Linda Yaccarino May Have the Toughest CEO Job

Here’s a question: How long can someone stay as CEO of a company when the owner of that company is publicly repudiating what they’re saying? Take Linda Yaccarino, CEO of X, previously known as Twitter. On Wednesday, Elon Musk confirmed a report in The Information about layoffs at X’s election integrity team—Musk even went further than what we reported, saying the team was “gone.” Yet in an interview with the Financial Times published earlier on Wednesday, Yaccarino said X was “expanding the safety and election teams all around the world.” Yaccarino doubled down on her statements at the Code conference on Wednesday evening, saying our report was “partial information” as X had hired people for the team that very day. What’s going on?

There may well be a coherent explanation: Perhaps Musk and Yaccarino didn’t like the election integrity team’s work and decided others in the trust and safety operation could handle their jobs. If that’s the case, why not say that more clearly? On that point, The Information contacted X to ask for comment about our story. We heard nothing back other than an acknowledgement that it had received our email. If Yaccarino thought the report was only partly true, why not provide more context beforehand? This isn’t a minor issue: X’s content moderation is a core concern for advertisers, who are still largely steering clear of the platform. Musk may not care about the muddled picture presented, but Yaccarino surely does. Presumably the reason for the confusing message is that Yaccarino can’t control her boss.

And this is hardly the only example of Musk contradicting Yaccarino. Another infamous example was his tweet in early September that he might sue the Anti-Defamation League, right after she met with the ADL chief to try to patch up a rift between the group and the company. Asked about that episode at the Code conference by CNBC’s Julia Boorstin, Yaccarino commented, “I wish that would be different,” perhaps indicating her frustration. But then she followed up with the nonsensical response that “the foundation of X is based on free expression and freedom of speech. Everyone deserves to have that opportunity…no matter who they are, including Elon.” In other words, she can’t stop her boss from undercutting her.

It’s not news that Musk is erratic. One of the problems with the news media is its tendency to fixate on bad behavior, whether by presidents or CEOs, constantly reporting examples as though it were real news, perhaps based on the hope that repetition will cause the perpetrator of misdeeds to change. So we get endless stories about Musk’s behavior, with always the same subtext: He’s a crazy person. Yes, we know that. The real story is how Yaccarino is coping, given that he makes it impossible for her to accomplish what has to be a top priority—luring back advertisers. It’s surely just a matter of time before she gives up—or he gives up on her.

Peloton's New Energy

Peloton’s deal to supply fitness class video content to Lululemon—unveiled after the market closed on Wednesday—won over investors, who pushed up Peloton shares by 5% on Thursday. Of course, when it comes to Peloton’s stock, the bar is low, given that it has fallen 38% so far this year to as low as $4.41 earlier this week, after even bigger declines in 2021 and 2022 from a high of $167 in early 2021.

In fact, Peloton’s Thursday stock rally lifted its market capitalization by just $89 million to $1.75 billion. That seems about right given the scope of the deal, which doesn’t seem likely to dramatically change Peloton’s trajectory. The deal will have even less impact on Lululemon, whose shares inched down slightly on Thursday, reducing its $46 billion market capitalization by $17 million.

The deal does offer Lululemon a graceful way to exit the business of providing fitness content to its customers, something it blundered into during the pandemic when it spent $453 million to buy Mirror, a company selling mirrors that double as video screens to show fitness content. Partnering with Peloton makes a lot more sense for Lululemon.

In Other News

Shares of enterprise software company Workday fell more than 8% on Thursday after it said during the company’s investor day that it expected annual subscription revenue to grow up to 19% over the coming three years, a moderation from the growth above 20% it had previously forecast, according to Barron’s.

Epic Games, the company that makes Fortnite, is laying off around 16% of its workforce, which amounts to 830 people, it said in a memo to employees.

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What We’re Reading

Secrecy of Google Antitrust Trial Leads to Blame Game (The Wall Street Journal)

IBM Tries to Ease Customers’ Qualms About Using Generative AI (The New York Times)

BBC Overhauls Social Media Rules for Presenters After Gary Lineker Row (Financial Times)

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Martin Peers is a columnist and co-executive editor of The Information, where he has worked since 2014. He was managing editor from 2015 through 2021. He previously worked for The Wall Street Journal and Daily Variety, among other publications. He is based in New York and is on Twitter @mvpeers.