Received this email from a friend? Subscribe here.

Tuesday, March 14, 2023

Silicon Valley is being rattled with upheaval this week. AI is reshaping the landscape, TikTok is reportedly contemplating divorce with ByteDance, and Apple is cutting more costs. Elsewhere in media, Tucker Carlson is flexing his muscle inside the GOP, staffers at the BBC are readying a strike, and Quentin Tarantino is starting work on what might be his final film. But first, the A1.

THE A1

Meta's Massacre

CNN Photo Illustration/Drew Angerer/Getty Images

"A challenging period."

That's how Mark Zuckerberg described in a memo what the near future will be like for Meta employees after he announced the once-impervious social media company will cut another 10,000 jobs in the months ahead.

Zuckerberg, who has been conducting a review of the business as he aims to execute on his so-called "year of efficiency," outlined key changes that will be implemented across the organization. Most importantly, from a structural standpoint, Zuckerberg said he wants to flatten the company "by removing multiple layers of management."

"This will be tough and there's no way around that," Zuckerberg said in his memo, hinting at the pain and raw emotion that will soon envelope the organization as the workforce is slashed yet again.

The cuts to the parent of Facebook, Instagram, and WhatsApp come after it laid off about 11,000 employees in November, which at the time represented the company's first-ever workforce reduction. Coupled with the new cuts, Meta will have cut about 24% of its workforce, or one in four employees, in just about half a year.

Meta, in particular, has been battling some of the most severe headwinds in Silicon Valley. The company has had to grapple with an ever-weakening digital advertising sector amid broader economic turmoil, Apple's unforgiving new privacy policy, the rapid emergence of artificial intelligence technologies, and the seemingly unstoppable rise of TikTok.

Nevertheless, the layoff announcements have naturally sent morale at the Menlo Park-headquartered company plummeting. The latest announcement, in particular, has left already anxious employees distressed and wondering whether they might be on the chopping block in the near future.

But Zuckerberg signaled that the sweeping changes are necessary to survive in what he characterized as a deteriorating economy that will not soon heal.

"At this point, I think we should prepare ourselves for the possibility that this new economic reality will continue for many years," Zuckerberg flatly warned, adding that the dim outlook had necessitated additional cuts "to operate more efficiently than our previous headcount reduction to ensure success."

A former tech CEO, who asked to remain anonymous to speak candidly, told me Tuesday that companies such as Meta, Google, Amazon, and Twitter had hired "stupid amounts of people" in the last few years to work on "science projects." Speaking specifically of Meta, the executive said, "You just wonder what are these 100,000-some people doing? The app doesn't change much."

"These companies become hugely profitable and the CEOs think that there are all these other areas they can expand into as part of their world domination plan," the executive remarked. "And then the economy takes a turn and everyone starts to care about profitability and growth."

As a result, the tech executive said, "It's surprisingly not hard for these big tech companies to cut large numbers of people without impacting the underlying revenue engine."

For now, employees at Meta will have to wait a little longer to learn how they and their teams will be impacted. Zuckerberg indicated that the job cuts will not be complete until the end of May.

"In terms of how we should operate during this period, I encourage each of you to focus on what you can control," Zuckerberg advised. "That is, do great work and support your teammates. Our community is extremely resilient."

"Change is never easy," he added, "but I know we'll get through this and come out an even stronger company that can build better products faster and enable you to do the best work of your careers."

The bigger question moving forward is whether Meta can indeed exit this painful phase a stronger company — or will instead continue in a slow decline as its primary products reach maturation while Zuckerberg chases the hope that one day his big bet on the metaverse will materialize.

"You can cut your way to profitability in the short term," the former tech CEO said. "But you can't cut your way to growth. At some point, it's like, is this the next AOL? And I don't know when that might be."

THE SIDEBAR

Wall Street loves the bloodshed over at 1 Hacker Way: Meta shares ended Tuesday up more than 7%.
Meta "lowered its outlook for 2023 expenses to $86 billion to $92 billion," Kurt Wagner reported. "That's down from $89 billion to $95 billion previously .. and includes about $3 billion to $5 billion in restructuring costs including severance." (Bloomberg)
Speaking of severance, Zuckerberg said in his note, "We will support people in the same ways we have before and treat everyone with the gratitude they deserve."
Morale at Meta has hit a low, Sarah Frier reports. (Bloomberg)
Gergely Orosz: "An evergreen wisdom with layoffs is 'cut once, cut deep, cut fast.' Meta somehow did not manage to do this, and this second set of cuts is stretched out much longer. Hard to see how morale and confidence in leadership is not destroyed." (Twitter)
Jessica Lessin: "Zuckerberg didn't issue a traditional layoff memo thanking everyone for their hard work. He issued a manifesto." (The Info)
That manifesto included Zuckerberg indicating that he is also having second thoughts about mass remote work, Joshua Bote points out. (SF Gate)
Casey Newton's big question: Meta's "recent products have flopped with consumers. Will a more focused team reverse the trend?" (Platformer)

——— BELOW THE FOLD ———

CNN Photo Illustration/Yuichiro Chino/Getty Images

All In on AI: The AI revolution continues to pick up steam — particularly on Tuesday with two big, but separate, announcements from OpenAI and Google. OpenAI unveiled GPT-4, the next generation of its wickedly smart ChatGPT. The new iteration of the tech is smarter (it aced a law school bar exam where the previous version failed) and is designed to be less likely to "go off the guardrails." Meanwhile, Google said that it will be soon introducing AI features into its Workspace suite of apps, such as Google Docs, Gmail, and Sheets.

🔎 Zooming in: All the change is almost certain to lead to mass societal disruption — which OpenAI President Greg Brockman acknowledged to The NYT's Cade Metz on Tuesday. "There is definitely disruption, which means some jobs go away and some new jobs get created," Brockman said. "But I think the net effect is that barriers to entry go down, and the productivity of the experts goes up." Obviously, that is best case scenario. There are far bleaker pictures being painted of an AI-dominated future, given the technology's frightening — and, frankly, unknown — powers.

THE BUSINESS

CNN Photo Illustration/Henry Nicholls/Reuters

Strike at the BBC: There is more drama at the BBC. Employees at the iconic British broadcaster "will stage their biggest strike in 13 years on Wednesday after eleventh-hour talks with management failed," Deadline's Jade Kanter reported on Tuesday. "The walkout will force coverage of the UK government's Budget off air and heap more embarrassment on Director-General Tim Davie, who has apologized for scheduling chaos over the Gary Lineker saga," Kanter wrote. More in Kanter's story here.

► Speaking of the BBC: Rowena Mason and Jessica Elgot report via leaked communications that the BBC came under government pressure to avoid using the term "lockdown" early on in the pandemic.

IN THE INDUSTRY

Diamond Sports Group, a subsidiary of Sinclair that owns the regional sports networks for more than 40 teams, files Chapter 11. (ESPN)
Fox Corporation announced it donated $1 million to the Red Cross, in honor of the Fox News team members who were killed in an attack in Ukraine one year ago. (Fox News)
The Radio Television Digital News Association sent letters to Florida lawmakers asking it to pass the Journalist Protection Act after the killing of Spectrum News 13 reporter Dylan Lyons. (RTDNA)
DirecTV sued Nexstar over a dispute about retransmission fees. (Reuters)
Another local outlet bites the dust: The Canadian Record, a local Texas outlet, is ceasing publication "in another indication of how perilous the news business is for local publishers," Nic Garcia writes. (Texas Tribune)

MEDIA MOVES

The Intercept appointed Annie Chabel as its inaugural CEO and announced a new board of directors. (Intercept)
The WaPo named Missy Ryan as its Pentagon correspondent. (WaPo)
The Verge tapped Adi Robertson as senior editor. (Twitter)

THE INFO WARS

CNN Photo Illustration/Janos Kummer/Getty Images

The Tucker Carlson Primary: Right-wing conspiracy theorist Tucker Carlson is flexing his muscle inside the Republican Party. Carlson revealed on his Fox News show this week that he had sent questionnaires to potential Republican presidential hopefuls, quizzing them on their stances on the Russia-Ukraine war — and several responded, including Mike Pence, Ron DeSantis, Kristi Noem, Greg Abbott, Tim Scott, and Chris Christie. Notably, DeSantis used the opportunity to make news, declaring that protecting Ukraine is not a key U.S. interest. As The NYT's Jonathan Swan and Maggie Haberman wrote, "The venue Mr. DeSantis chose for his statement on a major foreign policy question revealed almost as much as the substance of the statement itself."

🔎 Zooming in: The result of the episode? "Carlson had a chance to reinforce his view of the conflict to his audience, formalize the acquiescence of at least one leading candidate — and use his platform as a cudgel against those who disagreed," The WaPo's Philip Bump wrote Tuesday. It's also worth noting that these major Republican politicians were all seemingly OK with participating in Carlson's charade, just a week after he put his extremist politics, by way of 1/6 trutherism, on full display for the country yet again.

IN THE BATTLEFIELD

The changing tide: New research published Tuesday from the progressive Media Matters found that mentions of Ron DeSantis have outpaced those of Donald Trump on Fox News this year. (MMFA)
"Smartmatic is following the trail being cleared by Dominion Voting Systems, which means that sooner or later, if the Smartmatic suit proceeds along similar lines, we could be in for another deluge of chewy goodness, thanks to the discovery process," Charles Pierce writes. (Esquire)
Laurence Tribe: "Much of the most damning evidence surfaced in Dominion's case is now in the public domain and will be both relevant and admissible against Fox News in Smartmatic's case." (Salon)
Brian Stelter goes inside the fight between DirecTV and Newsmax: "DirecTV's decision makes total business sense, but Newsmax's emotional appeal trumps the other side's cold hard math — and it still may force DirecTV to cut a deal." (Fortune)
The SVB collapse was fueled by "the first Twitter-fueled bank run," Jennifer Korn's writes. (CNN)
"For the second time in two months, news events have revealed how the responses of the two major political parties distinguish their leaders, and how conservative media serves as an echo chamber even for the most improbable arguments," Jonathan Weisman and Stuart A. Thompson write. (NYT)
Chris Hayes mocked "deranged" right-wing media stars for coverage about "an outbreak of woke banks." (Mediaite)

THE VALLEY

CNN Photo Illustration/Valerie Macon/AFP/Getty Images

Bye to ByteDance?: The leadership at TikTok "is discussing the possibility of separating" from its Chinese parent company ByteDance, amid efforts "to help address concerns about national security risks," Bloomberg's Alex Barinka and Olivia Carville reported Tuesday. The duo reported that the option, which could come in the form of a sale or IPO, is "considered a last resort." Nevertheless, the fact that it is on the table is quite notable as the app faces mounting scrutiny from lawmakers and elected officials. Barinka and Carville have the details here.

TOO MANY TABS

Spotify boss Gustav Söderström talks to Alex Heath about the platform's latest TikTok-like redesign: "Spotify had a different type of feed, a two-dimensional feed, which was sort of state-of-the-art many years ago, but things change. They have to, and so does Spotify." (The Verge)
After acquiring the NFL's "Sunday Ticket," YouTube TV announced a "multi view" feature that will allow users to watch up to four games at once. (TechCrunch)
Apple was named the best podcast publisher by PodNews. (PodNews)
Apple is delaying bonuses for some corporate divisions and limiting hiring for more jobs in its latest cost-cutting effort. (Bloomberg)

CURTAIN CALL

CNN Photo Illustration/Jean-Paul Pelissier/Reuters

Tarantino's Final Film: The one and only Quentin Tarantino is working on what's being described as his final film, THR's Borys Kit reported Tuesday. Kit reported via sources that the iconic filmmaker has written a script that he is preparing to direct later this year. The working title? "The Movie Critic." Kit added that "logline details are being kept in a suitcase but sources describe the story as being set in late 1970s Los Angeles with a female lead at its center." More from Kit here.

OFF STAGE

Matt Belloni writes about Tom Cruise and James Cameron snubbing the Oscars: "These guys spent most of the year talking about the importance of the movie business .... But the moment they were 'snubbed' for best actor and best director ... and their movies likely weren't winning best picture ... they can't be bothered to appear at the single biggest promotional event for those movies?" (Puck)
Andrea Reeb, the special prosecutor in the "Rust" criminal case has stepped down, in a blow to the Alec Baldwin prosecution. (LAT)
Rebecca Keegan writes about "how A24 made Oscars history." (THR)
Brent Lang and Matt Donnelly have a smart story on how the A24 founders eschew the media spotlight. (Variety)
Jamie Lee Curtis announced on the "Today" show that she will refer to her Oscar statue using they/them pronouns in support of her transgender daughter. (CNN)
WGA leaders talk to Anousha Sakoui about the "existential" threat they say is facing Hollywood writers. (LAT)
Chris Rock's comedy special debuted on Netflix's streaming chart at No. 8 with 17.8 million hours viewed. (Deadline)
Avril Lavigne told a protester who disrupted her speech to "get the f**k off" stage at the Juno Awards. (Rolling Stone)
Vanessa Hudgens is set to return to "Bad Boys." (Deadline)
Florence Pugh and Andrew Garfield are set to co-star in the comedy + romance "We Live In Time." (Deadline)
Matthew McConaughey and Woody Harrelson will reunite for an Apple TV+ comedy. (Variety)
Mila Kunis will star with Michael Keaton for a comedy called "Goodrich." (Deadline)

Thank you for reading! This newsletter was edited by Jon Passantino. Have feedback? Send us an email here. We will see you back in your inbox tomorrow.