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Big Tech Layoffs Tied to Record Inflation in 2022

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Layoffs at Big Tech behemoths such as Twitter, Amazon.com, and Meta Platforms (Facebook) are the first on a large scale since early 2020.

Layoffs at Big Tech behemoths such as Twitter, Amazon.com, and Meta Platforms (Facebook) are the first on a large scale since early 2020.

After years of falling unemployment in the United States, it may appear that Silicon Valley is heralding the start of a dystopian future for workers. However, there is a good chance that what happens in Silicon Valley will not affect the rest of the economy.

A few years ago, big tech firms were quick to hire. After the pandemic struck in 2020, it took four months for employment in the “other information” sector to return to pre-pandemic levels. In comparison, total employment did not recover for another 29 months.

Regarding firing, Big tech in Silicon Valley is also ahead of the curve. Rising interest rates make capital more expensive, forcing businesses to cut spending on future projects.

This is especially difficult for tech companies that rely heavily on innovation to drive growth. Elon Musk cut Twitter’s headcount in half in November to cut costs. Employment has since fallen further as dissatisfied employees resign.

Companies are still hiring elsewhere. In September, there were roughly two job openings for every available worker.

According to Indeed, job postings for restaurant workers were up 38% from pre-pandemic levels as of Nov. 10. Listings for hospitality and tourism are 15% higher than they were previously.

Big Tech layoffs and slower hiring

Could Silicon Valley’s aches and pains spread? That depends on the Federal Reserve, which is mandated to reduce inflation from 6.3% to 2%, excluding food and energy prices.

In September, officials warned that the fight would almost certainly result in layoffs and slower hiring. According to the Fed’s projections, unemployment will reach 4.4% in 2024, implying that 1.2 million more people will be out of work.

Nonetheless, inflation appears to have peaked in June. On Wednesday, Fed Governor Christopher Waller suggested that such a trade-off might be avoidable.

This raises the prospect of a tech-specific adjustment rather than a white-collar recession. That’s not much consolation for employees returning their door badges. However, it suggests that Silicon Valley’s modest purge may be the worst it gets.

Amazon.com, Twitter, Meta Platforms, and other technology companies have recently laid off tens of thousands of workers as executives look to cut costs and prepare for slower growth.

According to the Federal Reserve, rising interest rates could lead to higher unemployment. Fed Chair Jerome Powell has repeatedly emphasized high job openings as a sign of an imbalanced labour market.

big tech

Inflation killing jobs

Inflation data released on November 10 showed that prices rose 7.7% yearly through October. This is a decrease from the previous month’s rate of 8.2%.

According to a KPMG study, at least 91 percent of top job creators are bracing for a Biden Recession, with more than half considering layoffs in the next six months.

“America’s CEOs are becoming an increasingly pessimistic group as inflation rages, and the Federal Reserve keeps hiking interest rates,” according to Fox Business.

Another recent survey found that more than a third of chief financial officers (CFOs) believe the United States is either in a recession or will be by the end of the year.

Layoffs at Big tech companies in the United States and Europe have recently increased due to record inflation, higher energy costs, and central banks aggressively raising interest rates, which has fueled recession fears.

During the coronavirus pandemic, technology companies increased hiring to meet increased consumer demand, but the tables have turned in 2022.

Global inflation has reached its highest level in nearly 40 years, forcing central banks to raise interest rates in late 2021, significantly reducing the amount of capital and liquidity available in markets for investment.

Major technology companies have been laying off employees or putting new hires on hold at an unprecedented rate to cut costs.

According to the data tracker website Layoffs.FYI, 788 tech companies have laid off 120,699 employees worldwide since the beginning of 2022.

According to a report by business information provider Crunchbase, over 67,000 workers in the US technology industry have been laid off this year.

Source: Reuters

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OpenAI CEO Warns That ‘Societal Misalignments’ Could Make Artificial Intelligence Dangerous

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DUBAI, UAE — The CEO of ChatGPT-maker OpenAI stated on Tuesday that the hazards that keep him awake at night about artificial intelligence are the “very subtle societal misalignments” that might cause the systems to wreak havoc.

Sam Altman, addressing via video call from the World Governments Summit in Dubai, reaffirmed his proposal to establish an organization similar to the International Atomic Energy Agency to monitor AI, which is expected to advance faster than the world expects.

openai

OpenAI CEO Warns That ‘Societal Misalignments’ Could Make Artificial Intelligence Dangerous

“There are some elements in there that make it easy to imagine what may go wrong. And I’m not particularly interested in the killer robots walking down the street causing things to go wrong,” Altman remarked. “I’m much more interested in the very subtle societal misalignments where we just have these systems out in society and through no particular ill intention, things just go horribly wrong.”

However, Altman emphasized that the AI sector, including OpenAI, should not be responsible for developing industry laws.

“We are still in the middle of a lot of discussions. So, you know, everyone in the world is holding a conference. “Everyone has an idea, a policy paper, and that’s fine,” Altman explained. “I think we’re still at a time where debate is needed and healthy, but at some point in the next few years, we have to move towards an action plan with real buy-in around the world.”

OpenAI, a San Francisco-based artificial intelligence startup, is a leader in the industry. Microsoft has invested billions of dollars in OpenAI. The Associated Press has reached a partnership with OpenAI to grant them access to its news archive. Meanwhile, The New York Times sued OpenAI and Microsoft for using its content without permission to train OpenAI’s chatbots.

openai

OpenAI CEO Warns That ‘Societal Misalignments’ Could Make Artificial Intelligence Dangerous

Altman’s success with OpenAI has made him the public face of generative AI’s rapid commercialization and anxieties about what the new technology may bring.

The UAE, an authoritarian federation of seven hereditary sheikhdoms, shows evidence of this risk. Speech remains strictly regulated. These constraints impact the flow of reliable information — the same details that AI programmes like ChatGPT employ as machine-learning systems to deliver user replies.

The Emirates also boasts the Abu Dhabi corporation G42, led by the country’s strong national security adviser. Experts believe G42 has the world’s leading Arabic-language artificial intelligence model. The corporation has been accused of spying due to its involvement with a mobile phone app identified as spyware. It has also faced allegations that it secretly collected genetic material from Americans for the Chinese government.

Due to American concerns, G42 has announced that it will break connections with Chinese suppliers. However, the conversation with Altman, hosted by the UAE’s Minister of State for Artificial Intelligence, Omar al-Olama, addressed none of the local issues.

openai

OpenAI CEO Warns That ‘Societal Misalignments’ Could Make Artificial Intelligence Dangerous

Altman, for his part, said he was encouraged to see schools embrace AI as critical for the future, despite teachers’ fears that pupils might use it to compose papers. However, he stressed that artificial intelligence is still in its early stages.

“I think the reason is the current technology that we have is like… that very first mobile with a black-and-white screen,” said Altman. “So, give us some time. But, in a few more years, I believe it will be far better than it is now. And in a decade, it should be rather extraordinary.”

SOURCE – (AP)

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Amazon’s Ring To Shutter Video-Sharing Program Popular With Police

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LONDON — Amazon cancelled its acquisition of robot vacuum firm iRobot on Monday, citing “undue and disproportionate regulatory hurdles” after the European Union opposed the transaction.

The firms announced in a joint statement that they were disappointed but agreed to end the acquisition. The merger drew antitrust attention on both sides of the Atlantic, especially in Europe, where authorities investigating competition issues were scheduled to make a final decision by February 14.

Amazon said that in 2022, it would buy iRobot, the producer of the circular-shaped Roomba vacuum, for $1.7 billion cash. However, the deal’s value decreased by 15% after iRobot took on extra debt.

Amazon will pay the Bedford, Massachusetts-based business a previously agreed-upon termination fee of $94 million, iRobot said in a separate release, which also revealed that it would lay off around 31% of its workforce and fire its CEO.

ring

Amazon’s Ring To Shutter Video-Sharing Program Popular With Police

The European Commission, the European Union’s executive arm and top antitrust watchdog warned Amazon last year of its “preliminary view” that the iRobot acquisition would reduce industry competition.

While British antitrust regulators cleared the deal in June, the Federal Trade Commission in the United States continued investigating.

The European Commission waited to respond to a request for comment. It was concerned that Amazon would minimise the exposure of an iRobot competitor’s product or restrict access to certain labels, such as “Amazon’s Choice,” which could draw more customers.

Last year, the commission said that Amazon may have discovered ways to boost the expenses for iRobot’s competitors to advertise and sell their products on its platform.

Amazon’s chief counsel, David Zapolsky, slammed authorities, saying consumers would miss out on “faster innovation and more competitive prices.”

“Mergers and acquisitions like this help companies like iRobot better compete in the global marketplace, particularly against companies, and from countries, that aren’t subject to the same regulatory requirements in fast-moving technology segments like robotics,” he added.

ring

Amazon’s Ring To Shutter Video-Sharing Program Popular With Police

He also pointed out that “undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition— the very things that regulators say they’re trying to protect.”

Now that the purchase has been called off, iRobot has announced a restructuring strategy to stabilise the company. The corporation plans to lay off approximately 350 people as part of these reforms.

Colin Angle, iRobot’s chairman and CEO, will also step down. Glen Weinstein, the company’s executive vice president and chief legal officer, will become interim CEO.

Consumer rights groups had expressed worries about the Amazon-iRobot merger, claiming it would increase the ecommerce giant’s domination in the smart home industry.

Amazon has previously acquired several smart home firms, including Blink, Ring, and Eero, a mesh-networking Wi-Fi company.

ring

Amazon’s Ring To Shutter Video-Sharing Program Popular With Police

This is the latest example of a partnership between US corporations that failed after being scrutinised by European regulators.

Adobe abandoned its $20 billion acquisition of online design business Figma last year due to antitrust concerns raised by the EU and the UK. After losing legal battles with antitrust officials in Europe and the United States, biotech giant Illumina was forced to cancel its $7.1 billion acquisition of cancer-screening business Grail.

SOURCE – (CNN)

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Business

AMAZON: Bid To Buy Roomba Maker IRobot Is Called Off Amid Pushback In Europe

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amazon

LONDON — Amazon cancelled its acquisition of robot vacuum firm iRobot on Monday, citing “undue and disproportionate regulatory hurdles” after the European Union opposed the transaction.

The firms announced in a joint statement that they were disappointed but agreed to end the acquisition. The merger drew antitrust attention on both sides of the Atlantic, especially in Europe, where authorities investigating competition issues were scheduled to make a final decision by February 14.

Amazon said that in 2022, it would buy iRobot, the producer of the circular-shaped Roomba vacuum, for $1.7 billion cash. However, the deal’s value decreased by 15% after iRobot took on extra debt.

amazon

AMAZON: Bid To Buy Roomba Maker IRobot Is Called Off Amid Pushback In Europe

Amazon will pay the Bedford, Massachusetts-based business a previously agreed-upon termination fee of $94 million, iRobot said in a separate release, which also revealed that it would lay off around 31% of its workforce and fire its CEO.

The European Commission, the European Union’s executive arm and top antitrust watchdog warned Amazon last year of its “preliminary view” that the iRobot acquisition would reduce industry competition.

While British antitrust regulators cleared the deal in June, the Federal Trade Commission in the United States continued investigating.

The European Commission waited to respond to a request for comment. It was concerned that Amazon would minimise the exposure of an iRobot competitor’s product or restrict access to certain labels, such as “Amazon’s Choice,” which could draw more customers.

Last year, the commission said that Amazon may have discovered ways to boost the expenses for iRobot’s competitors to advertise and sell their products on its platform.

amazon

AMAZON: Bid To Buy Roomba Maker IRobot Is Called Off Amid Pushback In Europe

Amazon’s chief counsel, David Zapolsky, slammed authorities, saying consumers would miss out on “faster innovation and more competitive prices.”

“Mergers and acquisitions like this help companies like iRobot better compete in the global marketplace, particularly against companies, and from countries, that aren’t subject to the same regulatory requirements in fast-moving technology segments like robotics,” he added.

He also pointed out that “undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition— the very things that regulators say they’re trying to protect.”

Now that the purchase has been called off, iRobot has announced a restructuring strategy to stabilise the company. The corporation plans to lay off approximately 350 people as part of these reforms.

Colin Angle, iRobot’s chairman and CEO, will also step down. Glen Weinstein, the company’s executive vice president and chief legal officer, will become interim CEO.

Consumer rights groups had expressed worries about the Amazon-iRobot merger, claiming it would increase the ecommerce giant’s domination in the smart home industry.

amazon

AMAZON: Bid To Buy Roomba Maker IRobot Is Called Off Amid Pushback In Europe

Amazon has previously acquired several smart home firms, including Blink, Ring, and Eero, a mesh-networking Wi-Fi company.

This is the latest example of a partnership between US corporations that failed after being scrutinised by European regulators.

Adobe abandoned its $20 billion acquisition of online design business Figma last year due to antitrust concerns raised by the EU and the UK. After losing legal battles with antitrust officials in Europe and the United States, biotech giant Illumina was forced to cancel its $7.1 billion acquisition of cancer-screening business Grail.

SOURCE – (AP)

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