On Thursday, it was reported that a record-setting 3.3 million people have filed for unemployment benefits the week ending March 21. With the potential threat of job losses looming, as a result of the coronavirus pandemic, CEOs are pledging to cease any plans of layoffs in 2020.
Top-tier investment bank Morgan Stanley’s CEO James Gorman committed to holding onto his staff and will forgo issuing any layoffs within the company. Gorman reassured his employees, “I am sure some, if not many, of you are worried about your jobs. While long term we can’t be sure how this will play out, we want to commit to you that there will not be a reduction in force at Morgan Stanley in 2020.” Of course, to be fair and realistic, Gorman added, “Aside from a performance issue or a breach of the Code of Conduct, your jobs are secure.”
Banking giant Citigroup’s CEO Mike Corbat reassured the job security of his more than 200,000 workers. He pledged that the bank will temporarily suspend any layoffs.
In another act of kindness, Citigroup reported that it’s giving out $1,000 bonuses to some employees and won’t count the days taken off from work during the coronavirus outbreak.
On Friday, in an interview on CNBC with Jim Cramer, Bank of America CEO Brian Moynihan said that the bank is committed to no layoffs in 2020. BofA hired 2,000 people in March and raised the minimum wage to $20 an hour in the first quarter of 2020.
“We told them all, there’s no issue, you’re all going to be working now through year-end. No layoffs, no nothing,” Moynihan said.
According to Reuters, in addition to Morgan Stanley, Citigroup and Bank of America, a number of other banks have publicly or privately declared that they will be holding off on reducing their headcounts. These companies include Goldman Sachs, Wells Fargo, Deutsche Bank and HSBC.
Alfred F. Kelly Jr., chairman and CEO of Visa, let his 20,000 workforce know that there won’t be any layoffs in 2020. Kelly said, “There is enough sadness in the world and already too many families impacted by job losses. I have no interest in contributing to that.”
FedEx chairman and CEO Frederick W. Smith said during an interview last Sunday on “Face The Nation” that his company is not projecting any layoffs, as a result of the coronavirus pandemic. He assured customers that their packages will be safely delivered.
Marc Benioff, billionaire CEO of Salesforce, tweeted a call to action for his fellow CEOs. He challenged them to join him in his promise to put into place a “90-day layoff pledge.” Benioff maintains that he and other top executives should do their part by helping workers keep their jobs during this tumultuous time.
Benioff also shared some advice to help fight back against the coronavirus outbreak and encouraged his staff to follow suit—with respect to the people they employ to do their daily chores. Clearly, Silicon Valley techies have a different lifestyle than most Americans.
In his eight-part Twitter storm, Benioff wrote, “Salesforce is pledging to its workforce Ohana (the Hawaiian word for family) not to conduct any significant layoffs over the next 90 days. We will continue to pay our hourly workers while our offices are closed. We encourage our Ohana to pay their own personal hourly workers like housekeepers & dog walkers.”
Salesforce has donated $1 million to UCSF’s Covid-19 Respond Fund, $500 thousand to the CDC Foundation’s Emergency Response Fund and matched employee donations to worthy causes.
This small—but growing—movement is encouraging. The commitment of CEOs toward their shareholders is consistent with a pledge made by over 180 CEOs and corporate executives back in August. Members of the Business Roundtable, an association of chief executive officers of America’s leading companies, pledged to change the way that they operate.
Moving forward, they promised to focus on their employees, the places where they conduct business and their vendors to ensure that everyone is treated fairly—and not just on the bottom-line profit. The commitment includes, “Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.”
When Airbnb cofounder and CEO Brian Chesky wrote, “We must realize our vision and ensure our vision is good for society. This means that we must have the best interest of three stakeholders in mind: Airbnb the company (employees and shareholders), Airbnb the community (guests and hosts) and the world outside of Airbnb.”
Years later, Airbnb became the subject of privacy violations, accused of allowing a home to be used as a “party house,” which resulted in a shooting, and permitting scammers to take advantage of renters. In response, Chesky reiterated his vision to build an enduringly successful business, along with making a positive contribution to society by serving stakeholders. His aspirational goals mirror the doctrine previously set forth by the Business Roundtable and Benioff’s new initiative.
It’s refreshing to see CEOs taking positive actions that serve in the best interests of their employees. Over the last few years, we’ve seen egregious behavior from CEOs. WeWork’s former CEO, Adam Neumann, was pushed out over allegations of financial self-dealings and controversial management practices. Uber’s CEO Travis Kalanick was driven out of the company in the wake of allegations over incidents of harassment, retaliation, discrimination and bullying—including his own videotaped rant at an Uber driver.
Overstock.com’s CEO, Patrick Byrne, resigned following the controversy surrounding his involvement in an FBI Russian espionage investigation and personal relationship with a convicted Russian agent, Maria Butina.
The list grows as Kevin Burns, the CEO of Juul, resigned after media reports about the health hazards experienced by younger smokers of his e-cigarette product. Carlos Ghosn, the CEO of Nissan Motor, was arrested over an alleged scheme that he tried to conceal more than $90 million of his compensation from investors. He later fled a Japanese jail and is on the run hiding out in Lebanon. John H. Schnatter (better known as “Papa John”), founder of the eponymous pizza chain, later stepped down as CEO after making racist comments.
Leslie Moonves was one of the most powerful and highest-paid media CEOs, serving as the chairman and CEO of CBS. Moonves was accused by a number of women of sexual misconduct and left the company. McDonald’s board of directors has ousted the fast-food chain’s CEO, Steve Easterbrook. The board, according to a company statement, said he “demonstrated poor judgment involving a recent consensual relationship with an employee.”
Under Armour CEO Kevin Plank left the company he founded. Then, it was announced shortly thereafter that there was a federal investigation by the Department of Justice and the Securities and Exchange Commission over its accounting practices, according to the Wall Street Journal.
All too often, we see CEOs more concerned with enhancing their own wealth and power. CEOs at airlines, aircraft manufacturers and in other sectors enacted stock buybacks, which served to self-enrich the executives, while nearly bankrupting their companies and requiring bailouts from the U.S. taxpayers.
Unfortunately, there are many more of these CEO horror stories. However, for now, we should applaud the CEOs who are taking bold and assertive actions to aid their employees, help the economy and support America in this time of crisis by doing the right thing.