Snap Plans to Lay Off 20% of Workers ✂️
Scott D. Clary | Daily Business, Tech & Finance Newsletter
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Here’s whats happening:
- Snap plans to lay off 20% of workers
- Facebook Gaming app to shut down
- Baidu reports better-than-expected quarterly results
- Paraguay president vetoes crypto regulation law
- EV maker BYD shares fall more than 12%
Snap Plans to Lay Off 20% of Workers ✂️
Snap is laying off 20% of its workforce, which equates to over 1,000 employees.
Snap has had a tough year, with the company most recently missing on both earnings and revenue in Q2.
In its second quarter investor letter, Snap said it would not provide a forecast for its current quarter.
Amidst all this, the company plans to lay off approximately 20% of its more than 6,400 employees.
Which teams will be affected?
- The layoffs will hit some departments harder than others, including hardware and developer products.
- Snap’s team working on ways for developers to build mini-apps and games inside Snapchat will be severely impacted.
- Zenly, the social mapping app Snap bought in 2017 and has since run separately, will also see job cuts.
- The company’s hardware team, which is responsible for its AR Spectacles glasses, will also see layoffs.
- In addition, Snap’s ad sales organization will also be restructured.
Facebook Gaming App to Shut Down 🔒
Facebook has said it will soon shut down the Facebook Gaming app, a little over two years after it was released.
What should you know? 🤔
- Starting October 28, Facebook Gaming will no longer be available on iOS and Android.
- Users can access the gaming features via the main Facebook app.
- If you’ve been using the app, you can download your search data before the app is discontinued.
Why is Facebook shutting down the app?
While Facebook has not given any reason behind the shutdown, it looks like the social media giant is shutting down the app as it struggles to gain a foothold in the live game streaming market.
Statement from Facebook:
“We want to extend our heartfelt thanks to all of you for everything that you’ve done to build a thriving community for gamers and fans since this app first launched,” Facebook said.
“This was truly a community-led effort to bring new gaming features to Facebook,” it added.
Baidu Posts Better-Than-Expected Quarterly Results Despite Struggling Chinese Economy 📈
Chinese tech group Baidu eked out better-than-expected quarterly revenue, thanks to a 31% jump in its cloud business. 🔺️
- Total revenue shrank 5% in the year to $4.3 billion (29.65 billion yuan vs. an expected 29.30 billion yuan) in the second quarter. 🔻
- Baidu’s online marketing sales fell 12% last quarter from the year before. 🔻
Key challenges for Baidu:
- Besides U.S. regulatory pressure, Baidu was impacted by increased regulatory scrutiny in its home country: China.
- The Chinese government has imposed demands for better corporate governance, anti-competitive practices, and improved political posturing.
- The new operating regulations are forcing companies like Baidu to increase their investment in the country, be it through marketing spending, sales revenue, or strategic investments.
Despite the increased regulatory headwind, Baidu is executing and reshaping its business for the future, and only time will tell whether these positive metrics can continue.
Paraguay 🇵🇾 President Vetoes Crypto Regulation Law
Mario Abdo Benítez, the president of Paraguay, vetoed a highly anticipated bill that would regulate crypto mining and other commercial activities related to digital assets.
Why did the president veto the crypto regulation?
The president said that crypto mining uses intensive capital with low manpower usage and would not generate added value on par with other industrial activities.
Abdo’s decision to veto the bill appears on the condition that crypto mining be recognized as an industrial activity with an electricity rate capped at 15% above the current industrial tariff.
Bill sponsor, Senator Fernando Silva Facetti, views:
In Silva’s view, the veto “ignores the existence of this activity that today functions in the regulatory shadows.”
He noted that the crypto mining industry operates in a legal gray area and cannot access the country’s financial system yet generates jobs and resources.
The bill will go back to both chambers of Paraguay’s legislature, where lawmakers can reconsider the proposal or accept the veto.
EV maker BYD shares fall more than 12% 🔻
Hong Kong-listed shares of BYD tumbled on August 31 after Warren Buffett’s Berkshire Hathaway cut its stake in the electric automaker.
Berkshire Hathaway slightly reduced its shares from 20.04% to 19.92% by selling 1.33 million shares for about $47 million.
The company now owns 218.7 million shares.
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