Lessons from the month of March

As the clocks spring forward and we’re faced with the idea of actually having an Irish
Summertime, we’ve decided to look back on the month that was–and share what we’ve learned from some of the biggest stories in business news.

1. A Corkman is leading the €3B takeover of Credit Suisse

Of course. Forever attempting to persuade us that they’re the Real Capital, Corkonian Colm Kelleher has been tasked with the €3 billion takeover of Swiss bank Credit Suisse after their spectacular fall from grace earlier this year. Making no bones about the fact this is an “emergency rescue”, Kelleher–the elected chairman of UBS – the world’s largest wealth manager, with co-headquarters in the cities of Zürich and Basle–has quite the task ahead, as the markets continue to experience upheaval and fears of banking system contagion remain.

This follows, indeed, the collapse of Silicon Valley Bank (SVB) just weeks prior–another example of a lender crushed as a result of executive decision making. The risks taken by executives at Credit Suisse were of a different nature to those at SVB, but still substantial. What many have come to question in recent weeks is: did we learn anything from 2008? Efforts were made then to ensure that potential bailouts would involve as little taxpayer money as possible, and that bank owners would be penalised should shit hit the fan. The Dodd-Frank Act in the US, for example, seemed to promise that shareholders would take the hit if a bailout was deemed necessary. However, theory and practice are very different things. With SVB, a number of top-level executives suffered no loss–instead, many of them took home a profit. A number of them actually sold their shares nearly two weeks before the failure, meaning they took home a nest egg while others suffered. It feels futile to say there is much to learn from this because we’ve been
here before.

2. Good news for Silicon Valley Bank

SVB was the largest bank to fail since the 2008 financial crisis when California regulators closed the bank on March 10, sparking massive market disruption and heightening stresses across the banking sector globally. Based out of Santa Clara, it was the 16th biggest lender in the US at the end of last year, with about $209 billion in assets.

On March 27, First Citizens Bank announced it would acquire the deposits and loans of SVB, closing one chapter in the crisis of confidence that has ripped through global financial markets. From that day, SVB’s 17 former branches began operating as Silicon Valley Bank, a division of First Citizens Bank, and SVB customers will continue to be able to access their accounts through websites, mobile apps and branches, First Citizens said. Investors welcomed the deal, sending First Citizens shares up more than 40%.

First Citizens is based in Raleigh, North Carolina and calls itself America’s biggest family-controlled bank. It has been one of the largest buyers of troubled banks in recent years. The UK arm of SVB was bought by HSBC earlier in March for £1.

3. Ireland is so hot right now

It’s the last week of March as I type this, so the dust mat finally settled on Ireland’s Grand Slam, Six Nations sweep and Oscar glory. While Banshees took home nothing (which, to be honest, Martin McDonagh and his eerie nature are likely delighted with) our Boys In Green did us proud by demolishing Owen Farrell’s side in a game that had every punter in Dublin pubs on their knees. The first 40 minutes of games like these is always a battle, just ask Paul Mescal who had to trust his whole family to play cool on international telly, but Sexton’s side ploughed on, despite Andrew Porter somehow already having a bleed on his ear before he even set his foot on grass.

It’s a great feeling to consider Ireland becoming somewhat of a world player, not since the Eurovision years have we felt such pride. Among the most impressive wins, however, might be the fact that people around the world now actually know that the Irish language is a thing, by way of the stunning An Cailín Ciúin and that our own James Martin became the first person with Down Syndrome to win an Academy Award. Colm Bairéad’s screenplay is a beautiful ode to family and belonging, much like the now Oscar-winning An Irish Goodbye, starring Martin.

If our rise to global stardom has taught us anything, it’s that culture is enormously important to everything we do, acceptance is key, and viewing someone for what they can do rather than what they can’t is genuinely game-changing. Also that we really should take another stab at Duolingo–not least to kill that blasted owl who has been emailing us for two years now telling us we’re 11% fluent in Portuguese.

4. The Great Layoff continues

Just as March came to a close, outsourcing giant Accenture said it would cut 19,000 jobs worldwide, around 2.5% of its total employee numbers, in the latest sign of a worsening global economic outlook. The news caps one of Ireland’s worst single weeks for job cuts in the tech downturn, with cuts announced by Amazon, Indeed and Irish firm Workhuman. Accenture has around 6,000 employees in Ireland, a number that was increased by almost 50% during the pandemic, due to business from tech sector partners who saw demand for their own services mushroom. The company said that around half of the cuts will happen by the end of the summer and indicated that a majority of the layoffs will affect staff who work directly for clients, as opposed to outsourcing-focused workers.

Similarly, jobs at Indeed are being slashed. Plans to cut 2,200 jobs worldwide, around 15% of its global workforce were announced towards the end of March, with no idea how many Irish employees are currently affected. The company employs over 1,000 people in Ireland. In a message to staff, CEO Chris Hyams said the cuts will come from “nearly every team, function, level and region,” at the company.

While companies usually at least feign an interest in their laid-off employees feelings, Accenture CEO Julie Sweet has hailed the lay-offs to analysts as “an opportunity”. “We’ve been dealing with the challenges of compounding wage inflation,” she said. “We’ve been doing that with pricing but we’ve also been doing that with cost efficiencies and digitisation and we’ve identified an opportunity to go after structural cost.”

Naturally, it’s every executive’s choice on who to fire, who to keep and how to run their business, but publicly characterising mass redundancies as an opportunity, especially during a cost of living crisis is… quite the choice. In truth, Sweet might be doing those laid-off a favour, though.

While some CEOs may dwell on the pain of mass layoffs, others choose just to accept and move on. It isn’t personal for them.

Summary:

Things are a little up and a little down, just like Rupert Murdoch’s impending honeymoon. Not too dissimilar to your worst ex, March’s news for Ireland leaves one feeling a little queasy but also kind of nostalgic in a shifting-at-the-Gaeltacht kind of way. Strip away the incidental details of what’s been in the news and we’re essentially clutching at straws in a world that’s grown to hate straws themselves.

Overall impressions? The theme of the next few months is likely to be ‘cautionary’. Not least because President Biden is due to visit his ancestral home (might a Biden Galleria be erected on the M1?) but also because we seem to be waiting for all of this (gestures to Ukraine, heating bills, layoffs and Enoch Burke) to be over, and the likelihood is that it’s just not going to be. On the bright side, Succession is back, baby lambs populate Ireland’s fields and we’ve never been closer to Joanne McNally hosting the Late Late Show. And for that, we’re thankful.

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