What Satya Nadella thinks – The New York Times

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Unlike almost every other company, Microsoft has felt a “minimal net impact” from the coronavirus, according to its latest financial report. The tech giant’s share price has risen 14% this year; he’s sitting on nearly $ 140 billion in cash; and it looks likely to emerge from the pandemic stronger than ever. Company CEO Satya Nadella spoke to Times editors and reporters about handling the pandemic yesterday.

Respond, recover, reinvent.

Mr Nadella sees the world go through three phases during the pandemic. The first is simply to respond to the immediate impact through office closures, cost reductions, etc. Next is the recovery, which is already underway in many places, and will look more like a “dial” than a “switch.” He said, “There will be a lot of movement of the dial, back and forth.”

In the ‘reimagining’ phase, innovations born out of necessity in the previous two phases will emerge, such as remote control of manufacturing processes, AI robots to help diagnose patients, and learning technologies. more efficient remotely.

“Be on the lookout for what is lost.”

Mr Nadella said the raw productivity statistics of many Microsoft employees have increased, but that is not something to “over-celebrate”. More meetings start and end on time, but “what I miss is when you walk into a physical meeting, you talk to the person next to you, you can connect with them during the meetings. two minutes before and after. “It’s hard to replicate virtually, as are other critical soft skills for management and mentoring.

To move from offices before the pandemic to a fully remote configuration would be “to replace one dogma with another dogma,” he said. “What does burnout look like? What does mental health look like? What does this connectivity and community building look like? One of the things I feel is, hey, maybe we’re burning some of the social capital that we’ve built up in this phase where we’re all working remotely. What is the measurement for this?

About all that money …

Microsoft spent $ 10 billion in its most recent quarter on share buybacks and dividends, up more than 30% from the previous year. Is Mr. Nadella changing the way he is spending it, either returning it to shareholders, creating a safety buffer, or spending it on acquisitions?

He replied that Microsoft will use “all our levers” to develop. “We are going to allocate and acquire boldly, build, innovate, associate, whatever,” he said. “And then we’re also going to make sure that we have the ability to credit small businesses and other organizations that need this help,” he added, claiming to have spoken to several CEOs of airlines about their problems.

Central bankers are generally cautious in public. But the chairman of the Fed warned bluntly yesterday that the economy could suffer permanently if Washington did not spend more to counter the economic effects of the coronavirus.

Congress has already offered $ 2.9 trillion, he noted during a virtual event, in what he called “the fastest and most important response to any post-war slowdown”. The Fed has also taken unprecedented action, cutting interest rates, buying a wide range of bonds and directly supporting state governments.

It may not be enough. “There is a feeling, a growing feeling I think, that the recovery will come more slowly than we would like,” he said. “Additional budget support could be costly, but it’s worth it if it prevents long-term economic damage and leaves us with a stronger recovery.”

The markets quickly faded away like worried investors on Mr. Powell’s predictions. One particularly striking statistic he cited: nearly 40% of people who worked in February and belonged to households earning less than $ 40,000 a year had lost their jobs in March.

For the 12 largest investment banks, the first quarter was the best in years, generating the highest collective revenues of the period since 2015, according to research firm Coalition. The company compiled the figures for Bank of America, Citigroup, Goldman Sachs, JPMorgan, Morgan Stanley, Barclays, BNP Paribas, Credit Suisse, Deutsche Bank, HSBC, Société Générale and UBS.

Revenue jumped 12%, to $ 44 billion. Trading activity, boosted by volatile markets, increased more than enough to offset lower M&A advisory fees. and IPOs Fixed income, currencies and commodities (known as FICC) performed particularly strong.

But the number of front office employees fell by 5%, at 49,000, the lowest in six years. Several banks had planned to cut thousands more jobs this year, but have held back to deal with the fallout from the pandemic. That hiatus may be over: This week, Deutsche Bank announced this week that it relaunch its deep restructuring.

😷 Has the coronavirus surged in states that have rushed to reopen, like Florida and Georgia? Axios says not yet, citing the seven-day average of new cases. The Washington Post, which has looked at more measures, says it is complicated.

💰 Three Senate Democrats have called on the Trump administration to strengthen bank supervision distributing rescue loans to small businesses, after some borrowers complained that they received less than requested. Meanwhile, listed companies continue to borrow of the program, despite threats from the Treasury Department.

📉 In a survey conducted by PwC in March, 69% of US CFOs said it would take less than a month for their business to return to “business as usual”. In a follow-up survey last week, only 10 percent did.

The electric car maker may start manufacturing vehicles at its main plant in Fremont, Calif., Next week, according to local health officials said yesterday, after days of battle with Elon Musk for the reopening of the factory.

Tesla facility can resume full operations on Monday, as long as it follows certain worker safety precautions. Local police will enforce an agreement between the company and Alameda County public health officials.

• Elon Musk said he would reopen the plant last Friday, defying a county lockdown order. He then a) sued the county and b) opened this week anyway.

To note: A county official previously told The Times that Tesla was in talks to open on May 18 – the same day Ford and GM would restart factories – before Mr. Musk began his insurgency.

Several employees said they believe the company prioritizes profits over people. A said Niraj Chokshi of The Times that Tesla instituted safety measures such as temperature checks, but little has changed.

News from one of Mr. Musk’s other fights: The head of Facebook’s AI efforts said the Tesla chief “has no idea what he is talking aboutOn artificial intelligence, which he declared a threat to humanity.

For years, companies have more and more highlighted “adjusted” accounting metrics in their financial reports, often more prominent than the numbers required by regulators. These tend to exclude all kinds of troublesome expenses, the most infamous of which is EBITDA, or earnings before interest, taxes, depreciation, and amortization.

Say hello to Ebitdac. Highlights from the Financial Times a German industrial company, Schenck Process, which included “EBITDA adjusted for the effects of the Covid-19 crisis” in its latest financial statement. Without the pandemic, Schenck said, its first-quarter profit would have been € 5.4 million ($ 5.8 million) higher.

Risk to “quality of earnings” increases in times of crisisTower Hudson’s Ben Laidler wrote in a research note. He believes that businesses will more often take advantage of the pandemic to report large, one-time accounting expenses – “big bath” or “kitchen sink” charges, in the lingo – that reset or mask underlying issues without report. “Managers can use bad news as a cover to get rid of past aggressive bookkeeping or gain future flexibility,” he wrote.

• What to watch out for: the ratio of operating cash flow to net income. During a downturn, the latter decreases faster than the former, as companies report large non-cash charges, whether justified or not.


• Uber sold $ 900 million in debt to finance acquisitions. (NYT)

• JC Penney could seek Chapter 11 protection as early as tomorrow and is negotiating $ 450 million in bankruptcy financing. (NYT)

Politics and politics

• FBI agents reportedly seized a cell phone belonging to Republican Senator Richard Burr of North Carolina as part of an investigation into his stock transactions after a briefing on the virus. (Los Angeles Times)

• Democratic and Republican lawmakers are more and more disagree on whether to suspend mergers and acquisitions. during the pandemic. The Justice Department’s antitrust chief said such a move would “”lost. “(Politics, CNBC)


• TikTok broke a deal with the FTC to protect children’s privacy, consumer advocates said. (NYT)

• The founder of Webvan, a food delivery service that went bankrupt in the dot-com era, is trying again. (Forbes)

The best of the rest

• The pandemic will cost insurers $ 200 billion, predicts Lloyd’s of London. (FT)

• Bill Gates is trying to get other billionaires to give more to fight the coronavirus. (Recode)

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About Perry Perrie

Perry Perrie

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