There are lots of unjust fees in the internet age. For example, despite having to complete a list of chores before you leave an Airbnb these days, you are also likely to be charged a cleaning fee. But I did the cleaning? I guess most people don’t mind though as Airbnb have just had their best quarter ever. I will continue not putting my sheets in the washer.

The lowdown

• 🔪 KPMG becomes the first Big Four firm to make cuts, mainly in Advisory.

• 🏠 Airbnb has record quarter, growing revenue by 24% to $1.9 billion.

• 🦩 Elon Musk hopes to stabilize Twitter and appoint a new CEO by year end.

Flex your finance muscle

Yesterday we looked at a couple of the conclusions from the CFO State of the Market 2023 report. The one that probably stands out the most is that, despite stories of mass layoffs, almost two thirds of the CFOs the Balance Sheet team spoke to are prioritizing growth for this year, and that some companies may be taking advantage of a fairly forgiving fat-trimming environment to get rid of underperformers.

Matrixing and bloat

So today we are explaining a little about “matrixing” and how it can contribute to bloat.

Matrixing is the tendency to have the revenue-oriented units within a company depend on shared non-revenue functions, such as manufacturing, distribution, advertising, and other support functions.

The problem with this approach is that it can create challenges in accountability and cost control. The costs associated with shared functions may not be attributed to specific product teams, which can make it difficult to identify and address inefficiencies and can lead to a bloated organization.

Read more about matrixing and how it may have contributed to big tech layoffs ($).

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Featured stories

An UnLutke bet

Shopify has forecast slowing revenue growth in 2023, though still in the high-teen percentages on a year-over-year basis. This failed to impress investors as the stock fell 10% in after-hours trading.

Expectations had been high, as the company had significantly increased subscription costs as well as reducing costs by laying off 10% of its workforce in July 2022.

During the pandemic, Shopify CEO Tobias Lutke explained he had effectively bet that the increase in ecommerce relative to bricks and mortar sales would be permanent. When stores opened, the sales mix reverted to the pre-pandemic split and the bet did not pay off. Not so Lutke after all.

The content we're consuming today

• Gamecraft podcast: The failures and futures of virtual reality (Ep.7).

• WSJ: WallStreetBets Founder Sues Reddit ($).

• AFR: PwC leaks scandal widens ($).

Off-balance sheet items

• If you spent Valentine’s Day alone this year and would like to change that next year, why not aim high to begin with and start working your way down this list of America’s Most Eligible Billionaires?

The bottom line