Last week brought a lot of bad business news, and with it a new trend emerged: How CEOs apologize.
Mark Zuckerberg announced the largest layoffs in Meta’s history. And in a letter to employees, he said something that is becoming all too familiar: an admission of guilt among tech CEOs, in a straightforward and blunt manner. “I got this wrong,” he wrote.
In Zuckerberg’s case, he meant incorrectly predicting that a pandemic surge in ecommerce would be a permanent trend and invested heavily in headcount to meet that growth.
Also last week, in a letter regarding Stripe layoffs, CEO Patrick Collison explained how, in early 2020, “the world rotated overnight towards e-commerce… The world is now shifting again.”
Even back in July, Shopify CEO Tobi Lutke said in a letter that he too mistakenly bet on the permanence of ecommerce demand. “I got this wrong,” he said.
But the bluntest of apologies came from FTX founder Sam Bankman-Fried – more commonly known as SBF.
On November 10, SBF tweeted “I’m sorry. That’s the biggest thing. I fucked up, and should have done better.”
SBF was the CEO of FTX International, the troubled global cryptocurrency exchange, up until last week, but has since stepped down amid controversy, bankruptcy and what is to be believed a several-billion-dollar hole in the company’s balance sheet. The exchange is alleged to have used customer funds to cover losses at SBF’s trading firm Alameda Research, before suffering a liquidity crunch last week as users withdrew funds and sent the value of FTX’s FTT token crashing.
What’s else has changed?
Advice from many lay-off best practices websites starts something like this:
A typical layoff goes something like this:
- You will likely be called into a meeting with a senior member of the team and human resources
- In the span of 30 minutes, they will explain the conditions of your termination…
But in each of these recent cases, another common thread is that employees were informed that they will be informed, if they are one of the unlucky ones.
In the case of Stripe, employees were to be informed within 15 minutes, via email. At Shopify emails would be out in the next few minutes. At Meta, employees would find out their fate “soon.”
There are likely legal and practical reasons for letting the company (and public) know layoffs are coming before the individuals are actually laid off. But having employees watching the clock while anxiously refreshing their inboxes can’t be good for morale. And authenticity is hard to recreate when your peers ran the same playbook the week before.
Prior notice or not, this new CEO apology style is likely an attempt to be direct with employees, connect with users and convey transparency with a statement not couched in corporate lingo. But is their sincerity working?
In the case of Meta, employees were reportedly shell shocked and angry.
In SBF’s case, likely not either.
FTX and its affiliated companies have since filed for bankruptcy protection, which means potentially billions of dollars’ worth of customer assets are trapped within the exchange and may be tied up in bankruptcy proceedings for a very long time.
In response to his frank admission of “fucking up,” angry Twitters users were not having it. Some tweets even called for arrest and jail time.
FTX is actively being investigated by the Texas Securities Board, the DOJ, the SEC, the CFTC, and California’s Department of Financial Protection and Innovation, according to Decrypt.
Unlike the other CEOs who tried to strike a contrite tone, it’s looking increasingly like SBF – who just publicly apologized with an admission of guilt – might have to take the stand. So, did it work? It seems not. Was it worth it? Time will tell.
As each CEO has said in their statement, there is no good way to do a layoff, and there have certainly been worse ones than we’ve seen in recent weeks. But Stripe CEO Collison may have done the best with a bad situation – he was the only CEO to include the word 'respect' in his statement.
Buy hey, at least Meta kept “email addresses active throughout the day so everyone can say farewell.”
Larissa Padden is an account director at Cognito