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Hello again, dear readers!

Even the best can have their off days. But when those at the top of the game make a mess of things, the consequences can be stupendous. CrowdStrike’s epic slip-up wiped over $5.4 billion from Fortune 500 companies, creating global cyber-headaches on a level that we haven’t seen since the Y2K panic. Read on to learn more about the fallout from July 19th. 

Also, those with us with a finger on the pulse of the talent market have been tracking a worrying trend: salaries are falling. Jobseekers across several industries are lowering their salary expectations by up to $20K as companies slash spending. Find out how employers are managing this (hint: geography plays a part) and why it’s happening, below. 

This issue features the usual bunch of AI Insights and recommendations for the week's podcasts, books, shows, charts, and tweets, followed by a final chuckle. 

Let’s get going.

Industry Highlights: CrowdStrike’s Epic Fail

Do you remember where you were on Friday, July 19th? 

Personally, I was trying to hit the send button on a previous issue of The Supply Times, and found to my dismay that my mailing list software was acting like a drunk octopus in a bar fight. Why? The CrowdStrike fiasco. 

As someone who closely follows IT news, I couldn't help but be captivated by the drama surrounding CrowdStrike. What started as a routine software update quickly spiraled into a major digital disaster, grounding flights, disrupting markets, and sending shockwaves through businesses worldwide.

On that fateful Friday, CrowdStrike rolled out a faulty software update that caused millions of corporate and government Windows computers to go haywire. You can imagine the chaos: the dreaded “blue screen of death” popped up on screens in banks, retail giants, and even healthcare systems. When the dust settled, CrowdStrike confirmed it was all due to a “defect found in a single content update for Windows hosts.” They insisted it wasn’t a cyberattack—just a really unfortunate software snafu. 

Still, the fallout was staggering: the company’s stock plummeted 11%, wiping out a jaw-dropping $9 billion in market value. Fortune 500 companies faced around $5.4 billion in damages from the outage, while insured losses were estimated to be between $300 million and $1.5 billion. Most of these losses will go uninsured, with fewer than 1% of global companies with cyber insurance affected.

CrowdStrike's software is designed for proactive monitoring; scanning machines for suspicious activity in real-time. But as we know, this kind of access can be a double-edged sword. While it’s great for catching threats, a single flawed update can disrupt entire networks. Cybersecurity expert Alan Woodward pointed out that this situation resembled a ransomware attack, albeit one initiated by the very company meant to protect against such threats.

One of the hardest-hit players was Delta, which took a massive $500 million hit and had to cancel thousands of flights due to the cascading failures from the failed update. In an ongoing spat, Microsoft has claimed it reached out to Delta daily from July 19 to July 23, offering support, but the airline reportedly turned down those offers. 

Delta's CEO, Ed Bastian, didn’t hold back in criticizing both CrowdStrike and Microsoft, calling Microsoft “probably the most fragile platform” among tech providers. Delta’s recovery was slow, partly due to internal systems that weren’t utilizing Microsoft’s products but were still impacted by the broader incident. Now, with investigations from the U.S. Department of Transportation underway, Delta could face fines depending on the findings.

As CrowdStrike scrambled to resolve the issues, each affected Windows machine required a reboot—sometimes as many as 15 times. You can imagine the frustration among IT teams, many of whom faced prolonged downtime. CrowdStrike assured customers they were working on automating the fix, but many were left waiting for days to restore full functionality.

The CrowdStrike outage is a vivid reminder of the vulnerabilities in our tech-dependent world - and a critical reminder to thoroughly vet updates before deployment. 

While this event may just be a blip in the grand scheme of cybersecurity, it’s one that will surely be analyzed for years to come. Even industry leaders can stumble, and a single update can lead to widespread consequences in the hyper-connected realm of cybersecurity. Hopefully, CrowdStrike will learn from this experience and come back stronger. After all, we will all benefit from reliable security solutions.

The Future of Work: No More Unicorns Needed

White-collar salaries are dropping fast, and blue-collar salaries are following. What’s driving this trend? Is it the employer-driven market where there are plenty of candidates competing for every role? Are business cost pressures forcing companies to slash recruitment budgets? Or is it simply a market correction after overspending on talent during the pandemic? 

As reported in the WSJ, a recent analysis from ZipRecruiter highlights a significant decline in wages, with positions that once commanded hefty paychecks now advertised for tens of thousands less. For instance, tech jobs that previously paid between $110,000 and $130,000 are now being filled by less experienced candidates for around $85,000 to $100,000.

One notable trend is the relocation of jobs from high-cost cities to more affordable areas. Companies are increasingly moving roles from cities like San Francisco to places like Cincinnati and St. Louis. This shift allows them to pay lower salaries while accessing a more affordable talent pool. Moreover, in a reversal of the reshoring trend, more jobs are moving overseas to take advantage of low-cost workforces in Mexico, Poland, and elsewhere. 

Employers are also favoring contractor roles over full-time positions. These contracts typically come with fewer benefits, making them appealing for companies looking to save a buck. Some candidates have reported receiving offers for contract roles at up to 65% less than their previous salaries for what is essentially the same job.

Another tactic for slashing employee spend involves hiring less experienced candidates. Many organizations are filling roles that were once occupied by seasoned pros with newcomers willing to accept lower salaries and a steep learning curve. Job postings that used to advertise salaries in the $80,000 to $100,000 range are now showing figures closer to $60,000. 

“Unicorns,” according to one expert quoted in the WSJ, are fast becoming extinct, with businesses no longer so eager to offer outsized salaries to top performers. One company reportedly has implemented a “no more unicorns” hiring strategy.  

Remember the attractive signing bonuses and hiring incentives that were all the rage during the pandemic? Those perks are largely disappearing now, and the red carpet appears to have been pulled from beneath the feet of new hires. Companies are scaling back on these incentives, reflecting a broader trend in cost-cutting measures. 

Economists have told us that the wages vs inflation numbers have been trending in the right direction since early 2023, but this reversal will likely erase those gains. This is concerning news in a period where households were already struggling to make their income stretch to cover food, energy, and housing. 

So, why are companies resorting to these strategies? The answer lies in the shifting dynamics of the labor market and rising operational costs. With more candidates competing for fewer high-paying roles, employers feel empowered to offer lower salaries. Economic pressures, such as inflation, are prompting firms to tighten their budgets, often at the expense of employee compensation. Many businesses are grappling with increased costs in other areas, including supply chain issues, which further restrict their ability to offer competitive wages.

While these strategies may yield short-term savings, they could lead to higher turnover rates when the job market shifts again. Employees accepting lower-paying jobs may not stay engaged or feel valued, harming workplace morale and productivity. 

If you’re a job seeker, staying informed about these trends and being ready to negotiate based on industry standards is essential. While it may be necessary to adjust your salary expectations, candidates should also consider the overall compensation package, including benefits, work-life balance, and growth opportunities. Stay adaptable, and stay informed.

AI Insights

• What’s the point of degrees if jobs will be automated? College students are reportedly suffering from anxiety and a lack of motivation in the knowledge that the skills they are learning will likely be replaced by AI. This article presents a psychologist’s viewpoint on how to cope. 

• Musk to unveil robotaxi at Warner Brother Studio in October: After nixing an August launch due to a last-minute design change, Tesla is finally unveiling its Robotaxi on October 10. But we won’t be able to see how it performs safely on the average street, with Tesla choosing to launch in the controlled environment of a Californian movie studio. 

• Alexa will be powered by Anthopic’s Claude AI: The next-generation Alexa will feature conversational shopping tools, aggregated news, child-friendly chatting, and better smart-home automation. However, it won’t be powered by Amazon’s in-house AI. Rather, it will use Claude (Anthropic AI). Amazon notably invested $4B into Anthropic last year.  

• Kids are using generative AI for maths homework: With the Gauth app, owned by ByteDance, students can simply point their phone at a homework problem and the AI will generate a step-by-step guide and (usually) the correct answer. Schools have been so focused on combating AI-generated writing assignments that this one may have slipped under the radar.

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The Supply Aside

📕 Read - Brave New Words: How AI Will Revolutionize Education (and Why That's a Good Thing)

Robots educating your kids? Welcome to the AI revolution in education! In Brave New Words, Salman Khan, founder of Khan Academy, explores how artificial intelligence and GPT technology are set to transform learning. He highlights the potential of AI to personalize education, tailoring lessons to each student's unique pace and needs while enhancing traditional teaching methods. Beyond technology, he delves into the ethical and social implications, advocating for a more accessible education system that benefits learners worldwide with the massively scalable power of AI. Our household has been a long-time fan of the Khan Academy, so we enjoyed this book quite a bit. 

What Else I’m Reading

• China steps up cyberattacks on US internet providers: Experts have warned of “unusually aggressive and sophisticated attacks” by Chinese hackers, who have accessed at least two major internet providers. Targets are believed to include government, military personnel, and other strategic groups. 

• Why saying “no” is crucial to protecting your personal brand: An interesting article about drawing lines in the sand in your career and only taking jobs that align with your values; measured against the reality where it’s sometimes necessary to “flex your principles.”  

• Will interest rate cuts raise commodity prices? The Fed's first rate cut is expected on September 18th. What will it do to commodity prices, which are especially sensitive to rate increases? Oil - according to The Economist - is not expected to jump significantly due to OPEC plans to unwind production cuts, and weak demand in China.

📺 Watch - Betting on Zero

In late 2016, a lobbying firm employed by Herbalife bought hundreds of tickets in an attempt to wreck the premier of this documentary by keeping the theater empty. This desperate suppression effort reflects the intense controversy surrounding Herbalife, a company accused of operating as a pyramid scheme. Betting on Zero, directed by Ted Braun, follows investor Bill Ackman as he takes a billion-dollar short position against Herbalife, believing it is on the brink of collapse. It explores the implications of multi-level marketing practices that prey on the poor and the fierce battles between Ackman, Herbalife’s CEO Michael O. Johnson, and majority investor Carl Icahn. Today, Herbalife has yet to collapse, although Ackman claimed a delayed victory after the stock plunged 32% in February 2024. 

👂 Listen - How to Expand Time and Increase Happiness

“Time poverty” is the chronic feeling of having too many things to do and not enough time to do them. It’s unsurprising that so many people suffer from this condition given that we Americans work an average of 1811 hours a year, which is 7 weeks more per year than people in the UK and Switzerland. We work longer days, we juggle multiple jobs, and we’re nervous about taking our vacation time. Professor Cassie Holmes, an expert on time management, joined The Good Life Project podcast to share her blueprint for reframing time, distinguishing between what matters and what doesn’t, and for living a more intentional life. I love Holmes’ description of time as a “nonrenewable resource.”

💡 Think - The Great Resignation to the Great Hesitation

The US job market is cooling faster than a forgotten iced latte. July's meager addition of 114K new jobs and unemployment climbing to 4.3% signal a shift from "You're hired!" to "Let's reassess." The labor market's no longer a pressure cooker for inflation, giving the Fed room to breathe (potentially cutting rates). Adding to the chill, the Labor Department dropped a bombshell: 818K fewer jobs were created in the year ending March 2024 than initially reported.

While it's still a (relatively) good time to be an American worker, the job market's getting less rosy. The private sector quits rate is at a tepid 2.3%, below pre-pandemic levels, and hiring rates are closer to 2020's trough than its peak. Wage growth is slowing, with the Employment Cost Index showing the slowest increase since 2021.

The Fed's balancing act continues: weighing inflation risks against a potential labor market nosedive. As economic growth decelerates, we might be in for a bumpy ride. Buckle up, folks - this economic rollercoaster isn't over yet.

📕 Be sure to check out my book: Fire the Boss, Keep the Love: 10 Jobs, 10 Exits, 10 Lessons.

Whether you're starting your career or a seasoned pro, this book offers fresh perspectives and actionable advice to help you level up. I delve into my own personal career story and career wisdom from top executives to explore topics including:

• Career transition strategies

• Building lasting professional relationships

• Tips for thriving in diverse corporate cultures

Fire the Boss, Keep the Love is a must-read for anyone ready to take charge of their career journey and forge an authentic path to success. Get your copy on Amazon!

💡 New course: Craft Your Career!

Almost four years ago, my colleague Aaron Cleavinger and I launched a course that transformed careers and changed lives. 

Helping people with career advice has always been our passion. We've done it informally since the start of our careers, and the demand has never stopped. With all the recent chaos in the job market, more people, including high performers, need help to take their careers to the next level, so we decided to do something about it.

We're thrilled to announce the relaunch and rebranding of our course, Craft Your Career (CYC)! Our course is updated for today's context and is even more in-depth and effective than our previous offering. 

Sign up here: https://craftyourcareer.ck.page/

Charts of the Week

Quote of the Week

Tweet of the Week

The Final Chuckle

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 want to see me address, email me at [email protected]!

Want more?

If you’d like to read more of my writing on the supply chain, entrepreneurship, or the future of work, check out my website.

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Happy reading this weekend!

-- Naseem