The cull of jobs in the U.S. tech sector continues. Amazon, Alphabet, and Microsoft have all warned that thousands more jobs will be cut imminently. Salesforce CEO Marc Benioff and Meta CEO Mark Zuckerberg have admitted that they hired too many employees under the assumption that the growth their sector experienced during the pandemic would continue. On social media, overconfident CEOs are being blamed for the devastating effects on individual employees.
When I teach behavioral science to executives at the London School of Economics, I am always bemused by how most students complain about overconfident CEOs, with Bezos, Musk, and Zuckerberg among the names most mentioned. I will probe them on why overconfidence is such a problem for them–and we will get to a place where they understand that overconfidence causes CEOs to underestimate the costs and risks associated with the projects that they want to undertake and at the same time overestimate their benefits.
