WEBVTT - The Banking Crisis, Crypto, and Amazon's Job Cuts 0:00:00.200 --> 0:00:03.560 From Mark hard Of. We're Innovation, Money and Power Calve 0:00:03.760 --> 0:00:08.520 in Silicon Valley, NBM. This is Bloomberg Technology with Caroline 0:00:08.560 --> 0:00:25.640 Hide and Ed Ludlow. I'm Caroline Hired of Bloomberg's World 0:00:25.640 --> 0:00:28.560 tadquarters in New York, and I met Ludlow in San Francisco. 0:00:28.680 --> 0:00:32.159 This is Bloomberg Technology coming up Financial conditions. They tighten 0:00:32.600 --> 0:00:35.280 what the latest details in the banking crisis mean for 0:00:35.320 --> 0:00:38.440 your tech investing. We go live outside of Suez and 0:00:38.560 --> 0:00:42.559 talk first Republic stock drop, plus what the banking fallout 0:00:42.600 --> 0:00:45.680 means for crypto as Bitcoin tops twenty eight thousand for 0:00:45.720 --> 0:00:49.000 the first time since June amid the turmoil, and we'll 0:00:49.000 --> 0:00:51.160 bring you the latest on job cuts in the world 0:00:51.159 --> 0:00:54.960 of technology. Amazon announces it's laying off an additional nine 0:00:55.000 --> 0:00:59.240 thousand employees. All that so much more coming up Broadly, 0:00:59.280 --> 0:01:01.440 the focuses on the banking sector, right That's where the 0:01:01.520 --> 0:01:04.600 feel good is. In the equity markets. You see underperformance 0:01:04.600 --> 0:01:07.360 in megacaps. They had a really strong week last week 0:01:07.440 --> 0:01:10.560 tech scene as a safety play. We're unraveling that this week. 0:01:10.600 --> 0:01:14.480 Some megacat names down considerably. Amazon down two percent. It 0:01:14.560 --> 0:01:18.840 actually paired losses on the headline nine thousand additional layoffs Caroline, 0:01:18.840 --> 0:01:22.120 but now continuing to trade lower. The number that always 0:01:22.120 --> 0:01:25.199 gets me is nine thousand plus eighteen thousand is twenty 0:01:25.200 --> 0:01:28.160 seven thousand layoffs in total. You have to remember at 0:01:28.160 --> 0:01:30.440 the end of last year they had one point five 0:01:30.560 --> 0:01:34.040 four million workers globally. Yeah, to drop in the ocean, 0:01:34.319 --> 0:01:36.320 it is. But remember most of those one and a 0:01:36.360 --> 0:01:38.440 half million are actually contract based. So if you're looking 0:01:38.480 --> 0:01:41.080 more at a corporate job, it's what, well, three hundred 0:01:41.120 --> 0:01:44.199 thousand or there or thereabouts. What's interesting is, like with Meta, 0:01:44.400 --> 0:01:47.800 a second key round of layoffs and like with Meta, 0:01:48.080 --> 0:01:51.160 kind of drawn out, maybe not happening till April till May. 0:01:51.200 --> 0:01:52.840 What does that mean for the overall job state or 0:01:52.880 --> 0:01:55.120 what does that mean for the macro picture, not just 0:01:55.160 --> 0:01:58.000 for technology as well. Yeah, but bloom those Mike McKee 0:01:58.040 --> 0:01:59.960 says exactly that it won't show up in the day 0:02:00.520 --> 0:02:02.280 until later in the year. Look at where the cuts 0:02:02.280 --> 0:02:06.800 are aws recruitment. Twitch interesting there because some of those 0:02:06.800 --> 0:02:09.000 are growth areas, some of them are consistent with what 0:02:09.080 --> 0:02:11.880 Amazon's done already, and once again just very painful here 0:02:11.919 --> 0:02:14.840 for an HR at any of these technology companies and 0:02:15.080 --> 0:02:17.640 all of this, Let's set it back into the macro backdrop, 0:02:17.720 --> 0:02:20.720 because this is what happens when interest rates rise. This 0:02:20.760 --> 0:02:23.079 isn't a cooling of an economy. This is jobs having 0:02:23.080 --> 0:02:26.560 to be sacrificed. This is also a rising interest rate 0:02:26.639 --> 0:02:28.680 world means for banks, and that is what we've been 0:02:28.680 --> 0:02:31.519 digesting all week long special coverage here roon Bloomberg and 0:02:31.520 --> 0:02:33.800 we've got to bring you from a technology context because 0:02:33.800 --> 0:02:36.320 it's been a frantic weekend. You saw Credit Suez the 0:02:36.360 --> 0:02:39.440 takeover by rival UBS. What does this mean for the 0:02:39.480 --> 0:02:42.840 overall investment landscape? Shnani Bassak, who's been working around the 0:02:42.840 --> 0:02:46.239 clock on Sunday, in fact, outside the company's New York headquarters. 0:02:46.240 --> 0:02:50.440 How does it feel, Listen, Caroline, this is really an 0:02:50.600 --> 0:02:53.000 iconic moment. This is an iconic building. I'm standing in 0:02:53.040 --> 0:02:55.799 front of Credit Squeeze at eleven Madison Avenue, a building 0:02:55.800 --> 0:02:58.640 that they've been at since the nineteen nineties, not too 0:02:58.680 --> 0:03:01.840 long ago, signing a multi decade lease, filled with people 0:03:01.840 --> 0:03:04.120 and one of the biggest investment banks in the United States, 0:03:04.400 --> 0:03:07.800 and now their crosstiwn V rival just less than thirty 0:03:07.840 --> 0:03:12.040 blocks away. The fate of this building, the people in it, 0:03:12.080 --> 0:03:14.280 there are a lot of anxieties that are under the surface. 0:03:14.400 --> 0:03:17.480 Remember the UBS CEO and a memo Jess late yesterday 0:03:17.880 --> 0:03:20.280 had told his staff that this is not a done 0:03:20.320 --> 0:03:22.760 deal yet in the sense that it still needs to close, 0:03:23.200 --> 0:03:26.200 meaning they should not be sharing information yet with their 0:03:26.320 --> 0:03:29.720 rivals over at Credit sweez Swee is still indeed arrival. 0:03:30.080 --> 0:03:32.760 With that said, remember before this deal was ever announced, 0:03:32.760 --> 0:03:35.360 Caroline Credit Sweezes had a plan to cut about nine 0:03:35.400 --> 0:03:38.280 thousand jobs over time, and UBS, while they have not 0:03:38.560 --> 0:03:42.080 given that sense of how deep the headcount reductions could go, 0:03:42.800 --> 0:03:45.520 there's still a plan to have about an eight billion 0:03:45.600 --> 0:03:50.040 Swiss frank cost reduction plan annually through twenty twenty seven, 0:03:50.080 --> 0:03:53.200 which implies significant job cuts. Now, on one hand, there 0:03:53.360 --> 0:03:56.680 is some silver lining here that when folks across Wall 0:03:56.720 --> 0:03:59.360 Street look at what's happening, Credit sweez has been one 0:03:59.360 --> 0:04:01.880 of the top in banks in the world, it presents 0:04:01.920 --> 0:04:05.000 an interesting opportunity for UBS to be getting even bigger 0:04:05.000 --> 0:04:07.520 in the United States. There are some worries as they 0:04:07.600 --> 0:04:09.880 roll off some of the more difficult assets in that 0:04:09.960 --> 0:04:13.040 investment bank, but this is really at this moment, in 0:04:13.080 --> 0:04:17.080 addition to a financial story, a very significant talent one 0:04:17.160 --> 0:04:20.720 with deep history here in the United States. Yeah, the 0:04:21.240 --> 0:04:23.440 repercussions are really being felt as well in the credit 0:04:23.440 --> 0:04:25.160 markets and the debt markets, which I'm going to get 0:04:25.200 --> 0:04:28.200 into later in the show. Bloomberctionali Bassett, thank you so much. 0:04:28.200 --> 0:04:31.000 Outside Credit Swiss in New York. Now, the TERMOI in 0:04:31.040 --> 0:04:33.800 the banking sector continues, but it sparked that rally in 0:04:33.920 --> 0:04:37.320 bitcoin and crypto related stocks. Katy Greifeld here with more 0:04:37.320 --> 0:04:40.040 and Katie, they're talking about high degree of correlation between 0:04:40.520 --> 0:04:44.240 basically real rates coming down and liquidity situation. What are 0:04:44.240 --> 0:04:46.400 you seeing out in the markets when it comes to crypto. Well, 0:04:46.440 --> 0:04:48.840 when you look at the rally that you're seeing in bitcoin, 0:04:48.920 --> 0:04:51.760 crypto broadly, but led by bitcoin, it really boils down 0:04:52.000 --> 0:04:53.919 to two theories. You have the one you were just 0:04:53.960 --> 0:04:56.960 talking about, which is that macro narrative that you're seeing 0:04:57.000 --> 0:04:59.800 big tech rebound mightily. Maybe not today, but last week 0:05:00.040 --> 0:05:03.200 it's best week of the year for the Nasdaq one hundred. 0:05:03.400 --> 0:05:05.719 We could be looking at the last rate hike of 0:05:05.760 --> 0:05:09.360 the FEDS tightening cycle on Wednesday. There's some talk about 0:05:09.440 --> 0:05:12.560 quantitative tightening maybe not being long for this world. All 0:05:12.560 --> 0:05:14.719 of that would be good for bitcoin and that's what 0:05:14.760 --> 0:05:17.120 you're seeing in the price is the other theory is 0:05:17.120 --> 0:05:20.760 sort of the original promise of crypto, basically that you 0:05:20.800 --> 0:05:22.839 want to be your own bank, you want to get 0:05:22.880 --> 0:05:25.400 away from the banking system. That is what some of 0:05:25.480 --> 0:05:28.840 the bitcoin maximalists on Twitter are saying right now. But 0:05:28.960 --> 0:05:30.880 you look at the performance of this asset class as 0:05:30.920 --> 0:05:33.320 a whole, some of those crypto stocks as well, it 0:05:33.440 --> 0:05:36.640 seems like it's leaning towards the macro narrative. Cara, I'm 0:05:36.680 --> 0:05:41.440 looking at CYP cryptgo on the Bloomberg and you forget. Actually, 0:05:41.440 --> 0:05:43.400 you look at all the other tokens, they're all lower, 0:05:43.400 --> 0:05:46.040 they're all in the red. Bitcoin continues to climb higher. 0:05:46.200 --> 0:05:48.080 That's where the focus is right now. It's the og 0:05:48.320 --> 0:05:51.120 perhaps it is well, the safety trade when you're looking 0:05:51.120 --> 0:05:53.400 at the world of crypto. But Katie, also, what's been 0:05:53.440 --> 0:05:55.239 so interesting, We're going to dig into it in a moment, 0:05:55.320 --> 0:05:58.560 is the worry about US crypto builders here in the 0:05:58.600 --> 0:06:01.560 United States being forced basically to bank outside of the 0:06:01.640 --> 0:06:03.560 United States, maybe even to move their entire company. It 0:06:03.600 --> 0:06:06.080 was notable that over the weekend, Signature Bank, which of 0:06:06.080 --> 0:06:08.800 course had been put up you know, taken over by 0:06:09.040 --> 0:06:12.680 regulators was being swooped up by a comment. Well, a 0:06:12.720 --> 0:06:15.560 region low bank, a community lender here in New York. 0:06:15.760 --> 0:06:18.120 What are you hearing of, basically resilience of the crypto 0:06:18.160 --> 0:06:20.960 market in general. Well, Caroline, that's kind of the irony 0:06:21.080 --> 0:06:24.520 is that along with that maximalist theory that these crypto 0:06:24.600 --> 0:06:27.440 companies they need to use the banking system. I mean, 0:06:27.480 --> 0:06:31.240 you saw Silvergate Signature. Those were huge players, huge you know, 0:06:31.400 --> 0:06:36.000 instances where crypto companies connected to traditional finance. And it 0:06:36.160 --> 0:06:37.800 is interesting if you look at some of the stocks 0:06:37.839 --> 0:06:40.640 associated with the crypto industry. I'm talking about some of 0:06:40.640 --> 0:06:44.960 the miners, for example, they're actually outperforming bitcoin. It's really 0:06:45.760 --> 0:06:48.280 striking to me that if you look at Marathon Digital 0:06:48.320 --> 0:06:50.440 I had to check the numbers a few different times. 0:06:50.440 --> 0:06:53.839 It's up one hundred thirty six percent this year. Even 0:06:53.839 --> 0:06:57.000 though bitcoin miners as an industry, they've really been struggling 0:06:57.000 --> 0:07:00.680 with higher energy costs, lower bitcoin prices. That's really compress 0:07:00.760 --> 0:07:04.000 their margins. But you're really seeing risk on across the 0:07:04.040 --> 0:07:07.400 crypto space. We'll see if it lasts. We're just stepping 0:07:07.440 --> 0:07:10.040 down by three quarters of a percent at pretty notable 0:07:10.080 --> 0:07:13.679 that twenty eight thousand level Katie Greifeld again working throughout 0:07:13.800 --> 0:07:16.320 the weekend. I think she had more source conversations than 0:07:16.400 --> 0:07:19.400 she does on a daily basis. They thank her. Let's 0:07:19.440 --> 0:07:22.760 morden this conversation out. Let's bring in Noel Atchison, the 0:07:22.800 --> 0:07:25.440 founder of the new Zetta crypto is macro. Now you 0:07:25.640 --> 0:07:28.720 have been writing on your day off over there in Spain, Noel, 0:07:29.440 --> 0:07:32.920 what is the sentiment like, why do you think bitcoin's rallying? 0:07:32.920 --> 0:07:35.880 To start it off? O, Caroline? It is such a 0:07:35.920 --> 0:07:38.920 complicated cresting at the moment. There is so much going on. 0:07:39.040 --> 0:07:42.320 Katie totally correctly identify two of the main threads that 0:07:42.360 --> 0:07:45.440 are driving the Bitcoin performance. One is the macro story. 0:07:45.520 --> 0:07:47.760 Bitcoin is a risk asset, has often traded like a 0:07:47.760 --> 0:07:50.680 macro asset, as we know, and it is even more 0:07:50.720 --> 0:07:54.760 than that though it is arguably the most sensitive asset 0:07:55.040 --> 0:07:59.480 two shifts in monetary liquidity. There's also the banking crisis, 0:07:59.560 --> 0:08:03.440 and Katie did mention how that ties into the crypto thesis. 0:08:03.520 --> 0:08:07.480 I mean, Caroline, just fourteen years ago, just over Tatoshi Nakamoto, 0:08:07.600 --> 0:08:10.400 the creator of bitcoin, embedded in the very first bitcoin blog, 0:08:10.680 --> 0:08:13.520 the link to the headline Chancellor on the brink of 0:08:13.600 --> 0:08:16.720 second bailout of banks. So this reminds how the macrocrisis 0:08:16.760 --> 0:08:19.480 leads into the banking crisis, which leads into the crypto crisis. 0:08:19.560 --> 0:08:21.800 All these threads are getting very intertwined, all that they 0:08:21.840 --> 0:08:24.960 are separate, and we also do have the market structure 0:08:25.400 --> 0:08:28.480 thread going in here. Bitcoin's market structure is quite unusual 0:08:28.480 --> 0:08:30.920 and that is one of the drivers of the speed 0:08:30.960 --> 0:08:33.760 of the rally that we've seen such seventy percent so 0:08:33.800 --> 0:08:36.880 far this year. And we also have the technological evolution 0:08:37.000 --> 0:08:39.920 which is still going on. So so many things going 0:08:39.920 --> 0:08:43.800 on at the moment driving the bitcoin's performance roative two 0:08:43.840 --> 0:08:46.959 minus piers that you mentioned, and that isn't itself unusual 0:08:47.000 --> 0:08:52.720 because usually in a market bitcoin underperformance ed. What's interesting 0:08:53.240 --> 0:08:56.040 is this sort of narrative that's thriving out there that 0:08:56.240 --> 0:09:02.240 maybe bitcoin weather's crises chaos at least sent relatively well well. Now, 0:09:02.240 --> 0:09:03.960 while the logic seems to be, you look at what's 0:09:03.960 --> 0:09:07.199 happening in the banking sector, right, excuse me, and then 0:09:07.520 --> 0:09:11.400 we're resetting expectations for rates globally, the FED, the ECB. 0:09:11.920 --> 0:09:13.640 That seems to be a part of the equation here 0:09:13.640 --> 0:09:16.760 when it comes to Bitcoin in particular, and The fact 0:09:16.760 --> 0:09:18.520 that there are so many parts of this equation, and 0:09:18.679 --> 0:09:22.360 you're totally right, gives bitcoin a support, a floor if 0:09:22.360 --> 0:09:25.199 you like, that many other risk assets don't have. When 0:09:25.240 --> 0:09:27.600 it comes to the banking crisis, it is obviously a 0:09:27.640 --> 0:09:30.040 factor and people paying closer attention to this, But very 0:09:30.040 --> 0:09:32.000 few of us believe that bitcoin is going to replace 0:09:32.360 --> 0:09:34.839 the banking. For your banking is convenient, it will recover 0:09:34.920 --> 0:09:37.040 from the crisis you perhaps in some other format. But 0:09:37.200 --> 0:09:41.319 what bitcoin represents from many it is it's an insurance asset. 0:09:41.520 --> 0:09:45.240 It's adjusting case, it's an ability. It represents an ability 0:09:45.240 --> 0:09:47.960 to transact even when the banking system isn't working. And 0:09:48.000 --> 0:09:50.120 I'm not suggesting it's going to stop working, but it 0:09:50.320 --> 0:09:55.560 is that insurance quality that many people are paying attention to. Now. Now, well, 0:09:55.640 --> 0:09:59.679 what is the biggest headwind to bitcoin from this point? On? Regulation? 0:10:00.160 --> 0:10:03.079 Regulation and the deep banking of the crypto industry which 0:10:03.080 --> 0:10:05.680 you referred to earlier. The d banking is a big 0:10:05.720 --> 0:10:08.480 blow to the North American trypto industry the US, I 0:10:08.480 --> 0:10:11.280 should say more specifically, but it's not a death blow 0:10:11.280 --> 0:10:13.120 by any means, and it's not really going to hamper 0:10:13.240 --> 0:10:15.719 much of the innovation much mure, there's somebody going to 0:10:15.800 --> 0:10:19.040 go elsewhere. There's another thing that's much people looked about bitcoin. 0:10:19.120 --> 0:10:22.040 It's mobile. It is so mobile. It can work just 0:10:22.200 --> 0:10:24.320 as well from anywhere in the world as it can 0:10:24.400 --> 0:10:28.000 from say San Francisco or New York. The US will 0:10:28.040 --> 0:10:30.240 lose out on a lot of talent and also investment 0:10:30.280 --> 0:10:34.080 capital and also innovation potential, but it will eventually realize, 0:10:34.320 --> 0:10:36.199 you know, the mistake that it's making, and come to 0:10:36.320 --> 0:10:38.800 its senses and try to scramble to catch up. Meanwhile, 0:10:38.840 --> 0:10:41.440 the bitcoin will continue to evolve in terms of the technology, 0:10:41.480 --> 0:10:44.200 in terms of the adoption, and in terms of understanding 0:10:44.240 --> 0:10:49.400 its role in the world. What about other crypto assets? 0:10:49.520 --> 0:10:52.400 Are the don bitcoin or any of them in insurance 0:10:52.520 --> 0:10:57.720 contract too? Not as simply as bitcoin. It's obviously DeFi 0:10:57.920 --> 0:11:00.600 has shown that it can weather the mother of all 0:11:00.640 --> 0:11:03.760 stress tests. It has done so many times over the 0:11:03.800 --> 0:11:06.920 past few months, over the past year, arguably defy even 0:11:07.040 --> 0:11:09.800 during the very dramatic weekend we had this past one, 0:11:09.800 --> 0:11:12.720 but the one before with the depeg of USDC continued 0:11:12.760 --> 0:11:15.199 to work just fine. USDC repegged as soon as we 0:11:15.320 --> 0:11:18.200 get access to the banking rails, So defy is definitely 0:11:18.240 --> 0:11:21.800 something to be looked at, but there is the regulatory overhang. 0:11:21.840 --> 0:11:24.840 Ethereum is another interesting situation. We have a big upgrade 0:11:24.880 --> 0:11:28.720 coming up, but again regulatory uncertainty, which is why Bitcoin's 0:11:28.720 --> 0:11:33.480 outperformance in an upmarket is unusual right now. Normally it's 0:11:33.520 --> 0:11:36.400 the as you mentioned, Caroline, it's the safe and big 0:11:36.440 --> 0:11:40.320 air quotes there the crypto asset, it normally underperforms and 0:11:40.400 --> 0:11:43.360 others totally outshine it because they are higher bolletied. But 0:11:43.440 --> 0:11:46.280 not right now because of the regulatory uncertainty. That is 0:11:46.320 --> 0:11:49.880 a headwind for the whole crypto market, including Bitcoin. Of 0:11:49.960 --> 0:11:53.320 what Bitcoin's doing anyway, well, in simple times, it's the 0:11:53.360 --> 0:11:56.080 regulation where there are still more questions to be answered. 0:11:56.120 --> 0:11:58.600 No actress, an author of the crypto is macro now 0:11:58.880 --> 0:12:00.679 news that are coming to us from Madrid. Thank you, 0:12:08.520 --> 0:12:11.800 Coca Cola. It is the latest big name revealing new 0:12:11.840 --> 0:12:15.720 AI tools today the soft drink's giant announced Create Real Magic. 0:12:15.760 --> 0:12:18.360 It's an AI platform that lets you generate original artwork 0:12:18.559 --> 0:12:22.360 with pretty iconic Coola visual assets. Having partnered with Open 0:12:22.400 --> 0:12:25.400 Ai with Baine for this initiative, where therefore Rapley is 0:12:25.480 --> 0:12:29.000 to welcome the CFO John Murphy into this discussion because 0:12:29.200 --> 0:12:32.559 you really are the executive that focuses in on innovation 0:12:32.760 --> 0:12:35.320 thinking about these sorts of ways in which it drives revenue. 0:12:35.360 --> 0:12:40.440 How does a deal like this drive revenue? John, Well, thanks, 0:12:40.600 --> 0:12:43.480 nice to be with you. First of all, we're at 0:12:43.480 --> 0:12:48.280 the forefront of an incredible new technology and capability. We 0:12:48.960 --> 0:12:53.599 believe it's part of our ongoing marketing agenda, the transformation 0:12:53.600 --> 0:12:59.160 of our marketing agenda and annie new exciting engagement with 0:12:59.200 --> 0:13:04.000 our consumer base is at the core of helping us 0:13:04.040 --> 0:13:07.600 create new value. In fact, our own bloombag intelligence analysts 0:13:07.679 --> 0:13:10.480 wrote that Coca Cola's forecast for generating seven to eight 0:13:10.480 --> 0:13:13.760 percent organic revenue growth this year hinges in large part 0:13:13.960 --> 0:13:17.440 on achieving success with the emphasis on innovation and marketing. 0:13:17.640 --> 0:13:20.960 Just tell us how this particular AI platform is going 0:13:20.960 --> 0:13:23.880 to drive marketing In particular, what do you think this 0:13:23.920 --> 0:13:26.520 will bring to the forefront in terms of innovation and 0:13:26.760 --> 0:13:31.439 well engagement from your core audience and user base. Well, 0:13:32.000 --> 0:13:35.240 marketing and innovation is really the engine that allows us 0:13:35.280 --> 0:13:38.559 to connect with our consumer base. We are on a 0:13:38.679 --> 0:13:44.200 journey to digitizing a lot of our interactions. We love 0:13:44.320 --> 0:13:49.160 this new technology as a way to allow us to 0:13:49.440 --> 0:13:54.199 engage in a very innovative and exciting way. And the 0:13:54.360 --> 0:13:56.960 program we've just launched today goes through till the end 0:13:57.000 --> 0:14:01.199 of March. It's an open invitation for millions of people 0:14:01.240 --> 0:14:05.160 to co create with us, to get another brand better 0:14:05.200 --> 0:14:09.720 and ultimately to bring awareness to the to the business 0:14:09.720 --> 0:14:13.360 and to our portfolio. So we're really really excited with 0:14:14.520 --> 0:14:20.320 learning and understanding how we can continue to build this 0:14:20.640 --> 0:14:23.840 new capability into into the work we're doing going forward. 0:14:25.520 --> 0:14:29.000 On that note, John chat gpt in and of itself 0:14:29.160 --> 0:14:32.320 is raised concerns around accuracy about some of the responses 0:14:32.360 --> 0:14:35.520 it's given. How closely are you looking at sort of 0:14:35.600 --> 0:14:39.280 deepening the integration of the underlying technology the tool into 0:14:39.320 --> 0:14:44.440 Coca Cola's business more broadly With those concerns in mind, well, 0:14:44.480 --> 0:14:50.720 I think any new, potentially disruptive technology is going to 0:14:51.440 --> 0:14:54.640 generate its first share of controversy, and it's really important 0:14:55.520 --> 0:14:58.840 to scale it within an enterprise like ours. It's really 0:14:58.840 --> 0:15:04.160 important to of good governance, good protocols, and the ability 0:15:04.200 --> 0:15:09.320 to collaborate with the various stakeholders we have involved with us, 0:15:09.360 --> 0:15:12.360 both internally and externally. So we're looking at this as 0:15:12.400 --> 0:15:16.080 a bold move versus a reckless one, and we think 0:15:16.320 --> 0:15:20.480 we have in place those protocols that will allow us 0:15:20.520 --> 0:15:26.160 to incorporate it and advance of that scale across the company. Johnny, 0:15:26.280 --> 0:15:31.560 is this relationship with open AI a marketing exercise in 0:15:31.600 --> 0:15:35.040 and of itself or is it actually needle moving when 0:15:35.040 --> 0:15:40.720 it comes to what Cooda is doing with technology. This 0:15:40.800 --> 0:15:44.800 is a much broader relationship than just a marketing campaign. 0:15:46.360 --> 0:15:50.160 We look at this has been an opportunity to really 0:15:50.200 --> 0:15:57.320 take any complex business challenge and compress it into a 0:15:57.400 --> 0:16:01.480 set of solutions that normally would take a lot longer 0:16:01.480 --> 0:16:06.400 and a lot more energy and time to deliver. Clearly, 0:16:06.400 --> 0:16:10.320 it's in the early stages. We have a test, learn 0:16:10.400 --> 0:16:15.200 and scale mindset, but we see it as being pivotal 0:16:15.280 --> 0:16:21.520 to the ongoing evolution of how we do business. Oles 0:16:21.640 --> 0:16:24.200 CFO and President John Murphy, thank you so much for 0:16:24.280 --> 0:16:27.880 your time, Caroline. Really interesting how we talk about innovation 0:16:28.040 --> 0:16:30.640 in big business. Let's talk tech a little bit more. 0:16:30.640 --> 0:16:34.560 Now see the largest Southeast Asia's internet firm and at 0:16:34.560 --> 0:16:37.160 one point the world's best performing stock. It's emerging from 0:16:37.160 --> 0:16:39.320 a pretty painful twenty twenty two. In a memoate of staff, 0:16:39.320 --> 0:16:42.520 billionaire founder for US. Lee says that after months of 0:16:42.560 --> 0:16:45.120 steep job cuts, the Asian Internet child has made changes 0:16:45.160 --> 0:16:47.440 it needs to deliver profits over the long haul, marking 0:16:47.440 --> 0:16:49.960 a turning point for the company. But the CEO also 0:16:50.000 --> 0:16:52.720 warns the company it still needs to prove that it 0:16:52.720 --> 0:16:55.840 can sustain a profit, writing quote, a job is not 0:16:55.920 --> 0:16:59.480 done yet. Similarly, Indonesian right hailing, an e commerce provider, 0:16:59.600 --> 0:17:02.480 go to Group, just reported a narrower adjusted loss for 0:17:02.480 --> 0:17:04.760 the fourth quarter after extensive cost cuts. The adjust had 0:17:04.800 --> 0:17:08.640 lost before interest, tax, depreciation and amaturization. That's a bit 0:17:08.720 --> 0:17:12.639 dark shrank, while revenue actually tripled, highlighting resilient demand even 0:17:12.880 --> 0:17:15.040 amid the cost of living squeeze in Southeast Asia. The 0:17:15.040 --> 0:17:18.439 company has cut six hundred rolls from its workforce this month, 0:17:18.720 --> 0:17:21.560 adding the one thousand, three hundred jobs it acts last year. 0:17:21.680 --> 0:17:24.000 There is a theme here, folks. Meanwhile, let's talk chips. 0:17:24.240 --> 0:17:27.159 Taiwan's exports of integrated circuit chips to China and Hong 0:17:27.240 --> 0:17:30.760 Kong falling from a fourth month in a row. That's February. 0:17:31.000 --> 0:17:33.520 As Washington Beijing tensions, they just simmer and demand for 0:17:33.560 --> 0:17:36.600 electronics continues to drop off. Exports in fact fell thirty 0:17:36.600 --> 0:17:39.080 one percent from a year earlier, the worst declined since 0:17:39.080 --> 0:17:41.879 two thousand and nine. China's market share of Taiwanese i 0:17:41.920 --> 0:17:45.880 SEE exports plunged to the lowest level since February twenty nineteen. 0:17:46.320 --> 0:17:50.240 All according to Balloomberg Data. Read First Republic resume trading 0:17:50.640 --> 0:17:54.480 extended its declines to forty six percent in the session. 0:17:54.520 --> 0:17:56.840 Has been halted again, of course, a number of ratings 0:17:56.880 --> 0:18:00.800 agencies cutting the rating on the bonds in decent hours. 0:18:01.600 --> 0:18:25.359 This is bloom bag. We're talking a lot about layoffs, 0:18:25.359 --> 0:18:27.600 those that are doing them, Amazon, those that are trying 0:18:27.680 --> 0:18:30.520 everything to avoid them. Just take Apple, for example, pulling 0:18:30.520 --> 0:18:33.280 every lever that it can to cut costs so it 0:18:33.320 --> 0:18:35.800 doesn't have to lay off full time employees. Let's bring 0:18:35.800 --> 0:18:38.160 in Mark German, who has just been writing time after 0:18:38.200 --> 0:18:40.840 time about some of the areas that Apple is able 0:18:40.880 --> 0:18:44.920 to compress costs on. Yeah, thank you so much both 0:18:44.960 --> 0:18:48.800 for having me. Apple is unique amongst the biggest tech companies. 0:18:48.800 --> 0:18:52.439 I mean, as we saw today Amazon cutting another several 0:18:52.480 --> 0:18:56.919 thousand jobs. We've seen Meta do multiple rounds of layoffs, Microsoft, Google. 0:18:56.960 --> 0:18:59.720 So Apple stands out, you know from that perspective. So 0:19:00.040 --> 0:19:02.000 how are they avoiding it? Well, first of all, you 0:19:02.040 --> 0:19:05.120 look at their cash balance. They have so much cash, right, 0:19:05.280 --> 0:19:07.960 they have so much momentum Right now with the stock price, 0:19:08.200 --> 0:19:11.919 sales are beginning to normalize. So from an outside perspective 0:19:12.040 --> 0:19:17.000 plus an internal perspective, it would be truly horrific. Right. 0:19:17.040 --> 0:19:19.959 It's horrible when other companies do layoffs, but for Apples specifically, 0:19:20.200 --> 0:19:24.040 would be horrific given their momentum, given the strategies they 0:19:24.119 --> 0:19:25.920 have in place, given the history they have in place 0:19:25.960 --> 0:19:27.880 for them to do layoffs. So what are they doing? 0:19:28.240 --> 0:19:32.200 Cutting back on travel, requiring senior vice president approval for 0:19:32.320 --> 0:19:35.960 many budget items. They're not backfilling, so as people are 0:19:36.040 --> 0:19:39.439 leaving in certain positions, they're not replacing them. They're not 0:19:39.520 --> 0:19:43.200 allowing cross department transfers on the corporate side in some cases, 0:19:43.440 --> 0:19:46.720 they're not allowing cross store transfers on the retail side. 0:19:46.720 --> 0:19:50.040 In some cases, firings are up on the retail side, 0:19:50.160 --> 0:19:53.920 not for layoff purposes, but your standard reasons about attendance 0:19:54.000 --> 0:19:57.119 and maybe lying about your hours and such. Right, So 0:19:57.119 --> 0:20:00.399 they're basically thinking of everywhere they can save money, and 0:20:00.440 --> 0:20:02.840 they're doing it. A part of the story as well, Mark, 0:20:02.840 --> 0:20:05.119 we just had thirty seconds is that actually throughout the 0:20:05.119 --> 0:20:09.520 Panamic era they hired judiciously compared to their peers. Right. 0:20:10.680 --> 0:20:13.200 They didn't do anything different during the pandemic in terms 0:20:13.200 --> 0:20:17.000 of hiring and spending as they did before. Right, whereas 0:20:17.080 --> 0:20:19.520 all these other tech companies they may be doubled or 0:20:19.520 --> 0:20:22.240 tripled or hiring or r and d spending in some cases, 0:20:22.280 --> 0:20:24.800 and now things are normalizing, they have to pull back. 0:20:24.880 --> 0:20:28.080 So Apple stayed the course. Not much has to change now. 0:20:29.080 --> 0:20:31.960 Bloomberg's Mark German, writing in power on check it out 0:20:32.160 --> 0:20:44.000 dot com and on the terminal, Welcome back to Bloomberg Technology. 0:20:44.000 --> 0:20:46.399 I met Ludlow in San Francisco. It's nine thirty am 0:20:46.440 --> 0:20:49.640 here on the West coast, but four thirty pm in London, says, 0:20:49.640 --> 0:20:51.639 take a look at where European markets closed. In the 0:20:51.680 --> 0:20:54.640 equity space, the stocks Europe six hundred up one percent, 0:20:54.960 --> 0:20:57.560 volatility and meet concerns. In the banking sector, we see 0:20:57.560 --> 0:21:01.800 a pullback modestly in the bond market. The German ten 0:21:01.920 --> 0:21:04.120 year burned off by a single basis point two point 0:21:04.160 --> 0:21:07.440 one percent. The concern all around credit Swiss ubs has 0:21:07.440 --> 0:21:11.680 come in to buy credit Swiss. It's Swiss traded shares 0:21:11.720 --> 0:21:14.399 down fifty seven percent fifty six and a half percent 0:21:14.640 --> 0:21:17.480 in Monday session, UBS Group up one and a half 0:21:17.480 --> 0:21:20.800 percent after doing that deal with backstop on liquidity from 0:21:20.880 --> 0:21:24.680 central banks. The concern really is in the additional Tier 0:21:24.720 --> 0:21:27.919 one bonds, the riskiest bank bonds where we saw a 0:21:28.000 --> 0:21:30.800 real write down risk. This is Credit Swiss is eighty ones. 0:21:31.160 --> 0:21:34.159 This is where the action's been throughout Monday's session. The 0:21:34.200 --> 0:21:37.720 concern is that similar effects will creep into eighty ones 0:21:37.720 --> 0:21:40.040 of other banks. We're seeing that play out as well. 0:21:40.160 --> 0:21:43.199 But Caroline, we have some sort of solution in the 0:21:43.200 --> 0:21:45.760 banking sector in Europe. The permanency of it is still 0:21:45.760 --> 0:21:48.000 in question, and we still looked at what's happening here 0:21:48.000 --> 0:21:50.560 in the US with First Republic Bank. We still think 0:21:50.560 --> 0:21:52.840 about what it all means for interest rates setting of 0:21:52.840 --> 0:21:55.760 course the FED coming on Wednesday, and we think about 0:21:55.760 --> 0:21:58.920 what higher interest rates means for jobs too. That clear 0:21:58.960 --> 0:22:01.440 and evident in the world of technology today, Amazon laying 0:22:01.440 --> 0:22:04.800 off an additional nine thousand employees, adding to cuts that 0:22:04.800 --> 0:22:07.359 were already the largest round of layoffs in the company's history. 0:22:07.560 --> 0:22:12.440 I Spending, Bloomberg Intelligences, and Ragrana just what was interesting 0:22:12.640 --> 0:22:16.080 about Andy Jase's own communication in the memo that Bloomberg 0:22:16.080 --> 0:22:18.760 seemed to get just ahead of the curve was the 0:22:18.760 --> 0:22:21.040 fact that they're focusing in on areas that really are 0:22:21.119 --> 0:22:26.159 growth drivers aws advertising. Yeah, I think that was the 0:22:26.200 --> 0:22:28.720 big thing. You don't want your day looking at non 0:22:28.760 --> 0:22:32.280 retail units where the major job cuts are, you know. 0:22:32.320 --> 0:22:35.200 For Thus this indicates that, you know, there is probably 0:22:35.880 --> 0:22:39.200 still a downward pressure on growth rates in Amazon's cloud unit. 0:22:40.040 --> 0:22:42.399 That has been the you know, the key story for 0:22:42.480 --> 0:22:45.320 Amazon for some time. It is the biggest profit driver. 0:22:45.440 --> 0:22:47.480