Hello dear readers!

Thanks as always for joining me here for an exciting issue of The Supply Times. If this is your first time here, welcome! If you’re a die-hard TST’er, thanks for your loyalty. I love the opportunities this newsletter has given me to connect with like-minded people around the world. If you know someone who you think might like it, be sure to send this their way!

This week, we take a look at the surprising uptick in corporate stock buybacks and an exciting win for the four day workweek. I’ll also share some of the great stuff I’ve been reading, watching, listening, to and thinking about.

Ready?

Industry Highlights: Buybacks, Baby

There’s always a sense of optimism when entering a new year. The idea that turning the page on the calendar also means a fresh start for businesses.

That was certainly the hope for businesses and investors, who in January bet on the Federal Reserve lowering interest rates after the market showed signs of slowing inflation.

But that ship has sailed, especially owed to the most recent jobs report and evidence that inflation will be an unwelcome guest for a bit longer.

With interest rate reductions unlikely in the near future, most companies are turning to another way to stabilize their return: buybacks.

According to The Wall Street Journal, stock buybacks are projected to top $1 trillion-with-a-T for the first time ever. As of mid-February, companies had authorized more than $220 billion in buybacks.

Topping the list so far this year is Chevron ($75b), Meta ($40b), and Goldman Sachs ($30b).

Buybacks do a number of things. In addition to buoying the market, they also add value to shareholders’ investments, which is ultimately the name of the capitalism game. Some companies also initiate buybacks to battle dilution.

Where it becomes hard to justify, though, is when you examine the decision to initiate buybacks in the midst of belt-tightening measures. The aforementioned Meta, which found $40 billion laying around to reinvest in itself, announced earlier this week that it was planning another round of layoffs that may result in thousands of employees getting the boot. These cuts come in addition to the 13% of its workforce that was shown the door in November. To be fair, Meta has said the layoffs are part of a strategy to flatten the company and make it more efficient, but it does warrant some skepticism when you see major layoffs concurrent with massive stock buybacks.

A cynic might accuse these corporations of using money to line investor—and executive— pockets, which probably explains why President Joe Biden announced a plan to triple corporate buyback taxes to 4% in February’s State of The Union Address. Biden cited oil companies that used record profits to buy back stock.

Other experts say buybacks are especially unethical when they’re funded by tax dollars. A New York Times op/ed pointed out that there are currently very few stipulations in the CHIPS and Science Act—a program designed to fund the building of US microchip factories—that prevent companies from handing that money right to shareholders.

But others stand firm on the buybacks’ benefits. In his recent letter to shareholders, Berkshire Hathaway chair Warren Buffett said penalizing all corporate buybacks—as Biden’s proposed tax hike would—was absurd.

Strong words from someone who typically strikes a calmer tone when discussing business. The question remains—is this new push a doubling-down of corporate greed, or a normal reward for investors?

The Future of Work: Thank Goodness It's...Thursday?

Hail to the 4-day workweek!

Firms around the world got a wakeup call in the form of the Great Resignation, where workers suddenly realized that yes, that meeting COULD have been an email, or it was possible to still be productive at home.

And though I’ve detailed a number of ways that companies have tried to slow the growing dissatisfaction about workplace conditions in previous issues, few have yielded tangible results.

Until now.

According to The Wall Street Journal, 61 UK businesses—ranging from banks to fast-food restaurants—experimented with giving their workers one paid day off a week to see if they could get just as much done while working less.

The result?

A whopping 90% of participants said they’d continue to experiment. 18 companies said they’d make the change permanent.

Overall, executives involved in the study said they loved the idea of seeking new and better ways to work, and if a shorter workweek can improve employee well-being and loyalty while not sacrificing productivity, so be it.

The question is: Will the 4-day workweek catch on in the US, or will we forever be chained to the norms propagated by the Industrial Revolution?

The answer for California congressman Mark Takano (D) is certainly the latter. The Washington Post reported that last week, Takano reintroduced a House bill that would make the 32-hour workweek a national standard and lower the threshold triggering overtime compensation for most employees.

I say reintroduced because Takano’s previous bill died last year without getting a hearing. Even if it had, there would’ve been little chance of making it through a Republican-controlled House.

But now, bolstered by the UK findings and winning some endorsements from key unions like the AFL-CIO, Takano believes there’s a much better chance of the bill seeing the light of day.

“Workers across the nation are collectively reimagining their relationship to labor—and our laws need to follow suit,” Takano said in a statement. “We have before us the opportunity to make common sense changes to work standards passed down from a different era.”

The question on the minds of skeptics is how reducing the workweek would affect productivity. Most companies are still scratching their heads about why workplace productivity dropped each quarter in 2022, and with the increased financial strain caused by inflation and rising interest rates, they’re certainly not poised to risk any losses in that area.

But as Scientific American reported this month, the results of the UK pilot program suggests it won’t be a concern. Despite workers logging fewer work hours, companies revenues actually INCREASED by an average of 1.4%

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The Supply Aside: What I’m Reading, Watching, Listening to, and Thinking About Re: Supply Chain, Work, and Beyond

📕 Read - Paul Graham 101

If you don’t know who Paul Graham is, you should. He’s a computer scientist, entrepreneur, venture capitalist, and one of the best essay writers I know. The thing I like most about Graham is not only how prolific he is, but how concise he is with words. There are no frills about his writing, and it’s hard to beat him on logic. He’s the kind of guy that even Elon Musk pays heed to when it comes to business wisdom. If you’re looking for an entry point to Graham’s work, I recommend this blog, which compiles some of his best thoughts in one (long!) post. Then get going on PaulGraham.com. You’ll be glad you did!

📺 Watch - The Murdaugh Murders and Low Country

Just when you thought that reality couldn't trump fiction, we get the murder trial of the century! Last week, jurors returned a guilty verdict for South Carolina lawyer Alex Murdaugh for the murder of his wife and son. Not surprisingly, the Netflix series “The Murdaugh Murders: A Southern Scandal,” that details the crime—and a whole lot more—hit number one on the site. Morbidity notwithstanding, it's some WILD reality TV. Not to be left behind, HBO Max also has their take on the murders called “Low Country: The Murdaugh Dynasty” that’s also worth a watch. You can’t make this stuff up.

👂 Listen - The World Reimagined with Gautam Mukunda

I love Gautam Mukunda’s World Reimagined podcast. Presented by Nasdaq, this Harvard professor, author, and former Jeopardy! contestant interviews some of the smartest leaders in the world about what it really takes to be successful at the top. The episode I recently listened to is an older one, but its guest has new significance. It features Ajay Banga, the former CEO of Mastercard. At the time, Ajay was Mastercard’s Executive Chairman of the Board of Directors, but recently, he was nominated to head the World Bank. Ajay is joined by Bhaskar Chakravorti, the Dean of Global Business at Tufts University’s Fletcher School. They discuss the importance of building a more digitally inclusive world—and the barriers that stand in the way.

💡 Think - Chinese Espionage

As if there wasn’t enough to worry about regarding Sino-US relations, it appears we now have to contend with a new form of espionage: cranes. Yep, you read that correctly, cranes. Although, as someone that has worked for a crane manufacturer, I have to admit that I didn’t see that coming.

The Wall Street Journal reported this week that the giant China-manufactured cargo cranes we've been installing at US ports could potentially gather business and economic intelligence using embedded container software. Talk about a Trojan horse!

What's more, The New York Times just published this incredible and detailed report on how deep China’s industrial espionage plans go. It shouldn’t come as a shock to anyone that global superpowers are spying on each other, but China’s apparent impunity is concerning. They are, as the Times article puts it, creating a “road map for theft.”

Charts of the Week

Quote of the Week

Tweet of the Week

Finally...

Thanks so much for reading. I’d love to know what you think about this issue and how I can make it more useful to you.

If you have suggestions or topics you’re interested in seeing me address, shoot me an email at [email protected]!

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Happy reading this weekend!

-- Naseem