On Wednesday, Delta (DAL) and Walmart (WMT) believe that the long-term business will cut or withdraw forecasts as a result of tariff uncertainty.
However, reducing guidance so that executive teams can buy their time to understand what constitutes business success under this new tariff regime is just one way businesses can use these events for cover.
Another way is to finish off what started after the pandemic: downsizing.
In 2022, a wave of layoffs blew the corporate world, particularly the high-tech industry, as businesses realized they were exaggerating during the pandemic boom.
And this trend still focuses on today’s decision-making.
For example, at Meta (Meta), the company reportedly continues to ull cull staff, pushing out what it considers as low-performing people.
AI is also an accelerator for businesses restructuring their workforce. And while predictions about AI that come for everyone’s jobs are sometimes hyperbolic, this new technology stack can be opened in the sense that it can avoid avoiding some employment in the first place.
Earlier this week, Shopify CEO Tobi Lutke outlined a new set of principles that company staff need to incorporate AI into their work. One of the key points of Lutke said that teams cannot seek personnel until they prove they can’t do the extra work they think humans are needed.
It will bring us back to customs.
All swings in the business cycle (higher fees, recessions, tariffs, etc.) open two doors for business management.
The first is that you need business to figure out how to navigate this new variable. This is the stage we are at today.
Second, you can make decisions that your management team might want to do anyway.
Take Mark Zuckerberg’s 2022 memo to Meta staff who announced that 11,000 jobs have been cut.
“In this new environment, we need to be more capital efficient,” writes Zuckerberg.
“We have shifted more resources to more high-priority growth areas, including AI Discovery Engine, advertising, business platforms and the long-term vision of Metaverse. We have reduced costs across our business, including scaling backback budgets, reducing perks, and reducing our actual real estate footprint.
Yes, the announcement saw the company’s stock price fall by about 60% from its record high. Interest rates were rising as inflation surged. The literal costs of doing business were rising. Capital efficiency has become a larger part of the implementation of social networks.
But will you change your organizational structure to improve efficiency, cut off perks, cut down budgets, and reduce your real estate footprint?
These are plans that any corporate finance team is ready to offer executives at any time. Just say the words.
From Zuckerberg’s memo, Meta’s business has been booming for the past two and a half years, with its stock price being met in physical form.
When the company decided to attract 11,000 people in November 2022, it had reported a total of 87,314 people a few weeks ago. In January, the company reported that the principal was 74,067 at the end of 2024.
Net income for the three months ended September 30, 2022 was $4.4 billion. For the quarter ended December 31, 2024, net income was $20.8 billion.
That’s efficiency.
And while not all companies that drive efficiently are aware of these types of outcomes, change agents like executives can’t come and go without taking shots.
Like the pandemic, the AI boom has covered several companies to go on new growth projects, pledging to leverage technology to unlock new markets.
And like the subsequent trends in inflation regimes and downsizing, tariffs and their accompanying uncertainty provide ample space for businesses to take another crack to increase efficiency in a post-pandemic world.
