The Vergecast - Meta announces job cuts and Twitter prepares for difficult times

Episode Date: November 11, 2022

The Verge's Nilay Patel, David Pierce, Alex Cranz, and Alex Heath discuss week two of Elon Musk as CEO of Twitter and Meta announcing job cuts. Later in the show: What's next for Binance and FTX, a stretchable screen by LG Display, and the Surface Pro 9 review. Further reading: Elon Musk tells Twitter staff to prepare for ‘difficult times ahead’ and ends remote work Read Elon Musk’s first email to Twitter employees Elon Musk offloads another $3.9 billion in Tesla shares Elon is putting Twitter at risk for billions in fines, says internal letter Elon Musk’s Twitter Blue with verification is now live Elon Musk's response to fake verified Elon Twitter accounts: a new permanent ban policy for impersonation  Everyone knows you paid to be verified on Twitter  Mario flipped off Twitter for nearly two hours with the blessing of Musk's 'verification'   Twitter rolls back gray ‘official’ checks that popped up on high-profile accounts Twitter’s new double-check verification disappears, Elon Musk says he ‘killed it’ Meta announces huge job cuts affecting 11,000 employees Binance won't bail out FTX, cites reports of 'mishandled customer funds' ‘I fucked up,’ says FTX founder Sam Bankman-Fried in public apology Microsoft Surface Pro 9 (Intel) review: this is the one to buy LG Display's 'stretchable' prototype display could attach to skin, clothing, and furniture  HP Pavilion Plus 14 review: a powerful, confusing OLED machine The Pixel Watch calorie bug is a reminder of why 'accuracy' isn't everything Razer made a customizable PS5 controller that — you guessed it — is very expensive   Email us at [e-mail] or call us at 866-VERGE11, we'd love to hear from you. We are conducting a short audience survey to help plan for our future and hear from you. To participate, head to vox.com/podsurvey, and thank you! Learn more about your ad choices. Visit podcastchoices.com/adchoices

Before we get to the show, I have a really quick favor to ask. What makes this show special, as you know, is you. It's the listeners. It's the people we get to hang out with every week and talk about tech. And that's why we'd like your help planning for our future, the future of the Vergecast. All we need you to do is fill out a short survey. You can go to the link in the show notes or directly to vox.com slash pod survey. Take a couple of questions, super easy.

Tell us about the Vergecast. Say main things about Nilai. We would absolutely love to get your feedback to help us understand and who's listening, what kinds of things you want us to talk more about and do, and hopefully how we can convince everyone you know, all of your friends and neighbors and coworkers and random people you encounter on the street, can come to be part of our awesome Vergecast community. That's it. Fill out the survey. Thank you so much.

Support for the show comes from Retool. Too many companies run critical operations on duct-taped spreadsheets, Slack workflows, and whatever else they could cobble together. Not because they want to, but because building internal tools means weeks of waiting on someone else's backlog. That's where Retool comes in. Build custom internal tools just by describing what you need. Prompts something like, build me a revenue dashboard on our Salesforce data. And Retool actually builds it on your company's data and your cloud with enterprise security built in.

Go to Retool.com slash Vergecast. We all need to retool how we build software. What's up, y'all? I'm Skyler Diggins, seven-time WMBA All-Star, Olympic gold medalist, and mom. And I'm Cassidy Hubbard, host and reporter for nearly 20 years covering the biggest names and stories in sports and mom. And this is Am Mom, a community for athletes, game changers, and moms of all kinds. Dropping May 14th. Tap in with us. Hello, and welcome to the Vergecast, the flagship podcast of verified users on Twitter.

I'm your host, Nilai Patel. See, this is the problem. No one would have known that that wasn't me. No one. If not for this dastardly blue check that Alex has purchased for herself. We sound exactly the same. How can anyone know who anyone is? Our audio engineer is like, I can't tell them apart.

Have you seen, there's like a really good TikTok where they speed up Sam Smith's voice and they slow down Adel's voice and then they have the same voice. That's Twitter blue. For $8 a month, you can speed up Bedell's voice and slow down Sam Smith's voice. You can't tell them apart. If you can't tell other Neely Patel is here. Hi, I'm your friend, Nealai. That's Alex Kranz. That's me.

David Pierce is here. Oh, yeah. I thought I was Neelai. Oh, my God. David Pierce is here. There are several Nealys on this podcast. No one can confirm which Neelai is which Nealai, only that there are many. Truly the real problem on the show is that there's two Alex.

So Kranz is here, and then Alex Heath is joining us. Hey, Alex. Hey, Alex. Hey, Russ and peace, Gary from Chicago. We'll get into that. We'll get that on the way up front. It's a huge week of news. Yeah.

So obviously, Elon and Twitter, Alex, I don't think you've slept. You've been breaking story after story. They all seem to happen at two in the morning, which is a real problem for you. Yes. Meta had massive layoffs this week, 11,000 people. Zuck wrote a very nice note. Real contrast in leadership styles between our nation's social media CEOs this week, I would say, including Gary from Chicago, who Alex and David made famous in a feature earlier this year.

And then FTX, the huge crypto exchange, I'm pretty sure just ruined Tom Brady and just sells marriage. Yeah. I can't make the causal connection. I don't have any evidence of it. But it seems obvious what's happening there. 100%. So we got to talk.

And that is the main consequence of everything going on with FTX. If you stop listening to this podcast right now, just know. The only thing you need to know about FTX is that it ruined Tom Brady's relationship. That's very important. Yeah. Tom Brady now has to play football until he's 85 years old. to just crawl out of the hole the crypto dug for him. So we got to talk about all that stuff.

We obviously have to start with Twitter, which is a minute to minute moment by moment, just out of control car crash hurtling towards yet another car crash, which itself is hurtling into the sun. Like, I don't know how to describe the current state of Twitter. People are quitting. Heath, tell us what you know so far. Well, we should say just real quick,

before we get too far in, We should just say it's 411 Eastern time on Thursday. If all of Twitter is different by the time you listen to this, which there's like a 60% chance it will be, just know that it is as of this moment, here is what we know everything subject to change at all times. We'll just dub in whatever change. Just to be clear about how real that is.

We were in a product meeting today about our redesign, what's coming next and all this stuff we want to do. And someone very casually, like a Vox Media product person was like, oh, and then we got to think about Twitter, like Twitter integration. And then there was like a beat. And then everyone's like, will Twitter still be around when the ships? And then we're just like cross it off the list. Because no one knows the answer.

Hold off on that one. Anyway, Alex, tell us what you know. Well, as we are recording this, Musk is addressing Twitter employees for the very first time in a meeting that he scheduled 15 minutes before and showed up about 10 minutes late too. Feels right. And we will have a read out of that. Hopefully after this podcast. He was literally addressing them over, you know, video for the first time since he took over. He sent a very terse email at almost midnight the other day, basically saying, get ready for pain.

He said he is not sure that Twitter will survive the coming recession, which is like a very, you know, hardwarming message to get from your new CEO. And then I guess my favorite part was he just sent a quick follow-up email, like less than five minutes after, which was just one sentence. And it was like, by the way, our type priority is fighting spam and bots and trolls. So very erratic inside Twitter right now. And I think all of that had a very fine bow put on it with this story we publish today. So the day before this podcast comes out that a Twitter lawyer posted a Slack message to the whole company, basically encouraging them to seek whistleblower protection. So totally normal things happening inside Twitter right now.

So let's try to walk through the week of things. I'm not, there are many ways to tell a story. Welcome to the Vergecast. There are many ways to tell the story. You can start with the most important thing first. You can lead with a conflict. Sometimes you're just beaten in the submission and the only proper way to tell a story

is chronological order. I can do it. You want me to do it? Let's go ahead. Let's see if you can pull up. Okay. Last week, Elon said I'm going to revamp Twitter Blue and we're going to start charging people more money

and they're going to get a blue checkmark. So I immediately went out and I reserved Reckless Patel. That's how you're telling the story. That's how I'm telling the story. Okay. And I immediately went out and I reserved Reckless Patel as a handle because I knew exactly what I was going to do. This is the story.

This is just self-congratulation. Exactly. 100%. A hundred percent. Go Cowboys. Anyway, over the weekend, they released a new version of the Twitter app on iOS and said, okay, Twitter Blues here, but it wasn't here. Right.

That was all lies. Well, because they made a last-minute determination that they should not roll out verification that is easily game to interstate people right before the election. Right. They realized, oh, no, we should not do that. So game-time decision to not ruin America's democracy with Twitter. Yeah. So they released this new version. It did absolutely nothing.

People were very confused. And then they all stopped carrying for at least two days. Then there was a whole election. There was an election. I will say, by the way, if you were, I don't believe this is true, but if you are one of the many people who believe that Elon Musk bought Twitter to push his right-wing agenda. Didn't work.

Just $44 billion to send the least effective political message of all time. He was like, I think you should vote for Republicans. And America was like, not as much as you want us to. And then they didn't do it. Yeah. So I just. Red trickle. Red trickle.

Again, my thesis was Elon is going to destroy his reputation and potentially cause grievous damage to his other companies. That's happening. And the first one appears to be happening. Anyway, continue your story about flagrantly breaking Twitter's rules. Then yesterday, Richard Lawler hit me up and he said, Alex. They did it. This is how I learned, by the way.

Richard Lawler, our news editor, you've all heard him on the Vergecast. He's amazing. Slack me. And he said, they've rolled out Twitter blue. It's finally here. What are we going to do? And I was like eating a banana. And I was like, I don't know.

What are we going to do? And then I remembered that I. Do you remember that you were? I had reserved Reckless Patel. And so I immediately went and I had to log out of my Twitter account on my phone because it only works on your phone. Only iOS. So, by the way, they are only rolling in set. And Elon said this, he said at a financial conference.

Right. That they are piggybacking on Apple's user verification and credit card security. Yes. So it only works on iOS. Yeah. And you have to have a Twitter account that was reserved before November 9th. Yeah. So I was ready to go.

I immediately reserved it using my, my verge email and my account that very clearly does not say Nilai Patel anywhere in it. And I had a blue check mark. And now she's just running around and personing me. And here's what I'll tell you. Alex has gotten herself up to 200 followers. Yes. Over 200.

Dieter just sent me a text message noting that the fake account now auto completes when you search for my name. It's being... That account was recommended to me in my... should follow it today. It's great. Follow it. It's great. It's amazing.

It's everything that you've ever wanted from identity verification system that basically comes down to do you have $8. Yeah. So the reason I brought up the piggybacking is, right, Elon's like the $8 will deter spammers. It will make spam too expensive. And also the credit card payment processors and Apple's iOS protections are additional layers of security.

This thesis has proven to be about as false. As it can be. Right. Like there is just spam all. over the platform like Mario is flipping you off from an account that looks like the Nintendo account it's it's still going right either's a fake Eli Lilly account that has been promising free insulin for a day which is I mean maybe they should just do it just like that's a good idea but it's a good policy he's completely lost control of over the platform yeah a hundred percent

this seems like a useful time to note that this is what he wanted like this is this is the whole thing and like this is this is the guy who said comedy is back on the platform and then said, actually, if you impersonate somebody, you'll get suspended from Twitter and then forced a bunch of comedians to do that and get suspended from Twitter. Like, Kranz, you get to do kind of a victory lap on this after last week because this was never, ever, ever actually about verifying users. And anyone who thought it was, it was wrong. What this is about is getting people to pay $8 to feel fancy. And you get, you get to be upranked in people's search results and algorithms and you get to have a checkmark. And

Even that has now been like completely undermined by the explanation that's like some people are verified because they're important and some people are verified because they paid. And like instantly being verified because you paid has become like the thircest, dumbest thing to possibly do. It's just this whole thing has gone so horribly awry in so many ways. But the thing that is like useful is the idea that like the idea that this was ever actually about verifying Twitter users on Twitter, we can just we can just put that to bed. It's gone. It's not what's happening. Total. Well, and there was.

Heath is just like cracking up. What's going on? We haven't even talked about the other checkmark yet. I know. All right. He explained the other check mark, which came and went in a, like a frenetic burst of chaos. Sandra O was so important for 30 minutes. I think all thanks to Marquez Brownlee, like it seems like Marquez Brownlee killed the other checkmark.

But Heath, you should explain. No. So Marquez did not kill it. What actually happened is just... Well, first you have to explain what it is. So basically, as they were rolling out blue, someone in the... inside Twitter realized, oh, shit, what do we do about all these government agencies that are not going to pay us $8 to have a checkmark, NGOs, etc. So they roll out this gray checkmark that's a second verification checkmark that is the same as the old checkmark in that it's literally managed in a spreadsheet inside Twitter.

And it's like part people from different parts of the company submitting names and Twitter accounts to be verified, right? which is how it used to work. That goes on for what? I don't even know. Was it, this is like... Yeah, it was like a half a day. Okay, you could have told me half a day. You could have told me an hour, whatever.

Then Elon tweets, I just killed this. I think it was maybe to Marquess. Yeah. When everyone just got confused and they were like, wait, why do some people have two checkmarks? What is this great check mark? And his whole thing was like lords and peasants, right? He was like, the original way verification works was bullshit. You know, power to the people.

Everyone gets it for $8. And then that wasn't the king. the day it rolled out. And so then he cancels it. And I think they may actually bring it back, guys. I think there's like right now, the problem is that a bunch of Twitter people frantically started trying to add names to this great checkmark list because they wanted their respective partners, agencies, et cetera, to have it.

So that's why Sandra. And he was like, no, like this is too much and shut it down temporarily. But I think they're going to bring it back. So I think there's going to be this still too. two-tier verification system, and it's just checkmarks all the way down. You know, it's just... It wouldn't be two-tier. It would be technically three-tier because there'd be the gray checkmark for people.

Then there'd be the blue, if you click on it, says this is an important person checkmark. And then finally, the blue, if you click on it, this is Reckless Patel. No, the mid-blue one is going away. The mid-tier blue checkmark, that's the legacy one, will go away. Okay. For now, there's going to be three. So are they going to change who gets the gray checkmark? Like, if you're currently have the blue check mark without paying, will you move to the gray?

Or are they going to, like, audit that and be like, Sandra O can keep it. Alex Cranes, absolutely not, which I would respect. Cran's, only Elon knows. Okay. Yeah. No, I would posit that even Elon doesn't know, that literally no one on this earth knows how that is going to shape. I just want to put this out there. We are at the point with all of this chaos that I received notes from like two or three people who are like tech company operators just floating the idea that he's trying to destroy the company on purpose.

Like it's the the amount of chaos is so like irresponsible that like smart people are like you should look into whether he's doing this on purpose to destroy Twitter. No, he's just rich. We haven't even gotten to the FTC violations. Yeah. We haven't even gotten to like the other, the looming shadow of. the government. Just like random people are like, you should look. I'm like, I don't, that seems like he wouldn't just light $44 billion on fire.

Yeah. Especially, like he said. He's definitely the point with the whiplash decisions and this sort of just, I don't know, disregard for the reality of running a company at Twitter scale that other smart people are like, there's an actual method here and the goal is to destroy the company, which I think is a remarkable place to be. I've had multiple people over the last several. days, use the phrase, never ascribe anything to malice that can be explained by incompetence.

Yeah. Like that exact phrase over and over. And it's like, it's because of that thing. It's like, you look at it and it's like, okay, the simplest explanation here is that Elon Musk is systematically trying to ruin Twitter. Like, that's the only simple explanation for what's going on here. But it's like, then you look around and it's like, okay, it's Elon Musk who has no idea how to run a company like this, who brought in a bunch of people who have no idea how to run a company like this, tried to change it all in 15 minutes, fired half the staff. And it's like, of course this is going to be a disaster. Like, you could do all those things and try your absolute hardest,

and it would go exactly like this. Like, it's craziness. This is the guy who beta test self-driving cars on public roads where anybody could theoretically be hit by it. Of course he's going to like... There's a real difference there. Is it? Okay. And I've been thinking about this a lot.

Okay. Elon does not have absolute disdain for the people. who work at Tesla and buy Teslas. Yeah. And his open disdain for the people who make Twitter is so obvious. And it's like, dude, you're addicted to Twitter. The thing they made is your favorite thing. This is like if you walked into the Oreo factory and you're like, who are the people

who made Oreos? Fuck them. Get out of here. I'm doing Oreos my way. And then you ruined Oreos. Like, it's absolutely bizarre. And I get that maybe the company was burning. too much of money and I think we have to say this every week. Criticizing Elon's 10-year

Twitter is in no way praise for the previous disaster chief executives of Twitter. They did a bad job running the company. I mean, Prague, yes. But the operation of the search, actually hasn't made bank yet, right? He's going to have to, he's going to, he didn't, he got fired for cause. And the cause was, you made me look bad and forced me to buy Twitter. So like, I just, it's just crazy to me that he doesn't, if you are, if you think you can do a better job managing an organization, just by making slightly different decisions and not actually like changing how the organization works, like you're in for a bad time. And here with verification, all this stuff, there's like really good reasons that smart people made rigorous decisions to get where they

landed. Right. And he's not taking them into account. Okay. Which leads us, Alex, to the FTC. Yeah. Yeah. Well, before that, I was just going to say to kind of add to what you were saying, This is live kind of updates from the all hands that was just ended. He told employees that, quote, bankruptcy is not out of the question, and that he expects Twitter to have negative cash flow of several billion dollars next year. So, yeah, your theory that he may actually be just setting it on fire is definitely not unfounded. Yeah, but then, like, how are you going to do all the things you want to do? Like, he's filed paperwork to start a payment service and, like, building everything after it.

What if he just bought it for the tech? Next stack? There's not, I mean, it's like, it's fine. I'm just, I'm kind of speechless with all this. I mean, this is certainly the wildest story I've recovered. Do you want to talk about the FTC thing, Eli? Yeah, this is the big scoop that you had this morning. Oh, my God.

Well, um, props to Casey for scooping me on Twitter. But, yeah, we have this full memo that a company lawyer, a senior counsel on the privacy team sent as kind of like a falling on your sword. I mean, she clearly is expecting to be fired after this, basically saying that Elon is pushing the company to violate this FTC consent decree, which has very, you know, stringent rules about certifying how data is used and, you know, privacy review that Twitter has been caught violating before and that the company is standing to face billions of dollars in fines. And that the most alarming thing, I think, was that engineers, individual engineers are now being asked to. self-certify their code under this consent decree. And the three executives who were actually in charge of enforcing this internally all resigned the same, well, the evening before this memo went out. And this is a company in-house lawyer ending a message saying, by the way, here's how

you can contact the FTC to whistleblow. I'm going to take PTO now, salute emoji, which is the emoji that are all giving when they get laid off. Amazing. So just like a truly, incredible thing to have sent inside a company by one of your own lawyers. What is the self-certifying? Well, so this back up. We can explain kind of the mechanics here. So in 2011, Twitter got in trouble because they were using personal information to target ads. So you'd sign up for Twitter, you tell them your email address, your phone number, or whatever.

PII, it's called personal identify information. And they were using it to target ads. Okay. They got mad at them, made them sign a consent decree saying you're not going to do this. May of 2022, Twitter pays fine, $150 million, because guess what they did? They used your personal information, target the ads. So they re-up the consent decree, modified order. This requires them to have a group of people.

We don't know who that group of people is that is accountable to the FTC. Oh, it's the people who resigned, NELI. Yeah, yeah, yeah. It's the chief privacy officer, chief compliance officer, and chief security information officer, all three of whom resigned together. Right. Okay, so I didn't think we had this when we wrote the story. But so Alex has now confirmed it, the people responsible to the FTC for filing compliance reports,

keeping Twitter in compliance with this FTC order. Not getting fined again. Well, no, but they're accountable to the FTC. So if they're on the hook, Twitter's on the hook for billions of dollars and fines, they're on the hook personally. Right. And we should say like, yeah, going to jail. They can go to jail. So one of the clauses in this consent decree is 14 days after a change in.

in ownership or control of the company, Twitter, these people have to file a compliance report. So if anything happens to the company, company changes control. 14 days later, the FTC wants a document saying, data practice is still good. Guess what that was? They all quit.

Yesterday. They don't want to be on the hook. They don't want to go to jail for Elon's crazy. Right. And the FTC is owed this thing. The FTC had a statement. They gave it to us.

They were watching this very closely. They are alarmed. In the meantime, Elon's rushing out features that take your credit card number and purport to identify you without going through, as Alex reported, all the necessary reviews, including hilariously the Red Team review, which is like, here's all the things that could go wrong. They didn't take any of the recommendations. All of the things immediately went wrong exactly the way that you would expect them to. Right. To be clear, so there was an emergency Red Team review the night before Blue launched, the night before.

And all of the things that we were just talking about with impersonation, this was all raised, I'm told, internally, as like, hey, we should be thinking about this. This is going to happen immediately. Obviously, none of it was implemented. And yeah, so that's just a sign of how breakneck the company is operating. And I mean, this lawyer in this note says we're on one to two week from product inception to release sprints and how in the world are we supposed to get that through our FTC requirements. And I mean, I just like, I know I already said like this is like a remarkable thing for someone to write. But this is this is a company lawyer literally saying like people are going to go to jail basically, right? And this person was still on the payroll when they sent it. So obviously I'm clear what's going to happen. But yeah, that's the state of things. Could Elon go to jail? Could he buy Twitter and get sent to jail?

I mean, I don't think that causality is that direct. But yes. My head, it will always be. His personal attorney, Alex Spiro, who is also Twitter's acting head of legal, told the person who wrote this memo that I reported, quote, Elon puts rockets into space. He's not afraid of the FTC. So that's good. Yeah. Wow.

I mean, it's a good line. Yeah, it's a very good line. I would say the threats to get you sent to jail. The threats from space conceptually. Yeah. And government lawyers are different in form, which is one of those. things like if you're good at one thing you're not always good at the other thing. Yeah.

One is going up. I type really well. I'm not afraid of playing NFL football. It's like that it's the same form of argument, you know, but that to me is this is the ultimately what I think Elon has failed to grasp is that Twitter is a deeply complicated company. And a lot of its dysfunction is because of the conflicting pressures. it's under from all directions at all times.

Some of which is self-inflicted, right? The FTC consent decree, Twitter should not have used data in a way that Twitter should not have used your personal information in a way that violated people's privacy. Right. And so now they have to be extra careful or some officers of the company go to jail. Well, I was just going to say it's worth noting to that in this Twitter spaces that Elon hosted with advertisers the other day, he talked about merging Twitter's text stacks. And he's done this internally already in terms of like he's created a new

central engineering organization. Twitter used to have its advertising stack and its tweet kind of relevant stack for consumers separate. And he's talked about frantically trying to merge all of it together. And I think his quote was like, we need to be adventurousome or something. But he wants the same technology that powers ads to power tweet relevance. And this gets it at the heart of this FTC thing, which is like you cannot just merge datasets without going through us.

And he literally said that on a call with 100,000 people listening a couple of people. Yeah, I mean, this is like straightforwardly the thing Twitter has gotten in trouble for in the past is promising to use people's data one way and then using it another, which would be a huge issue in for any other company and a particularly huge one for Twitter, which has basically signed the thing saying, you, you are allowed to destroy us if we do this again. And yet I get to, I just keep coming back to this thing that we talk about a lot on this show, which is that Elon Musk believes the rules. don't apply to him. Yeah. And has a fair amount of evidence that says that they don't. And like, the SEC has not stopped him from tweeting whatever the hell he wants over all this time.

So, like, if I'm Elon, I have a lot of evidence that says these government agencies are going to yell and yell and yell and then I'm going to get my way. And maybe he thinks that because he took it private, like it doesn't matter? I don't know. Like, I mean, I'm just like, is it because it's like his, like, his toy now that he can do whatever he wants with it? I mean, I really, I don't get it. What's the over-under on his personal lawyer who is clearly calling a lot of like the legal shots, having any knowledge of how an FTC consent decree works?

Who knows? Like this is not like, you know, usually you have lawyer, like this lawyer sounds like. Yeah, specialized lawyers. And this guy's not that. Well, they all quit. Yeah. Well, so it's interesting. His lawyer, Alex Spiro is also this week representing Megan the stallion.

in a feud with Drake, according to TMZ. So he might be busy, actually. A little busy. He was also just on an NBA podcast about crisis communication. So it was good. You know, I listen to it. Here's my big question about all this, right? He's not in a fight with the FTC yet.

He, I don't know if he's pissed off Twitter users with the blue stuff. I don't think he's ruined the experience. He keeps claiming, by the way, the numbers are way up, which is hilarious because he keeps tweeting MDOW charts. The same charts he said were full of bots when he tried to get out of the deal. So who knows? Maybe more bots have been added to Twitter. Can't tell.

But he says the numbers are up. Usages are up. He has driven away a bunch of advertisers. They don't appear likely to come back, especially if reckless Patel is out there, just like given Nintendo the bird. Yeah. Seems unlikely that advertisers want to be. Thirst tweeting at Mariah all day. I mean, I would just do that.

Mariah, if you're out there. That's very awkward. Mariah, if you're out there. In fact, you would understand. I think she's a Vergecast listener. Do you know Mariah really cares about charging standards? Does she? Yeah.

I feel, I believe it. I believe it. This is how you guys are going to meet. This is the connection. She's like USB 3 Gen 2 version 1. What is that bullshit? She's up. This year, all I want for Christmas is Mariah Carey sneaking up on you in spatial

audio. That's all I want in the world. That's the only use for her spatial audio is Mariah Carey. Anyhow, the advertisers seem extremely wary. They're not going back. My question is, Elon's companies are, effectively monopolies in their spaces. Like SpaceX, in particular, the United States has no other way of going to space.

It's SpaceX or the Russian government. The SLS was on the launch pad. A hurricane came by. And they're like, no, never mind. Never mind. Like, it's a permanently cursed. Blue Origin can't get all the way. Like.

The Blue Origin rocket lends itself to the most incredible jokes about not being able to go all to space. We just got to set those aside. Yeah. SpaceX is the event. for the United States government. One of the reasons Elon gets away with everything is because they got no other choices. Tesla for years, only viable electric car company. Right. And, you know, people really like the cars and the software experience is great and there's

all of that. Change the automotive industry. Yeah. Like huge congratulations to the Tesla team. You made this thing happen. But he's in markets where he's the only player. Next year, you know, I've heard from auto advertisers in particular who are like, well, why would we go back to Twitter? like, why would we put our marketing plans on Twitter? Alex was mentioning this last week. I talked to some folks this week. Like, that's their vibe. They think Tesla is going to have to compete against all of these cars that are coming out

in the next year if they ever come out, right? But if the auto industry succeeds in actually shipping cars next year, Tesla's in a competitive environment and might have to advertise. Twitter is the only business Elon runs that is not just like a full monopoly. Right. Where his actions might have consequences in a way that they can't over, can't be overcome because there's no other choices. Yeah. I mean, historically, he's bought into these companies when they're still barely

companies. They're these tiny little things. This is the first time he's like, I'm going to buy in and own this company that's been chugging along in the public realm for years. And now, like, I think he's learning some lessons, although I don't think he necessarily wants to admit it. Yeah, there's just a piece of, I mean, am I ranting about competition on the Vergecast? I'm ranting about competition on the Vergecast. There's just a piece of me that says he gets away. with it all the time. Because what are you going to do if you want electric car, not buy a Tesla? What are you going to do if you want to put a satellite in the space? Not sign up with SpaceX. Get the guys back from space. What do you get? What are you going to do if you want the astronauts back from the space station and you're fighting a proxy war with Russia? Well, it's one choice.

Yeah. So here, it's like, what are you going to do if you don't want to spend money on Twitter in your general Mills? It's like, oh, I can just spend money anywhere else. Anywhere. Alex, I want to recapitulate a conversation that you and I have been having, like, all week. Because I've been saying, if I'm Mark Zuckerberg, famously ultra-competitive Mark Zuckerberg, I'm like, I could just kill Twitter tomorrow. I can just take all those advertising dollars and put them on my platform in some way. And you have been pointing out that that's actually not a huge incentive. Yeah, I mean, we'll get into this.

But like the people that Zuckerberg laid off, you know, he's probably going to say, of Twitter's annual revenue and just like the people he laid off. Like we're talking about a scale that is just so much larger. And the dollars that are spent on Twitter are the kind of dollars that would flow

more to like billboards than they would meta, right? They're not performance advertisers. Elon even said this in a memo to employees that we reported on the Twitter's advertising base is 70% brand, which is code for large

big brands doing campaigns without a verifiable kind of outcome, right, just to spread brand awareness. Those dollars, they go other places. They don't necessarily go to search or meta. Wait, can we just, I just want to clarify for the listener what you mean by performance and brand. This is our world, right? The verters is like an advertising supported publication. Performance advertising or direct advertising is like search ads. Like you search for a thing, you search for a flight, and United Airlines shows you a price, and you click the button, and you're like all the way at the bottom of the advertising funnel where you have like expressed intent to buy something.

Yeah. And then they can track that you bought something. And the reason it's called performance is because the advertising performs. Brand advertising is all the way at the other end where you're just aware that United Airlines exists. Yeah. It's just Matt Damon saying crypto is good. Yeah. Basically. That's brand.

So all those AWS ads on football or all the weird IT solution vendors' ads at the airport, like when you push on like why they. exist. Like, is anybody watching an NFL football game like, I should sign up for AWS? Like, that's all brand advertising. And the reason they all do it is so that when they, when people go to their CIOs or their vendors, there's like a baseline level of familiarity. Right. That makes you more inclined to do a thing as opposed to being like, I've never heard of ATAX. And that's why he's concerned about it right now. Yeah. Because we're in a weird economic space. And one of the first things to go is, well, do we really need people to be that?

aware of AWS, we're probably good. We can probably cut that budget. And I thought that was really interesting that in that letter he sent, or that email, whatever it was, he sent, he was like, we're getting 50% of it here. We need 50% or more of our revenue from Twitter Blue subscriptions. You need to make billions of dollars on Twitter Blue subscriptions is basically what he's saying. Alex, do you think that they're close to making Twitter banks, what, $4 or $5 billion a year? Are they going to make $2.5 billion in $8 Twitter Blue subscriptions? If they up the price to what Musk had originally wanted before Stephen King got involved, maybe.

I will note that the $8 a month is labeled as an introductory price. I do think he has every intention to raise the price. Yeah. Next week. I noticed that too. I thought that was interesting. But I would just say one more thought on the meta thing. Like, let's not forget that Mark Zuckerberg literally rebranded his company because he wanted

to get away from dealing with all of the nonsense that comes. comes with running a social network. Like, nobody knows better the perils of running Twitter than Mark Zuckerberg. And he, like, dude decided he wanted no part of it. And he doesn't talk about it anymore. He doesn't answer questions about it anymore. He's like, have you heard about legs? Yeah.

And avatars, let's talk about that. And it's like, even if Facebook could and thought it was interesting monetarily to kill Twitter, which it obviously doesn't, it's just everyone who has been through this has discovered the gigantic headache that it is trying to do this. This is why nobody bought Twitter in the past because people kept kicking. the tires and kept going, oh, this is a shit show. We want no part of this. And it took Elon Musk, like, putting his hand on the stove to figure out that, oh, actually everybody was right the whole time. Oh, and guys, since we're just, you know, we're doing this in real time. It's Twitter,

everything is changing at all times. I'm now getting pings that UL Roth, Twitter's head of trust and safety that Elon has elevated in the last couple weeks is on the way out. I'm clear if it was because he was forced out or voluntarily resigned. This is the the guy that was on the call with advertisers. The honest said is the one he trusts to implement his content moderation policies. And UL is now. He was the face. He was the one sent out to say the content policies haven't changed.

I've decreased hate speech on the platform. He's tweeting charts. The charts, by the way, he's like, here's charts of hateful speech. And it's like, that's a chart of people tweeting the N-word. I just want to be clear. When you say this is a chart of tweets with slurs in it, this is how often people tweet the Oh, my God. Oh, my God. Yeah. I'm sorry. The head of that, I just, we got to just have this in the pod because it's all going to be out by the time. Robin Wheeler, the head of advertising, has also left who was on the call with Elon the other day talking to advertisers. Yeah. That he just made, he just put her in charge of all ads and marketing. And she is also leaving with you out.

So that, just to put a point on this, there was a Bloomberg story this morning that named those two people as two of the three most important people at Twitter who he had decided were like his inner circle who were as. sending to be leaders of the company. That's two of the three names. This is the danger. The people who know how Twitter works, who have their relationships with the customers who understand the complexity of content moderation, they're all looking at this and saying this isn't worth it.

Yeah. There's a part of me that feels bad for Elon Musk. Like, he wakes up every day, and this is the loneliest place you can be. And his only release is tweeting clown emojis at Tom War. when Tom Warren is like, look at how bad Twitter verification is going. Like, I'm not, it's not a lot of pity. Yeah.

But like the walls are just closing in. Well, I wonder if he recognizes that because we were also seeing him this week tweet like, yeah, our average user base is growing. Right. So like maybe in his head it's like, well, you know, at least one important number still go up. We still good. Yeah, he's been saying this a lot that like, no, you know, it's, it's messy, but it's, it's at least it's interesting. And it's like, okay, that's all well and good, Elon. And it is certainly interesting. Like it is, it is, our audience is interested in it. The internet is

interested in it. Like, I was at, I was at a doctor's appointment this morning. And we talked about what Elon Musk is doing to Twitter. Like, this is, this is a captivating thing. But then there comes a minute where Elon Musk has to pay a billion dollar interest payment to make this money work. and it's just not interesting doesn't eventually pay the bills here. And it looks like all the money is walking away even if the thing is more interesting from day to day. Here's the thing that's going to really get Elon in trouble. A fake Taylor Swift account just tweeted that her tour is canceled and it has 5,000 likes. And he pissed off the BTS fans.

It's all over. The BTS Army is mad. Now you got the Swiftie's mad. We got to get the, I believe they're called the Lamblays. that's your people, Eli. The Lamblies. That's what Mariah calls her fans. The Lamblays?

The Lambly. Like family, but lambs. All right. There's a limit to my Mariah fandom. It really ended with how very single I was when I was a teenager. There's a little box around my Mariah fandom. I don't know this. And I don't want to.

Again and end with the Heartbreaker video. That's all I'm saying. Yeah, that sounds right. But like this has been happening. Like there was a fake. Bronjames who tweeted requesting a trade that that became a whole thing. Like, this is just, this is going to happen over and over and over again. And it sounds like basically there are somewhere between zero and four people at Twitter who

are just like manually chasing this around the platform trying to delete stuff as it goes. And it's like, this just isn't going to work. Yeah. And it's going to get so much worse so quickly. You're seeing other companies dunk on it. I think both Tumblr and Substack, neither company doing terrifically well, have both announced that they're now doing blue check marks. Tumblr's offering you two for the price of one.

We should not put those two in the same category because Substack is like doing this very earnest thing where they're like, Twitter sucks. We are your great home. And our checkmarks represent actual writer's success on the platform. And Tumblr's just like, give us $8. We'll give you two checkmarks. They don't mean anything.

Fuck you. And it's amazing. It's very good. Sorry, I'm also catching up on the YOL Roth news. I mean, it is crazy. I'm just going to read this tweet from Casey and then we've got to take a break because we can't keep talking about Twitter

in this moment of flux. Like, I'm just going to read this tweet. Casey. Right now the timeline kind of feels like the day the llama's escaped, except this time the llamas are loose at Twitter headquarters and are trying to shut the company down.

It is incredible how much all of this platform has turned its gaze inwards and it's just watching the company collapse. Yep. I don't know what's going to happen next. Heath, I don't think you know what's going to happen next. Because it would be really helpful if I just say it.

I don't know. I mean, this FTC thing may sink the company because my understanding is the people who are being asked to self-certify product launches and code at the risk of facing possible jail time are all quitting. So everyone on like the security and privacy team under the executives who left are all kind of quitting together. And so I don't know how much of a company he's going to have left next week, to be perfectly honest. Even tomorrow. Yeah. Or tomorrow. And we should say, we have not talked about the technology of Twitter very much on our tech podcast.

Twitter is starting to subtly break in weird ways. Like follower accounts have gone up. The retweet button was doing manual retreats for a while. I should note because this happened because Twitter had a code freeze in place until the day after the midterms when they launched blue, where basically you couldn't push anything through production unless you got VP approval. And that lifted Wednesday evening. And I'm told that once that lifted, it was kind of like all hell broke loose. And now that the site can be changed, you're seeing all this dramatic stuff with what the lawyer sent and all these resignations because everyone's realizing like, oh, when Elon actually has the keys and can make changes, this is what happens. Oh, boy.

All right. We got to stop talking about Twitter because literally the more we talk about it, the more we summon chaos. Yeah. More people are leaving. It just invalidates everything we just said. We'll see what happened. We're obviously going to talk about next week. We got to take a break.

Come back. Heath is going to walk us through what's going on at Meta, which is going through equal, K. But I would say in a more controlled way. Yeah. We'll be right back. Support for this show comes from Shopify. Every thriving, successful business has to start somewhere. A good place to start is a relatively simple question.

What if, given the right tools, I really put my all into this. One tool that can help grow your sprouting business to new heights is Shopify. Millions of businesses around the world rely on Shopify for e-commerce. They offer a host of helpful tools you can take a lot of helpful tools you can take a advantage of, from payment processing to analytics to website design. Their design studio includes hundreds of templates to help you create the exact website you've been envisioning for your business. If you're wondering, what if I need help, then no worries, because you're never left to fend for yourself. Shopify's award-winning customer support is available 24-7. It's time to turn

those what-ifs into a thriving business with Shopify today. Sign up for your $1 per month trial today at Shopify.com slash vergecast. Go to Shopify.com slash vergecast. That's Shopify.com slash vergecast. Support for the show comes from

LinkedIn. If you're a small business owner, you know that every hire counts, but time and resources are limited. Finding, connecting with, and screening the right candidates takes up valuable time you could be giving to your customers. That's where

LinkedIn Hiring Pro comes in. It's built to be your hiring partner, helping you find the right candidates faster. That way you can hire with confidence without turning it into another full-time job. Hiring Pro streamlines the entire process from drafting your job to shortlisting candidates and conducting AI-powered interviews for initial screenings. Its updated conversational interface lets you describe what you need in plain language. Nearly 60% of hirers find a candidate to interview within a week. With hiring pro, you spend less time searching and more time connecting with the right talent. And instead of getting buried in resumes, you get a focused shortlist that actually moves your hiring forward. Join the 2.7 million small businesses using LinkedIn to

hire. Get started by posting your job for free at LinkedIn.com slash track. Terms and conditions apply. Okay, we're back. I've struggled to keep all these stories. apart in my head. Like Twitter chaos, meta chaos, FtX chaos. Collapse. Chaos. Just across the board. Let's talk about meta, though. 11,000 people let go. A very different tone from Mark Zuckerberg in letting those folks go. Very generous terms. He wasn't like you're all idiots. By the way, we should note that in the all hands that Elon just had, he said that even after the 50% layoffs, Twitter still overstaffed,

which just cannot be motivating for the people who remain. Meta in a very different place. Elon also said if you're physically able to come to the office and you don't, resignation accepted, which is a pretty bold. Like, I think starting, like today was the, he told them yesterday and it was starting today was the end of their remote work policy. So, yeah, I would say Mark Zuckerberg handled this significantly more gracefully is probably the word I would use. And strange to be in the timeline where Mark Zuckerberg is the revered older statesman

of tech, but here we are. Alex, what's going on with meta. Sure. Let's contrast this quickly at the top. So Twitter layoffs were unsigned emails, no message from Elon, very terse, also like potentially violating the Warn Act, TBD on that, about minimum severance you could offer. And meta, by contrast, it's a lot of people. So this is the largest tech company layoff to date, one of the largest, I think, ever. It actually may be the largest ever.

It's 13% of the company, over 11,000 people. And the way this happened was Mark gathered all the directors and VPs the day before. on a call where I'm told he was very remorseful looking, like kind of hazy-eyed and took responsibility, which you can laugh at that, right? Because it's like billionaire CEO takes responsibility. What does that actually look like? But said like, this was my fault.

I thought that the trends we saw during COVID, where there was a pull forward as all these tech executives were talking about in people's online activity, commerce, et cetera. People thought this was going to. And I kept hearing this at the time too. I'm sure Nelai and others did too. All these tech executives,

as we're saying during COVID, like, this has pulled forward 10 years of growth in a matter of 18 months. And Zuckerberg said on this call with kind of management that he expected that growth to sustain and to not, you know, retreat. And certainly, I guess no one expected Jay Powell to just raise rates the way he did. And that certainly affected everyone. And then the following day, you know, emails start going out. And Mark actually gets on a call with everyone who was laid off, kind of reiterates again. There was video of this that leaked. Looks like he's basically. tearing up, said, thank you guys so much. He's giving everyone four months of severance, and it just couldn't be handled differently. But in terms of like the impact to meta,

I think what's been interesting based on my conversations with employees and including some who were laid off is that everyone was kind of shocked at how sporadic these cuts were, because over the summer, meta has been doing quiet layoffs. Essentially, they asked managers to build lists of bottom performers, about 10% to 10 to 15% of their team, which matches the layoffs that they just did that need support. And they were also, they had frozen internal transfers, they'd frozen external hiring. There had been a real ramp up in attrition.

And everyone thought that these layoffs would just hit those people on that need support list. And instead, I'm hearing about directors and AI, people working on the AR glasses, areas that you wouldn't necessarily expect that are still key bets. Obviously, some stuff that you would expect. Like, META had like almost 7,000 recruiters. So that org got decimated. And also in marketing and some of those other areas,

comms pretty hit hard. But it wasn't like really focused on, I would say, reality labs with the Metaverse Division that everyone's saying he needs to be cutting on as much as it was kind of spread randomly throughout hitting senior and low-level people. And what I heard was they didn't want to focus it on one org because they didn't want that to breed resentment in the company

for one or getting hit more than the other. Even though reality labs, everyone acknowledges internally is very bloated. It has over 25,000 people. This is the part of the company that makes Horizon, which I wrote the VP is having a hard time even getting the people building it to use. And Horizon has a thousand people on it. And this isn't a product that has like maybe 150,000 users. Well, we should, wait, we should talk about that for one minute because we haven't published

our Quest Pro review yet. We will. It would just, it has been a very busy week. But Addie's working on that review. It's going up. We're working on the video. Alex, you have a Quest Pro. I have a Quest Pro.

I have a Quest Pro. We've tried now several times to hang out in both Horizon Workrooms, which is the Metaverse conference room situation and Horizon Worlds, which is the fun one. It's bad. And I'm just going to offer you this one snippet of a moment, not to totally tease this review. I don't want to spoil it too bad. You should probably tell from the tone of my voice. Oh, I'm ready.

we we Alex was Alex Heath was trying to join me and Addie in workrooms and he couldn't get on it just like didn't work so then he invited us into his world in Horizon Worlds and so he beam in there no legs no legs and suddenly we are surrounded by the sound of teen boys saying there's a girl on the server oh boy there's a girl here oh no and then they said ask her if she's over 18 woof. And then dozens of avatars ran across. So just Xbox in 2002. It was terrifying. And the funniest part about this was we don't even know if that was Addy. Because we hear her clearly

talking to someone else. It was pure chaos and it's just like imagine you know scrolling through Twitter but in 3D where you're embodied and it's a bunch of people yelling. I don't want that. Is there a girl on the platform? is she over 18?

I mean, it was like instance after we, like, I hit the button to beam to where Alex was. Just like dozens of boys, like teen boy voices being like, there's a girl. She's the only girl on the server. You don't see that as often as you used to. Because like early internet days, you'd be like, I'm a girl.

And oh no. It was those AOL chat rooms got spicy for this 12 year old girl. But, like, you don't see it as often now. So it's like, whoof. Yeah. That's something. Yeah. There's no, I don't think there's a button in the metaverse that lets you type ASL.

But that's, it was very much that vibe. So I won't give away the whole thing. But like, it's a lot of money going towards an experience that I would say is not very good at this point. Yeah. But as you're saying, they didn't cut reality labs because they didn't want the reality labs people to be resentful of Instagram or whatever. No, I just, I'm saying throughout the company, the cuts were. relatively spread because they didn't want certain teams. And there were, to be clear, there were some product teams that got hit a lot harder.

There was actually still a remnant of a consumer smartwatch team trying to figure out if their meta was going to do a consumer smart watch, which I didn't even know. Are they still there? No, that team got really sacked. So there were some teams that got hit hard. But in terms of where the cuts were spread throughout, all of meta, it was fairly distributed. and that was on purpose to not breed resentment. Yeah. Well, and I also think it's kind of emblematic of this impossible position that Meta is in

and that Mark Zuckerberg continues to put himself in, which is that everybody wants him to pull back on the Metaverse bets and start investing in the stuff that actually makes the company money. But he is now so all in pot committed to the idea that the Metaverse is the future of the company that he almost can't afford to retrench on that and be like, okay, actually, we need to focus on the stuff that makes us the money. We'll worry about that someday in the future. Then you inspire a whole different kind of panic.

He has to project confidence in this idea that he has sort of loudly bet the company on, even as it sort of systematically destroys the company. Yeah. And I don't know how you navigate that. Well, I just want to be careful that, yeah, this is super precarious for him, obviously. Like, they're losing a lot of money and investors don't believe in this mission. At the same time, like, this is not Twitter. Like, meta is wildly profitable.

They did like $5 billion in profit. last quarter. So it's a very different situation. That said, I think the cuts put meta back to where it was like less than a year ago. Like this company has hired so much. That was that feature featuring Gary from Chicago, you know, rest in peace salute that David, you and I wrote over the summer where like meta hired like 40% headcount growth during the pandemic all remotely. So they went from like 30-ish thousand pre-pandemic to like 87,000 now. And the offices are empty, you know, so it's like people are still working remote. It's just, it's this, I think, bigger story that we've seen across tech of these companies

thought that the punch bowl that they were giving during COVID would never be taken away. And they're all realizing very forcefully and frighteningly at the same time that it's totally gone. And they're left out, you know, but what does Buffett say like if when the tide comes back in, you get to see who's swimming naked. So that's like what's happening right now. I was just going to say this is a thing I've heard from a bunch of people over time. And it's been really interesting to track this over the last like six months. Because there was, like we've been talking about, there was this moment where basically for two years, everybody was like, okay, we have essentially fast forwarded a decade into the future.

Yeah. And that growth is going to keep going. This stuff is never going back. We're all going to order groceries and have them delivered. We're all going to hang out in the Metaverse. Zoom is the future, all this stuff. And then there was this period after that where everybody was like, okay, we've made all these changes, but maybe the pace from here isn't going to be quite as fast as we thought. So everybody started slowed down a little bit.

And more recently, I've started talking to people who were like, oh, my God, we're just going back to 2019. Yes. All of the stuff that happened is now being sort of systematically undone as people go back to work and back to the ways that they were doing things before now that they could. And so like not only not moving forward as fast, we're actually going backwards. And to me, that's one of the things that has really, like,

combine that with all the macroeconomic stuff. And all of these companies have gone like, oh, my God. We are no longer anywhere near actually set up to be the kind of company we need to be to succeed right now. And it's just everybody is sort of feeling that crunch simultaneously, which has been really interesting to hear about. Yeah. I think we talked about this a lot on the Vergecast, which is there are the first order pandemic effects and like the second order ones. And like my favorite second order effect is everyone cares more about their webcams. Like does macOS continuity cam and that little belkin mount exist if not for the global COVID pandemic?

No. Definitely not, right? Like, no. Everyone had to care about it, so we care about it. And now there's like an entire category of AI powered webcam that exists. And that's like a hilarious second order effect. The problem is everyone overestimated the first order effects. And the way that like tech people, computer people often do, which is, oh my gosh, you've moved all of your stuff to this computer platform.

It's so much faster and more efficient. Why would you ever go back to the old way? And it turns out the old way of doing lots of things has benefits as well. Like, it's, it's not. Well, the answer is because schools are open again. Right. Like, that's, they let us go back to school. I was on CNBC the other day, and we were talking about the gaming companies and their earnings and the way that you do on CNBC.

And they sent me a bunch of research to repair. And one of them was a note from Jeffries about Roblox earnings. And the analyst's note was, we expect Roblox to be soft at the end of the year because the kids are in school. And it was just like dead ahead. Literally that simple. Like the kids are in school. And when they're in the classroom, they cannot be playing Roblox. And it turns out that for two years, kids at school at home were kind of playing Roblox on the side.

And like, that's just reality for so many of these companies. And I think it's the thing with meta, though, is they didn't launch a bunch of pandemic products. They hired a lot of people for coming shifts. And I think Zuckerberg's view was everyone's at home on their computer now. This is the right time to make a face computer. So your whole life is the computer all the time. Yeah. Because I think he was running headfirst into app tracking transparency and 30% platform fees and all this other stuff.

And he was like, I have to make a new platform for the coming change. And the new platform, again, not to spoil our review, I think they probably should have just kept that one on the shelf. Yeah. It's really bad. I think Addie said that Adi said Horizon is like the worst software experience she's ever had, like ever. which, yeah, I mean, I do think the hardware is, you can see the quality, you can see the design, and that they clearly have a lot of X Apple people there. And they, I think they did an okay job with the hardware.

It's just the software is so atrocious on this thing. And yes, there were MetaQuest Pro employees and engineers laid off. Like, this is a product that just shipped. And I think just goes to show like kind of how and disarray this whole, strategy is. Yeah. So we'll see. I mean, again, I don't think that there has been a really definitive review of the

Quest Pro yet. There's a reason we're taking a lot of time with ours. I think to make some of the claims are going to make, you got to take a lot of time. Yeah. That review will come out. But I think it will put a pin, I think, on this era of meta in a way that the layoffs are putting a pin on this era of meta. And really, this era of tech.

Apple's doing a hiring freeze. I would expect Google to be doing some sort of changes soon. We were just seeing it across the time. industry. All right, we got to take a break. We're going to come back. We're talking about one more disaster. Alex, I think you're not sticking with us, right? I think you got to do some reporting. I've got to go. All right, Alex is going to go, figure out what's going on on Twitter. We'll be back. David's going to take us through FTX. We'll be right back. Support for this show comes from

whatnot. Whether you're selling online or out of a storefront, you already know the challenge. You're simply hoping for people to find your listing or waiting for them to walk in. But What Not flips that. They say they're the live shopping marketplace where you can shop, sell, and connect around the things you love. On What Not, you go live and sell directly to people in real time. They see what you've got, ask questions, and buy. And they keep coming back. Whether it's beauty, collectibles, electronics, luxury fashion, and yes, even cookies, sellers are building real thriving businesses. And for a limited time, What Not says they'll match your first $150 sold in the first month.

You can visit Whatnot.com slash sell to start selling. That's W-H-A-T-N-O-T dot com slash sell. What-N-O-T-com slash sell. Support for the show comes from Anthropic. Not every question has an e-O-T-O-T-com. easy answer. And the ones that are really worth asking usually come with a healthy mix of inspiration and backpedaling, aha moments, and quiet meditation. When you're working through one of those problems, you want a partner to bounce ideas off of and figure out where the deeper issue

lies. That's where Claude can help. Claude is the AI for minds that don't stop at good enough. It's the collaborator that actually understands your entire workflow and thinks with you, whether you're debugging code at midnight or strategizing your next business move. Claude extends your thinking to tackle the problems that matter. Plus, Claude's research capabilities go deeper than basic search. It can have comprehensive, reliable analysis with proper citations, turning hours of research into minutes. Ready to tackle bigger problems? Get started with Claude today at cloud.

cloud. a.ai slash vergecast. That's clod. dot AI slash vergecast and check out Claude Pro, which includes access to all the features mentioned in today's episode. Claude.aI. slash vergecast.

All right, we're back. Let's see if we can do this quickly, David. Alongside all of the social media disasters, there's a giant crypto exchange called FTX. Yes. Which just ate itself this week. What happened? That's pretty solid description, actually.

So, okay, the piece of context that is useful to understand here is that Sam Bankman-Fried, who is the CEO of FTX, which is one of the biggest crypto exchanges, and there's FTX.com and there's FTX. Ft.x.U.S. is a separate thing that is also potentially falling apart, but for the purposes of this, we are not going to be talking about FTX.U.S. Is it also an exchange? It is also an exchange, and that is the one that people in the U.S. actually use. But basically, because a lot of people are confused and or mad at crypto rules, a lot of people run their crypto stuff offshore. So that is a thing that has been happening, and that is what FTX.com is. Sam Bankman-Free, the CEO of FTX, has been, I think beefing is like a fair way to describe it, with Chang Peng Xiao, the CEO of Binance, which is the largest crypto exchange. So they've been fighting for various reasons over time.

and FTX has been on this crazy run during the crypto downturn of basically just buying everything it could find, right? Like they definitely seem to sort of sense that this was a moment to gain market share and win in a big way.

But all of this is to say, basically this week, Binance, Changpeng Xiaar specifically started a huge run on the token that FTX gives out, which is called FTT. Basically, they decided

they didn't want to own any of it anymore and sold a gigantic amount of it all at once. Very publicly, very loudly announced that they were doing this. And when somebody like the CEO of finance decides to do this, and when they sell this much, the price goes down. So the price goes down, which means more people want to withdraw, which means the price goes down further, which means more people want to withdraw.

This is what they call a run on the bank. Yes. So this now becomes a gigantic disaster. And then it turns out that FTX didn't have the money to pay all the people who wanted to get their money out, which is a problem for a lot of very complicated reasons. But if you don't have people's money to give them, that's generally considered to be a problem. So there was a minute where FTX was going to be sold to Binance and Binance was going to essentially take it over in an effort to give customers their money back and sort of make all of

them whole while swallowing FTX.com. Binance, from what we can tell, basically did like six minutes of due diligence when, oh my God, this is so much worse than we thought, never mind, we're out, we're not doing this. And again, announces this very publicly, makes a statement about how essentially saying like FTX sucks so bad we don't even want to buy it for one dollar like we're out and then over the course of the last 24 hours it has come out that basically the most egregiously wrong thing that FTCX did was use the money that people had invested to fund its own trading with this separate firm called Alameda that was basically a hedge fund using FTC's assets so now it has come out that FTX was using customer money to do its own trading crypto goes down that

trading doesn't work so you don't have the money to give back to people. It just spins out of control, right? Like money, money goes down. Everything falls apart. And so now what it basically looks like is Sam Bankman-Free, the CEO, is out trying to get somewhere in the range of $9.5 billion just to like make customers whole and make this work. And by work, you mean, pay all those people because no one wants to invest in it now. Yeah. So essentially what, I mean, I think if he can't make customers whole and then shut his company, down, it's going to get much worse for them. Right?

There's like, this gets very ugly when people can't get their money out. And right now those people can't get their money out because it literally doesn't exist. And so he has explored a bunch of different avenues. There are other crypto people who are like, oh, turn your crypto into our crypto for very expensive exchanges. And that's a disaster. So it's like scams on top of scams, on top of scams. And it seems like at the end of this FTX and Sam Bankman-Fried was like the crypto guy.

Yeah. boards in San Francisco. He's like, he is the face of crypto in a very real way. He was a cover of Forbes or Fortune. Yeah, like recently. And this is, this is all absolutely just crashing around him. And I don't know exactly how it's going to end, but it seems very unlikely that FTCS continues to be a thing for much longer after this. Does this just kind of like prove that a lot of crypto, not the underlying technology. Blockchain is cool. Blockchain is like the technology has Blockchain is a thing that exists.

That's like the most I'm willing to give you for sure. And I feel like it could be cool. We're not used in a multi-billion dollar pyramid scheme. Which is like, that's what if this is. Like everything you're saying, I'm like, that's just like the time I gave money to get an Xbox to someone online. I didn't get my Xbox. I lost $40. It's less pyramid scheme and more pond.

in the sense that I'm going to take your money and I'm going to do some stuff with it. And then I'm going to take someone else's money and give it to you while I'm still doing the stuff. And then at the end, all of us are going to be so rich that you're not even going to be worried about it, except then crypto goes down. So real Bernie Madoff energy. Super Bernie Madoff energy. Unintentional Bernie Madoffing is like, is that a thing?

Can you like accidentally bring up? No, he just lied to everyone. He was very intentionally doing this. So Sam Bankman-Feed, SBF, as people know, like the profiles are. are glowing. And he was the one in like the halls of Congress pitching the regulation. So we've got to change the laws to it. The reason there's FTX and FTX U.S. is because FDX does riskier trades than are allowed in the United States. There's a real thing. Yeah. Yeah. So he's like running around saying they should be crypto regulation and you should allow me to do these kinds of trades.

And the crypto industry has a pretty conflicted relationship with him. They didn't like the bills he was proposing. There's like a medium chance he just got taken down for proposing crypto regulations that would have cemented his own position. He was doing a Ponzi. But also, I mean, there's that element for sure. Yeah, yeah. Well, but also, this is why I bring up the beefing that's been going on between Sam and Chang Feng Zhao, the CEO of finance. Like, Sam did this whole long tweet thread, basically apologizing for being horrible and making a lot of horrendously bad decisions. And like, to some extent, took,

you know, acknowledged all the stuff that he did wrong and the mistakes that they made and all this stuff. But then at the very end was basically like, you know,

I don't want to, I don't want to pick fights. But like, I think the last thing was like, you did it, you won, which is like very clearly directed at Chang,

Peng Zhao, who just like cemented his own place and Binance's power in this industry by sort of systematically destroying a competitor. Yeah, I think he said,

I think he said, and I don't want to like name any names here, but you want. And everybody's like, okay, it's, it's finance. Let's stop this and let's talk about the most important part. FTX ran a lot of ads. They ran a Super Bowl ad. They own a stadium.

They own a stadium. They own a bunch of stadiums. Like hundreds of millions of dollars of rights deals that FtX has paid for. Some of them, I think, in crypto. Can we just skip to the important part of this, which is the FtX did a lot of advertising. Yeah. Like a lot of advertising. They owned, I think, Miami Heat play an FTCS arena.

Right. They got a lot of arenas. Tons. They did a Super Bowl ad. It's like, great. The Superlod is like just Tom Brady calling people and me like, are you in? And it's like an escalating series of famous people, you know? My favorite is that Major League Baseball umpires wear an FTX logo on their uniform.

Sure. So Tom Brady and Giselle have an equity deal. They own a huge chunk of FTX. And they poured like some significant amount of their net worth into it. We don't know how much, but they were like on the record being like, we're betting big on FTCs. Well, they just, they just. They just finalized their divorce. And I wonder if part of it was Giselle was like, you take all the crypto holdings.

I'll take the cash. So she's just sitting there being like, wow, man, sucks to be you. Let me just read from this press release. A seven-time Super Bowl champion and one of the greatest athletes of all time, Tom is a natural fit in his new role as ambassador for FTX, given that the platform has quickly risen to be one of the leading exchanges worldwide. The first part of that sentence and the second part of that sentence have nothing to do with each other. Nothing.

Being the greatest athlete in the world, that's nothing to do. I'm a great writer. That means I'll play football. There's a lot of that on the Vergecast this week. Can we retcon deflategate to be about the lowering price of crypto instead of about footballs? Do you think we can do that? Somehow, Giselle was named the environmental and social initiatives advisor to the crypto exchange. Oh, wow.

And she talked about how much she cares about the environment in the context of her crypto investment. I'm fairly convinced, and there's a lot of Tom Brady noise. He's got to play football for the rest of his life now. Forever. He can never stop. He's going to be hustling, gatorade, like, whatever, forever now. People are, like, not going to tackle him at some point because they're like, I don't want to break his bones. Yeah.

Just cut him and half. It's also, this is perfect proof of the long-running thesis that as soon as a company puts its name on a sports stadium, you can assume that that that company is about to fall apart. Yes. Like, it just, it is. It has never not been true. And blessings to FDX, it continues to be true. Kudos to everybody. We'll just see what happens with this.

But this is like the weirdest fallout of all this crypto noise is the number of celebrities and athletes who bet huge on crypto in the middle of the pandemic. And now that's all getting wiped out. Aaron Rogers, I should point out, and that's a deal where he was going to get paid in Bitcoin, which is a horrible deal now. Like, that dude just took care of God. I love it. And there's like lots of athletes who took deals like this to promote.

And he did it, by the way, with our friend Jack Dorsey and Cashab. Okay. Jack Dorsey, you know, the extremely good CEO, Jack Dorsey. He knows how to run a company. So just a lot of chaos in tech this week. Yeah. Well, and FTCS was supposed to be one of the like responsible future of crypto companies. Right.

That it was like a lot of people bet on it because it was like, okay, when all of the noise goes away, there's going to be a handful of sort of good stewards of crypto left, and FTX is going to be one of them. And now you have people like Brian Armstrong, the CEO of Coinbase, who like could not have reacted quicker to distance Coinbase from FTX. And even he was like, we looked at it and oh boy, it's bad news. Meanwhile, Coinbase's dock is down like 80% this year. Like it's been a disaster for everybody. And even he is coming out being like, oh, I didn't touch that with a 10-foot pole.

Yeah. It's rough. I would imagine now that the midterms over, the politics are down. Well, down. We're down to a low boil of American democracy, not a full rolling boil. It's still hotter than you'd like. Supreme Court will announce a case soon. We'll be back at it. But you imagine that a crypto regulation is going to pick up in Congress because a lot of famous people just got wrecked by some shady crypto dealings that is going to require some regulation to prevent people from doing it. How many politicians do you think? Got wrecked along the way. That's the story. If you're a politician and you got wrecked by FTX. Send us your bill.

Just let us know. We love to write about it. We should end on some gadget news. End in a high note. Also, we got to check Twitter to see if anything else changed in Twitter in the last five minutes. The answer is yes,

but you'll have to check the verge.com to see what happened. We should have with some gadget stuff. Monica reviewed the Service Pro 9. I would say that Microsoft's attempt to put an arm chip in a surface laptop has once again been felled, and Monica says you should just buy the Intel one.

Great. It was very pretty. She had it. We're in the office. We saw, I got to play with it for half a second yesterday when she was in a meeting with me. It's beautiful. You should get that laptop.

Or you should get the service per night. Yeah, Microsoft has, like, done everything with the surface that you would want it to do, except make, like, that next leap to this next magical place of great battery life and perfect connectivity. But in terms of, like, regular old surface things, it's like they continue to be very good. Seems nice. If you want to surface, buy this surface. It's very good.

Yeah. I think that's like I can ask for. LG has a stretchable display now. LG display. No, not LG. LG. LG display. LG display.

They have very different PR companies and they get really... They're fine, actually, if you confuse them, but they cannot help you. But yeah, LG display has a stretchable prototype that hopefully

we'll be seeing at CES. Hopefully that will be one of the things LG display shows off. And it's different because, you know, they've done rollable and they've done like foldable. And this is more like

you could theoretically put this on clothes or furniture. I think that's a ways off. Yeah. Would the furniture be like those vinyl covers that like grandma used to have? I think it would be like, yeah. Like animated florals on the couch. Just like a mouth opening as you go to sit down. Absolutely not. That's pretty good. Monica also reviewed the HVillion plus 14.

I just like OLED laptops and I will read any review of an OLED laptop. There's something, I just want one. And this is not the one apparently. She said it was very confusing. But shouldn't we just be at a place where OLEDs and laptops are a thing like all the time? Well, I just, I like this one because it got the OLED part right and the laptop part. Like, what if the screen was really good, but the laptop felt like it was going to break every time you picked it up or touched it? It's like, well, yeah, we've done, we've done the hard part, right? But you kind of forgot about the easy part. Yeah.

But the screen does look really nice. Pixel watch already bug and how it counts calories. Amazing. Wow. Shocking. Just shock. King. Yeah, all that AI.

And they're like, we know we're bad at counting. Yeah. That's good. A very expensive controllers coming from Razor. Yeah. Tell me about this. Yeah. I'm a little excited about this because for years,

you could not get a really customizable controller for Sony products. You had to go to SCuff. Scuff was basically it. And they would modify them themselves. But we started to see more of these. And this is kind of like the Microsoft Xbox controller Elite, I believe is the name, the elite controller. and this is the Wolverine

version 2 Pro I think that's what the V stands for. It's the Wolverine V2 Pro $250 and still more expensive than Sony's own first party super fancy customizable controller. Yeah. This thing looks like a chunk.

It looks like a big boy. Yeah. I immediately think of Kirby the Nintendo character every single time I look at this. It's just it's a Kirby controller. I love this thing, and I love what Razor is doing, where they're like, oh, there's a lot of gaming stuff out there. What if we made something that was so much more aggressive than anything else you've ever had? Is that something you'd be interested in?

And it turns out the answer is yes. And this is like, this is what Razor has always done well. They're just like, here's some like deeply like capital E extra gaming gear. Would you like that? And I'm like, yes, I would. I do have one concern about it because it looks like the handles on the side. It's called the Wolverine. What's there to be made about that?

The last Wolverine was great. The last Wolverine was wonderful. The buttons were really nice. Some of the best buttons in these kind of controllers. But this one looks like it might have a different texture on the sides. And I'm not about that. I want the smooth, sweaty, plastic texture everywhere. Gross.

I don't want, like, rubber. I'm actually with Alex on this. If it's not like slipping out of my hands all the time, I'm not interested. Yeah. I don't want sticky controllers. Oh, I see what you mean. Yeah. But this looks like a textured plastic.

Yeah. I'm hoping that's what it is. It's got a lot. lot of lights on it. You can expect the buttons to be pretty good. The triggers on the back are different. A lot of people do these like flipper style triggers. Are there four triggers?

Oh, yeah, four triggers. I'm looking at this picture. It looks like there's four triggers. Oh, yeah. Hell yeah, dude. They're all programmable. So you should be able to like, be like, I want to jump by just using my middle finger on the back of the controller and do it.

But then you have to like train your body to remember that. That's why I never can use them? Because I always forget. And then I'm like, why am I jumping so much? And I'm like, oh, it's, I've just been holding this trick. on the back. I'm going to buy this just to play skateboarding games on Apple Arcade, and it's going to be absolutely glorious.

I have zero regrets. $250. All right. The most overkill possible move, I'm all in. We should end there on overkill controllers with RGB lights. I'm so excited. We got to end on a high note. There's like other stuff to talk about, but we got a high note.

The thing that's not collapsing is customizable controllers for your PS5. Gamer lights are the one thing you can rely on in 2022 America. Invest. You get in. Buy high, don't sell. Hold. Gamer lights. All right.

That's it. That's the Vergecast. Somehow we've gone over, but we're still right on time. Yes. That's what that feels like to me. Nailed it. We got right to where we need to be.

We're going to just have Twitter coverage. Look, we made our entire site look like Twitter, right? Because we wanted to move faster. Pretty your colors. Little did we know that the perfect use for our new product would be covering Twitter. it's not what I expected, but it's working out. The site's a lot of fun.

It's every minute of every day. Also, first little tweak to the redesign coming next week. Ooh. I think people are going to like it. I think so, too. We're going to bring back some old flows. You're going to like it. But we still have the new flow.

Yeah. It's going to be sick. Yeah. You're going to like it. But just check out this like because it's every minute. Every minute of every day, something's crazy happening. And who knows how long Twitter will stay around. round. What's your over under 90 days?

120. 120. So one more month. Okay. What do you got? It's not going anywhere. I'll take, I'll take any over you give me, but will I be there in 120 days? No. I've already drafted the like, you know what everybody does, the like here all the other ways you can reach me not on Twitter tweet. I have drafted that like three or four times already in the last week. And then every time I type it all and then I'm like, who am I kidding? I'm not done with Twitter. But one of these days I'm going to send that tweet and be done the Twitter. The place you're going to find us is the Verge. We're going to add comments to the quick

posts. But Reckless Patel will be there. Tell the end. All right. We got to wrap this up. Here's my last, if any of you know Mariah Carey. You know, like I hadn't thought about it a long time, but if you know, just let me know. Slide into those DMs. It's Christmas time. That's all the same. This is, Nilai, no one should underestimate this. Nilai's entire profile and career success has built to the moment where he can ask a lot of people to get him in touch with Mariah Carey. This is that moment. Do not let it down.

Let him shoot his shot. Yeah. I think actually the funniest thing about this, like, I think Becky would like to be in the room. Phone just slowly come up, record. I don't know what this is, but I want to watch it go down. I've known her since I was 18 years old. She's going to be like, I want to be in that room. All right.

That's it. That's the Verge. Again, if you know Mariah, just let it be known. She's a business. She can come on to go to her. Hit him up at at Reckless. That's it. That's the Vergecast. Rock and roll. And also the sweet Dulcet Sounds of Mariah Carey. And that's a wrap for Vergecast this week. Thanks for listening. If you enjoy the show, subscribe in the podcast app of your choice or tell a friend.

You can send us feedback at Vergecast at theverge.com. This show is produced by me, Liam James, and our senior audio director, Andrew Marino. This episode was edited and mixed by Amanda Rose Smith. Our editorial director is Brooke Minters, and our executive producer is Eleanor Donovan. The Verge cast is a production of The Verge and Box Media Podcast Network. And that's it. We'll see you next week.