Tonight: A most ironic return-to-office directive. Plus: It's billion-dollar Barbie. Let's get into it. By Allison Morrow |
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| | Last updated August 7 at 7:44 PM ET | |
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One of the wildest business stories of the pandemic era is the saga of Zoom Communications Inc. This is the company whose name you might have vaguely known before the lockdown, for those once-in-a-blue-moon video-conferencing meetings with the London and Hong Kong offices, perhaps. Then, of course, it became the portal to just about everything, even happy hours (in those early days before we all got so tired of trying to socialize over screens). Three years later, Zoom, the company that powered the remote-work revolution, wants its own employees back in the office. Here's the deal: Zoom is now enforcing a "structured hybrid approach." That means employees who live near an office need to be onsite two days a week. "We'll continue to leverage the entire Zoom platform to keep our employees and dispersed teams connected and working efficiently," the company said. BIG PICTURE The Return to Office Era is officially in full swing, even as workers continue to resist and fight for flexibility. In the tech world, Zoom's decision follows similar moves by Google, Amazon and Salesforce to claw back some, though not all, of the remote-work allowances those companies embraced in 2020. Even the White House is cracking down on remote work, saying last week that Cabinet agencies need to bring federal workers back into the office more frequently, according to an email obtained by CNN. Like many tech companies that benefited from the remote-work boom of 2020, the comedown for Zoom hasn't been smooth. In February, the company cut approximately 15% of its staff, amounting to about 1,300 employees. Members of the executive leadership team also reduced their base salaries by 20% and forfeited their fiscal year 2023 bonuses. My two cents Institutional muscle memory can be a blessing and a curse. Say you run a company that, like Zoom or Peloton or Netflix, was doing well enough before the pandemic, then experienced a sudden boom. For two-plus years, things were going great. Then the economy started to cool and quarter-to-quarter comparisons started to look really rough. In the face of that, it'd be reasonable to look around and say, OK — let's just go back to whatever recipe we were following back in 2019. That was working for us, right? Yes and no. It was certainly working for the bottom line. It was working for the C-Suite and other high-level managers who could more easily afford child-care and private transportation and $20 salads from the cafe around the corner. But, as countless surveys and anecdotal evidence shows, the five-day in-office setup was not working for workers. The pushback companies are facing over returning to the office stem from two management failings, as I see it: - Managers have repeatedly failed to make a compelling case for what's supposed to happen in the office. You can't tell a working parent they need to spend two hours a day commuting in the spirit of "camaraderie" or "rebuilding the culture." After three years, you're asking your workers to sacrifice something — what's it for? Surely the culture you want to flourish is not one where workers sit hunched in their cubicles, headphones on, plowing through work as fast as possible so they can beat rush hour.
- Managers tend to infantalize their employees. The rise of intrusive workplace spying technology underscores this bizarre dynamic of American corporate culture that turns many bosses (not all, of course) into parent-like figures who have to monitor their employee-children minute-by-minute and punish them if they don't do their chores. Driving your staff back to the office so you can keep a closer eye on them isn't going to do much for morale. Treating them like adults who can manage their own time is a goal worth striving for.
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Barely three weeks into its run, Greta Gerwig's blockbuster "Barbie" surpassed the billion-dollar mark. The movie hit $1.03 billion in global ticket sales over the weekend, according to Warner Bros. estimates, making Gerwig the first solo female director with a billion-dollar movie. Turns out that Margot Robbie, the movie's titular star and producer, was right when she pitched the project to studio execs. "I think I told them they'd make a billion dollars..." she told Collider last month. "Maybe I was overselling, but we had a movie to make!" ("Barbie" is produced by Warner Bros. Pictures, which is owned by CNN's parent company Warner Bros. Discovery.) |
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After trying for three years, Paramount is finally unloading Simon & Schuster. Here's the deal: Paramount agreed to sell Simon & Schuster, one of the biggest book publishers in the world, to KKR, a private equity firm, for $1.6 billion in cash. The sale to KKR caps a three-year saga in which Paramount has sought to trim its portfolio, reduce debts and beef up its streaming business. Bob Bakish, the CEO of Paramount Global, said Simon & Schuster is a "fantastic asset" but that it didn't fit with its core mission of video entertainment. (Read: More "Yellowstone," less books.) The deal comes a year after Paramount pulled out of a $2.18 billion agreement to sell Simon & Schuster to Penguin Random House. That deal, which would have married two of the "Big Five" US book publishers, prompted antitrust concerns. The Justice Department sued, and a judge ruled the merger would illegally reduce competition. Rather than appeal, Paramount pullled out and put Simon & Schuster back on the market, obligating Penguin to pay it a $200 million termination fee. BIG PICTURE While private equity and book publishing may seem like a mismatch made in hell, some industry executives sounded optimistic after the deal was announced. The New York Times notes that Richard Sarnoff, KKR's head of media, entertainment and tech, is a familiar and not unwelcome name in the publishing world. Similarly, KKR, which acquired audiobook company RBMedia several years ago, isn't new to the book business. Of course, there's a reason the words "private equity takeover" tends to send chills down the spines of people who work in media. The private equity industry itself is just a nicer rebranding of the business practice once more commonly known as "leveraged buyouts" — in short, they buy a company with mostly borrowed funds, try to wring value from them, and eventually sell them off at a profit. PE firms tend to focus on short-term gains, which often means layoffs and other painful cost cuts. |
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🚘 Tesla's "Master of Coin" and Chief Financial Officer Zachary Kirkhorn has stepped down. 🥫 Campbell is acquiring Sovos Brands, the company behind Rao's pasta sauce and Noosa yogurt, in a deal worth $2.7 billion. 🐓 Tyson Foods, which supplies about a fifth of the beef, pork and chicken in the United States, is shutting down four chicken plants — two in Missouri, one in Indiana and one in Arkansas — as chicken sales have fallen. 🚫 More than 11,000 Los Angeles city workers are planning to go on strike Tuesday, according to the union that represents many of the city's public-sector staff. 📱 PayPal is rolling out its first stablecoin as it attempts to capitalize on the "emerging potential" of US dollar-backed digital tokens for consumer payments. 💰 Tupperware, the latest meme stock darling, secured a financial lifeline last week, just four months after the company said it had doubts about its ability to stay in business. |
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Last updated August 7 at 7:00 PM ET | |
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