Finance

The Tariff Dilemma: What Finance Chiefs Must Tell Investors

A series of tariff orders and threats from the Trump administration have left finance executives struggling to make accurate earnings projections for investors, particularly concerning the potential effects of fluctuating trade policies.

At the start of each year or quarter, many companies provide investors with guidance on key metrics like sales and profit, based on carefully crafted scenarios that finance teams spend considerable time developing. However, recent U.S. tariff announcements, such as the planned 25% import tax on goods from Mexico and Canada—set to take effect this month before being delayed by 30 days—have upended many of those forecasts.

Additionally, President Trump has suggested the possibility of imposing 25% or higher tariffs on automobiles, semiconductors, and pharmaceuticals, and has instructed federal agencies to assess the potential for aligning U.S. tariffs with those of other countries.

The sudden shifts in policy, especially concerning Mexico and Canada, have left CFOs uncertain about how to address the issue. “Where it gets a little bit trickier is trying to decide on the things that may be more about negotiating leverage, like the tariffs on Canada and Mexico,” explained Greg Husisian, a partner at law firm Foley & Lardner. “That’s a bit harder and more nebulous to model.”

While public companies are not required to provide earnings guidance, they must disclose any material impact to their operations. Some companies, including Cisco Systems, Tapestry, and Crocs, have incorporated the impact of tariffs into their latest guidance, while others, like Chipotle, Clorox, and Kellogg, have left it out.

TECH

2024 Sees 5,000 Tech Layoffs in Massachusetts

According to a new report, the majority of global tech layoffs in 2024 occurred in U.S. hubs, such as Silicon Valley and Boston.

The broader picture: Despite rising profits, the layoffs highlight how the tech industry is downsizing, as noted in a report by international payments company RationalFX.

Key factors: U.S. companies are clearly restructuring after over-hiring during the pandemic, the report explains. High inflation, recession concerns, and growing interest in artificial intelligence also contributed to the trend.

Julia Pollak, chief economist at ZipRecruiter, told USA Today that there has been a cultural shift from a focus on risk-taking, growth, and experimentation to one of cautious, conservative decision-making, particularly after recent rounds of layoffs.

By the numbers: In 2024, over 280,000 tech workers lost their jobs, with more than half (157,950) coming from U.S.-based companies. The largest layoffs occurred at Dell, Amazon, and Microsoft—companies with offices in Massachusetts—as well as Intel, Samsung, and Tesla.

In January alone, another 26,000 tech workers were let go, including 730 employees from Boston-based Wayfair. Nearly 5,000 tech jobs were cut in Massachusetts last year, where the tech sector makes up 8% of the workforce, most of which is concentrated in Greater Boston.

CRYPTO

Musk’s DOGE Takes the Lead as Trump’s Crypto Love Affair Deepens

Elon Musk and the cryptocurrency exchange Coinbase emerged as prominent GOP donors during the 2024 presidential campaign. Now, both political parties are reaping the rewards of their connections with the White House, as well as the ongoing reworking of regulatory power under Trump’s influence.

On Friday, the Securities and Exchange Commission (SEC) dropped its case against Coinbase, marking a significant win for the company. SEC Chief Legal Officer Paul Grewal described the decision as “nothing short of a complete win.” Coinbase, the largest exchange in the U.S., becomes the first major beneficiary of a relaxation in enforcement under the new administration.

Coinbase CEO and co-founder Brian Armstrong has long argued that while the crypto industry is open to regulation, it requires a regulator capable of establishing a proper framework for digital currency. In contrast, SEC Chair Gary Gensler has consistently viewed crypto as an unregistered security, a stance he reinforced with the now-dismissed lawsuit against Coinbase in 2023.

Meanwhile, Musk's Department of Government Efficiency (DOGE) is said to have significantly reduced the size of agencies investigating Musk’s own ventures:

• A team at the National Highway Traffic Safety Administration overseeing self-driving cars has been halved.

• FDA employees investigating Musk’s Neuralink brain-chip startup have been fired.

• The State Department has committed $400 million to purchase a fleet of armored Teslas.

• The Justice Department dropped a discrimination lawsuit against SpaceX for allegedly refusing to hire refugees and asylum seekers.