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Amazon

Amazon plans to trim employee stock awards amid tough economy

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As the world’s largest online retailer experiences an unstable economic climate, Amazon.com Inc said it will limit employee stock grants, a component of its compensation scheme.

Employees of Amazon are given shares of Amazon stock as just a component of their complete compensation scheme. These stocks are known as Restricted Stock Units (RSUs). These stocks vest throughout time as opposed to being granted at one time.

Amazon
Image Source: investing.com

The tech behemoth stated in March that it intended to eliminate 9,000 employees, making it the most recent business in that sector to do so in the context of a potential downturn.

Also Read: Meta releases AI model that can identify items within images

Adding to a surge of job losses that have rocked the tech industry as a challenging economy compels corporations to get smaller, this announcement comes weeks since Amazon declared a new round of major layoffs.

“We made the decision to reduce RSU (restricted stock units) awards in the final outlook year by a small amount (other years are not impacted),” an Amazon spokesperson said in an emailed statement, without specifying the period of the final outlook year.

Source: economictimes.indiatimes.com

The announcement comes with Amazon’s announcement of a 2nd round of huge job cuts a few weeks earlier, adding to a surge of job losses that have rocked the technology industry since tough economic times compel firms and various businesses to become smaller.

The proposed adjustment to the firm’s pay scale was initially reported by Business Insider, which also stated that Amazon would re-evaluate 2025 salary during the initial quarter of 2019 to prepare for stock variation

“The company was weighing the possibility of adjusting its compensation model in the future to be more balanced between base cash compensation and equity, after looking at the combination of an uncertain economy and its compensation budget,” the spokesperson said.

Source: livemint.com

Following a nearly 50 percent share decline in 2022, Amazon’s share price has increased this year by more than 20 percent.

Also Read: Google Workers in London stage walkout over job cuts

As a part of massive layoffs, Amazon.com Inc. fired around 100 staff from its video-game businesses, Game Growth, including Prime Gaming, and the firm’s San Diego facility.

Even with its Crown channel which is an entertainment channel on the Twitch streaming video service, Amazon has had difficulty making the most of its gaming tools.

Apple

Apple wins U.S. appeal over patents in $502 mln VirnetX verdict

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In the long-haul dispute between the two corporations regarding privacy-software technology, Apple Inc. convinced a U.S. appeals court to retain a patent tribunal’s decision that would jeopardise a 502 million USD award for patent licencing company VirnetX Corporation on Thursday.

The U.S. Patent and Trademark Office’s judgement to invalidate the two rights that VirnetX claimed Apple had violated was upheld by the U.S. Appeals court for the Federal Circuit.

Apple
Image Source: communicationstoday.co.in

The ruling was disappointing, according to VirnetX Chief Executive officer, Kendall Larsen, and the corporation is thinking about asking for a rehearing or trying to appeal to the US Supreme Court.

Also Read: Apple launches ‘buy now, pay later’ service in the US

After that decision was made, VirnetX stock dropped more than 14 per cent by Thursday afternoon. Immediately following the company’s announcement that it will distribute a special cash dividend to its stockholders and expected a possible future payment from the Apple lawsuit, the stock had increased by 55 per cent before the decision had been made public.

A call for comment from an Apple spokesperson elicited no immediate response.

The 13-year legal conflict between the two firms has involved numerous trials & challenges. After finding that Apple violated the VPN (virtual private network ) rights question in Thursday’s verdict, an East Texas court fined VirnetX 502 million USD in 2020.

Apple has filed a separate appeal of the judgement on its own behalf, although the Federal Circuit has not yet made a decision. Both sides argued that maintaining the decree cancelling the patents would probably also invalidate the jury verdict when the court heard mixed statements in the two cases in September.

“If the court upholds the (USPTO’s) decision, we have a big problem,” VirnetX attorney Jeff Lamken of MoloLamken said at the September hearing. “I don’t think we have an enforceable judgment.”

Source: finance.yahoo.com

Also Read: Apple announces new classical music app

On Thursday, the Federal Circuit upheld findings made by the USPTO’s Patent Trial & Appeal Board that the rights were ineligible due to prior works that had similarly described discoveries.

In a different case, VirnetX triumphed against Apple in 2016 with a 302 million dollar judgement that was subsequently enhanced to 440 million dollars in an East Texas court. The case involved claims that the technology giant had incorporated its internet-security technology into functionalities like FaceTime video conversations.

chip

Will China’s new policy help to tackle the chip talent shortage?

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China is stepping up efforts to cultivate domestic semiconductor ability as it attempts to quickly fill a skills gap that has been exacerbated by American efforts to restrict Beijing’s access to cutting-edge chip technology.

Thanks to increased funding for prestigious universities and a boom in smaller, private schools with an emphasis on shorter-term education, enrollment in undergraduate and graduate programs has increased over the past five years.

chip
Image Source: theprint.in

While entry-level salaries have doubled, certain graduates with degrees in other fields are being drawn into the expanding sector. A white paper estimates that China will be short 200,000 industry employees this year.

Also Read: Why are OPPO and OnePlus exiting the UK and Europe markets?

Closing this gap is becoming even more crucial since the U.S. wants to cut China out of global supply chains due to concerns that any advanced chips it produces will ultimately be used by China’s military.

Liu Zhongfan, a member of the Chinese Academy of Sciences, told local media earlier this month that China needs to prioritize developing talent even over finding quick fixes to its supply-chain problems.

Students and experts, however, told Reuters that more modern schools in Taiwan and the US give more practical industry experience than China’s emerging chip curricula. According to a poll conducted in 2022 by the Chinese research company ICWise, more than 60% of students majoring in chip engineering in China graduate without having held a relevant internship.

Professors at Chinese colleges are frequently rewarded for writing papers rather than imparting cutting-edge techniques that are helpful in a company lab or chip manufacturing facility.

Taiwan Semiconductor Manufacturing Co. (TSMC), a leading chip manufacturer, has set up research facilities at four universities in Taiwan. In China, there have been some moves in this direction. Semiconductor Manufacturing International Corp (SMIC), its largest chip foundry, announced in 2021 the establishment of a School of Integrated Circuits at Shenzhen Technology University.

According to Hu Yunwang, founder of a Shanghai-based employment agency for chips, the average yearly salary for an entry-level engineer in the industry has increased since 2018, from approximately 200,000 yuan ($28,722.43) to 400,000 yuan, underscoring the supply-demand imbalance.

Also Read: Accenture to Cut 19000 Jobs as IT Spending Slows

With chip engineering training programs that claim to offer a fast track and primarily target graduates who specialized in a topic tangentially associated with chip engineering, several private schools have popped up to provide a temporary answer.

A former engineer from Arm Ltd. founded EeeKnow in Shanghai in 2015, offering in-person courses on topics like “Cortex-M3 MCU front-end design and verification in 60 days,” costing between 2,000 and 4,000 yuan.

bitcoin

What’s behind bitcoin’s latest surge?

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In the midst of a gloomy winter at the beginning of the year, bitcoin was in bad shape after 2022 marked by falling cryptocurrency prices, company scandals, and bankruptcies.

In fewer than three months, bitcoin has regained its luster. It has outperformed other significant commodities this year with gains of over 70%, and on Wednesday, it was trading close to its highest level in nine months.

Image Source: theprint.in

The first and largest cryptocurrency has been through this before; over its 15-year existence, it has experienced both dizzying price increases and drops. Interest rates are driving the increases.

Also Read: Why Google suspended China’s Pinduoduo app?

According to six investors and analysts from the crypto and conventional finance industries who spoke to Reuters, markets anticipate that central bank increases in the cost of credit are reaching their peak, which is expected to support risky assets like bitcoin.

Other factors are also in play, such as the banking industry’s unrest and persistent but unfulfilled hopes that bitcoin will become a widely accepted method of payment. On Sunday, Bitcoin recorded its greatest week in four years and has since increased by 45% in just 12 days.

Suggestions that bitcoin is an asset resistant to risks in conventional finance have gained momentum as the failure of American firms Silicon Valley Bank and Signature Bank served to prompt the takeover of 167-year-old Credit Suisse by competitor UBS on Sunday.

According to Usman Ahmad, CEO of Zodia Markets, a cryptocurrency exchange run by the venture arm of Standard Chartered and Hong Kong-based BC Technology Group, “It’s rather narrow-minded to say that bitcoin is going to succeed because a bank failed. But confidence is almost a critical factor – confidence in the banking system has been damaged.”

Significant changes in bitcoin’s price in the past have been closely related to changes in global monetary policy. Stay-at-home investors fueled a six-fold gain for bitcoin between September 2020-April 2021 as stimulus measures inundated the worldwide financial system during the COVID-19 pandemic.

These actions, combined with growing interest in cryptocurrencies from bigger investors and businesses, led proponents of the technology to proclaim that there was less chance that it would experience the violent crashes that have historically occurred after bitcoin rallies.

Bitcoin, however, fell by over fifty percent from the all-time high of $69,000 in merely 75 days as rates started to rise as signs of rogue inflation late in 2021 drove central government agencies and banks to curtail stimulus packages.

Also Read: With GPT-4, are we one step closer to losing our jobs?

The decline of a significant crypto token in 2022, brought on by higher interest rates, caused the closure of significant hedge funds and crypto lenders, and a drop in bitcoin of over 65%.

Regulatory issues and the abrupt collapse of the FTX market further battered it. Despite the claims of its supporters that bitcoin is a secure haven asset in periods of economic and political stress, the disastrous year served as another warning of its susceptibility to outside shocks.

Silicon Valley Bank

Why Did Silicon Valley Bank Collapse?

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The US Federal Reserve’s decision to raise interest rates and dampen investors’ appetite for risk led to Silicon Valley Bank’s closure and takeover by authorities on Friday.

A bank run was the primary factor in Silicon Valley Bank’s demise. Before customers began to flee the company, the firm was neither insolvent nor even close to being insolvent. However, banking is a business that depends equally on trust and money, and if either of those disappears, the show is over.

Silicon Valley Bank
Image Source: cnn.com

Since last year, the Federal Reserve has been increasing interest rates from their historically low levels in an effort to combat inflation. When the money that is accessible to them becomes pricey because of greater interest rates, investors have less willingness to take risks.

Also Read: Taiwan’s TSMC to recruit 6,000 engineers in 2023

Silicon Valley Bank’s main customers, technology startups, suffered as a result of their investors becoming less risk-tolerant. Some Silicon Valley Bank clients began taking money out to fulfill their liquidity needs as higher interest rates forced the marketplace for initial public offerings to close down for several startups and made private financing more expensive. As a result, Silicon Valley Bank began this week to search for solutions to handle customer withdrawals.

On Wednesday, Silicon Valley Bank liquidated a $21 billion bond portfolio, primarily made up of US Treasury bonds, to pay for the redemptions. Averaging 1.79%, the portfolio’s yield was much lower than the present yield on the 10-year Treasury note, which is around 3.9%.

SVB was compelled to record a $1.8 billion deficit as a result, which it had to make up for by raising capital. To close its financing gap, SVB disclosed on Thursday that it would sell $2.25 billion in common equity and preferred convertible stock. Investors worried that the deposit outflows might force it to seek even more capital, which caused its shares to finish the day’s trading down 60%.

According to Reuters, some SVB clients withdrew their funds from the bank at the suggestion of venture capital companies like Peter Thiel’s Founders Fund. The capital raising attempt failed late on Thursday as a result of investors, including General Atlantic, who SVB had queued up for the sale of stocks, becoming alarmed by this.

Also Read: Germany planning to ban Huawei, ZTE from parts of 5G networks

On Friday, SVB rushed to find alternate sources of financing, including by selling a company, But later that day, the Federal Deposit Insurance Corporation (FDIC) made the announcement that SVB had been shut down and was now in its administration.

The FDIC further stated that it would try to sell SVB’s assets and that future dividend payouts to uninsured depositors might be made.

Elon Musk

Elon Musk to unveil Tesla’s ‘Master Plan 3.’ What to expect for us?

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Elon Musk, the CEO of Tesla, said on Twitter on Wednesday that he will unveil the eagerly anticipated Master Plan 3 on March 1 at the company’s investor day.

Tesla announced it will discuss its next-generation vehicle platforms at the forthcoming investor day, which will be held at its gigafactory in Texas. Elon Musk has said that these platforms would result in a car that costs around half as much as Tesla’s current vehicle underpinnings. The session will be broadcasted live.

Elon Musk
Image Source: hypebeast.com

The company said that some retail and institutional investors will be welcome to attend in person. According to the company, investors will be able to tour its manufacturing facility and speak with members of the leadership team about issues such as the company’s long-term expansion goals, its generation 3 platform, and capital allocation.

Also Read: Tesla is getting cheaper. Is it a good move by Elon Musk?

Musk originally made vague promises to increase Tesla operations to “extreme size” in his Master Plan 3 hints from last March. He also touched on issues like AI and said that his other companies, SpaceX and The Boring Company, would be a part of this next phase of the plan.

On Wednesday, there was a new update. He tweeted, “Master Plan 3, the path to a fully sustainable energy future for Earth will be presented on March 1.”

In 2006, Musk published a blog entry on Tesla’s website explaining what he referred to as the Master Plan. The four-step approach began with the development of a high-priced, low-volume vehicle, and then used the proceeds to fund the creation of a medium-volume, lower-priced car.

An affordable, high-volume car would be produced with the money made from the medium-volume car. The plan concluded with the phrase “provide solar power.”

Part two, or Part Deux, was introduced in 2016 with the goal to “create stunning solar roofs with seamlessly integrated battery storage,” expand Tesla’s EV product line to include all key market segments, and provide self-driving technology that is ten times safer than manual.

Also Read: Why is Meta shutting down Echo VR?

The plan also claimed that owners will be able to use ride-sharing to leverage self-driving technology and profit from their unused vehicles. In part two, Tesla did not check off all the boxes. The Cybertruck, which is apparently a part of the strategy to extend the EV line of products, has not yet been released.

Despite the branding, its advanced driver-aid technology does not drive itself, so owners cannot convert their cars into money-making robot axis. Musk appears to be prepared to continue with Part 3 anyway.

Last year, Tesla shares experienced their worst yearly performance as a result of Musk selling Tesla shares to pay for his acquisition of Twitter and other shareholders losing faith in his commitment to the automaker, whose sales growth fell short of expectations.