Finance leaders predict rougher seas ahead when it comes to operations costs.

Half of the 273 finance leaders who responded to Grant Thornton’s Q1 CFO survey said they expect operating costs to increase over the next year, which marked a 12-percentage-point rise from the previous quarter and tied the high-water mark for the accountancy’s quarterly survey.

Organizations are feeling the sting of higher shipping costs due to attacks in the Red Sea, Paul Melville, Grant Thornton’s national managing principal of corporate finance, said in the report. CFOs’ confidence waned by 11 percentage points from the previous quarter when it came to meeting their supply-chain needs, the survey found.

“People are having to pay more to get goods delivered. That’s a cost that has risen over the past few months,” Melville said in the report.

Economic optimism. The survey also found strong optimism among CFOs about the economy. Just over a third said they were “very optimistic,” an 11-quarter high for the survey. Meanwhile, the 12% of respondents who said they were pessimistic about the economy tied an 11-quarter low. Jim Wittmer, Grant Thornton’s national managing partner for tax growth, said expectations of lower interest rates played a role in respondents’ optimism.

For more on CFO sentiment, click here.—AZ

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If this big bank earnings season had a theme song, we know which Katy Perry classic we’d pick. A week when they reported unexpectedly strong revenues—especially from investment banking and trading—but also forecast weak revenues and profits is one that we could only describe as “Hot N Cold.”

You’re yes… An uptick in corporate dealmaking fueled investment banking growth at the four largest US banks—JPMorgan Chase, Bank of America, Wells Fargo, and Citibank—as well as at Goldman Sachs and Morgan Stanley. The result was “one of [investment banking’s] best quarters” since the Fed began hiking rates in 2022, the Wall Street Journal reported. Their earnings releases over the last week either matched or beat the consensus forecasts for revenue and earnings per share, according to the WSJ.

“It’s clear that we’re in the early stages of a reopening of the capital markets,” Goldman Sachs CEO David Solomon said in an earnings call last Monday. Goldman reported that growth in its investment banking and trading pushed its net income up 28% year over year, beating analyst expectations. Solomon said he expects more M&A activity will keep boosting the demand for debt underwriting at Goldman, which saw a 32% YoY jump in i-banking revenue.

…then you’re no: Solomon’s sunny outlook was beclouded the next day by Fed Chair Jerome Powell. The Fed had hoped inflation reports would show it could cut rates soon without overheating the economy, but instead inflation has continued to tick up.

Click here to continue reading.—GD

Companies that grow at an accelerated pace run the risk of hiring too aggressively, resulting in an overgrown organization with duplicated roles.

Tesla seems to have experienced this issue. In an April 15 email to employees, CEO Elon Musk announced layoffs affecting more than 10% of Tesla’s workforce. He attributed the need for cuts, in part, to the company’s “rapid growth,” which led to “duplication of roles and job functions in certain areas.”

Rapid-growth companies tend to set aggressive business goals that come with equally aggressive headcount plans, Neil Costa, CEO of recruitment marketing agency HireClix, told HR Brew. But when a headcount plan is too bold, it can result in duplicating roles.

HR and finance can work together to keep the headcount plan in check, he noted. By reviewing market data on compensation and “payroll and personnel costs,” they can determine if a manager’s hiring plan is too bullish, he said in a follow-up email to HR Brew. This can ultimately help prevent role duplication and layoffs.

Click here to read HR Brew’s story on avoiding overhiring.—AS

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Can't travel to New York on May 2? We have good news! We’re bringing the event to you via livestream, so you can tune in wherever you are (well, wherever you have Wi-Fi). Tune in and hear from Mastercard, Headspace, CFO Leadership Council, and many more on AI integration, toolkit strategies, and finance operations. Tune in.