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Weekly Roundup Of The Biggest Stories In Tech And Wall Street!
FTC Bans Noncompete Clauses, Freeing Workers To Pursue New Jobs And Start Businesses
The Federal Trade Commission announced on Tuesday the passing of a new rule banning noncompete agreements for workers.
The 3-2 decision of FTC rule makers was made to help promote career mobility, innovation and spur on competition by prohibiting employers from using noncompete clauses that restrict workers from freely changing jobs.
The FTC’s vote determined that noncompete agreements are an unfair method of competition that dampens wages, hamstrings innovation and blocks potential entrepreneurs from building new businesses that would hire more people.
“Noncompete clauses keep wages low, suppress new ideas and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned,” said FTC chair Lina Khan in a statement. “The FTC’s final rule to ban noncompetes will ensure Americans have the freedom to pursue a new job, start a new business or bring a new idea to market.”
Employers will be required to provide written notice to employees that their existing noncompetes are no longer enforceable. The rule applies retroactively, so employers must rescind existing noncompete agreements. The new law, however, does have a ceiling: existing noncompetes for senior executives are still compulsory.
Over the years, workers have felt stuck in their jobs and were afraid to take another role elsewhere. The reluctance to remove themselves from an untenable situation was due, in part, to the dreaded non-compete clauses in their hiring agreements. Workers either remained trapped or faced the risk of legal action if they joined a rival business.
Wall Street Bonuses At JPMorgan, Goldman Sachs And Morgan Stanley Are Under Scrutiny By U.S. Regulators
Banking regulators are setting their sights on renewing efforts to tighten executive compensation at large banks. The regulatory agencies aim to restart a prior proposal that would require big banks, such as JPMorgan, Goldman Sachs and Morgan Stanley, to defer compensation for executives and claw back bonuses if losses at their companies become too high, the Wall Street Journal reported.
The average Wall Street bonus last year was $176,500, according to New York State Comptroller Thomas DiNapoli. Bonus pay for workers in New York City’s securities industry hit a record high of $240,400 in 2021.
For decades, traders, brokers, bankers and other financial services employees could roll the dice in hopes of winning big. However, if they lost money, they didn’t suffer the ramifications.
The new potential rule may be thwarted as previous attempts, such as the 2010 Dodd-Frank Act, didn’t gain enough traction due to pushback from Wall Street. The last proposal in 2016 required the biggest financial institutions to defer payment of at least half of executives’ bonuses for four years and establish a seven-year clawback period.
How Meta’s $200 Billion Stock Plunge Could Impact Workers
At the close of the stock market on Wednesday, Meta’s share price plummeted on CEO Mark Zuckerberg’s aggressive artificial intelligence and mixed reality spending plans, which wiped out more than $200 billion in market valuation.
Investors overlooked its strong first-quarter earnings and focused on the large costs that the tech giant will incur in building out its AI strategy—a major deviation from Meta’s self-touted belt-tightening “year of efficiency” in 2023.
In the Q1 earnings call on Wednesday, Zuckerberg stated that investments in AI would protract “meaningfully,” and that it would not generate profits in the near term for the social media platform.
He advised those on the conference line to consider the bigger picture, “Smart investors see that the product is scaling and that there is a clear monetizable opportunity there even before the revenue materializes.”
The potential for Meta’s market cap losses to exceed $200 billion raises serious concerns about the job security of its workforce, especially as the company contemplates its next step in placating investors’ concern about boosting growth. Historically, job cuts are the go-to, quick-fix to appease investors.
It also suggests the possibility of broader layoffs and stock price declines across the tech industry, if the current economic challenges persist. Employees at other major tech firms may need to brace for potential job cuts and volatility in the months ahead too, as Meta is seen as a bellwether for what will happen in the tech sector and the overall marketplace.
Valerie Beaulieu, Chief Sales & Marketing Officer at The Adecco Group: The 'Career Backpack'
Valerie explains her secret to a remarkable career journey, what she calls her "career backpack," which landed her in the C-suite and on the boards of various public companies and organizations.
We look at when Microsoft was a startup and what it was like working in the tech industry when everyone was unsure if it would go anywhere.
Valerie explains how she became the chief marketing officer at Microsoft and the international moves and career pivots along the way. She also explains the skills and relationships she had to build and how we can replicate her career path today.
Spotify’s Recent Layoffs Impacted The Company ‘More Than Anticipated’
When Spotify laid off more than 1,500 workers—17% of staff—ahead of the holidays in December 2023, I had written that the company would “likely see backlash” that could result in decreased productivity.
Although the streaming platform saw record first-quarter profits, the company fell short in hitting its Q1 guidance on profitability and month-to-month active user growth.
In the company’s earnings call this week, Spotify CEO Daniel Ek told investors that the impact of the December workforce reduction resulted in “significant” challenges.
“Although there’s no question that it was the right strategic decision, it did disrupt our day-to-day operations more than we anticipated,” Ek acknowledged.
The Spotify CEO wasn’t alone in making job cuts last year. Nearly 1,200 tech companies downsized in 2023, according to Layoffs.fyi, with Amazon, Twilio, Zulily, Chewy and others also trimming headcount right before the winter holidays.
Small Businesses, Which Employ More Than 60 Million U.S. Workers, Are Losing Confidence
Small businesses in the United States are facing a perfect storm of high inflation, rising costs, labor shortages and reduced consumer demand, all of which are creating significant challenges for this segment of the economy. As a result, the optimism of small business owners has plunged to its lowest level since December 2012, according to recent data by the National Federation of Independent Business, a nonpartisan, nonprofit organization that advocates for small and independent businesses in the U.S.
The Small Business Optimism Index plummeted to 88.5, dropping 0.09 of a point, in March, marking the 27th consecutive month the index fell short of the 50-year average of 98.
Small businesses—independent businesses with fewer than 500 employees—are a crucial component of the U.S. economy, as they account for substantial job creation and contribute significantly to the nation’s gross domestic product.
There are 33.3 million small businesses in the U.S., which employ about 61.6 million workers, according to data by the Small Business Administration Office of Advocacy. Small businesses comprise nearly half (45.9%) of the American labor force and account for 43.5% of the country’s GDP.
In the past 25 years, small businesses have created more than 12.9 million jobs, representing around two-thirds of all new jobs added to the U.S. economy during this period.
How AI Is Growing Fast On Wall Street
The convergence of financial services and technology continues to be a growing trend, as investment banks are increasingly using artificial intelligence in their operations. It is estimated that throughout the cross section of banking, wholesale and retail, generative AI could add between $200 billion to $340 billion in value, according to McKinsey research.
The securities industry is utilizing AI to automate and streamline tasks, ranging from writing code, compliance monitoring to portfolio analysis, to boost productivity and effectiveness.
Banks are developing AI-powered tools to assist bankers, traders and wealth managers in making better, more informed decisions. This includes AI-powered equity selection and real-time customer insights. Financial institutions are experimenting with GenAI models, like ChatGPT, to create content, answer questions and assist with various banking tasks.
AI can help relationship managers collect, organize and distill information to generate personalized content and insights for clients. AI-powered natural language processing and generative models can analyze data from various sources to infer market sentiment and help clients adjust their investment strategies.
The fast-emerging technology can assess and forecast exposure to risks like interest rates, credit, liquidity and default, helping banks comply with regulations like stress testing. GenAI can help draft documents like ESG and audit reports by pulling data from across the organization.
10 Perfect Jobs For People Who Love To Travel
With many jobs requiring frequent travel, some professionals purposely seek out these opportunities that afford them the chance to see the world. During the job search process, it is critical for professionals to consider how much travel is required to perform a specific role successfully. By carefully evaluating the travel requirements, candidates can make informed decisions about jobs that are a compatible fit for their circumstances, preferences and career aspirations.
Extensive travel can disrupt personal and family life, making it challenging to maintain a healthy work-life balance. Professionals with caregiving obligations may find frequent travel particularly burdensome or impossible.
However, for those who have wanderlust, a career that offers the opportunity to get paid to explore new places may be a dream come true. In these roles, accommodations and travel expenses are often covered, while you get to immerse yourself in different cultures.
If you have been bitten by the travel bug, here are 10 occupations you should consider that will earn you a paycheck for traveling.
Traveling for work and meeting new people can strengthen your professional network and lead to potential clients and customers. Moreover, demonstrating that you can adapt to new environments can be a valuable soft skill in your career.
How To Get A Job In Tough Times: All The Advice You Need To Succeed From A Top Executive Recruiter
There’s an old saying, “Tough times make tough people.” In this book, Jack Kelly will help guide you every step of the way in your job search to ensure that you stay strong, resilient and positive, and get that great, new job.
