New wave of layoffs in the US hits big techs and startups – 01/31/2024 – Tech

This is the edition of the FolhaMercado newsletter for this Wednesday (31). Do you want to receive it from Monday to Friday, at 7am, in your email? Sign up below:

---

Layoffs at technology companies have returned – at least in the US.

This Tuesday, it was PayPal’s turn to inform its employees of a mass layoff, which affected 9% of the company, or around 2,500 workers, as reported by Bloomberg.

The payments company joins other companies of all sizes that have publicly or internally announced mass cuts (see the list below).

In numbers: January isn’t even over yet, but it’s already the month with the most cuts in technology companies (28,963) since March last year (37,823), according to the Layoffs.fyi platform.

In the USA, the first wave of layoffs in technology was concentrated at the end of 2022 and the beginning of 2023, amid the process of rising interest rates in the country.

• A more restrictive monetary policy from the Fed (Federal Reserve, American BC) affects companies in the sector from two sides: it makes financing more expensive and scares away investors.

What has changed since then? Precisely the Fed’s stance. Today, expectations are about when cuts in American interest rates will begin – bets are concentrated on the first half of the year.

• Big techs, whose shares suffered in the last wave of layoffs, today see their shares either at or close to historic highs.

• For smaller companies, the private investment scenario is beginning to ease, but it is still far from what we saw during the pandemic, with interest rates at the lowest levels and “infinite” money.

Why are there layoffs?

The reasons vary, and we can divide the cuts into three categories, as Nabeel Hyatt, partner at a venture capital fund, explained to the New York Times:

↳ Big techs who are laying off auxiliary positions in areas that are not yet profitable as expected, in a reallocation of the budget to invest in AI (artificial intelligence) professionals.

• This list includes Microsoft, Alphabet (owner of Google), Salesforce, Amazon.

↳ Large and medium-sized companies (like unicorns, startups valued above US$1 billion) that are not desperate for money, but are trying to correct the hiring boom they experienced during the euphoria of the pandemic.

↳ Startups whose operations burn cash and see their source of financing dry up. The layoffs are a kind of last breath to try to continue activities.

• Here they are: InVision (British design unicorn), Vroom (American vehicle marketplace), Pitch (German software company) and Artifact (Instagram founders’ network that tried to be the “TikTok of texts”).

---

What we know about Musk’s company brain chip

Neuralink, one of Elon Musk’s companies, made its first brain chip implant in a human being, and the person is recovering well, the billionaire said on Monday (29).

“Initial results show promising signs of neural activity,” wrote Musk, who created the chip startup in 2016.

What is the objective? The initial idea is to allow people to control a computer cursor or keyboard using just their thoughts.

Who is it intended for? Neuralink is looking for candidates with conditions such as quadriplegia, paraplegia, limb amputation and visual or speech limitations to apply for the Telepathy tests,

• The study uses a robot to surgically place a brain-machine interface implant in a region of the brain that controls the intention to move, Neuralink said.

How was your development? Neuralink had already carried out tests on monkeys, pigs and sheep.

• Some of the monkeys used as guinea pigs died during the experiments;

• Musk stated that some of the animals had terminal illnesses and that they did not die because of the chip;

• After several attempts, the startup received permission from the FDA (American regulatory agency) in May last year to begin recruiting for the first human test.

Because it’s different? Telepathy contains more than 1,000 electrodes, a much higher number than other implants. Neuralink’s chip also targets individual neurons for greater precision, while rivals target signals from groups of neurons.

---

recycled jewelry

Danish Pandora, the world’s largest jewelry company by sales, said it had achieved its goal in December of ending the use of mined silver and gold.

The company now only makes parts from recycled precious metals, which require less energy to produce.

In numbers:

• 340 tons of silver and one ton of gold are purchased by Pandora per year.

• 58,000 tons of carbon dioxide per year the jewelry company says it avoids by adopting recycled metals, rather than newly mined ones.

• US$10 million per year is how much Pandora invests in change. It says it will not pass the cost on to consumers.

Yes but… Supply chains for recycled metals pose risks. Once gold is melted, it is difficult to prove its origin.

To try to prevent fraud, Pandora uses a chain of custody standard developed by the RJC (Responsible Jewelery Council). It excludes gold coins and bars as a source of recycled gold.