Good morning. At a recent CEO dinner in New York, conversation turned to the topic of jobs. 2025 was an underwhelming year for U.S. job growth—adding 584,000 jobs compared to 2 million in 2024—and this year is likely to be more of the same. (Strip out health care and social assistance industries, and the U.S. lost jobs last year.)
But the question being debated was how to talk about possible job cuts in relation to AI. “I’d rather focus on AI than falling demand,” one attendee said. “At least you look ahead of the curve instead of behind it.”
Last year, U.S. employers explicitly blamed AI for 55,000 of the 1.17 million job cuts, according to Challenger, Gray & Christmas. That’s fewer than 5% of layoffs. AI is not yet the bête noire nor the magic elixir that people have made it out to be. (Forgive the mixed metaphors there; proof of a human at the helm.) In August, MIT released a study that found 95% of generative AI pilots fail to generate meaningful return.
And yet we’re all hearing predictions about how AI is going to impact jobs, from gutting knowledge work to creating an army of AI-enhanced humans who will achieve more in 5 hours than most of us do in 5 days. If my dinner conversation is anything to go by, leaders are quite happy to stoke that debate. Here’s why:
It motivates employees. The prospect of AI can spark both fear and fascination. In either case, talking about it externally and internally is a great way to get people motivated to learn about it. The productivity boost, especially in areas like coding, can be significant. Tying it to job cuts is code for telling everyone to learn it.
It can excite investors.UPS stock jumped 8% the day that CEO Carol Tomé announced 48,000 jobs had been cut in “the most significant strategic shift” in company history. Research from the IMF, Deloitte and others confirm that public companies are quicker to resort to layoffs than their private counterparts. “I think it’s too early to quantify,” one dinner attendee told me, “but AI impacts how we think about hiring and firing.”
It focuses the mind. With geopolitical conflicts, tariffs, climate risk and general concerns about the U.S. economy, leaders have a lot of variables to juggle when deciding what to do next. Being on the cusp of a new era of innovation can simplify some of those choices. As one person put it: “I don’t know what’s going to happen in Venezuela but I do know I have to invest in AI.”
The U.S. attorney’s office in D.C. has opened a criminal investigation into Fed Chair Jerome Powell over renovations to the Fed’s headquarters and whether he lied to Congress about the scope of the work. In a response, Powell acknowledged that the Fed had been served subpoenas, questioned the motive, and vowed to continue his job “without political fear or favor.” Federal Housing Finance Agency Director Bill Pulte is reportedly behind the probe; he’s used the usually staid agency to investigate foes of President Donald Trump for mortgage fraud.
President Trump has threatened to sideline Exxon Mobil on future Venezuela oil projects for “playing too cute.” In a Friday meeting between Trump and oil company executives, Exxon CEO Darren Woods called the Venezuelan market “uninvestable” in its current state, a comment that seemed to draw Trump’s ire.
CEO who laid off employees that rejected AI would do it again
IgniteTech CEO Eric Vaughan laid off almost 80% of his employees two years ago because they wouldn’t adopt AI. He toldFortune it was “extremely difficult” but would do it again.
Tariff removal could boost jobs
In a social media post over the weekend, Moody’s Analytics chief economist Mark Zandi argued that the removal of President Trump’s Liberation Day tariffs would be “the fastest way to boost the job market.” A decision from the Supreme Court on the legality of the tariffs is expected any day now.
How a cap on credit card rates would play out
President Trump indicated his support for a one-year 10% cap on credit card interest rates late last week. Some experts say doing so would soften credit card rewards programs and make accessing credit hard for those with lower credit scores.
The markets
S&P 500 futures were down 0.7% this morning. The last session closed up 0.65%. STOXX Europe 600 was down 0.23% in early trading. The U.K.’s FTSE 100 was down o.o9% in early trading. Japan markets were closed. China’s CSI 300 was up o.65%. The South Korea KOSPI was up 0.84% to reach a record high. India’s NIFTY 50 was up 0.42%. Bitcoin was at $90K.
The announcement that Karl Mistry will become the next CEO of the luxury homebuilder Toll Brothers is more than a routine leadership change. It highlights a succession model at the Fortune 500 stalwart that’s built around continuity and internal development rather than episodic change.
Mistry joined the company in 2004 as an assistant project manager through its executive training program and advanced steadily through operational roles. His appointment makes him only the third CEO in the company’s nearly 60-year history, reflecting a deliberate preference for leaders shaped within the organization rather than recruited from outside.
At Toll Brothers, leadership development functions less as a human resources initiative than as an organizational risk management strategy. By progressing through the business from the project level upward, Mistry developed a working understanding of the company’s operations, culture, and decision-making norms that could take an external hire years to absorb—if at all.
The fact that Mistry is only the third CEO also underscores the company’s unusually long leadership cycles. Founder Robert Toll led the firm for roughly 43 years, followed by Douglas Yearley’s tenure of about 15 years. This stability allows the board to operate on longer strategic horizons and reduces the disruption that often accompanies leadership turnover in large organizations.
A related feature of the model is direct, high-level mentorship. Yearley has described how Toll personally spent years mentoring him on Monday nights, institutionalizing the transfer of knowledge across generations of leadership.
Of course, this is not to suggest that external leadership is inherently inferior or a failure of governance. In periods of strategic disruption, declining performance, or structural change, boards often turn to external leaders precisely because discontinuity is what they seek.
But in firms whose competitive advantage rests on execution, institutional memory, and long-cycle decision-making, leadership continuity becomes a strategic asset. The broader implication is that Toll Brothers treats succession as a long-term design problem, rather than a periodic crisis. Instead of relying on external searches when transitions arise, it has invested in talent early, tracked it over time, and created credible internal pathways to senior leadership.
Mandarin Oriental’s CEO on his lack of industry experience as a strength: “I don’t pretend to be a hotelier. I’m not a hotelier…Bringing some other perspectives, coming from other economic sectors, other brands, is very good.”
News to know
John Ternus, a senior Apple executive, is emerging as a leading internal candidate to succeed Tim Cook as CEO. NYT
Gwynne Shotwell is the operational and diplomatic force behind SpaceX’s success, and with a potential IPO approaching, her role is becoming even more visible. WSJ
Allegiant is acquiring Sun Country in a $1.5 billion deal that will create a combined airline offering more than 650 routes. Fortune
Jerome Powell warned that a DOJ probe tied to rate-cut demands represents a direct challenge to the Fed’s political independence. Fortune
Oil futures gained on concern that intensifying unrest and political instability in Iran could disrupt supply from one of the world’s largest producers. Fortune
What prominent economists and business leaders are saying about the DOJ’s investigation into the Federal Reserve. BI
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Good morning. The U.S. economy closed out 2025 with a puzzling mix: sluggish job growth alongside accelerating productivity.
The U.S. Bureau of Labor Statistics (BLS) reported on Friday that nonfarm payrolls rose by a seasonally adjusted 50,000 in December 2025, missing the 73,000 Dow Jones estimate and slowing from November’s revised gain of 56,000. November payrolls were revised down by 8,000 jobs, while October’s loss deepened to 173,000 from 105,000. For 2025 as a whole, payrolls grew by an average of 49,000 jobs per month, down sharply from 168,000 in 2024.
Bank of America Global Research analysts wrote in a report on Friday that although payroll growth has slowed since June, the unemployment rate has risen by only about 11 basis points. The report noted, “We have been highlighting that tighter immigration restrictions are likely to play a bigger role in the slowdown in job growth this year.”
The unemployment rate is a key statistic for the Fed, and markets responded to Friday’s miss by pricing out a January rate cut, according to the analysts. Futures now imply less than half a cut priced in through April, which marks the end of Powell’s term.
The productivity factor
Despite weak job growth, forecasts still point to solid overall economic expansion. I asked Gregory Daco, EY chief economist, how the U.S. economy can continue to grow strongly while hiring softens.
“We’re seeing a clear decoupling between growth and hiring,” Daco said. Output is still expanding, but companies are generating that growth with fewer incremental workers and fewer hours.
“Productivity has rebounded meaningfully as businesses continue to streamline operations, automate processes, and extract more output from existing teams in a high-cost, high-interest-rate environment,” Daco explained. “This isn’t AI-led in a narrow sense yet—it’s the payoff from multi-year efficiency drives, tighter cost discipline, and delayed hiring.”
According to the BLS, nonfarm business sector labor productivity increased 4.9% in the third quarter of 2025, as output rose 5.4% while hours worked increased just 0.5%.
Areas of job growth
Where job growth has occurred, employment in food services and drinking places continued to trend higher in December, adding 27,000 jobs. The sector added an average of 12,000 jobs per month in 2025, roughly in line with the 11,000 average monthly gain in 2024.
Health care employment also continued its upward trend in December, rising by 21,000 jobs, including a gain of 16,000 in hospitals. Health care added an average of 34,000 jobs per month in 2025, down from an average monthly increase of 56,000 in 2024.
Monster’s newly released 2026 Job Market Outlook also reflects these pockets of strength. Based on full-year 2025 job posting and job seeker data, the report shows employer demand remaining firm in health care, essential services, infrastructure-related roles, and skill-based jobs, even as other parts of the labor market slow.
‘Hiring hasn’t stopped’
As private payroll growth weakened throughout 2025 and hiring appetites diminished, I asked Daco whether he expects that trend to continue amid ongoing geopolitical uncertainty and tariff-related risks
“Yes—barring a material improvement in policy clarity, I expect hiring restraint to persist,” he said. Private payroll growth has already slowed sharply as firms shift into cost-control mode, with geopolitical risks, tariff uncertainty, and elevated financing costs reinforcing that bias, he explained.
“Hiring hasn’t stopped, but it has become more selective and more conditional on clear demand visibility,” Daco added. “In this environment, CFOs are likely to continue favoring efficiency, automation, and capex discipline over broad-based workforce expansion.”
*Quick note: “The Data Imperative: Reinventing Finance with AI,” is the next Emerging CFO webinar which will take place Tuesday, Jan. 27 at 11 a.m. ET. Join Fortune, in partnership with Workday, for a timely discussion featuring Adobe’s CFO Dan Durn, and additional speakers to be announced, that will offer firsthand insights and practical strategies from leaders shaping AI-driven finance transformation. You can register for the event here. Email us at CFOCollaborative@Fortune.com with any questions.
Leaderboard
Young Kim was appointed CFO and chief operating officer at Bitmine Immersion Technologies, Inc. (NYSE: BMNR) effective immediately. Kim has more than 20 years of experience. From 2021 to 2025, he served as partner and senior portfolio manager at Axiom Investors, following a decade as senior portfolio manager at Columbia Threadneedle Investments from 2011 to 2021. Earlier in his career, Kim held roles across investment research, venture capital, business development, and software engineering.
Jimmi Sue Smith is retiring from her position as CFO of Koppers Holdings Inc. (NYSE: KOP) effective Jan. 5. Smith will continue to serve as treasurer, as well as in an advisory role, to assist with a transition through Feb. 28. Bradley Pearce, chief accounting officer, will serve as interim CFO and still perform his current role while an external search is conducted to identify a permanent successor.
Big Deal
The latest S&P Global Market Intelligence data shows that large U.S. corporate bankruptcies rose to one of the highest monthly totals in five years in December 2025, with filings increasing to 72 from 63 in November. This uptick extended the 15-year high for annual filings first set in November, bringing the total to 785 for the year—the highest since 2010. Rising interest rates have been a significant factor, as many companies struggled to refinance their debt, according to the report.
The data covers companies with public debt and at least $2 million in assets or liabilities, as well as private companies with at least $10 million in assets or liabilities at the time of filing.
Courtesy of S&P Global Market Intelligence
Going deeper
“Powell blasts DOJ criminal probe as attack on Fed independence. ‘Public service sometimes requires standing firm in the face of threats’” is a Fortune article by Jason Ma.
He writes: “Federal Reserve Chairman Jerome Powell said in a statement on Sunday that the Justice Department served the Fed with grand jury subpoenas, threatening a criminal indictment over his testimony before the Senate last June related to renovations on the headquarters, which has seen cost overruns. Powell, who is typically cautious in his public remarks, was clear that the probe was political in nature and had nothing to do with the Fed renovations or his testimony, dismissing them as ‘pretexts.'” Read the complete article here.
Overheard
“After more than two decades of declining well-being for most middle- and low-income households, it is clear that structural reforms are needed to bring costs back in line with wages.”
—Gene Ludwig, former U.S. Comptroller of the Currency, and chairman of the Ludwig Institute for Shared Economic Prosperity, and Shannon Meyer, a research analyst at the Ludwig Institute, write in a Fortune opinion piece titled, “Millions of Americans are grappling with years of declining economic wellbeing and affordability needs a rethink.”
Mattel Inc. is introducing an autistic Barbie on Monday as the newest member of its line intended to celebrate diversity, joining a collection that already includes Barbies with Down syndrome, a blind Barbie, a Barbie and a Ken with vitiligo, and other models the toymaker added to make its fashion dolls more inclusive.
Mattel said it developed the autistic doll over more than 18 months in partnership with the Autistic Self Advocacy Network, a nonprofit organization that advocates for the rights and better media representation of people with autism. The goal: to create a Barbie that reflected some of the ways autistic people may experience and process the world around them, according to a Mattel news release.
That was a challenge because autism encompasses a broad range of behaviors and difficulties that vary widely in degree, and many of the traits associated with the disorder are not immediately visible, according to Noor Pervez, who is the Autistic Self Advocacy Network’s community engagement manager and worked closely with Mattel on the Barbie prototype.
Like many disabilities, “autism doesn’t look any one way,” Pervez said. “But we can try and show some of the ways that autism expresses itself.”
For example, the eyes of the new Barbie shift slightly to the side to represent how some people with autism sometimes avoid direct eye contact, he said. The doll also was given articulated elbows and wrists to acknowledge stimming, hand flapping and other gestures that some autistic people use to process sensory information or to express excitement, according to Mattel.
The development team debated whether to dress the doll in a tight or a loose-fitting outfit, Pervez said. Some autistic people wear loose clothes because they are sensitive to the feel of fabric seams, while others wear figure-hugging garments to give them a sense of where their bodies are, he said.
The team ended up choosing an A-line dress with short sleeves and a flowy skirt that provides less fabric-to-skin contact. The doll also wears flat shoes to promote stability and ease of movement, according to Mattel.
Each doll comes with a pink finger clip fidget spinner, noise-canceling headphones and a pink tablet modeled after the devices some autistic people who struggle to speak use to communicate.
The addition of the autistic doll to the Barbie Fashionistas line also became an occasion for Mattel to create a doll with facial features inspired by the company’s employees in India and mood boards reflecting a range of women with Indian backgrounds. Pervez said it was important to have the doll represent a segment of the autistic community that is generally underrepresented.
Mattel introduced its first doll with Down syndrome in 2023 and brought out a Barbie representing a person with Type 1 diabetes last summer. The Fashionistas also include a Barbie and a Ken with a prosthetic leg, and a Barbie with hearing aids, but the line also encompasses tall, petite and curvy body types and numerous hair types and skin colors.
“Barbie has always strived to reflect the world kids see and the possibilities they imagine, and we’re proud to introduce our first autistic Barbie as part of that ongoing work,” Jamie Cygielman, Mattel’s global head of dolls, said in a statement.
The doll was expected to be available at Mattel’s online shop and at Target stores starting Monday for a suggested retail price of $11.87. Walmart stores are expected to start carrying the new Barbie in March, Mattel said.
The Centers for Disease Control and Prevention reported last year that the estimated prevalence of autism among 8-year-old children in the U.S. was 1 in 31. The estimate from the CDC’s Autism and Developmental Disabilities Monitoring Network said Black, Hispanic, Asian and Pacific Islander children in the U.S. were more likely than white children to have a diagnosis, and the prevalence more than three times higher among boys than girls.
Politics8 years ago