Hey Insiders, Today’s Inside.com Book Club is all about REWORK by 37signals, and we have an extremely special guest showing up: 37signals CEO Jason Fried, who happens to also be an Inside.com community member. The book club begins at 2:30 p.m. PDT, so come ready to share, listen, and learn. Whether you have questions about REWORK or are really into Basecamp or HEY, Jason will be on the call to talk about everything that went into this book. We’re excited to have him and hope you can join us. |
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What happened: Shares of Meta Platforms rose 12% in extended trading Wednesday after the Facebook parent reported better-than-expected revenue and earnings for the first quarter. The company's stock price has surged since announcing its 'year of efficiency' on Feb. 1.
Relevance: After three straight quarters of declines, it was the first quarter that Meta saw year-over-year revenue growth, hinting at early recovery in the ad market. The company is "becoming more efficient," said Zuckerberg, a reference to Meta's management theme for 2023. It has cut underperforming projects and initiated layoffs of more than 20,000 employees since November. What the numbers say: Meta posted $28.6B in quarterly revenue and $2.20 earnings per share, exceeding Wall Street's estimates of $27.7B and $2.02, respectively. In after-hours trading, Meta saw its stock surge, adding $8.4B to the net worth of CEO Mark Zuckerberg, according to a Forbes estimate. Still: Meta reported a $3.99B operating loss in its AR/VR/metaverse division in Q1, down from a $4.28B loss the previous quarter. While it continues to pour money into its long-term metaverse plans, Zuckerberg has emphasized a shift toward AI, saying Meta will add generative AI across WhatsApp, Messenger, Facebook, and Instagram. The technology, which includes chatbots, is "literally going to touch every single one of our products," the CEO said.
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Dropbox plans to reduce its global workforce by 16%, affecting approximately 500 employees, as a result of slowing cloud growth and the arrival of "the AI era of computing." Instead, the cloud storage company will hire new talent to help develop its AI projects. Dropbox's CEO, Drew Houston, said its upcoming phase of expansion will require a diverse range of skill sets, with an emphasis on AI and product development in the early stages. More: - Despite being profitable, Houston said Dropbox is moving pre-emptively to reduce its workforce and invest in new areas for growth, such as AI.
- He also cited the natural maturation of businesses and a slowdown in cloud business growth as its customers face pressures due to the economy.
- Dropbox is expected to incur charges of $37M to $42M related to the job cuts.
- The announcement marks the company's first layoffs since January 2021, when it laid off 315 workers.
- At the end of 2022, Dropbox had 3,118 full-time employees worldwide, including 2,583 in the U.S.
TECHCRUNCH 
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 Amazon is shutting down Halo, its division of consumer tech and fitness trackers. As a result, all Halo products, including the Halo Band, Halo Rise, Halo View, and accessories, will no longer be supported after July 31. More: - Amazon is offering full refunds to customers who purchased a Halo device or accessory band in the past 12 months.
- Additionally, the company is no longer charging subscription fees and will refund all prepaid Halo subscription fees.
- Any remaining data on the Halo health app will be deleted after Aug. 1.
- Amazon has also now pulled the Halo View, Band fitness tracker, and Rise sleep tracker from its e-commerce site.
Layoffs: - The shutdown will result in layoffs of parts of the Halo team, and employees in the U.S. and Canada have already been notified.
- Employees who are let go will be offered severance payments, transitional health insurance benefits, and external job placement support, Amazon said.
- In an email, an Amazon VP said Halo has been facing "significant headwinds" recently, which include "an increasingly crowded segment and an uncertain economic environment."
ENGADGET
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Samsung reported a 95% decrease in operating profit during the first quarter of 2023, driven by a $3.4B loss in its core chip business. The South Korean memory chip maker expects inventory levels to start falling in the second quarter and has targeted a gradual recovery for chips in H2 2023. More: - The January-March period marked Samsung’s smallest quarterly operating profit since 2009.
- Operating profit fell to 640 billion won ($478.6M) for the quarter, down 95% from a year earlier.
- Its chip division, considered its biggest profit driver, reported a loss of 4.58 trillion won ($3.41B) versus an 8.45 trillion won profit a year ago.
- On a positive note, profit in its smartphone division rose 3% over the previous year.
- The company attributed the loss in its chip division to weak demand for tech devices leading to high inventories.
Zoom Out: - During the pandemic, PC and phone makers stockpiled chips as a hedge while consumer demand for their devices skyrocketed.
- They were left with high inventories when demand plummeted due to high inflation and economic uncertainty.
- Samsung expects those inventories to have run down in the second half of this year. It's also betting on China's economic recovery and increased demand from new PC and smartphone launches.
CNN
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A U.S. federal appeals court has sided with Meta Platforms in an antitrust case brought by state attorneys general. The lawsuits filed by 48 states and territories, led by New York, focused on the company's anticompetitive practices related to the acquisitions of Instagram in 2012 and WhatsApp in 2014. More: - The attorneys general waited too long and "unduly delayed" suing Meta over the acquisitions, according to the three-judge panel from the U.S. Court of Appeals for the DC Circuit.
- Initially filed in December 2020, the suit accused Meta of engaging in a “buy or bury” scheme to eliminate rivals and monopolize the social networking market.
- Thursday's ruling upholds a decision from U.S. District Judge James Boasberg from June 2021.
Zoom Out: - The Federal Trade Commission also has an almost identical lawsuit against Meta, which will also be heard by Boasberg.
- While Boasberg dismissed the state case, saying they waited too long, the same legal doctrine does not apply to the federal government.
BLOOMBERG
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TikTok is now testing a feature that will allow users to create AI-generated profile pictures. The tool is similar to Prisma Labs' viral Lensa AI app for creating colorful digital portraits, but is built directly within TikTok. More: - For the TikTok tool, users submit three to 10 photos and choose among several styles to produce up to 30 avatars.
- It takes several minutes for the tool to generate the images. Once finished, TikTok users can download one or multiple avatars, upload them as a profile photo, or share them in their TikTok stories.
- This feature is currently an experiment in select markets. It has two tiers, Lite or Plus, and can only be used once a day.
- A spokesperson confirmed the test and said the company is "always thinking about new ways to add value to the community and enrich the TikTok experience."
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- During an hour-long meeting on Wednesday, Elon Musk discussed "AI and the economy" with U.S. Senate Majority Leader Chuck Schumer (D-N.Y.).
- Accounting giant PricewaterhouseCoopers (PwC) said it would devote $1B toward generative AI over the next three years.
- Billionaire tech investor Peter Thiel was reportedly concerned about Mark Zuckerberg's focus on the metaverse and its impact on Meta's revenue-driving social media platforms, causing him to resign from Meta's board of directors.
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 |  | Beth is a writer and editor at Inside.com covering artificial intelligence and daily technology news. She has written the Inside AI newsletter since 2019. You can reach her at Beth.Duckett@inside.com. |   | | Editor | Eduardo Garcia is a writer and editor based in New York. He is the author of "Things You Can Do," an illustrated book about climate action. Bylines in The New York Times, The Guardian, Slate, Scientific American, and others. In one of his previous lives, Eduardo worked as a Reuters correspondent in Latin America for nearly a decade. | |
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