Business

Why 'economic headwinds' are suddenly to blame for everything

Published

2 years ago

March 13, 2024

Why 'economic headwinds' are suddenly to blame for everything

An atmospheric disturbance is whipping through the job market.

When Volvo announced it was cutting more than a thousand jobs last year, its CEO cited a particular phenomenon for the cuts. When the founder of the Messenger announced to his hundreds of employees that they were all laid off without severance, less than a year after the online publication booted up, the same weather pattern got the blame.

Chief executives at accounting firms, cookie companies and Crypto.com have all laid off thousands of workers in the last year, and pointed the finger at one metaphorical culprit: economic headwinds.

The phrase evokes a solemn CEO scanning the sky from the deck of the corporate ship. Eye on the horizon, he senses a change in the weather, a different snap to the rippling canvas, a new chop to the sea. With a grim set to his jaw, he concludes that only one course of action can save the voyage: massive layoffs.

Headwinds have always blown around in business English, but the phrase economic headwinds serves a special purpose: a majestic waving of the hand, an abandon to the fates, an inkling of force majeure.

“It’s a useful term, because we can’t control the wind,” said Thomas C. Leonard, a historian of economics at Princeton University. “If you’re a corporation trying to sell unhappy outcomes to shareholders or regulators, it’s a way of saying it’s a tough environment, but more importantly it’s a tough environment beyond our control.”

It’s a phrase heard often these days in the tech and media sectors, which face real challenges.

Tech companies that could raise and spend cash freely when interest rates were close to zero are struggling to stay afloat. The ad market has hit the doldrums — in part because all those companies that used to have cheap cash to pump into ads now have to keep their powder dry — which has taken the wind out of the sails of many media businesses, which had been facing financial problems for decades. And in L.A., Hollywood studios have been slow to pick up the pace of production after last year’s strikes, as they face questions over the viability of the streaming business model.

Executives in these industries are using the term precisely because of the contrast between their challenges and the wider world, Leonard said.

“The wild thing is, notwithstanding the headwinds in media and technology, the economy is doing unbelievably well,” Leonard said. Inflation is down, unemployment is at historically low levels, the U.S. is outperforming other rich countries, the stock market is booming, and even inequality of wealth and income is falling, Leonard said.

This presents a conundrum for those tasked with swinging the ax: how to explain why your company is ailing when everybody can see blue skies above?

By leaning on economic headwinds, executives can acknowledge a problem while avoiding getting into the messy details — say an outdated business model or internal failings.

EDGAR, the online database of the Securities and Exchange Commission, confirms that economic headwinds are being evoked more now than ever. In the 2000s, only a slight breeze was blowing, with public filings showing a handful of economic headwinds mentions. Things picked up in 2008 and 2009, as the financial crisis battered corporate America, but conditions seemed to subside in the middle of the last decade.

Then high interest rates rolled in. Since 2022, when the Federal Reserve started ratcheting up the federal funds rate to cool down the economy, EDGAR has been logging record after record. Nearly 500 companies mentioned economic headwinds in 2022. In 2023, that more than doubled to over 1,000.

A scan of the Newspaper Archive, which stretches back to the 18th century, tells a similar story. Through the booms and busts of the Gilded Age, the cataclysms of the Great Depression and the whirlwind of the 1970s oil crisis and stagflation, economic headwinds were barely worth mentioning. Most early mentions are riffs on the metaphor of the ship of state, with entire nations beating against the breeze, or come as puns in stories about airplanes or shipping companies.

But something changes after Y2K. Press usage of the phrase follows the same trajectory as the SEC record — with mentions up through the recession, followed by a dip, and now heading to new heights.

The collective experience of the last few years — pandemic, recession, inflation and now interest rate hikes — may have led to a turning of the rhetorical tides, said Robert Reich, professor of public policy at UC Berkeley and former secretary of Labor.

“The dominant economic assumption for really the entire post-World War II era has been that Keynesian macroeconomic management can tame the uncertainties and extremes of the economy,” Reich said. But since 2020, it’s been difficult to avoid the sense that things are spiraling out of control. “Most people felt at sea, and there’s something not necessarily comforting but seemingly realistic about these metaphors now.”

The economy stopped feeling like a precision machine in need of a tuneup, pointed surely toward growth, and started feeling more like an unpredictable journey to an unknown shore.

“Seeing the economy as a boat, one of those old galleons, or a three-masted schooner, tossed on the great waves of uncertainty and the waves of this roiling system makes much more sense to people,” Reich said.

It’s also “a wonderfully convenient way of avoiding responsibility” when things go sideways, Reich added.

Nautical metaphors are nothing new for the world of commerce — trade, finance and the joint-stock company can all trace their roots to seafaring merchants engaged in risky adventures to haul holds full of goods across the world in capital-intensive ships. And business euphemisms aren’t just limited to the seas. Few parts of the natural world have been spared from the corporate lexicon, with its changing landscapes and seismic shifts. Even the cosmos is fair game, especially in a tech world known for its moon shots and escape velocities.

Such fanciful phrases might serve a more grounded purpose: smoothing things over with investors. Research has shown that euphemisms actually work to soften bad news in the financial markets.

Kate Suslava, a professor of accounting at Bucknell University, spent years tracking how the use of metaphors in corporate earnings calls changes how the stock market reacts to new information. She found that investors aren’t total rubes — the stock prices of companies whose executives used negative metaphors like speed bumps or economic headwinds, or mentioned the need to tighten our belt or sharpen our pencils to get back to work after a series of missteps, indeed went down on the day of the earnings call.

What surprised her was that over the following months, the stock prices of the companies in question continued to drift down. “Investors take it as bad news, but it should be even worse news,” Suslava said. “If the market was efficient, they would completely capture it on the date of the call.”

In other words, a softening metaphor gets investors to under-react to the bad news. “Which is exactly the point of euphemisms,” Suslava said. “They work.”

Business

U.S. Space Force awards $1.6 billion in contracts to South Bay satellite builders

Published

13 minutes ago

December 20, 2025

Press Room

U.S. Space Force awards .6 billion in contracts to South Bay satellite builders

The U.S. Space Force announced Friday it has awarded satellite contracts with a combined value of about $1.6 billion to Rocket Lab in Long Beach and to the Redondo Beach Space Park campus of Northrop Grumman.

The contracts by the Space Development Agency will fund the construction by each company of 18 satellites for a network in development that will provide warning of advanced threats such as hypersonic missiles.

Northrop Grumman has been awarded contracts for prior phases of the Proliferated Warfighter Space Architecture, a planned network of missile defense and communications satellites in low Earth orbit.

The contract announced Friday is valued at $764 million, and the company is now set to deliver a total of 150 satellites for the network.

The $805-million contract awarded to Rocket Lab is its largest to date. It had previously been awarded a $515 million contract to deliver 18 communications satellites for the network.

Founded in 2006 in New Zealand, the company builds satellites and provides small-satellite launch services for commercial and government customers with its Electron rocket. It moved to Long Beach in 2020 from Huntington Beach and is developing a larger rocket.

“This is more than just a contract. It’s a resounding affirmation of our evolution from simply a trusted launch provider to a leading vertically integrated space prime contractor,” said Rocket Labs founder and chief executive Peter Beck in online remarks.

The company said it could eventually earn up to $1 billion due to the contract by supplying components to other builders of the satellite network.

Also awarded contracts announced Friday were a Lockheed Martin group in Sunnyvalle, Calif., and L3Harris Technologies of Fort Wayne, Ind. Those contracts for 36 satellites were valued at nearly $2 billion.

Gurpartap “GP” Sandhoo, acting director of the Space Development Agency, said the contracts awarded “will achieve near-continuous global coverage for missile warning and tracking” in addition to other capabilities.

Northrop Grumman said the missiles are being built to respond to the rise of hypersonic missiles, which maneuver in flight and require infrared tracking and speedy data transmission to protect U.S. troops.

Beck said that the contracts reflects Rocket Labs growth into an “industry disruptor” and growing space prime contractor.

Business

California-based company recalls thousands of cases of salad dressing over ‘foreign objects’

Published

12 hours ago

December 19, 2025

Press Room

California-based company recalls thousands of cases of salad dressing over ‘foreign objects’

A California food manufacturer is recalling thousands of cases of salad dressing distributed to major retailers over potential contamination from “foreign objects.”

The company, Irvine-based Ventura Foods, recalled 3,556 cases of the dressing that could be contaminated by “black plastic planting material” in the granulated onion used, according to an alert issued by the U.S. Food and Drug Administration.

Ventura Foods voluntarily initiated the recall of the product, which was sold at Costco, Publix and several other retailers across 27 states, according to the FDA.

None of the 42 locations where the product was sold were in California.

Ventura Foods said it issued the recall after one of its ingredient suppliers recalled a batch of onion granules that the company had used n some of its dressings.

“Upon receiving notice of the supplier’s recall, we acted with urgency to remove all potentially impacted product from the marketplace. This includes urging our customers, their distributors and retailers to review their inventory, segregate and stop the further sale and distribution of any products subject to the recall,” said company spokesperson Eniko Bolivar-Murphy in an emailed statement. “The safety of our products is and will always be our top priority.”

The FDA issued its initial recall alert in early November. Costco also alerted customers at that time, noting that customers could return the products to stores for a full refund. The affected products had sell-by dates between Oct. 17 and Nov. 9.

The company recalled the following types of salad dressing:

Creamy Poblano Avocado Ranch Dressing and Dip
Ventura Caesar Dressing
Pepper Mill Regal Caesar Dressing
Pepper Mill Creamy Caesar Dressing
Caesar Dressing served at Costco Service Deli
Caesar Dressing served at Costco Food Court
Hidden Valley, Buttermilk Ranch

Business

They graduated from Stanford. Due to AI, they can’t find a job

Published

1 day ago

December 19, 2025

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They graduated from Stanford. Due to AI, they can’t find a job

A Stanford software engineering degree used to be a golden ticket. Artificial intelligence has devalued it to bronze, recent graduates say.

The elite students are shocked by the lack of job offers as they finish studies at what is often ranked as the top university in America.

When they were freshmen, ChatGPT hadn’t yet been released upon the world. Today, AI can code better than most humans.

Top tech companies just don’t need as many fresh graduates.

“Stanford computer science graduates are struggling to find entry-level jobs” with the most prominent tech brands, said Jan Liphardt, associate professor of bioengineering at Stanford University. “I think that’s crazy.”

While the rapidly advancing coding capabilities of generative AI have made experienced engineers more productive, they have also hobbled the job prospects of early-career software engineers.

Stanford students describe a suddenly skewed job market, where just a small slice of graduates — those considered “cracked engineers” who already have thick resumes building products and doing research — are getting the few good jobs, leaving everyone else to fight for scraps.

“There’s definitely a very dreary mood on campus,” said a recent computer science graduate who asked not to be named so they could speak freely. “People [who are] job hunting are very stressed out, and it’s very hard for them to actually secure jobs.”

The shake-up is being felt across California colleges, including UC Berkeley, USC and others. The job search has been even tougher for those with less prestigious degrees.

Eylul Akgul graduated last year with a degree in computer science from Loyola Marymount University. She wasn’t getting offers, so she went home to Turkey and got some experience at a startup. In May, she returned to the U.S., and still, she was “ghosted” by hundreds of employers.

“The industry for programmers is getting very oversaturated,” Akgul said.

The engineers’ most significant competitor is getting stronger by the day. When ChatGPT launched in 2022, it could only code for 30 seconds at a time. Today’s AI agents can code for hours, and do basic programming faster with fewer mistakes.

Data suggests that even though AI startups like OpenAI and Anthropic are hiring many people, it is not offsetting the decline in hiring elsewhere. Employment for specific groups, such as early-career software developers between the ages of 22 and 25 has declined by nearly 20% from its peak in late 2022, according to a Stanford study.

It wasn’t just software engineers, but also customer service and accounting jobs that were highly exposed to competition from AI. The Stanford study estimated that entry-level hiring for AI-exposed jobs declined 13% relative to less-exposed jobs such as nursing.

In the Los Angeles region, another study estimated that close to 200,000 jobs are exposed. Around 40% of tasks done by call center workers, editors and personal finance experts could be automated and done by AI, according to an AI Exposure Index curated by resume builder MyPerfectResume.

Many tech startups and titans have not been shy about broadcasting that they are cutting back on hiring plans as AI allows them to do more programming with fewer people.

Anthropic Chief Executive Dario Amodei said that 70% to 90% of the code for some products at his company is written by his company’s AI, called Claude. In May, he predicted that AI’s capabilities will increase until close to 50% of all entry-level white-collar jobs might be wiped out in five years.

A common sentiment from hiring managers is that where they previously needed ten engineers, they now only need “two skilled engineers and one of these LLM-based agents,” which can be just as productive, said Nenad Medvidović, a computer science professor at the University of Southern California.

“We don’t need the junior developers anymore,” said Amr Awadallah, CEO of Vectara, a Palo Alto-based AI startup. “The AI now can code better than the average junior developer that comes out of the best schools out there.”

To be sure, AI is still a long way from causing the extinction of software engineers. As AI handles structured, repetitive tasks, human engineers’ jobs are shifting toward oversight.

Today’s AIs are powerful but “jagged,” meaning they can excel at certain math problems yet still fail basic logic tests and aren’t consistent. One study found that AI tools made experienced developers 19% slower at work, as they spent more time reviewing code and fixing errors.

Students should focus on learning how to manage and check the work of AI as well as getting experience working with it, said John David N. Dionisio, a computer science professor at LMU.

Stanford students say they are arriving at the job market and finding a split in the road; capable AI engineers can find jobs, but basic, old-school computer science jobs are disappearing.

As they hit this surprise speed bump, some students are lowering their standards and joining companies they wouldn’t have considered before. Some are creating their own startups. A large group of frustrated grads are deciding to continue their studies to beef up their resumes and add more skills needed to compete with AI.

“If you look at the enrollment numbers in the past two years, they’ve skyrocketed for people wanting to do a fifth-year master’s,” the Stanford graduate said. “It’s a whole other year, a whole other cycle to do recruiting. I would say, half of my friends are still on campus doing their fifth-year master’s.”

After four months of searching, LMU graduate Akgul finally landed a technical lead job at a software consultancy in Los Angeles. At her new job, she uses AI coding tools, but she feels like she has to do the work of three developers.

Universities and students will have to rethink their curricula and majors to ensure that their four years of study prepare them for a world with AI.

“That’s been a dramatic reversal from three years ago, when all of my undergraduate mentees found great jobs at the companies around us,” Stanford’s Liphardt said. “That has changed.”