A spokesperson called the barbs “baseless gossip.”



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Business

Goldman Sachs yanks ‘free coffee’ perk as bankers return to five-day week

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It’s time for Goldman Sachs bankers to wake up and smell the coffee — and pay for it, too.

As employees filed into the Wall Street giant’s headquarters in lower Manhattan last Tuesday for a mandatory return to a five-day work week, they got an unwelcome surprise: The “free coffee” station had been wheeled away, sources told The Post.

The complimentary “grab and go” station at the entrance of 200 West St. — cold-brew, as well as stashes of French vanilla creamer, almond milk, soy milk and half-and-half — had appeared during the pandemic to encourage attendance, according to insiders.

But the brass has since determined it doesn’t need sweeteners to get people back to the office, sources told The Post. Instead, management now believes the threat of getting fired should more than enough incentive, the sources said.

“RIP to another pandemic perk for junior bankers,” one junior Goldman banker lamented. “I’m sure the partners still don’t have to pay for their coffee — or anything in their fancy dining hall.”

“Of course they took the coffee away,” another junior banker added. “But I’ve been so slammed since Labor Day I haven’t really had time to think too much about it.”

Natural gas prices are displayed in front of Morgan Stanley in the Times Square neighborhood of New York.
Bloomberg via Getty Images

As for coffee, a source close to the bank notes there is still free drip coffee elsewhere in the building, including at the building’s “Sky Lobby” on the 11th floor. The source added the bank also provided cupcakes to employees on their first day back. Still, junior employees counter that it’s a hassle to get to and doesn’t have the same quality of cold brew.

At other banks on Wall Street, executives and CEOs are embracing the return to normalcy — and the disappearance of perks that many had long taken for granted.

At Goldman as well as rivals JPMorgan an Morgan Stanley, bankers at all levels are lamenting the loss of free tickets to the US Open tennis championship in Forest Hills, Queens. Before the pandemic, the big banks typically made extra tickets available to top performers. But this year, the only way to nab a seat is to bring a client, sources add.

Spokespeople at JPMorgan and Morgan Stanley declined to comment on the US Open perks.

JPMorgan CEO Jamie Dimon, for his part, has grown increasingly aggressive with a clampdown on remote work, privately telling senior managers he expects the rank and file to be at the office five days a week — a more stringent standard than the bank’s official line of three days a week, according to sources close to the company.

But it’s Goldman CEO David Solomon — who famously called working from home an “aberration” — who has signaled the return to office with particular force. As first reported by The Post, Goldman told workers in a memo last month it planned to lift all COVID protocols a week after Labor Day — a sign it won’t accept excuses for employees to work from home.

In April, Solomon ended free daily car rides to and from the office, which the bank had begun offering at the start of the COVID outbreak, The Post was first to report. It now limits the perk to employees who work well into the evening, sources said.

Workers at Goldman Sachs filed into 200 West Street last week.
Bloomberg via Getty Images

This spring, Goldman likewise announced that employees will once again be on the hook for the cost of breakfast and lunch.Goldman did hike its meal allowance for dinner to $30 from $25 — two months after The Post reported staff were griping they couldn’t even buy a Chipotle dinner with the stingy stipend.

For some employees, however, part of Goldman’s allure is the prestige of working long hours in addition to getting face time with the boss.

“There’s a pride that comes with working crazy hours — and Goldman thinks the best will want what Solomon is demanding,” John Breault, CEO of recruiting firm Breault & Smith told The Post.

Other banks have taken a more relaxed approach to returning to the office. Citigroup CEO Jane Fraser — who famously banned Zoom meetings on Fridays in response to employee fatigue — has refrained from requiring a five-day work week although the bank asked most employees to return at least a few days a week in March.

Bank of America CEO Brian Moynihan, meanwhile, has said he will give more guidance about returning to the office in the next six to eight weeks — and will outline “more formality to the flexibility.”

Not all of the rank and file are convinced.

“Citibank and Bank of America are the lame banks,” one 20-something Wall Street banker who works at a boutique firm told The Post, adding he’d never take a job there.

Still, some of the young bankers who have landed prize gigs at Goldman and JPMorgan say they wish they had more flexibility.

“I’d prefer not to be in the office five days a week,” one junior banker conceded.

“I don’t think anyone wants to be in the office five days a week,” a former Goldman employee, who left to find a more flexible role, told The Post.

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Technology

Coddled Wall Streeters in for a rude back-to-the-office awakening

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The most coddled generation that Wall Street has ever encountered is about to find out what it means to really go to work.

That is the word coming from the C-suites of the Big Banks — Morgan Stanley, JP Morgan and Goldman Sachs. The CEOs of these firms made their bones back in the day when the price paid for a lucrative career on Wall Street was long hours while being screamed at by your boss.

Now they want to turn back the clock — even if that means getting on the wrong side of the influx of pampered millennials and Gen-Z’ers that they needed to hire during the long bull market. They won’t say this publicly, of course, but they’re secretly welcoming the looming economic and Wall Street deal-making slowdown as a way to reassert control over the woke masses.

The stock market and deal-making boom extended incredible leverage to a class of Wall Street employees brainwashed by woke college professors and administrators into believing any and all of their feelings are important and existential, including not wanting to work so hard.

Wall Street, despite its Darwinian rep, succumbed to the pressure, transforming itself into something like a college safe space because it needed entry- and associate-level bodies to process deals and trades, and faced competition for talent from Big Tech. That meant more perks for the grunts of the business (think stuff like free Pelotons on top of higher pay), flexible work hours and demands to work from home well after the worst of the COVID pandemic subsided.

Jamie Dimon and his peers are reportedly fed up with the new generation of Wall Street.
AFP via Getty Images

It also meant accepting the ­mores of the new generation even if it meant lower productivity. Wall Street execs used to brag that they slept in the office under their desk when big deals were on the line. Now the up-and-comers embrace something known as “quiet quitting” where doing the bare minimum is the norm.

How’s that for Wall Street grunt work?

Associates’ fowl bawl

For my money, this pampering weirdness reached peak absurdity when a bunch of youngish Goldman lefty associates in Manhattan had a meltdown because someone had the temerity to order Chick-fil-A while working late on deal-making.

No, this wasn’t a fight over the health benefits of the popular chicken sandwich. As it turns out, the staffers were outraged that the then-CEO of the company believes in Jesus and is against same-sex marriage. Goldman management did an intervention to make sure those with hurt feelings could survive the trauma. (Goldman didn’t end up banning Chick-fil-A, thank God.)

But times appear to be changing again. The boomers who run the Big Banks — Jamie Dimon at JP Morgan, James Gorman at Morgan Stanley and David Solomon at Goldman — are said to have had enough, I am told, and will use the looming deal-making slowdown and recession to show the young’uns who’s boss.

With power shifting to management, last week Solomon began forcing all employees back to the office five days a week after Labor Day, the Post’s Lydia Moynihan was first to report. A companywide memo cited “significantly less risk of severe illness” while a spokeswoman cited the need to preserve the firm’s “client-centric business,” which is corporatese for “get your rear ends to work because you’re less productive on Zoom.”

Many Goldman Sachs workers have quit due to working conditions.
SOPA Images/LightRocket via Gett

As I first reported, Morgan Stanley’s head of HR issued a similar memo around the same time stating the firm is lifting its COVID protocols (i.e. testing and contact tracing) and asking employees to stop working from home because of productivity issues.

JP Morgan’s Dimon isn’t far off from making office work mandatory no matter how much the woke masses complain.

Ironically, it’s been the woke tech CEOs like Meta’s Mark Zuckerberg and Google’s Sundar Pichai who first began clamping down on the youthful angst. They were forced to demand better productivity measures because the economic slowdown hit their wallets first.

Now that Wall Street is bracing for declining deal flow and probably layoffs later in the year, Solomon, Dimon and Gorman are flexing their management muscles and will likely continue to do so in ways that will annoy their pampered masses who will have increasingly less bargaining power to complain and force management to cave.

And who knows? Sleeping under your desk might become cool again.

Reportedly Wall Street heads are looking forward to cutting some of their staff.
Getty Images

To tell the ‘Truth’

There’s lots of drama around Truth Social, former President Trump’s newish social-media platform designed to compete with Twitter, including questions about its business model, content and The Donald going nuclear on it in much the same way he used Twitter before it banned him.

One more bit of drama likely to play out over the next 24 hours or so involves its planned merger with Digital World Acquisition Corp., the special purpose acquisition corporation slated to combine with the platform and create a publicly traded stock. There’s an important Digital World shareholder vote, with a Sept. 6 deadline, to extend the length of time to complete the merger by 12 months.

Patrick Orlando, Digital World’s chief, says the extension will allow the company to sort out all that’s going on and hopefully return some value to shareholders. Digital World’s stock has fallen nearly 75% from its high of $97 in March.

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Business

Elon Musk Files to Kill Twitter Deal, Twitter Will Sue

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Image: Chris DELMAS / AFP (Getty Images)

On Friday evening, Tesla CEO Elon Musk finally made it crystal clear that he has no interest in adding “owner of Twitter” to his list of titles. The move was months in the making. Twitter is planning to sue in response.

In a letter to Twitter’s Chief Legal Officer Vijaya Gadde filed with the Securities and Exchange Commission, Musk notified the social media company that he would terminate the $44 billion acquisition deal he made in late April. However, it is not yet clear whether Musk can unilaterally end the agreement.

Musk has fixated on the number of spam accounts on the social network. Citing their proliferation of automated bots, he first claimed Twitter was in breach of its merger agreement in early June. Musk’s lawyers argue that the billionaire is backing out of the agreement because “Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement, and is likely to suffer a Company Material Adverse Effect.”

Twitter plans to sue Musk in response. Twitter CEO Parag Agrawal retweeted the company’s board chairman Bret Taylor’s promise of legal action minutes after the news broke in defiance of the Tesla CEO.

“The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery,” Taylor wrote.

In an email to staff on Friday obtained by the Verge, Sean Edgett, Twitter’s general counsel, told folks not to share any commentary on the merger on Twitter or Slack.

“Given that this is an ongoing legal matter, you should refrain from Tweeting, Slacking, or sharing any commentary about the merger agreement. We will continue to share information when we are able, but please know we are going to be very limited on what we can share in the meantime,” Edgett wrote. “I know this is an uncertain time, and we appreciate your patience and ongoing commitment to the important work we have underway.”

Jesse Fried, a Harvard Law School professor, told Gizmodo in an email on Friday that Musk could not “simply walk away from the deal” and is probably trying to lower the price of the acquisition.

“He is bound to buy Twitter if he has adequate financing, as it seems he does. There are narrow outs,” Fried said. “Given the contract and Twitter’s post-signing conduct, Musk is highly unlikely to get a Delaware court to give him a ‘get-out-of-merger free card.’ He has presumably been told that by his lawyers.”

The news that Musk is backing out of the acquisition agreement follows months of public buyer’s remorse expressed on Twitter itself. The company says automated bots and spam accounts make up just 5% of the social network’s users, a figure Musk believed was much higher. He requested and received more data on Twitter’s user base but ultimately said the information provided was insufficient.

On Thursday, the Washington Post reported that the billionaire’s deal to acquire Twitter was in “serious jeopardy” and that Musk had stopped engaging in funding discussions. The outlet cited doubts from Musk’s team over the data provided on the number of fake accounts and spam bots provided to it by Twitter.

The back-and-forth with Musk has had detrimental effects on Twitter. The stock price of the company had fallen to $36.10 as of Friday, well below the $54.20 he offered. The company laid off members of its recruiting team on Friday as well, though layoffs have struck the tech industry writ large as the stock market has tumbled in recent months. Musk cited the layoffs in his deal termination letter as well as several high-profile resignations. In June, amid a flurry of Musk mayhem, Twitter said it was still committed to closing the deal and hinted that it was unafraid to take legal action. When asked about the Post’s report early today, Twitter reiterated its June response: “We believe this agreement is in the best interest of all shareholders. We intend to close the transaction and enforce the merger agreement.”

Musk, Twitter’s largest shareholder, has behaved like Twitter’s owner for weeks now: He’s taken questions from Twitter employees in a town hall, given them product advice (make Twitter more like TikTok).

Fried said it’s all probably just a game to Musk.

“Litigation will be costly for Twitter, and it may agree to lower the price to settle the litigation. This is probably Musk’s game plan here,” the professor said.

Musk’s lawyers delved into further detail of Twitter’s perceived slights and contract violations, the majority of which centered on the blue bird company apparently declining to provide or providing incomplete information to the billionaire.

The billionaire’s accusations are as follows:

Spam and Fake Accounts

As is to be expected, Musk complained about a lack of information from Twitter related to Twitter’s spam and fake accounts. His lawyers state that the social media company did not provide the following:

“(1) daily global mDAU data since October 1, 2020; (2) information regarding the sampling population for mDAU, including whether the mDAU population used for auditing spam and false accounts is the same mDAU population used for quarterly reporting; (3) outputs of each step of the sampling process for each day during the weeks of January 30, 2022 and June 19, 2022; (4) documentation or other guidance provided to contractor agents used for auditing mDAU samples; (5) information regarding the user interface of Twitter’s ADAP tool and any internal tools used by the contractor agents; and (6) mDAU audit sampling information, including anonymized information identifying the contractor agents and Quality Analyst that reviewed each sampled account, the designation given by each contractor agent and Quality Analyst, and the current status of any accounts labelled “compromised.”

The billionaire said he did not receive data on the methodology Twitter uses to suspend spam and fake accounts.

According to the letter, Musk apparently wanted “access to the sample set used and calculations performed” to determine that less than 5% of Twitter’s mDAUs are fake or spam accounts, which is what the company claims. The request included the daily measures of mDAUs for the past eight quarters. The letter states that the social media company has provided “certain summary data” regarding its mDAU calculations, but not the complete daily measures. In addition, Musk requested materials provided to Twitter’s board about mDAUs’ calculations. Again, he claims he received incomplete information.

“Preliminary analysis by Mr. Musk’s advisors of the information provided by Twitter to date causes Mr. Musk to strongly believe that the proportion of false and spam accounts included in the reported mDAU count is wildly higher than 5%,” the letter states.

Materials Related to Twitter’s Financial Condition

Furthermore, the billionaire’s lawyers claim that he is entitled to certain financial data related to Twitter, including information that aims to help him secure financing for the deal. Musk purported asked for a Twitter’s financial model and budget for 2022, an updated draft plan or budget, and a “working copy” of the Goldman Sachs’ valuation model. He reportedly has only received a PDF copy of Goldman Sachs’ final board presentation.

Access to APIs and Query Restriction

When Musk was provided with information, his lawyers claim it came “with strings attached.” For instance, they claim that Musk was initially not given the same access given to customers to eight Twitter developer APIs. This was only remedied after explaining the lack of access to the company.

Nonetheless, the APIs reportedly contain a “query cap” that prevents Musk and his team from carrying out their desired analyses of the data. The cap was only removed after Musk complained about it twice.

Twitter Fired Two High-Level Execs, Laid Off People, and Froze Hiring

Finally, Musk’s lawyers state that Twitter was obliged to “preserve substantially intact the material components of its current business organization,” something they claim it did not do. The violations in this area began when the blue bird app fired Kayvon Beykpour and Bruce Falck, its general manager of product and general manager of revenue, respectively, in May.

The letter also cites Twitter laying off 30% of its talent acquisition team this past Thursday and its hiring freeze. As if that wasn’t enough, Musk is also purportedly mad that Twitter didn’t stop its head of data science; the vice president of Twitter service; and a vice president of product management for health, conversation, and growth from leaving.

“The Company has not received Parent’s consent for changes in the conduct of its business,” Musk’s lawyers wrote.

Update 7/9/2022, 6:26 a.m. ET: This post has been updated with information about Edgett’s email to staff.

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Business

Bitcoin Could Hit $100,000 if Investors Treat It Like Gold, Goldman Sachs Says

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The publicly available float of Bitcoin is just under $700 billion.


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Bitcoin could be worth $100,000 if investors accept the premise that it really is digital gold, according to a report by


Goldman Sachs
.

At its current price around $46,800, Bitcoin has a market cap of $870 billion, compared with $2.6 trillion for gold held by the public for investment purposes, such as privately held bars and assets in exchange-traded funds.

The publicly available float of Bitcoin is just under $700 billion, as a considerable amount of Bitcoin doesn’t trade, according to Goldman. That implies that Bitcoin consists of 20% of the entire “store of value” market—Bitcoin plus gold, assuming gold at current prices around $1,800 an ounce with 44,000 metric tons in circulation for investment purposes.

Bitcoin could get to $100,000 if its market share of the “store of value” market were to increase to 50%, estimates Goldman analyst Zach Pandl. “We think that Bitcoin’s market share will most likely rise over time as a byproduct of broader adoption of digital assets,” he wrote in a note published Tuesday.

Hitting $100,000 implies Bitcoin would see annualized returns of 17% over the next five years. The target doesn’t assume demand growth for “store of value” assets, and it factors in the supply growth of Bitcoin, with about 900 coins minted every 24 hours at the current production rate (scheduled to halve in early 2024).

Yet Bitcoin won’t have a straight shot to $100,000—if it ever gets there. “The network’s consumption of real resources may remain an important obstacle to institutional adoption,” Pandl writes, flicking at the energy consumption toll that Bitcoin mining takes.

That is no trivial matter. Many countries are trying to reduce their carbon emissions, and Bitcoin mining—a global network of computers processing transactions—doesn’t help. Bitcoin miners are consuming 0.56% of the world’s electricity consumption, similar to the amount used by countries like Norway or Sweden, according to the Cambridge Bitcoin Electricity Consumption Index.

Some of that energy comes from renewables, but Bitcoin is also being mined from coal, oil, and natural gas-fired plants. And it’s getting tougher to justify in countries facing crippling energy shortages and soaring prices.

In Kazakhstan, where mining has taken off after China banned the practice, protesters stormed government buildings on Wednesday over soaring energy prices. The country’s telecom provider shut down internet access, cutting off Bitcoin miners.

Bitcoin may be far more appealing than other cryptos as a store of value, given its hard cap on supply. But it is also competing against other cryptos for investment dollars. The overall market is worth $2.2 trillion, including $450 billion in Ether and $85 billion in Binance Coin. And unlike many cryptos that are finding uses as “smart contracts” for trading cryptos, lending, and minting new digital assets like nonfungible tokens, Bitcoin’s primary use case and appeal may be as an alternative to gold.

Working in Bitcoin’s favor is that investors are now worried about inflation and the impact of soaring global money supplies, potentially depreciating national currencies. That could help Bitcoin in the long run, since its supply is capped at 21 million coins, with 18.9 million already produced.

But Bitcoin hasn’t been acting like an inflation beater lately. Prices have been flat for months.

Bitcoin has done better than gold in the past year: Bitcoin is up 15% from early January 2021, versus a 6.8% decline for the


SPDR Gold Shares
ETF (ticker: GLD). But gold has beaten Bitcoin in the past three months, with the Gold Shares ETF up 6% and Bitcoin slumping about 10%.

Timing, it seems, may matter just as much with digital gold as it does with the real thing.

Corrections & Amplifications

Bitcoin has a market cap of $870 billion. An earlier version of this article incorrectly said the market cap was $870 million.

Write to Daren Fonda at daren.fonda@barrons.com

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