Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Bumble chief executive Whitney Wolfe Herd has criticised staff for “freaking out” after announcing the company would eliminate more than 160 roles in London, warning drastic cost-cutting measures were needed as “dating apps are feeling like a thing of the past”.
The online dating group’s founder, who returned as chief executive in March, made the remarks while telling staff this week that its British office would bear the brunt of 240 planned job cuts that represents 30 per cent of its global workforce.
According to people familiar with a company-wide call, Wolfe Herd said she was “worried” that Bumble — which also owns dating app Badoo — may collapse by next year if measures were not taken to safeguard the business. A person with knowledge of the move also said that staff globally had been offered voluntary redundancy.
Wolfe Herd said its “centre of gravity” would move to the US where the “talent pool is right now”. She said that “London’s not the first choice, that’s the frank reality”.
The move represents a strategic change for the online dating company, with 70 per cent of the staff currently based in the UK.
Those with knowledge of the video call said that Wolfe Herd turned critical when staff responded with a series of thumbs down emojis.
“I see a lot of freaking out emojis, y’all need to calm down,” she said. “This is being taken out of context. I like London and I think everyone is overreacting to this candidly . . . Everyone’s going to have to be adults in dealing with this.” She also suggested all staff take the rest of the week off following the call.
Bumble’s market capitalisation has shrunk almost 30 per cent over the past year to about $700mn, down from around $13bn when the company went public in 2021, with investors concerned with its falling revenues.
The group — which has ditched its signature feature that women must message men first — is one of several dating apps including industry leader Tinder, to steadily lose users in recent years.
Industry surveys have shown that many Gen Z users were complaining of dating “burnout”, while women have reported concerns about receiving unsolicited material and violent threats while using the online dating services.
On the staff call, Herd said that although Bumble would not close its UK office entirely, it could not continue to be “London first”, adding that global expansion “hadn’t delivered” for the company.
She added the group would open a new office in Silicon Valley to capitalise on the artificial intelligence talent in the San Francisco Bay Area.
A spokesperson for Bumble said it has made some “very difficult decisions” over the past week to “better position the company for long-term growth and success.”
“While we continue to deepen our presence in the US, London remains a part of our global hub strategy. As we’ve consistently stated, we remain firmly committed to investing in our talented team there,” they added.
Bumble is set to announce a series of new products such as a photo and phone number verification system to attempt to convince users to stick with the service in the coming months, according to a person familiar with the company’s thinking.
“We are in a decline from a numbers standpoint,” said Wolfe Herd. “Dating apps are feeling like a thing of the past.”
Jamie Dimon is unequivocal about the impact of remote working on training new bankers. “It doesn’t work in our business,” the chief executive of JPMorgan Chase told Stanford’s Graduate School of Business this year. “Younger people [are] left behind.”
He has previously spoken of the importance of “the apprenticeship model . . . which is almost impossible to replicate in the Zoom world”.
In many workplaces, that apprenticeship model is as simple as sitting near a more experienced colleague or joining a client meeting to watch how it is done, while also learning the ropes by taking on often more repetitive and basic tasks.
But on-the-job learning is now facing the double threat of hybrid working, which means junior staff spend less time observing and listening to more senior colleagues, and generative AI, which is making obsolete many of the routine tasks that have long been building blocks of professional knowledge.
The effect has been noted across professional industries, from auditors and law firms to the big investment banks. Last year, the Public Company Accounting Oversight Board reported that the pandemic and remote and hybrid work had affected audit firms’ “apprenticeship model for on-the-job training, dissemination of culture, and professional scepticism”.
Others see the format as ripe for reform, anticipating that greater changes will come from generative AI.
Employers are investing heavily in AI to assist with working practices. Tools such as those rolled out by law firm A&O Shearman to deal with antitrust and contracts or Goldman Sachs to summarise complex documents and analyse data, are designed to enhance productivity. AI start-up Rogo aims to automate some of the laborious tasks done by junior investment bankers. However, some argue that by eliminating repetitive tasks, junior recruits will fail to develop muscle memory, which is essential for critical analysis, as well as the ability to identify mistakes in AI.
The changes may mean employers have to be more structured and deliberate in the training opportunities they offer junior staff, while working out how to get the best out of generative AI to free up time for their employees to do more valuable work.
Yolanda Seals-Coffield, chief people and inclusion officer at PwC’s US division, says hybrid working means that there needs to be a much more proactive approach to on-the-job training
Navid Mahmoodzadegan, the newly appointed chief executive of boutique investment bank Moelis & Co, says he hopes junior bankers will be rewarded with more “intellectually stimulating” work. Patrick Curtis, chief executive and founder of Wall Street Oasis, an online community catering to the financial services industry, predicts “this shifting more dramatically in the next 24 months as these [junior] roles start leveraging AI more, with some getting displaced outright”.
To maintain the apprenticeship model, leaders at some companies have followed Dimon in mandating five days of office attendance a week. Others, including Citigroup, are continuing with various hybrid working arrangements. Clare Francis, a partner at Pinsent Masons, a law firm that does not mandate days, says that while “junior lawyers benefit from office attendance,” some work, such as research, can be more effectively done at home. She adds that “everyone learns in different ways” and the reality is that many meetings are held on Teams so juniors “can see how they work” just as easily outside the office.
Yolanda Seals-Coffield, chief people and inclusion officer at PwC’s US division, believes hybrid working means “we have lost a little bit of that” tacit knowledge. She sees the solution in junior and senior staff being “far more intentional” about mentoring and debriefing. “We have to be [in] a world post-Covid where people are hybrid, you’re no longer sitting next to someone in an office or on a client side or at a meeting.” Staff, including trainees, at PwC US are required to be on-site half of the time. The arrangement means new recruits need to be clear about saying, “I want to actually shadow this particular behaviour”, she says. This might mean a junior associate sits in on a virtual client meeting or reviews a recorded walk-through of a technical process, followed by structured debriefs to reinforce the learning.
Rather than “a passive experience”, says Seals-Coffield, it requires bosses to think about modelling behaviour such as through guided questioning and peer feedback. AI could start to help with this by, for example, flagging to a team leader that a scheduled interview might provide a shadowing opportunity for a graduate employee who has indicated they are looking for this skill.
I’m optimistic that the tools will enable juniors to think about the material critically
Staff still need to be able to provide critical judgment to evaluate the work that AI might be producing
New graduates might also be more fluent in AI than their supervisors, potentially opening up new responsibilities for them to take on. Patrick Grant, project director of legal tech and innovation at the University of Law, says they have developed courses to encourage students to use tools such as ChatGPT critically and ethically in assisting with research, organisation and editing, and to spot “errors or hallucinated references”. They encourage students, for example, to compare drafts of clauses with AI outputs to understand the tools’ lack of nuance.
Francis points out that junior lawyers using generative AI for research is not that different from past generations switching from books to the internet. “Today, the workflow of junior lawyers is not yet fundamentally different [from] how it was before AI was a tool at the disposal of legal teams. Lawyers at the outset of their training continue to learn by verifying results.” The role will “adapt and evolve” alongside AI.
Some argue that by eliminating repetitive tasks, juniors can progress more quickly by taking on more sophisticated and creative work earlier. Francisco Morales Barrón, a partner at Vinson & Elkins law firm in New York, is sceptical about the traditional model. “A lot of older generations will say you learn so much from reviewing thousands of contracts . . . somehow magically you learn through the process of repeating it hundreds of times. I’m optimistic that the tools will enable juniors to think about the material critically.” Francis agrees: “How much do you learn from a monotonous task?”
Seals-Coffield says employers need to get to grips with the desired outcomes of graduate training by separating the task from the skill: “If they’re not [going to] have the opportunity to do that task 50 times, they still need to be able to evaluate it, they still need to be able to provide the critical judgment and independent thinking that is important to evaluate the work that AI might be producing.”
This could include simulations in training, says Francis, “to develop, test and challenge the lawyer both on legal expertise as well as on soft skills such as communication and negotiation”.
Others suggest that any freed-up time will not be spent on more creative tasks, but on additional grunt work — or cutting the number of junior jobs.
According to Oxford Economics, a consultancy, “there are signs that entry-level positions are being displaced by artificial intelligence at higher rates”.
But in some organisations this could be a while off. “Analysts in my class are in a relatively favourable position in which we will have the aid of AI without it replacing us just yet,” reports one investment banking analyst.
Additional reporting by Anjli Raval and Sujeet Indap
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
As they trade the campus for the job market, fresh-faced graduates are quickly turning glum. From North America to Europe, university leavers are struggling to find suitable work. The unemployment rate for recent college graduates in the US has for the first time been consistently above the national level since the Covid-19 pandemic. In the EU, the employment rate of 15- to 25-year-olds has fallen over the past two years. Even the crème de la crème are struggling. The percentage of MBA students from Harvard Business School and MIT Sloan without a job offer three months after graduation has risen sharply since 2021.
The rise of artificial intelligence is a factor. In the US, entry-level tech jobs are coming under pressure as coding tasks are automated. The unemployment rate for computer engineering graduates is 7.5 per cent; the national rate is 4.1 per cent. In Britain, the Big Four accountancy firms have cut back on early-career hires in recent years. Economists and recruiters reckon higher costs are encouraging UK professional services firms to experiment with AI in more administrative tasks usually conducted by juniors.
But the plight of graduates predates the emergence of large language models in the workplace. Other structural developments are at play. As more young people around the world are choosing to go to university, competition for jobs has picked up. In Canada, a popular destination for young graduates, the unemployment rate for those under 25 with post-secondary education was 11.2 per cent in the first quarter. Last year in the UK there were an average of 140 applications per graduate job — the highest in three decades, according to the Institute of Student Employers.
As the supply of learned graduates has risen, demand has come under pressure. Research by Indeed, a job search site, finds that the share of US job postings requiring at least a bachelor’s degree has fallen over the past five years. As for the public sector, civil services are being squeezed across cash-strapped advanced economies. Multinationals with big graduate programmes have also been developing global capability centres in low-cost hubs such as India, where they are outsourcing more skilled roles such as data analytics, rather than just back-office functions.
The recent economic cycle has not been kind to recent graduates either. Many professional services and tech firms overhired in the post-pandemic years, assuming activity would bounce back faster than it did. Recruitment rounds have been subdued since. Demand for investment banking analysts and newly qualified lawyers has also been stunted by subdued global mergers and acquisitions activity. Global economic uncertainty makes it difficult for businesses to plan investments and hiring cycles.
Even if the economic environment improves, graduates will still be contending with the rise of AI in the workplace and competition for entry-level jobs. Ensuring students have a better understanding of post-graduation prospects would help them make wiser course choices. Universities and the private sector will need to collaborate more closely if courses are to evolve with the changing demands of work. Even so, businesses and governments will need to raise support for adult training and life-long learning; three-year degrees can quickly become obsolete. The travails of university graduates should also encourage more investment in non-degree vocational training and apprenticeship opportunities, as businesses have long been calling for.
A surfeit of underemployed elites is bad for society and the economy. To ensure it does not become a feature, education must evolve from being a ticket to a job to a toolkit of skills for a changing world.
