Linked List: January 18, 2023

Wednesday, 18 January 2023

Amazon Lays Off ‘Up to 50 Percent’ of Staff at ComiXology 

Rich Johnston, reporting at Bleeding Cool:

Today, there are significant redundancies and firing occurring at Amazon, with executives sending statements to staff. This included staff members at the digital comic book publisher and distributor ComiXology, acquired by Amazon and later integrated into the main Amazon site, with reports of up to 50% layoffs.

Brutal. I don’t know anyone who likes comics who doesn’t love ComiXology.

Layoffpalooza in Tech 

Microsoft is far from alone in announcing signficant layoffs. CNBC has the tally at 60,000 total jobs:

CNBC put Google on the list, but at just 230 employees (from their health service division), that’s a different ballpark.

Microsoft to Lay Off 10,000 Employees (5 Percent of Workforce) 

Satya Nadella in a company-wide memo, after 167 words of throat-clearing:

Today, we are making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q3. This represents less than 5 percent of our total employee base, with some notifications happening today. It’s important to note that while we are eliminating roles in some areas, we will continue to hire in key strategic areas. We know this is a challenging time for each person impacted. The senior leadership team and I are committed that as we go through this process, we will do so in the most thoughtful and transparent way possible.

Second, we will continue to invest in strategic areas for our future, meaning we are allocating both our capital and talent to areas of secular growth and long-term competitiveness for the company, while divesting in other areas. These are the kinds of hard choices we have made throughout our 47-year history to remain a consequential company in this industry that is unforgiving to anyone who doesn’t adapt to platform shifts. As such, we are taking a $1.2 billion charge in Q2 related to severance costs, changes to our hardware portfolio, and the cost of lease consolidation as we create higher density across our workspaces.

Curious what “changes to our hardware portfolio” means.

Twitter’s Revenue Dropped 35 Percent in Q4 

Erin Woo, reporting for The Information:

Twitter’s fourth quarter revenue fell about 35% year over year to $1.025 billion, a top ad executive revealed at a staff meeting Wednesday, the most detailed sign yet of how much revenue has fallen. That was 72% of Twitter’s internal goal for the quarter, according to a slide showed to employees.

The executive, Twitter’s global sales and marketing chief Chris Riedy, also said the company is hoping to generate $732 million in revenue in the first quarter, which would be a drop of 39% from the first quarter of last year.

Bummer.

The Financial Times: ‘With $1.5 Billion Bill Due at Month-End, Elon Musk’s Options Aren’t Great’ 

Tabby Kinder, Richard Waters, and Eric Platt, reporting for The Financial Times:

The bill for Elon Musk’s purchase of Twitter is coming due, with the billionaire facing unpalatable options on the company’s enormous debt pile, ranging from bankruptcy proceedings to another costly sale of Tesla shares. Three people close to the entrepreneur’s buyout of Twitter said the first installment of interest payments related to $13 billion of debt he used to fund the takeover could be due as soon as the end of January. That debt means the company must pay about $1.5 billion in annual interest payments. [...]

Musk’s personal equity investment in Twitter of about $26 billion would be effectively wiped out in the event of a bankruptcy, alongside other equity stakeholders such as Sequoia Capital, Oracle co-founder Larry Ellison, and Saudi Prince Alwaleed bin Talal. In the queue for repayment, their investments would be behind the banks that have loans secured against Twitter’s assets, as well as the company’s unsecured lenders and trade creditors.

Boy, you’d just hate to see it.

Meanwhile, with Tesla’s stock falling 65 percent last year and Musk selling heavily, the value of his stake in the company has plunged to about $50 billion, from $170 billion when he offered to buy Twitter in April last year. That has left him with far less room to raise cash by collateralizing more shares. One alternative would be to exercise some of his stock options, though that would leave him with a large — and immediate — tax bill. The biggest concern for Tesla investors has been if Twitter continues to bleed cash then Musk may have to sell more stock. [...]

Technology equity analyst Dan Ives at Wedbush Securities said that Twitter was worth closer to $15 billion today than the $44 billion Musk paid for it.

Heck, Tesla’s stock is down 25 percent in the last month alone. Heartbreaking.