In recent weeks, layoffs have hit the tech ecosystem hard. From industry giants like Meta and Amazon, to ride-share company Lyft, and cloud provider Salesforce, many employees are now rearranging their lives in a fraught macroenvironment (and that’s not even mentioning Twitter, which has a set of unique post-acquisition issues all its own).

But how does a company decide when and how to let employees go—and is there a strategic checklist that CFOs follow when making the call to reduce headcount?

“What often happens is the process really starts well in advance of any type of decision,” Russ Porter, CFO of the Institute of Management Accountants, told CFO Brew. “And it starts with people doing strategic planning and scenario planning, and envisioning: What happens if the market turns down? What happens if our revenue doesn’t materialize the way we’re expecting?”

While layoffs can feel sudden for employees on the receiving end, Porter said the scenario planning begins when data starts trending downward. “It’s almost never about what I’m seeing today. It’s very often about what today’s results mean for the longer-term future.” Financial planning and analysis (FP&A) teams may even be asked to sign non-disclosure agreements (NDAs) while they’re running projections, to prevent word of job cuts from leaking out before the company is ready.

Laying employees off should never be the first line of defense, Porter told CFO Brew, and said companies facing lower projected revenues usually will cut back on discretionary or travel expenses first. “People are one of the last things that companies want to shed,” he said.

When determining whether layoffs are necessary, Christina Ross, CEO of FP&A planning company Cube, told CFO Brew that—even though most people don’t—it’s really the time to “understand and make sure you’re clear on your business strategy” before anyone jumps to conclusions around cutting headcount.

Read more here.—KT

Putting your money where your mouth is ain’t easy, especially when your mouth is talking about billions of dollars. But sometimes, to use another hack phrase, you gotta put up or shut up. Or, you know, spend to save! Skin in the game! Whatever cliché works for you.

That’s particularly true when it comes to building supply-chain resiliency. The supply-chain disruptions of the last several years exposed vulnerabilities and risks in critical industries. Fixing those problems is costly and complicated.

Take semiconductors. There’s a narrow funnel of semiconductor production running through geopolitically risky Taiwan and many industries found their supply of semiconductors choked off during the pandemic. Nearly all of the world’s semiconductor manufacturing was outsourced to Taiwanese companies over the last two decades, and there is little chip-manufacturing capacity outside of Taiwan. One firm alone, Taiwan-based Taiwan Semiconductor Manufacturing Company (TSMC), controls over half of the world’s semiconductor foundry production.

Governments, companies, and think tanks the world over are now looking for ways to bolster and protect semiconductor manufacturing and supply chains. Paying for those solutions requires financial creativity, innovation, and cooperation.

Case in point: To reshore semiconductor manufacturing, US chip maker Intel started building two new semiconductor foundries in Arizona last year, at an estimated cost of $20 billion. In August 2022, Intel announced a new $30 billion funding model for the Arizona facility.

“To build these $30 billion fabs [fabricating facilities] is not something that even Intel can do on its own,” said Intel CFO David Zinser during a fireside chat at the MIT Sloan CFO Summit last week.

Read more here.—DA

Buy now pay later (BNPL) products are gaining popularity. By 2026, almost 40% of US internet users will use BNPL. Download our report to find out where BNPL is headed.

Get your free report now.