January 23, 2023

Today's Topics

Hello! Join us as we hop into the year of the rabbit, with billions beginning to celebrate the Lunar New Year across East Asia and the rest of the world. Today we've got charts exploring:

  • Ctrl+Z: Big tech is undoing some of the massive hiring spree of recent years.
  • COVID: Taking stock of COVID's impact, 3 years after Wuhan's lockdown.
  • Looking for slack: Salesforce is the latest target of a famed activist investor.
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Undoing

The tech world was rocked by another round of layoff announcements last week after Microsoft and Google’s parent company Alphabet both confirmed they’d be slashing 10,000 and 12,000 jobs, respectively.

Across the wider tech sector, some ~46,000 workers have now reportedly been laid off this year — that’s 2,000 jobs axed every day of January so far at the time of writing.

Apple’s sweet

Big tech companies used 2022 to bolster workforces, but those headcount expansions have started to look overly-optimistic as the economy has turned.

Indeed, Alphabet upped its workforce by some 17% in 2022 compared to 2021. Meta and Microsoft went even further with their new hires, adding 19% and 20% to their workforces, respectively, in the same time frame. On a proportional basis, Meta has gone on both the largest hiring spree, and has announced the largest cuts, with the 11,000 lost jobs at Meta accounting for 13% of its workforce.

The only company in tech’s “big five” to have not announced layoffs in the last three months is Apple. That’s perhaps down to a more prudent “slow-but-steady” hiring policy over the last few years, which has ensured that the iPhone giant remains a firing-free haven in the technology sector… at least for now.

3 years ago to the day, the city of Wuhan went into lockdown. For many of us in the west, Covid-19 at this point was a concerning headline at this point, but not something that impacted our day-to-day. That, of course, didn’t last long as the virus — and the restrictions that came with it — eventually swept the globe.Much of the credit for our escape from rolling lockdowns was down to the development of Covid-19 vaccines. By now the majority of high income and upper-middle income countries are done with their mass vaccine campaigns — and have been for some time. While a lack of supply was the main barrier to vaccinations in 2020 and 2021, these days it’s a lack of demand, even in many lower income countries where only a fraction have had even one vaccine dose.

New normals?

In terms of lasting societal impacts, two of the largest changes have come to the way we travel and work.

Demand for remote jobs remains at an elevated level, particularly for office-workers. Using New York as an example of a majority office-based working population, and subway ridership data as a reasonable proxy for return-to-office demand, it's easy to see how different our working habits are now. The latest figures show daily subway usage in Jan 2023 is still roughly 30% below what it was when compared to pre-pandemic days, a significant recovery on 2020, but still nowhere near "back to normal".

The aviation industry, however, has made a stronger recovery, with vacations and visits to loved ones seemingly having a stronger pull than going back to the office. Passenger volumes through the TSA show figures close to 2019 averages, and Labor Day weekend in 2022 saw the TSA screen 8.76 million people, surpassing the same weekend in 2019.

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Looking for slack

Salesforce is the latest target of Elliott Management, with the infamous activist investor taking a major stake in the company — adding to the list of woes for the software giant.

Founded in 1999 in a one-bedroom apartment, Salesforce has grown into a software behemoth thanks in part to an impressive track record of dealmaking, including a $28bn acquisition of messaging app Slack and a $16bn deal for data platform Tableau. Though not a household name, Salesforce has a market cap similar to that of Netflix (~$150bn), and a track record of growth befitting of Silicon Valley royalty.

Recently, however, times have been trickier at Salesforce Tower. Like many tech companies (see above), Salesforce overhired during the last few years and has had to resort to layoffs to slim down its workforce. Those layoffs have come alongside major management changes. Slack's CEO announced his departure in December, and Salesforce founder Marc Benioff became frustrated with how his co-CEO Bret Taylor was spending his time, leaving Benioff — once again — alone at the helm.

Investor relationship management

Having a new investor doesn’t sound like a concern, but Elliott Management is no ordinary investor. As an activist hedge fund, the company doesn’t just invest and rest, instead they'll push for substantial change at companies that they think aren’t fulfilling their potential. That could mean lobbying for new board members, asset sales, a change of strategy or new management altogether. It’s not just someone saying “hey I think you could be doing more”, it’s someone laying millions, or billions, of dollars on the line and saying it with a megaphone.

More Data

• Rent-a-date companies reportedly see an uptick across Lunar New Year as singletons in Asia look to avoid awkward relationship inquiries at family gatherings.

Citadel has broken the record for highest earning hedge fund in a single year, after making $16 billion in 2022.

• Ready to order? Browsing the New York Public Library’s collection of 40,000+ food menus.

• How Japan is perfecting its sashimi machine learning with an army of robot sushi chefs.

Hi-Viz

• Totally original: exploring the fall of cover versions in modern music.

• A great visual walkthrough of the traditional Lunar New Year meal.

Trendlines: 2022 wasn’t exactly a roaring success for Netflix by the streaming giant’s usual sub count standards, but how was its final quarter of the year? Answer below.

(A) Added 7.7m in final quarter, +8.9m for the year.

(B)Added 2.5m in final quarter, +3.8m for the year.

(C) Lost 1.9m in final quarter, -0.6m for the year.

Click on your guess to see the answer.

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