Tech Brew Ride Home - Mon. 11/07 – Meta Layoffs Incoming?

Episode Date: November 7, 2022

Looks like those rumors of massive Meta layoffs might be coming true this week. Covid has led to brand new iPhone shortage worries. Is Apple about to make it easier to invoke Siri? Airbnb has made it easier to understand the true cost of a rental. And this weekend in the Twitter Clown Car. Sponsors: Storyblok.com/ridehome Links: Facebook Parent Meta Is Preparing to Notify Employees of Large-Scale Layoffs This Week (WSJ) Apple Issues iPhone 14 Pro Shipment Warning Ahead of Holiday Shopping Season (MacRumors) Apple’s Next Change for Siri: Dropping ‘Hey’ From ‘Hey Siri’ Trigger (Bloomberg) Airbnb to Make Cleaning Fees Clearer on Searches After Customer Complaints (WSJ) Elon Musk Appears To Threaten Advertisers Wary Of His Twitter Takeover (HuffingtonPost) Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Tech meme right home for Monday, November 7th, 22. I'm Brian McCullough today. Looks like those rumors of massive meta layoffs might be coming true this week. COVID has led to brand new iPhone shortage worries. Is Apple about to make it easier to invoke Siri? Airbnb has made it easier to understand the true cost of a rental. And this weekend in the Twitter clown car. Here's what you missed today in the world of tech. Well, I'd been hearing rumblings about this as I told you.

probably about a month ago. And now, basically, every venue covering tech is reporting what I heard that META plans to lay off thousands of employees as soon as this week, with an announcement expected as soon as November 9th. This would mark the first broad staff cuts in META slash Facebook's entire history, quoting the journal. Meta reported more than 87,000 employees at the end of September. Company officials already told employees to cancel non-essential travel beginning this week, The people said, the planned layoffs would be the first broad headcount reductions to occur in the company's 18-year history, while smaller on a percentage basis than the cuts at Twitter this past week, which hit about half of that company's staff. The number of META employees expected to lose

their jobs could be the largest to date at a major technology corporation in a year that has seen a tech industry retrenchment. The Wall Street Journal reported in September that META was planning to cut expenses by at least 10 percent in the coming months, in part through Stafford. reductions. The cuts expected to be announced this week follow several months of more targeted staffing reductions in which employees were managed out or saw their roles eliminated. Realistically, there are probably a bunch of people at the company who shouldn't be here, Mr. Zuckerberg told employees at a company-wide meeting at the end of June. Meta's expenses have also risen sharply, causing its free cash flow to decline 98% in the most recent quarter. Some of the

company's spending stems from heavy investments in the additional computing power. and artificial intelligence needed to further develop reels, meta's TikTok-like short-form video platform on Instagram, and to target ads with less data. But much of meta's ballooning costs stem from Mr. Zuckerberg's commitment to reality labs, a division of the company responsible for virtual and augmented reality headsets, as well as the creation of the Metaverse. Mr. Zuckerberg has built the Metaverse as a constellation of interlocking virtual worlds in which people will eventually work, play, live, and shop. The effort has cost the company $15 billion since the beginning of last year, end quote. Once again, I'm going to turn to

Gergley Oros, who we might need to get back on the show for a Twitter space, since he covers all things worker-related at tech companies. Quote, if meta does layoffs, it means a few things. One, growth for 2023 is likely to be looking worse than it did just a few months back. Two, there is no safe place in tech. Companies with profits dropping, even with founders with absolute control, will likely reach to this. Three, recession. I really hoped that meta would not do layoffs despite their revenue's growth coming to a halt. This has nothing to do with meta itself, but everything with how an eye-wateringly profitable company with a founder who has absolute control could afford to ride out a rough period. I told people if meta was not controlled by Zuck, but by a career CEO, there would have no doubt been layoffs at the company already. Zuck and dual-class shares was the reason this never happened in 18 years.

I'm told any layoff decision was with Zuck. This week will likely hear more, end quote. I missed covering this, but there was apparently a COVID breakout recently at the biggest Foxcon facility that produces iPhones. and thus, quoting Mac rumors, Apple today said it expects iPhone 14 Pro and iPhone 14 Pro max shipments to be lower than the company previously anticipated due to temporary COVID-19 restrictions at the primary Foxcon factory where the devices are assembled in China. A report last week claimed that iPhone production could be reduced by as much as 30% compared to usual levels at the Foxcon factory due to the restrictions. Apple said that the supply chain's

reduced capacity will result in customers experiencing longer weight, times for iPhone 14 Pro and iPhone 14 Pro Max orders. The devices are currently estimated to ship in three to four weeks on Apple's online store in the United States. On November 2nd, the Chinese government ordered a one-week lockdown for an industrial area where the Foxcon factory is situated following a COVID-19 outbreak, end quote. And it's Monday, so Mark German, Apple Rumor newsletter wrap-up time. According to a source that Mark spoke to, Apple is working on shortening the hey Siri trigger phrase to just Siri by 2024 and plans to integrate Siri deeper into third-party apps and services. By the way, trigger warning literally for this piece,

quote, the company is working on an initiative to drop the hay in the trigger phrase so that a user only needs to say Siri along with a command. While that might seem like a small change, making the switch is a technical challenge that requires a significant amount of AI training and underlying engineering work. Apple has been working on the change for several months, and if all goes to plan, hopes to roll out the switch either next year or the year after. The company has been testing the simplified wake word with employees and collecting the necessary training data. The complexity involves Siri being able to understand the singular phrase Siri in multiple different accents and dialects. Having two words, hey Siri, increases the

likelihood of the system properly picking up the signal. Apple has also been engineering first, changes. It will integrate the voice assistant deeper into third-party apps and services and improve its ability to understand users and take the correct course of action. If successful, the shift from Hey Siri to Siri would match Amazon's Alexa, which requires users to simply say Alexa rather than, Hey Alexa. Google requires the prompt OK Google or Hey Google, but has been working to let users make follow-up requests without repeating the wake word. By removing the hey and hey Siri, Apple would also in turn speed up back to back. requests. The company has recently made a few other tweaks to Siri, including redesigning the

interface on the Apple TV as a part of TVOS 16.1, end quote. Airbnb has announced it's going to do something users have been screaming at them to do for years. Airbnb now plans to show the total cost of stays in search results, inclusive of cleaning fees, starting in December. This follows years of complaints over what users feel is opaque pricing. quoting the journal. Starting in December on an undetermined date, the company will allow guests to filter their search results by the total cost of the stay before taxes, Chief Executive Brian Chesky said on Sunday, that means the often maligned cleaning fees will be among the fees included in the prices customers see. Guests will need to hit a toggle switch to display the total cost of nightly rates and fees,

rather than just the nightly rate, which now is often the only cost customers in the U.S. and elsewhere see early in the shopping process. a customer selects the feature, the total price will display on maps, wish lists in itineries, and when searching by price range, Mr. Chesky says, quote, we want everyone to see it. We want people to turn it on, he says. The feature will stay turned on as long as the person is logged in, so it doesn't need to be selected every time, he says. The change comes after complaints the company heard regarding how pricing is displayed on the platform. After social media backlash last year, Airbnb announced a review of its fees in May 2021. The company said it aimed to have the review

and recommendations in place by December 15th of that year. Asked why the process took nearly another year, Mr. Chesky says that it involved feedback from hosts and guests and turned into a general review of pricing. The company tested defaulting to displaying the total cost of the stay, a feature already mandated by law in certain countries, including those in the European Union. When Airbnb displayed the total price without any reference to the change, people were confused, he says. The prices do look more expensive. They don't know why they're more expensive, and certainly that's not helpful to business, he says. He added that Airbnb needed extra time to get the design of the display right. Toggling on and off allows people to become aware

of what changes were made in the display, he says. The change is one of a few the company is announcing formally on Monday. The total cost of the stay will also factor more heavily into search results, regardless of whether users toggle the total price feature. Listings with better value determined by price and quality relative to other listings in their area will rank higher in search results, says. This change is live, but will continue to be refined, Mr. Chesky says. In the coming months, hosts will have access to tools to set more variable pricing, including seasonal and weekday discounts, the company says. Early next year, Airbnb also plans to make pre-departure requirements related to cleaning easier to find on listings so people can evaluate them before they book,

Mr. Chesky says. This also means updating guidelines for hosts on what is a reasonable task, he says. Some requirements such as turning off lights and locking doors are reasonable, but others, such as vacuuming and doing laundry, cross a line, he says. These are chores, and we don't think that people should have to do unreasonable chores, Mr. Chesky says, end quote. Finally today, I see by my watch that it's time to see how things went with Twitter over the weekend, and I see that it's all going just swimmingly. It seems lots of folks have been changing their Twitter handles to Elon Musk,

and then tweeting out insulting and sarcastic things, Seemingly, under his name, a lot of those accounts were suspended subsequently. Some of them were prominent comedians and even tech pundits who had their accounts suspended. So then, Elon himself tweeted that Twitter handles, quote, encouraging in impersonation without clearly specifying parity will be permanently suspended and there will be no more warnings. So the accounts lately have mostly been just adding the word parity. their Elon Musk, in quotes, Twitter profiles. Sources were also telling Bloomberg over the weekend that after cutting around 3,700 staff, Twitter has begun asking dozens of them to return. Upon

realizing that some of those fired are needed to build features that Musk himself once and others were sacked in error. The rumors are that a lot of people were fired because Tesla and SpaceX engineers were brought in by Elon to write up fireless. And while I'm sure, sure those folks are talented engineers, they might not have had a good working knowledge of who was actually important to Twitter actually continuing to function. Speaking of, Bloomberg was also reporting that Musk fired over 90% of Twitter's more than 200 staff in India over the weekend, including around 70% of the product and engineering teams. So again, we're reaching the point where one wonders if they have the actual human resources to actually keep the lights on. Also,

over the weekend, Twitter appeared to roll out its updated Twitter blue subscription, offering a blue checkmark for $8 per month on iOS in the U.S., UK, Canada, Australia, and New Zealand. But that was it. Just a blue checkmark. There didn't seem to be any other verification processes in place for user identity. Just you pay $8 a month and you get your blue check. Then word came out that actually rolling out the check marks and verification features to blue subscribers will be delayed until November 9, which is, again, one day after the U.S. midterm elections tomorrow. but there were also rumors that the reason for the delay was the whole thing just wasn't ready yet. I did a search to see if advertisers were indeed at least pausing their Twitter spend, and the not authoritative list I was able to cobble together includes General Mills, CVS, United Airlines, GM, Audi, Mazda, Porsche, VW, American Express, Coca-Cola, Johnson & Johnson,

Levi Strauss, Spotify, Ford Dyson, Forbes, DirecTV, Nintendo, United, Nintendo, Unilever, and PBS, which I believe have all suspended most or some of their ad spend on Twitter. Now, Elon noticed this. Elon tweeted that Twitter suffered, quote, a massive drop in revenue due to activist groups pressuring advertisers despite doing, quote, everything to, quote, appease the activists, end quote. Now, I have no doubt that this is indeed happening, that activists are pressuring advertisers. But I also do know a little. bit about advertising-supported media, and here's the thing. Advertising is an old-school business. It's a business of relationships, but also, crucially, a business built on vibes.

Advertisers, especially the lucrative brand advertisers, we all know they don't want their ads showing up next to objectionable material, but there's a more important flip side to that coin. They also only want their ads showing up when people are feeling good, not showing up when they're agitated, angry, upset, etc. So imagine you're the brand manager for, say, Cheerios, the breakfast cereal, believe owned by General Mills. For sure, you don't want your ad for Cheerios showing up next to Nazi stuff, racist stuff, sexual stuff. You also don't want your ad showing up in the morning when someone logs into Twitter and just gets pissed off for whatever reason. For whatever the content is, you want people to wake up, log in, see something that makes them happy,

or calm or just ready to cheerfully be incepted into the thought of having a bowl of Cheerios this morning. If you're the Don Draper or Peggy Olson on the Cheerios account, chaos is not a ladder for you. Chaos is the thing that you fear the most. You want to protect your brand from chaos. And from what I just described, does Twitter sound like a platform that is calm and cheerful at the moment? Or chaotic? Exactly. I'm not saying that advertising is a noble industry.

I'm not saying it's rocket science by any means, but it does have very simple, hard, and fast ways that things tend to be done. And chaos is anathema to how advertising is done. Mark Zuckerberg famously once said of Twitter that it was, quote, such a mess. It's as if they drove a clown car into a gold mine and fell in. Well, Elon came in, fired half the clown car, and replaced it with a different, I don't know, outside clown car. Twitter was already a product and a business barely limping along because its main product, ads were so dicey for advertisers. They're even more dicey now. And that's why brands are scared.

You don't need any activists to scare them. Elon needs to fix the Twitter product. Yes, he needs to get rid of the bots as he's long said. Yes. Maybe add some new product lines. Yes. Though, as we said, $8 a month can only get you so far. More than anything, the last thing Elon needs to do right now is tip over the teetering advertising business that was already in trouble, and that seems to be exactly what he's doing at the moment. Over the weekend, he literally threatened advertisers, tweeting, quote, a thermonuclear name and shame is exactly what will happen if this continues, end quote. He was referring to advertisers leaving the platform, and I guess suggesting that any advertisers that left, he might put them on blast. Like, forget your ads showing up

next to questionable content, forget the chaos on the platform itself. Do you know the thing that absolutely terrifies a brand manager of, say, Cheerios more than anything else? That would be if Elon Musk, the most famous man in the world with millions of fanatical followers, decided to wake up tomorrow morning and tweet out that Cheerios is, I don't know, full of sugar and strychnine, and no one should ever buy it. That would be like an existential PR disaster. And unfortunately, we live in a world where we all know that's something that's not only possible with Elon, it's frankly probable if you get on his bad side. And so quite frankly, the logical and safe thing to do if your Cheerios is to just sit this one out as far away from the chaos as possible. Not to put too fine a point on this, but if advertisers are scared of Twitter right now, it's not entirely, but largely because of Elon himself.

If I were giving Elon advice, which I'm not, the thing that he should do quickly if he wants to turn Twitter's business around is get someone in the CEO chair tomorrow, not named Elon. On a slightly different topic, on the topic not of advertisers on Twitter, but on the health of the Twitter community itself, it occurred to me over the weekend that I'm probably a pretty good barometer of Twitter's health because of my job, because of what I have to do every day for this show, I need Twitter desperately. It's the primary way I take the temperature of the tech industry. It's one of the ways, you know, I give you the context around the headlines, what people are actually thinking behind, what is actually happening. So if the day comes where enough people

leave Twitter, enough of the sources I follow, I'll have to follow them wherever they go. If you ever see me quoting things from Mastodon all of a sudden, that's going to be a sure sign of which way the winds are blowing. Right now, as best as I can tell, I've only seen about two or three of the most valued accounts I follow for Tech News actually say they're giving up on Twitter, and who knows, maybe they'll be back. But if it becomes a flood, I'll be the canary in the coal mine.

I'd say at the moment, for the purposes of me doing this show, Twitter is 95% still alive, but maybe I'll keep a running tally of that percentage and check in here and there with an update of what percentage alive, think Twitter is for our purposes, because, as I said, I'll have to go where the action is, and since I do this basically 24-7, I'll have a sense of that before a lot of folks do. I hope it doesn't end up that way. I want Twitter to survive. I want Elon to fix it. Mostly because I don't know where else I could get such easy insight into the zeitgeist for you.

We'll see. Talk to you tomorrow.