Business

Ciscos CEO at Davos says most executives are very optimistic about the economy's futuredespite Americans' recession fears

World leaders, CEOs, and hedge fund titans met in Davos, Switzerland for the World Economic Forum this week, and amid consistent predictions of an impending global recession, many remained upbeat about the future. At least thats what Cisco CEO Chuck Robbins said on Wednesday when asked what he was hearing from his C-suite peers.

Publicly, everybody is being asked, Do you think were going to have a recession? And most people are saying, Yeah, were probably going to have a mild one. Beyond that, were not really talking about it, he told CNBC. And I think most people are generallyover the near-term and the long-termvery optimistic.

While recent retail sales data shows consumers are cutting back for fear of a recession, and layoffs at many tech firms are mounting, Robbins said he is continuing to invest in Ciscos future.

Were actually investing this year, he said. Well actually spend more in the fiscal year this yearthat we end in Julythan we did last year.

The CEOs comments contrast with statements from other attendees, including Nick Studer, chief executive of the Oliver Wyman Group consulting firm, who told the Wall Street Journal on Tuesday that the mood at the event was somber. But Studer did add that many attendees are hoping that any coming recession is either short or shallow.

The worlds top investors also gave mixed forecasts at Davos this week. Billionaire co-chairman of private equity giant Carlyle Group David Rubenstein argued that investors should begin to look for opportunities despite the fact that there is some uncertainty about the economys direction.

I think its a good time to invest now, because markets are not going to see another 20% drop in prices. I think thats past us, he told CNBC on Wednesday. I think were probably coming back to the point where people are going to feel very comfortable investing.

But not every investor was so bullish. Guggenheim Partners Investment Management chief investment officer Anne Walsh said a recession will hit by the middle of this year because of the Feds overly aggressive interest rate hikes and quantitative tighteningor the process of shrinking the central banks balance sheet in an attempt to decrease the money supply and slow inflation.

Equities havent repriced yet, and as we go through a recessionary timeline, we will see that, Walsh told CNBC on Wednesday.

Walsh recommended investors look to fixed income investments because higher interest rates have increased the average return for the first time in a decade.

Theres one thing the Fed has done for us, theyve put the income back in fixed income, she said.

Learn how to navigate and strengthen trust in your business with The Trust Factor, a weekly newsletter examining what leaders need to succeed. Sign up here.

Inherently speculative slightly crazy: Davos bigwigs snipe at crypto and call for more regulation

If theres one thing that the crowd of bankers and finance types at Davos can agree on, is that banks are safe and crypto is, as one attendee put it, inherently speculative.

That attendee, Senior Minister Tharman Shanmugaratnam of Singapore also added that crypto assets are slightly crazy, as the audience laughed in agreement.

As the leaders of the worlds biggest financial institutions gathered in Switzerland for the annual meeting of the World Economic Forum this week, several bashed crypto, pointing instead to banks as a safe haven for assets.

Even as the economic tumult of 2022 brought about the bankruptcies of crypto firms like Three Arrows Capital, and FTX, the traditional banking sector emerged largely unscathed.

This feat, in the eyes of UBS Chairman Colm Kelleher, means that traditional finance firms are systemically safe due to years of regulation.

Kelleher said that although he believes in the underlying technology of the blockchain, non-banks, which includes crypto, the sector has fallen through the fingers of regulators.

Regulators have with respect taken their eyes off the ball in terms of the non-banking sector, Kelleher said at the World Economic Forum this week, according to Reuters.

European Central Bank Governing Council member Francois Villeroy de Galhau agreed, pointing to Sam Bankman-Frieds FTX and stating that The greatest challenge today is non-banks.

He later added, We should rush to some urgent non-bank regulation starting with cryptos.

Still, Shanmugaratnam, the senior minister from Singapore, suggested that even regulating crypto using the same framework as traditional finance could pose a risk by legitimizing the asset class.

Are we better off, just providing ultra clarity as to whats an unregulated market, and if you go in, you go in with your own risk? he asked rhetorically. I lean a bit more towards the latter view.

The crypto industrywhich banks regard as a rivalhas a different view of course, and are also making their case at Davos. As the Washington Post reports, well-known crypto firms like Davos are hosting parties and framing the recent tumult as a reset period that will benefit good actors.

Learn how to navigate and strengthen trust in your business with The Trust Factor, a weekly newsletter examining what leaders need to succeed. Sign up here.

Would you rather be unemployed than unhappy at work? 1 in 3 workers say they would

Workers have become more selective over the past year when it comes to choosing a company to work foreven faced with the prospect of a looming recession.

That was what HR giant Randstad found when it surveyed 35,000 workers in 34 countries toward the end of 2022, with the company noting that the pandemic left a lasting legacy on workers demands on flexibility.

There is generally a consensus that some form of recession is on the horizon this year for much of the world. However, labor markets in many countries have remained resilient even amid fears for their wider economies.

The survey, published on Wednesday, found that workers had taken that economic uncertainty into account. More than half of its respondents said they were worried about how the economic climate might impact their job security, while around one in three said they were worried about being laid off.

Gen Z participants were even more concerned about keeping their jobs than other cohorts, with 43% of the youngest workers polled saying they had fears about losing their job.

In spite of macroeconomic headwinds, Randstads poll found that 61% of workers would decline a job offer if it negatively impacted their work-life balance. A third said they would rather be unemployed than unhappy in a job, and 42% said they would quit their job if their boss didnt consider a request for better working conditions.

While workers were prioritizing job security in the current economic climate, flexibility and working for a company that shares their values were also cited as important considerations when mulling a job change, according to the study.

Eighty-three percent of respondents told Randstad flexible hours were important to them in terms of what they looked for in a role, while 62% said parental leave policy was an important factor and 76% cited training and development.

Remote work also remained a core consideration point for many workers, with 71% saying flexibility in terms of working location was a played a key role in whether they would accept a job offer.

Corporate values were also important, with half of the employees across the globe saying they would leave a job if they felt like they didnt belong at the company.

This was even more relevant to Gen Z workers, with 61% saying they wouldnt work for a firm where they felt out of place.

Meanwhile, two in five people said they would reject a job offer from a company that didnt share their social and environmental values.

Cost-of-living crisis

Inflation surged to levels not seen for decades in many countries last year, with annual inflation rates in the U.S. jumping to 9.1% in June, and exceeding 10% for several months in the U.K. and the EU.

Thanks to persistently high inflation, many workers have seen their purchasing power squeezedand according to Randstads research, one in four people around the world have either taken on or are on the lookout for a second job to help them manage the cost of living.

Side hustles were even more prevalent among Gen Z workers, with 30% saying they were considering or had taken on an additional source of income. Just 17% of Baby Boomers said they had done the same thing.

Others were looking to their existing job to help them increase their income, with 23% saying they were planning to increase their hours at their current job.

Meanwhile, a fifth of workers said they were currently considering resigning from their job to look for a better-paid role to help them cope with spiraling costs. Again, this was a more prevalent consideration among Gen Z workers.

Rising costs were also forcing workers to rethink their retirement plans. Almost three-quarters of those surveyed said their financial position was preventing them from retiring as early as they would like to.

A quarter of Baby Boomers said they had delayed their retirement because of their financial position.

Half of workers said they thought theyd retire before 65down from 61% a year earlier.

Employers have to step up

According to the survey, employees are looking to their employers to help them manage rising living costs.

Almost 40% said they wanted a pay rise outside of their usual annual pay review schedule, while 41% said they were hoping for a monthly pay boost from their employer.

Almost a third said they wanted their employer to provide subsidies for energy, travel or other daily expenses.

Randstad CEO Sander van t Noordende suggested on Wednesday that employers ought to consider these expectations and demands from the global workforce, asthanks to a strong labor market talent scarcity is here to stay.

Employers have to step it up once again, as cost of living support is becoming a new differentiator in the ongoing scrabble for talent, he said in a news release on Wednesday.

The height of the Great Rotation may have passed, but companies must step up to expectations if they want to attract and retain their talent, he added.

Companies should have the ultimate ambition of creating a happy, inclusive and inspiring workplace where people feel they belong, and this means listening to workers views and respecting their values. Ultimately the businesses which support their employees throughout the tougher economic conditions will reap the rewards in retention when times are easier.

Learn how to navigate and strengthen trust in your business with The Trust Factor, a weekly newsletter examining what leaders need to succeed. Sign up here.

Goldman Sachs CEO David Solomon says the investment banking giant did 'too much, too quickly' pushing into consumer banking following a brutal earnings report

Goldman Sachs Group Inc. was overly aggressive in pushing into the consumer space, doing too much, too quickly, which contributed to worse-than-expected fourth-quarter earnings, Chief Executive Officer David Solomon said.

We obviously had a disappointing quarter and we tried to own that upfront, Solomon said in a CNBC interview Wednesday at the World Economic Forum in Davos, Switzerland.

The investment-banking giant poured billions of dollars into its retail effort, which includes the Apple Card and specialty-lending platform GreenSky. That operation, which posted revenue of $513 million for the quarter, has racked up $3.8 billion in pretax losses over the past three years. Goldman on Tuesday reported a bigger increase in expenses than analysts expected as compensation costs surged 16% from a year earlier to $3.8 billion.

Despite its missteps, New York-based Goldman did some things right in the consumer business, Solomon said. We now have a very good deposits business, he said, and the partnership with Apple Inc. is an interesting opportunity to experiment and try different things.

The banks return on equity for 2022 fell to 10.2%, below the 14%-to-16% target it set for itself earlier in the year. The firms shares slumped 6.4% on Tuesday, their biggest decline in a year.

Solomon also said in the interview that hes hearing more indication that the economy may be able to dodge the recession that had been widely predicted.

The sentiment is softening a little bit, and the view of the chance of a softer landing both in the US and Europe is actually increasing, he said.

Learn how to navigate and strengthen trust in your business with The Trust Factor, a weekly newsletter examining what leaders need to succeed. Sign up here.

Office cake culture should be banned, says top health official

In the midst of a busy working week theres often nothing more welcome than having a hot drink and grabbing a slice of cake for a colleagues birthday.

But one top health official has said allowing cakes into offices undermines peoples free will, adding its as bad as passive smoking.

The comments were made by Professor Susan Jebb, an academic at the University of Oxford who also chairs the Food Standards Agency.

Speaking to The Times, she said: We all like to think were rational, intelligent, educated people who make informed choices the whole time and we undervalue the impact of the environment.

If nobody brought in cakes into the office, I would not eat cakes in the day, but because people do bring cakes in, I eat them. Now, OK, I have made a choice, but people were making a choice to go into a smoky pub.

It comes after years of businesses pushing to make themselves more attractive to prospective employees.

Content creation platform Ceros built a pub in its office to act as a meeting and leisure space for staff.

The Google offices are packed with cafes and snack bars offering everything from healthy handmade meals to a quick bar of chocolate. Other businesses have pizza days or company-wide meals out.

So has the trend come full circle, as employees are called back to their desks instead of being offered incentives to come in under their own steam?

The key is balance, said Chris Preston, founder and director of UK-based business The Culture Builders.

He explained that offices should try to have a mix of healthy snacks and treats like cake, adding: If youve got your staff sitting there stuffing their faces with cake, thats a symptom of something worse. Employers need to be asking themselves why staff havent got access to education about a balanced diet or why theyre not able to get their hands on healthy food.

It could be a signal that staff are working really long hours and simply dont have the time to get their hands on anything other than a bit of cake thats been left lying around.

Another apparent work perk is having easy access to booze, with offices featuring beer taps and fridges full of alcohol. The trend even gave rise to companies like DeskBeers, which offers business class drinks deliveries.

A study lead by Marianna Virtanen of the Finnish Institute of Occupational Health drew similar comparisons about alcohol and overworking.

The study, which took data from 61 different studies to create a dataset of over 330,000 workers across 14 countries, found those who slog long hours are about 12% more likely to become heavy drinkers.

What are the benefits of having cake in the office?

While over-consumption could be a signal of a bad office culture, having cake in the office can really bring teams together, added Preston.

On peoples birthdays having celebrations like cake really allows colleagues to engage in those moments. The office for many people is their second home, they see it as an extension of their home life and they want to enjoy those times of joy with friends, he said.

There are a couple of things employers can do if theyre worried about having loads of stale cake lying around. One could be to introduce a birth month which is especially useful in a big team. It means everyone who has a birthday in a given month is celebrated on one day, so you dont end up with wasted food. Its also less of a financial burden on people who are bringing big cakes in to feed the whole team.

Another idea would be to take a wedding cake approach, said a spokeswoman for London-based artisan cake company Deluce Cakes. At a wedding you dont expect to get a massive wedge of cake, theyre cut into one-inch by one-inch pieces. It means everyone can have a bit and join in without going mad, the spokeswoman added.

She also said cakes which use natural, high-quality ingredients are always preferable: The method of everything in moderation applies to food. The idea of FOMO in the office environment is understandable to some extent but adults should be trusted to have some autonomy and self-control.

Learn how to navigate and strengthen trust in your business with The Trust Factor, a weekly newsletter examining what leaders need to succeed. Sign up here.

Davos attendees see dawn of new U.S. industrial policy

If the U.S. wants to reach tipping points in green energy technologies before climate change gets out of control, it would do well to take a page from the Asian playbook on industrial policy. That is one of the insights shared by Davos-goers at the World Economic Forum this week. Business should stop seeing government as an obstacle, and see it as the catalyst for required systemic change.

Depending on which perspective one takes, America has had an industrial policy since Alexander Hamilton invested half a million dollars in American manufacturing in 1791 instead of relying on imports from Great Britain. Or, critics might say it has never had an industrial policyat least not one like South Korea, Japan, and the Asian tigers had when they crafted import substitution after the Second World War.

Either way, U.S. industrial policy is now a reality for the first time in a long time, various participants at the World Economic Forum said this week. With the CHIPS act, the IRA [Inflation Reduction Act] and the infrastructure and jobs bills we now have the makings of a national industrial policy, Jon Creyts, CEO of the Rocky Mountain Institute, told me in an interview.

The acts infuse hundreds of billions of dollars into the American economy, helping U.S. companies shift toward a high-tech, low-carbon economy through financial incentives such as tax credits. And that, in itself, is a major shift for American capitalism, which has typically relied on a free market economy and limited interventions or steering by the government, Creyts said.

The advantages of this approach are obvious to those who study industrial policy elsewhere. The Rocky Mountain Institute will soon release a study with Deloitte that shows how economies can reach tipping points in the adoption of green technologies such as hydrogen, sustainable aviation fuels, and electric vehicles. The study points to emerging economies such as India as examples for such transformations, and the catalyst role that government can have in bringing them to fruition.

In India, for example, more than 100 companiesincluding Amazon, Flipkart, Ola, and Uberhave committed to achieve zero carbon mobility. It would help the country in its green transition, make it a leader in electric vehicle technologies, particularly for two- and three-wheelers, and put an end to the air pollution, which bogs down cities like Delhi. Crucially, though, state governments in Delhi and Maharashtra provided the necessary financial incentives.

But if the advantages are clear, so are the risks and downsides. It is no secret that certain elements of the design of the Inflation Reduction Act raised a number of concerns in terms of some of the targeted incentives for companies, European Commission President Ursula von der Leyen said in a Congress Hall speech in Davos on Tuesday.

The worries that Americas nascent industrial policy is protectionism in hiding are warranted, Christoph Catoir, president of Adecco, one of the worlds largest HR services firms told me in an interview. We already see positive effects of Americas industrial policy and expect that to accelerate in the second and third quarter of 2023, he said. Global companies are considering to invest in America instead of in Europe, which could lead to a win-lose situation.

And Europes executive leader didnt just stick to words. As Reuters reported, The European Union responded on Tuesday to U.S. moves to boost its energy transition with its own plans to make life easier for green industry, saying it would mobilize state aid and a sovereignty fund to keep firms from moving to the United States.

As such, what is meant as a race to the top in technologies could just as easily turn into a race to the bottom for governments. And whether thats a good thing for the two blocs consumers, remains to be seen. It certainly shows the challenges of the idea of cooperating in a fractured world, the theme of the Davos meeting this year.

Learn how to navigate and strengthen trust in your business with The Trust Factor, a weekly newsletter examining what leaders need to succeed. Sign up here.

Twitter Blue gets a little bit less expensive

Twitter is making it a little less expensive to get a blue check mark.

The social media site has rolled out an annual membership for the subscription service, which charges $84 per year. That lowers the monthly cost of the tick from $8 to $7.

Previously, subscribers were required to pay a monthly fee, rather than having the option for an annual one. People who subscribe via Apple iOS will still pay $11 per month, as the company passes on Apples fees to the user.

Twitter Blue is still a controversial addition to the site, as users are still confused about the differences between its checkmarks near user names and the sites former verification methods. (It was paused soon after its introduction amidst a flurry of fake verified accounts being posted.)

Beyond the check mark, Twitter Blue subscribers also see their replies ranked higher, can edit Tweets, customize the site more to their own preferences and upload videos that are up to 60 minutes long.

Musk has told Twitters remaining employees that the subscription business is vital to the future of Twitter, since the site has historically been so advertising driven (and many advertisers have pulled back from Twitter since Musks takeover).

Without significant subscription revenue, there is a good chance Twitter will not survive the upcoming economic downturn, Musk wrote in his first company-wide email in November. We need roughly half of our revenue to be subscription. Of course, we will still then be significantly reliant on advertising, so I am spending time with our sales & partnerships teams to ensure that Twitter continues to be appealing to advertisers.

Twitter has not announced subscriber numbers to date for Twitter Blue. In November, The New York Times, citing internal Twitter logs, reported just 140,000 of the sites 240 million accounts had signed up for the service.

Learn how to navigate and strengthen trust in your business with The Trust Factor, a weekly newsletter examining what leaders need to succeed. Sign up here.