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Netflix shakeup, Big tech layoffs continue, Boston Dynamics upgrades Atlas, and yet another crypto company fails. Newsletter #7
Reed Hastings to step down as head of Netflix
Big tech layoffs continue
Boston Dynamics updates its humanoid robot
Crypto lender, Genesis, files for bankruptcy
Reed Hastings steps down as CEO of Netflix
Netflix co-founder, Reed Hastings, has announced he’ll step down as CEO. Netflix was launched in 1997 and initially delivered DVDs by mail before becoming the world's largest online streaming service. Hastings will become Executive Chairman, and Greg Peters will become co-CEO alongside Ted Sarandos.
Peters, formerly Chief Operating Officer and Chief Product Officer, played a crucial role in creating the new ad-supported membership tier and helped Netflix expand in Japan and grow its videogame business.
Sarandos first joined Netflix in 2000 and was formerly Chief Content Officer. He’s responsible for many innovations at Netflix, including purchasing multiple seasons of shows without pilot episodes and using algorithms to predict what people will want to watch before producing them.
Hastings said that executives had worked well together for years and that, despite his change in role, he plans to continue working there for many years to come.
The same day he revealed he was stepping down, Netflix announced it had beaten its forecast for subscriber growth in the fourth quarter of 2022. It had expected to add 4.5 million but added 7.7 million - it ended 2022 with 230.8 million subscribers.
Revenue rose just 1.9% year over year to $7.85 billion in Q4, while profit plunged 91% to $55.3 million due to losses from Eurobond currency hedging that went against them as FX markets shifted.
Netflix said, “2022 was a tough year, with a bumpy start but a brighter finish”. It says growth should be cheaper in the future, and that it’s now focussed on generating strong cash flow. Its ad-supported subscription option and password-sharing crackdowns this quarter are two ways it plans to do this.
Big Tech Layoffs Continue
Alphabet (Google’s parent company) announced on Friday that it plans to cut 12,000 jobs worldwide, about 6% of its workforce. This is just the latest in an industry-wide cull that’s seen around 50,000 people laid off from just four companies combined - Amazon, Meta, Microsoft, and Alphabet. Other notable tech companies that have laid off staff include Twitter, Snapchat, and Salesforce.
Alphabet CEO said the layoffs marked a “difficult economic cycle” and that he took “full responsibility for the decisions that led us here.”
Google’s search business slowed dramatically in Q3 2022. Revenue grew by 4.2% to $39.5 billion, way off expectations of 8%.
Two days before Alphabet announced its layoffs, Microsoft said it would cut 10,000 jobs (~5% of its staff) by March to bring down costs. Microsoft added 40,000 workers in the last financial year, more than double the year before, and it now seems that’s coming back to bite them.
CEO, Satya Nadella, said customers are now trying to “optimize their digital spend to do more with less” after they accelerated their spending during the pandemic.
Other notable job cuts in the tech sector in the past few months include Amazon, which cut 18,000, and Salesforce, which cut ~8,000 or 10% of its staff. Meta cut 11,000 or roughly 13% of its workforce in November after sinking more than $10 billion into metaverse development in 2022 - it expects this to grow significantly this year.
The cuts come after a hiring boom during the pandemic, which saw demand for digital goods and services rocket.
Despite the cuts, many of the companies say they’re still hiring, just in different areas of the business. With the advent of tools like ChatGPT and GPT-4 planned for release sometime this year, it seems that AI is one area that the big tech companies all want to get ahead in.
Boston Dynamics Shows Off Atlas Updates
Boston Dynamics’ humanoid robot, Atlas, just got an upgrade. The robot could already run and jump over complex terrain thanks to its feet; it now has hands! Instead of being just an agile tool for carrying things around, Atlas can pick up and drop off anything it can grab, bringing it a whole new lease of life.
Its “hands” are actually grippers - they have a wrist, two fingers that stay in place, and one moving finger, but, as you can see from the video below, that’s all it needs to pick things up.
Atlas was initially unveiled to the public in 2013. It was originally developed by the US Department of Defense and Boston Dynamics for search and rescue tasks but has since become an internet hit for its (sometimes) human-like capabilities.
These abilities, such as vision, movement, and now dexterity, led some to declare the emergence of a new species - Robo sapiens.
Although this sounds scary at first, Atlas’ capabilities are actually hard-coded and don’t use much machine learning. Unlike programs like ChatGPT or DeepMind’s AlphaGo, Atlas can’t self-improve and learn on its own; it relies on engineers for upgrades. As with most robots, most of what it does is pre-programmed, although as you can see below, Google is trying to change this.
Genesis Files for Bankruptcy
As if the crypto space hadn’t already had enough problems in 2022, 2023, at least for one exchange, is also off to an awful start. Genesis, one of the world's biggest crypto lenders, filed for bankruptcy last Thursday, the latest company to do so after the collapse of FTX late last year. It’s just the latest major crypto company to fail since just last spring. Other notable ones include Three Arrows Capital (3AC), FTX, and BlockFi.
The bankruptcy of Genesis is closely tied to the failure of the other 3. It was owed $1.2 billion by Three Arrows Capital, and the failure of the FTX blowout has harmed the public perception and trust in the crypto industry.
Genesis says it’s “taken strategic actions to achieve a global resolution to maximize value for all clients and stakeholders and strengthen its business for the future,” - meaning it’s bankrupt and is trying to restructure the business.
Genesis is owned by venture capital firm Digital Currency Group (DCG) - which also owns CoinDesk, one of the biggest crypto news websites, and Grayscale, the world’s largest Bitcoin fund, along with around 200 other crypto-focused businesses.
Genesis is also involved in a dispute with Gemini, yet another crypto exchange. Gemini is owned by the Winklevoss twins, best known for The Social Network, a 2010 film depicting the first days and initial growth of Facebook. The “Winklevi” claim they’re owed $900 million by DCG.
The SEC has charged both companies with illegally selling crypto assets to hundreds of thousands of investors through a product called Gemini Earn. Gemini Earn was marketed as an opportunity to make up to 7.4% interest on crypto holdings and was used by 340,000 customers.
The knock-on effect from the Genesis bankruptcy is difficult to know at the moment, but I’m sure we’ll find out over the next few weeks.
Despite the bad news, crypto had a great week; the market cap of all crypto was $1.04 trillion on Friday, up from $972 billion at the start of the week. Unfortunately, it’s falling as of Sunday evening.
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Is Bitcoin a religion - https://nftnow.com/features/is-bitcoin-a-religion-a-scholar-of-religion-explains
Crypto Technology’s Impact Goes Beyond Crypto Technology - https://www.coindesk.com/consensus-magazine/2023/01/18/crypto-technologys-impact-goes-beyond-crypto-technology
DeepMind’s CEO Helped Take AI Mainstream. Now He’s Urging Caution - https://time.com/6246119/demis-hassabis-deepmind-interview
The advent of the “prompt engineer” role - https://www.neutronsalad.com/articles/the-advent-of-the-prompt-engineer
ChatGPT, AI, and Microsoft -