WEBVTT - Jobs Data and Apple Layoffs 0:00:01.440 --> 0:00:06.760 From Mahard. We're Innovation, Money and Power Collie in Silicon Valley, NBN. 0:00:07.080 --> 0:00:20.520 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:25.320 --> 0:00:28.520 I'm Caroline heard at Bloomberg's world headquarters in New York. 0:00:28.360 --> 0:00:30.840 And alongsider for One more Day. I'm Ed Lovelow, also 0:00:30.880 --> 0:00:33.160 in New York. This is Bloomberg Technology. 0:00:33.240 --> 0:00:35.320 Coming up, we'll get a read on the health of 0:00:35.360 --> 0:00:36.960 the tech labor market that. 0:00:37.040 --> 0:00:39.760 As US jobs report comes in hot it is there. 0:00:40.280 --> 0:00:43.120 With the read through into Silicon Valley, we'll discuss last. 0:00:42.960 --> 0:00:44.960 We stick on the topic of jobs and new filing 0:00:45.000 --> 0:00:48.800 shows Apple slashed around six hundred rolls after scrapping its 0:00:48.840 --> 0:00:50.400 car and screen projects. 0:00:50.400 --> 0:00:52.559 Will bring you that. Bloomberg Reporting and. 0:00:52.600 --> 0:00:56.600 Meta changes its policies around artificial intelligence to allow more 0:00:56.720 --> 0:01:00.880 AI generated content to remain on its platforms. We'll discuss 0:01:00.960 --> 0:01:03.840 that and so much more throughout this hour. And what 0:01:03.880 --> 0:01:05.920 are you watching on more of the MACROPA Just the. 0:01:05.800 --> 0:01:08.720 Basics of the jobs numbers, three hundred and three thousand, 0:01:08.760 --> 0:01:11.959 that's hot, the estimate two hundred and fourteen thousand worth, 0:01:12.040 --> 0:01:15.240 noting that there was also an upward revision to twenty 0:01:15.280 --> 0:01:18.360 two thousand. Net for the prior two months on the 0:01:18.440 --> 0:01:19.959 money when it comes to. 0:01:19.920 --> 0:01:20.880 Wages or earnings. 0:01:20.880 --> 0:01:23.200 As you said, you know, we'll think about what this 0:01:23.280 --> 0:01:26.800 means for specific tech names. 0:01:25.959 --> 0:01:26.880 In just a moment. 0:01:27.000 --> 0:01:29.440 But I think that it's good news in the sense 0:01:29.440 --> 0:01:32.760 Corporate America is looking great, you know, powering the economy. 0:01:32.760 --> 0:01:36.000 But the concern clearly is the timing of a FED 0:01:36.080 --> 0:01:38.520 rate cut. Higher rates discount the present value of future 0:01:38.520 --> 0:01:40.920 cash flows, as we always say on this show, and 0:01:40.959 --> 0:01:44.040 the market right now pushing out that rate cut bet 0:01:44.160 --> 0:01:46.600 to September from July. That's kind of where my head's 0:01:46.600 --> 0:01:47.199 out right now. 0:01:47.920 --> 0:01:50.400 Certainly, let's just get our heads around what happened with 0:01:50.400 --> 0:01:52.080 the job's number, what it means for a labor force, 0:01:52.080 --> 0:01:54.960 particularly in the technology sector. LinkedIn Head of Economics America's 0:01:55.160 --> 0:01:58.080 Corey Katang is joining us for look your take on 0:01:58.160 --> 0:02:02.160 the numbers, because all we've had inbound wise is companies 0:02:02.240 --> 0:02:06.800 becoming more contained with their hiring, more focused on just 0:02:06.840 --> 0:02:09.880 the AIS part of the equation and ultimately letting people go, 0:02:10.400 --> 0:02:11.880 what do you make of the fact that still we've 0:02:11.880 --> 0:02:13.960 got such a resilient jobs market coin. 0:02:15.360 --> 0:02:18.040 Well, today's number was a solid number. It's important to 0:02:18.120 --> 0:02:20.520 keep in mind that the job's number in terms of 0:02:20.600 --> 0:02:24.280 total jobs added has actually been fluctuating on average between 0:02:24.320 --> 0:02:27.320 two and three hundred since June twenty twenty three. So 0:02:27.360 --> 0:02:29.760 we're actually seeing a fair amount of steadiness in the 0:02:29.800 --> 0:02:32.120 labor market in terms of the number of jobs added. 0:02:32.480 --> 0:02:34.600 When you think about what's happening in the tech sector, 0:02:34.919 --> 0:02:37.400 we're seeing that the tech sector has also been sort 0:02:37.440 --> 0:02:40.360 of stabilized since June twenty twenty three. Based on our 0:02:40.440 --> 0:02:42.600 data a LinkedIn, we've see that the pace of hiring 0:02:42.600 --> 0:02:43.800 at tech has leveled out. 0:02:43.960 --> 0:02:44.840 It's still well. 0:02:44.680 --> 0:02:47.200 Below what it was before the pandemic, but we are 0:02:47.240 --> 0:02:50.320 no longer seeing massive drop offs in terms of hiring 0:02:50.320 --> 0:02:50.680 in tech. 0:02:50.840 --> 0:02:52.040 Corey, let's stick with that. 0:02:52.120 --> 0:02:55.040 So the pace of hiring in technology has leveled off 0:02:55.040 --> 0:02:59.680 according to your data. Therefore, it's not a big contributor 0:03:00.200 --> 0:03:02.360 to that three to three we saw this morning. 0:03:02.560 --> 0:03:03.120 The sector. 0:03:03.160 --> 0:03:06.680 I mean, that's right, two thirds of that three oh 0:03:06.800 --> 0:03:10.760 three is coming from just three sectors. Government, leisure and hospitality, 0:03:10.880 --> 0:03:13.600 hospitals and healthcare. That's the case this month, that was 0:03:13.639 --> 0:03:14.840 the case last month as well. 0:03:15.360 --> 0:03:19.200 I'm also interested that in money, wages, earnings, call it 0:03:19.240 --> 0:03:21.160 what you will, Karen and I pointed out, you know, 0:03:21.320 --> 0:03:25.240 on estimates, but we're not hearing that, particularly in the 0:03:25.280 --> 0:03:26.200 context of AI. 0:03:26.680 --> 0:03:28.880 We heard from Brad light Cap. 0:03:28.680 --> 0:03:31.959 The COO of Open AI, on the show yesterday there 0:03:32.000 --> 0:03:34.560 is a talent war, and a net result of talent 0:03:34.639 --> 0:03:37.080 war is usually you've got to pay more, either in 0:03:37.160 --> 0:03:39.720 cash or in stock. What's your data telling you. 0:03:41.160 --> 0:03:44.840 Well, certainly for AI roles, we're talking about technical AI roles, 0:03:44.840 --> 0:03:47.560 not just roles that may use AI. For those technical 0:03:47.600 --> 0:03:50.560 AI roles, there's a shortage of supply of workers that 0:03:50.680 --> 0:03:52.880 has been growing. We've seen in LinkedIn data that the 0:03:53.000 --> 0:03:55.920 number of workers who have those technical AI skills has 0:03:55.960 --> 0:03:58.880 been rising and rising rapidly, but it hasn't been able 0:03:58.920 --> 0:04:01.360 to keep up with the demand for these workers. So 0:04:01.400 --> 0:04:04.040 that's driving wages up and companies are going to consider 0:04:04.160 --> 0:04:06.120 other options, right They're also going to look for other 0:04:06.160 --> 0:04:08.680 places like Brazil and India where can they find these 0:04:08.680 --> 0:04:11.520 workers with these technical skills in order to build AI 0:04:11.560 --> 0:04:15.800 tools in house to foster productivity and innovation, but also 0:04:15.960 --> 0:04:17.960 managed to keep some control on their costs. 0:04:18.240 --> 0:04:21.800 Interesting we're hearing of course that ultimately immigration is helping 0:04:21.920 --> 0:04:24.719 keep down that wage inflation pressure. That's happening here in 0:04:24.720 --> 0:04:27.080 the United States as well. I wonder how many of 0:04:27.120 --> 0:04:30.240 those are coming into the tech sector. Is their talent 0:04:30.320 --> 0:04:32.000 coming in from abroad at the moment, do you think? 0:04:32.000 --> 0:04:32.240 Coy? 0:04:34.040 --> 0:04:36.360 So right now we're not seeing a ton of talent 0:04:36.440 --> 0:04:39.880 coming into the tech sector, but we are seeing a 0:04:39.920 --> 0:04:43.240 recovery from the pandemic. So the pandemic really knocked off 0:04:43.320 --> 0:04:47.599 a lot of movement within the tech sector, and we're 0:04:47.600 --> 0:04:50.039 starting to see those numbers come back up. 0:04:50.400 --> 0:04:50.560 Now. 0:04:50.600 --> 0:04:52.920 There is a gap that was created by the workers 0:04:52.920 --> 0:04:56.039 who didn't come in twenty twenty twenty twenty one, and 0:04:56.120 --> 0:04:58.920 so we're still not there in terms of making up 0:04:58.960 --> 0:05:01.640 the gap for those works, but it's starting to come 0:05:01.680 --> 0:05:04.240 back at a level at a pace that can help 0:05:04.279 --> 0:05:05.280 support that sector. 0:05:05.920 --> 0:05:08.520 What about diversity, I mean, this is something that we 0:05:08.640 --> 0:05:11.159 always need to keep a track on that ultimately the 0:05:11.200 --> 0:05:14.440 disparity in wages that are going to people to color 0:05:14.520 --> 0:05:16.760 versus white workers, women versus men. 0:05:16.920 --> 0:05:18.640 How are the demographics shaking out at the moment. 0:05:20.160 --> 0:05:22.800 So one thing we've actually recently seen at LinkedIn, we've 0:05:22.800 --> 0:05:25.880 done an analysis that says when the labor market slows down, 0:05:25.960 --> 0:05:29.039 we see less women hired into leadership and that's not 0:05:29.279 --> 0:05:32.200 a situation where less women are applying for leadership. When 0:05:32.240 --> 0:05:35.200 the labor market slows down, they're applying more, but they're 0:05:35.279 --> 0:05:37.880 less likely to make their way into the top levels 0:05:37.880 --> 0:05:40.560 of leadership. So as the labor market slows down, it's 0:05:40.680 --> 0:05:44.359 very clear that everyone is disproportionately impacted. For example, the 0:05:44.400 --> 0:05:46.760 pandemic wiped out about five years of gains in the 0:05:46.760 --> 0:05:50.600 Black White unemployment gap. So as we continue to see 0:05:50.600 --> 0:05:52.479 some of the air being let out of the labor market. 0:05:52.560 --> 0:05:54.479 Right now, it looks stable, but if we do continue 0:05:54.480 --> 0:05:57.279 to see some air light out as expected until we 0:05:57.279 --> 0:05:59.800 start to see interest rates cut, that is certainly going 0:05:59.800 --> 0:06:01.400 to proportionately impact workers. 0:06:02.000 --> 0:06:05.359 LinkedIn Head of Economics for America's Corey Contenga, it's great 0:06:05.360 --> 0:06:06.520 to have you back on the program. 0:06:06.640 --> 0:06:07.040 Thank you. 0:06:07.320 --> 0:06:10.480 Some important breaking headlines and an update. The FAA says 0:06:10.480 --> 0:06:14.880 there is a ground stop at JFK and Newark Airports. 0:06:14.880 --> 0:06:17.040 In a statement, the FAA says at four point eight 0:06:17.040 --> 0:06:20.760 magnitude earthquake in New Jersey may impact some air traffic 0:06:20.839 --> 0:06:24.640 facilities in New York, New Jersey, but also Philadelphia and Baltimore. 0:06:24.960 --> 0:06:28.359 Air traffic operations are resuming as quickly as possible, and 0:06:28.400 --> 0:06:31.119 for more real time information go to the official channels, 0:06:31.160 --> 0:06:34.080 but we'll keep you posted here on Bloomberg Technology as well. 0:06:34.120 --> 0:06:35.680 I'm one of those people due to fly back to 0:06:35.680 --> 0:06:38.280 the West Coast from one of those airports this afternoon. 0:06:38.320 --> 0:06:41.200 Let's see what happens and also stick with the job 0:06:41.279 --> 0:06:44.200 story for a moment. According to filings with the California 0:06:44.279 --> 0:06:48.159 Employment Development Department, Apple laid off more than six hundred 0:06:48.200 --> 0:06:51.559 employees as part of the decisions to end its car 0:06:51.880 --> 0:06:54.520 and smart watch display projects. More let's go out to 0:06:54.520 --> 0:06:57.640 Bloomberg's Mark German. This is based on the warn notices, 0:06:57.680 --> 0:06:59.560 a really important place to look. 0:06:59.720 --> 0:07:01.800 What ima. 0:07:01.880 --> 0:07:04.520 So we've known about the layoffs for quite some time. Obviously, 0:07:04.560 --> 0:07:07.039 we broke the news in February that the Apple car 0:07:07.080 --> 0:07:10.800 project was being ended, and we also broke the news 0:07:10.800 --> 0:07:13.960 that the Apple micro led display project related to next 0:07:13.960 --> 0:07:17.400 generation Apple watches was being ended. The display project is 0:07:17.480 --> 0:07:19.600 less known, so me explained it for a minute. This 0:07:19.720 --> 0:07:22.320 was an effort where Apple was custom designing its own 0:07:22.400 --> 0:07:25.320 screens for the first time. Typically they relied on designs 0:07:25.320 --> 0:07:28.240 from Samsung, LG, what have you. For the first time, 0:07:28.280 --> 0:07:31.680 they were designing and test building test manufacturing their own 0:07:31.720 --> 0:07:36.400 displays at facilities in Santa Clara in Silicon Valley, California. 0:07:36.480 --> 0:07:41.120 So both of those projects ending. The people are some 0:07:41.200 --> 0:07:42.960 of the people part of the projects being laid off. 0:07:43.000 --> 0:07:45.040 We've known that. Now thanks to the war notices, we 0:07:45.080 --> 0:07:48.320 have a number. The total was six hundred and fourteen 0:07:48.400 --> 0:07:52.240 people right in California. Now the layoffs are actually a 0:07:52.240 --> 0:07:54.480 lot higher than that. There was a big group of 0:07:54.520 --> 0:07:58.040 Apple car employees working out of a secretive facility in 0:07:58.200 --> 0:08:02.160 Arizona outside Phoenix, at an old General Motors facility, and 0:08:02.200 --> 0:08:05.160 then in Asia you had several hundred people also working 0:08:05.200 --> 0:08:08.160 on the display project. So in California, six hundred and 0:08:08.160 --> 0:08:10.960 fourteen people, but the layoffs probably a bit closer to 0:08:11.040 --> 0:08:11.600 one thousand. 0:08:11.840 --> 0:08:12.040 Mark. 0:08:12.080 --> 0:08:13.960 Can you give us the context of what one thousand 0:08:14.080 --> 0:08:17.000 is relative to how many employees Apple has? 0:08:18.280 --> 0:08:22.000 You know, Apple has about one hundred and eighty thousand employees, 0:08:22.040 --> 0:08:24.000 maybe a little bit more, a little bit less than that, 0:08:24.040 --> 0:08:27.080 but that is a rough estimate that that includes both 0:08:27.120 --> 0:08:30.800 corporate and retail employees. On the on the corporate side, 0:08:30.840 --> 0:08:36.160 it's probably closer to seventy thousand employees, right, So a 0:08:36.160 --> 0:08:39.440 couple percentage points of the company. Again, these are not 0:08:39.520 --> 0:08:41.880 the mass layoffs that you've seen from some of the 0:08:41.920 --> 0:08:45.880 other companies in Silicon Valley. We're not talking about ten, eighteen, 0:08:46.040 --> 0:08:49.320 twenty thirty percent here. But still for Apple, this is 0:08:49.559 --> 0:08:52.920 three major rounds of layoffs. And I say major major 0:08:52.960 --> 0:08:55.880 contextually for Apple because they just don't do this right. 0:08:55.920 --> 0:08:59.439 So you had San Diego in January one hundred and 0:08:59.480 --> 0:09:02.520 twenty one people. This was an office where they did 0:09:02.640 --> 0:09:07.240 annotation and testing and improvement to Siri. They offer jobs 0:09:07.280 --> 0:09:10.560 to those people in Texas, but you can probably count 0:09:10.600 --> 0:09:12.440 on one or two hands how many people will be 0:09:12.480 --> 0:09:15.840 moving from San Diego to Texas for this role. And 0:09:15.880 --> 0:09:17.560 so that's one hundred and twenty one people. Then in 0:09:17.559 --> 0:09:21.240 February another six hundred and fourteen people, plus the several 0:09:21.240 --> 0:09:24.320 other one hundred in Asia in Arizona. So it is 0:09:24.400 --> 0:09:26.600 quite notable for Apple that we've come to this point 0:09:26.600 --> 0:09:29.880 where they're killing R and D projects and they're laying 0:09:29.960 --> 0:09:30.520 people off. 0:09:31.040 --> 0:09:33.600 Mar Gooman, we thank you so much for coming on 0:09:33.640 --> 0:09:36.200 in a day where you're meant to be resting. Thank 0:09:36.240 --> 0:09:38.400 you for spilling the means when it comes to Apple. 0:09:38.520 --> 0:09:40.360 We've got some more stocks to watch for. At this moment, 0:09:40.440 --> 0:09:43.200 Paramount currently under pressure. Now this is what we see 0:09:43.200 --> 0:09:46.880 reporting coming from CNBC that sky Dance's unique offer for 0:09:46.960 --> 0:09:49.520 Paramount is a special committee has a company continuing to 0:09:49.559 --> 0:09:50.360 trade publicly. 0:09:50.400 --> 0:09:50.920 But get this. 0:09:51.360 --> 0:09:54.800 Ultimately, the offer coming from Skydance will mean that the 0:09:54.840 --> 0:09:58.959 new ecuity will be dilutive for existing shareholders, but will 0:09:59.000 --> 0:10:01.200 align voting in each economic control in a way that 0:10:01.240 --> 0:10:04.120 hasn't been the case with the Redstone family. Of course, 0:10:04.120 --> 0:10:07.400 this is as we see Skuydoance taking over that Redstone 0:10:07.400 --> 0:10:12.120 Sherry Redstone element of control over Paramount's parent company shares. 0:10:12.240 --> 0:10:15.719 Keep a close eye on this potential deal. We're down 0:10:15.760 --> 0:10:17.439 four and a half percent after a rally yesterday. This 0:10:17.520 --> 0:10:28.680 is Bluemo Technology. Let's just go to another key stock 0:10:28.720 --> 0:10:30.720 that's actually on the move today to the higher side, Meta. 0:10:30.840 --> 0:10:32.640 But this is as the company is actually announcing it's 0:10:32.679 --> 0:10:35.640 changing its artificial intelligence policies. It's going to allow for 0:10:35.720 --> 0:10:39.800 more content generated by AI to remain on its platforms 0:10:40.120 --> 0:10:40.400 for more. 0:10:40.480 --> 0:10:42.400 Let's bring in bluemos Kirk Wagner. 0:10:42.040 --> 0:10:46.320 For ultimately the policy nuance here, they're going to allow it, 0:10:46.400 --> 0:10:47.560 but they'll market. 0:10:48.720 --> 0:10:49.160 That's right. 0:10:49.280 --> 0:10:51.280 So a couple of years ago, they came out with 0:10:51.280 --> 0:10:54.400 this manipulated media policy which basically said, you know, if 0:10:54.400 --> 0:10:57.400 someone uploads a video that makes it look like you, Caroline, 0:10:57.440 --> 0:10:59.480 are saying something you didn't actually say, it's been AI 0:10:59.559 --> 0:11:02.480 generated to sort of mislead people, that they would take 0:11:02.520 --> 0:11:04.959 that down. And now what they're saying is they're going 0:11:05.000 --> 0:11:06.360 to leave it up, but they're going to label it. 0:11:06.559 --> 0:11:08.760 And the idea being that if those types of videos 0:11:08.760 --> 0:11:12.000 do not violate a different rule within the company, if 0:11:12.000 --> 0:11:15.080 the only sort of you know, issue is that it 0:11:15.120 --> 0:11:17.440 was AI generated, they're going to leave it up even 0:11:17.440 --> 0:11:19.280 if it is misleading. Now, these things could still be 0:11:19.320 --> 0:11:21.720 fact checked, right, so there's a couple different ways that 0:11:21.760 --> 0:11:25.079 the company could sort of label these as AI generated 0:11:25.160 --> 0:11:27.360 or misleading, but they are going to lead them up 0:11:27.400 --> 0:11:28.360 instead of taking them down. 0:11:29.000 --> 0:11:34.080 Kut. How does this differ from others, Well, you know. 0:11:34.400 --> 0:11:36.520 X as we've seen, has sort of they have a 0:11:36.559 --> 0:11:40.000 manipulated media policy as well, but it doesn't not necessarily 0:11:40.080 --> 0:11:42.520 convinced that they're able to enforce these things in the 0:11:42.520 --> 0:11:45.160 way that they say they are. You know, we've seen 0:11:45.160 --> 0:11:48.360 this happen with the twenty twenty election. We saw some 0:11:48.520 --> 0:11:51.880 manipulated videos and audio show up. We've already heard complaints 0:11:51.920 --> 0:11:54.400 that this might be an issue for twenty twenty four, right, 0:11:54.440 --> 0:11:56.800 So the reason we're following this news and why these 0:11:56.800 --> 0:11:58.920 policies matter, of course, even if it is a small 0:11:59.040 --> 0:12:01.880 number of actual post hosts that are impacted, it's that 0:12:02.000 --> 0:12:04.360 those posts could be you know, shared by President Trump, 0:12:04.400 --> 0:12:08.000 President Biden, major campaigns are that are trying to influence 0:12:08.000 --> 0:12:10.360 this election, and so it's important that the company figure 0:12:10.400 --> 0:12:12.239 this out before twenty twenty four happens. 0:12:12.679 --> 0:12:15.360 Okay, And this does come into such a political context, 0:12:15.360 --> 0:12:17.280 It comes in such context at the moment of just 0:12:17.360 --> 0:12:20.760 generative AI being the flavor de jure. And are we 0:12:20.920 --> 0:12:25.600 seeing ultimately companies having to front run politicians and indeed 0:12:25.640 --> 0:12:26.800 regulatory change at this. 0:12:28.360 --> 0:12:31.720 We are because there is no regulatory framework for how 0:12:31.760 --> 0:12:36.439 these companies shouldn't moderate AI posts, but specifically generative AI. 0:12:36.679 --> 0:12:39.360 And so we've seen Nick Klegg at Meta come out 0:12:39.360 --> 0:12:41.880 publicly several times already in the last couple months and 0:12:41.920 --> 0:12:45.679 say we need rules, We need you know, government and 0:12:45.720 --> 0:12:48.120 regulators to basically come in and put some guardrails on 0:12:48.120 --> 0:12:50.800 this thing, because otherwise it's up to the companies themselves 0:12:50.800 --> 0:12:53.240 and Meta you know, to its credit, is trying to 0:12:53.280 --> 0:12:55.560 be proactive, or at least that's what they seem to 0:12:55.559 --> 0:12:59.120 be doing. But you know, unless there's anybody holding them accountable, 0:12:59.160 --> 0:13:02.480 holding you Tube and X and other platforms accountable, it's 0:13:02.520 --> 0:13:05.800 just everyone for themselves here. And so you know they 0:13:05.800 --> 0:13:09.480 are doing this proactively because there is no framework from 0:13:09.520 --> 0:13:11.040 the US or other governments. 0:13:11.080 --> 0:13:13.080 Really, Wagner, we thank you. 0:13:20.880 --> 0:13:22.599 Welcome back to Bloomberg Technology. 0:13:22.679 --> 0:13:23.320 I'm ed LOVEO. 0:13:23.480 --> 0:13:24.480 I'm Caroline Hyde. 0:13:24.600 --> 0:13:25.840 Okay, a quick update. 0:13:25.960 --> 0:13:29.920 An earthquake rattled northern New Jersey on this morning, shook 0:13:29.960 --> 0:13:33.400 building offices in Manhattan, and was felt on Long Island 0:13:33.480 --> 0:13:37.280 and in New York's Hudson Valley. Preliminary reports say it's 0:13:37.320 --> 0:13:41.040 a four point seven magnitude tremor. New York Governor Kathi 0:13:41.120 --> 0:13:44.800 Hokel posting about the quake, saying her team's assessing impact 0:13:45.080 --> 0:13:49.480 and damage. Headlines also out that President Biden has been briefed. 0:13:49.640 --> 0:13:50.240 Caroline. 0:13:50.440 --> 0:13:52.959 You local San Franciscans are just going like, what are 0:13:52.960 --> 0:13:53.880 they worrying about? 0:13:54.400 --> 0:13:55.080 Ed, what have you got? 0:13:55.320 --> 0:13:57.240 Okay, check this out for a second. 0:14:00.600 --> 0:14:04.480 So it looks like I'm not the only Bay Area 0:14:04.559 --> 0:14:07.600 local spending some time in New York City this week. 0:14:07.640 --> 0:14:10.800 That was Levi CEO Michelle Gas ringing the bell at 0:14:10.800 --> 0:14:13.760 the New York Stock Exchange earlier today, just days after 0:14:13.760 --> 0:14:18.160 the company reported earnings, but also of significant milestone or 0:14:18.160 --> 0:14:23.400 anniversary since the IPO five years interesting lifting EPs forecast 0:14:23.440 --> 0:14:26.320 for the full year, reporting adjusted knit income for the 0:14:26.320 --> 0:14:31.280 first quarter that beats estimates discipline cost cutting. There's a 0:14:31.280 --> 0:14:34.080 bigger story out there, and it's Beyonce. Delighted to say 0:14:34.520 --> 0:14:37.040 that Levi Michelle Gas joins us on set. 0:14:37.280 --> 0:14:39.640 Thanks for having me, ed carolinem thrilled to be here. 0:14:39.840 --> 0:14:43.280 I think we should just get right to Beyonce. To 0:14:43.360 --> 0:14:46.160 those who are living under a rock or perhaps didn't 0:14:46.160 --> 0:14:50.200 see it, Beyonce dropped the track list first for her 0:14:50.240 --> 0:14:53.760 new album. One of the titles was Levi Eyes Jeans. 0:14:53.760 --> 0:14:57.280 There was next Trye in there. That must be quite 0:14:57.320 --> 0:14:58.600 a boost you got this week. 0:14:58.960 --> 0:15:01.200 Well, I mean, let me just we are just so 0:15:01.360 --> 0:15:05.240 honored that someone like Beyonce, who is a global icon 0:15:05.320 --> 0:15:07.160 of a culture shaper, would. 0:15:07.080 --> 0:15:08.440 Name a song after us. 0:15:09.160 --> 0:15:11.880 Completely organic by the way, ed so, but. 0:15:11.800 --> 0:15:13.320 We will hold it on. What do you mean by 0:15:13.360 --> 0:15:14.560 completely organic? 0:15:14.600 --> 0:15:16.360 That we didn't have anything to do with her? 0:15:16.440 --> 0:15:17.960 Naming a song after us. 0:15:18.040 --> 0:15:20.160 Yeah, but that being said. 0:15:20.080 --> 0:15:22.040 I will say, I mean to me, you know, one 0:15:22.080 --> 0:15:24.160 of the things that's so critical about Levi's. I mean, 0:15:24.200 --> 0:15:28.240 we've been around for one hundred and seven years, deep heritage, authenticity, 0:15:28.440 --> 0:15:30.840 but it's so important that we remain at the center 0:15:30.880 --> 0:15:34.520 of culture. Right We're very We're a very inviting brand. 0:15:34.600 --> 0:15:38.000 We resonate with so many different people to be at 0:15:38.000 --> 0:15:41.760 that center of culture and have that youthfulness and relevance. 0:15:42.280 --> 0:15:44.920 And there's no better testament to being at the center 0:15:44.960 --> 0:15:47.720 of culture to have someone like Beyonce actually on her 0:15:47.760 --> 0:15:49.200 own name a song after us. 0:15:49.480 --> 0:15:52.520 So we are just thrilled. Has that done two sales 0:15:52.560 --> 0:15:53.720 in the last week or so? 0:15:53.800 --> 0:15:55.480 Can you get so it's so you know, so so 0:15:55.680 --> 0:15:58.000 very early, But I think it's it's part of I 0:15:58.000 --> 0:16:00.400 think the bigger thing that's happening right now is Levi's 0:16:00.480 --> 0:16:03.240 is having a great moment. I mean, you just mentioned 0:16:03.280 --> 0:16:05.560 we were so pleased to start the year off so strong, 0:16:05.720 --> 0:16:10.920 exceeding expectations inside and externally, but underneath that a lot 0:16:10.960 --> 0:16:15.040 of goodness. The denim category, after some volatility the last 0:16:15.040 --> 0:16:18.000 couple of years, has stabilized. We're expecting the category to 0:16:18.040 --> 0:16:21.600 grow globally in the mid single digits. Importantly, Levi's is 0:16:21.640 --> 0:16:24.040 growing share, so in the US we're going share with 0:16:24.160 --> 0:16:28.120 men's and women's, with youth, with the middle income consumer, 0:16:28.160 --> 0:16:29.920 which is a great bell weather to the health of 0:16:29.920 --> 0:16:33.160 the consumer. And you know, as we think about our 0:16:33.200 --> 0:16:36.680 business kind of driving that optimism, I'd first say it's 0:16:36.680 --> 0:16:40.720 our direct to consumer that business up now for eight 0:16:40.800 --> 0:16:45.080 consecutive quarters, up eight percent. And also what's driving that 0:16:45.280 --> 0:16:48.360 is what's happening in Denham, Like Levi's is having a moment, 0:16:48.560 --> 0:16:52.440 Denim's having a moment. Head to toe denim dressing. We're 0:16:52.560 --> 0:16:55.760 leading in trends. So as we think about our men's 0:16:55.760 --> 0:16:59.880 and women's business, loose fits, baggy fits up forty percent, 0:17:00.440 --> 0:17:05.439 our tops are exceeding expectations, dresses skirts, denim skirts are 0:17:05.560 --> 0:17:06.280 triple digits. 0:17:06.359 --> 0:17:08.600 So really, when you look underneath the. 0:17:08.600 --> 0:17:10.399 Hood, there is a lot of great things to be 0:17:10.440 --> 0:17:13.000 excited about. Hence why we raised expectations for the year. 0:17:13.040 --> 0:17:14.760 And there's a lot to be said for the plans 0:17:14.800 --> 0:17:17.000 that you've put in place. Now, you say that you 0:17:17.040 --> 0:17:19.200 had nothing to do with Beyonce's naming of a song, 0:17:19.200 --> 0:17:21.560 but actually Levi's did back in the day because they 0:17:21.560 --> 0:17:23.960 were one of the only key brands that would affiliate 0:17:24.000 --> 0:17:26.960 themselves with Destiny's child, and so ultimately she comes from 0:17:26.960 --> 0:17:28.480 this place of authenticity. 0:17:28.600 --> 0:17:30.040 You come from a place of leveraging it. 0:17:30.040 --> 0:17:32.480 From an influencer perspective, we see how you read brand 0:17:32.880 --> 0:17:35.919 the Instagram handle for the day to be a double eye. 0:17:36.320 --> 0:17:38.840 What do you therefore do with the director consumer sort 0:17:38.880 --> 0:17:41.800 of online element of this because I now buy my 0:17:41.880 --> 0:17:44.560 Levi's via Amazon. How much have you been we're a 0:17:44.560 --> 0:17:46.639 tech show. How much has technology been where it's. 0:17:46.520 --> 0:17:46.919 At for you? 0:17:46.960 --> 0:17:49.600 No, I think that's great. I mean testaments who are 0:17:49.600 --> 0:17:52.960 really talented marketing and social media time team women. When 0:17:52.960 --> 0:17:56.000 that happened, instantly they got after it and to your point, 0:17:56.080 --> 0:17:58.880 leveraged that branding and social media. And we've had over 0:17:58.920 --> 0:18:00.680 a billion impressions since they. 0:18:00.600 --> 0:18:01.720 Got after that that day. 0:18:01.840 --> 0:18:04.840 Just to give you a sense, but peeing direct to 0:18:04.880 --> 0:18:08.480 consumer is really omnichannel. If you think about our e 0:18:08.520 --> 0:18:11.040 commerce business that was up with double digits on top 0:18:11.080 --> 0:18:12.600 of double digits, I mean that. 0:18:12.560 --> 0:18:13.600 Business is on fire. 0:18:13.840 --> 0:18:16.479 But it's all connected. And as we connect with our 0:18:16.520 --> 0:18:21.720 consumer online and our stores, all ships raise and you 0:18:22.320 --> 0:18:23.440 made a commona Amazon. 0:18:23.640 --> 0:18:24.480 We want people to. 0:18:24.400 --> 0:18:27.280 Buy Levi's wherever they want to. I mean, we love 0:18:27.320 --> 0:18:29.639 it when they're engaging in the store because they can 0:18:29.680 --> 0:18:31.600 see the full expression, right, they can see all. 0:18:31.520 --> 0:18:32.159 The new fits. 0:18:32.280 --> 0:18:35.360 Our talented stylists can help them find their next favorite 0:18:35.359 --> 0:18:37.240 pair of jeans or the next great top that goes 0:18:37.240 --> 0:18:39.440 with it. But you know, as many. 0:18:39.200 --> 0:18:39.679 Stores you will. 0:18:39.680 --> 0:18:42.160 We have three thousand stores now globally, a thousand which 0:18:42.200 --> 0:18:44.760 are company owned and operated, and we're intending to build 0:18:44.760 --> 0:18:47.560 a lot more one hundred Net News stores this year. 0:18:47.720 --> 0:18:50.359 One of which, by the way, is that we're relocating 0:18:50.640 --> 0:18:53.280 at the Champs des Age just in time for the Olympics. 0:18:53.600 --> 0:18:56.320 It's going to be a beautiful store this summer before 0:18:56.359 --> 0:18:59.439 the Olympics. And so we'll have those flagships stores, but 0:18:59.480 --> 0:19:01.399 lots of store that are coming into neighborhoods. But we're 0:19:01.440 --> 0:19:04.000