WEBVTT - Microsoft and Amazon Downsize Staff 0:00:12.880 --> 0:00:15.360 And Caroline hired at Bloomberg's world headquarters in New York 0:00:15.720 --> 0:00:19.320 and Imed Ludlow in San Francisco. This is Bloomberg Technology 0:00:19.440 --> 0:00:22.360 coming up. Tens of thousands more tech employees are out 0:00:22.360 --> 0:00:25.760 of a job after Microsoft and Amazon start downsize today 0:00:26.079 --> 0:00:29.800 as employers reduced headcount. Is the pandemics moment of worker empowerment? 0:00:29.960 --> 0:00:35.120 Over and universities in Texas are taking action against TikTok, 0:00:35.240 --> 0:00:39.080 with Texas A and M and Texas University reportedly blocking 0:00:39.120 --> 0:00:41.640 the app from its WiFi networks as part of the 0:00:41.640 --> 0:00:45.400 governor's orders. Could this be the start of a greater trend? 0:00:45.920 --> 0:00:49.000 And do you want one of Twitter's officers neon signs 0:00:49.280 --> 0:00:52.159 or a white board or a giant refrigerator. Twitter has 0:00:52.200 --> 0:00:55.680 resorted to auctioning office items will show you what was 0:00:55.760 --> 0:00:58.760 up for grabs. But first we want to talk about 0:00:58.800 --> 0:01:01.560 one of the key issues that off sometimes bring, certainly 0:01:01.600 --> 0:01:06.199 for plenty of chief technology and chief security officers, because 0:01:06.240 --> 0:01:09.319 there are security concerns around all of this. Disgruntled workers 0:01:09.319 --> 0:01:12.120 for examples, maybe they take corporate secrets with them when 0:01:12.120 --> 0:01:14.320 they get laid off, or maybe they get a bit 0:01:14.360 --> 0:01:17.240 careless about them. Margie Murphy has a great story on 0:01:17.280 --> 0:01:19.280 all of this, and just tell us a little bit, Margy, 0:01:19.360 --> 0:01:22.640 about how companies are starting to prepare themselves as they 0:01:22.680 --> 0:01:24.720 know they're going to make layoffs. How do they ensure 0:01:24.800 --> 0:01:28.560 that the data that they have remained secure. Yeah, it's 0:01:28.600 --> 0:01:31.360 a real problem because around the time that layoffs are happening, 0:01:31.400 --> 0:01:34.559 obviously everyone's trying to tighten their belt, and that's when 0:01:34.680 --> 0:01:38.000 security budgets might be cut a little bit. But companies 0:01:38.040 --> 0:01:40.520 are looking at things like new software that's around to 0:01:40.640 --> 0:01:46.600 track whether employees are are using data exfiltration methods um. 0:01:46.640 --> 0:01:49.320 And they're also trying really hard to just give out 0:01:49.360 --> 0:01:52.280 the messaging and reminding people that things that they're working 0:01:52.280 --> 0:01:55.920 on belong to the company, not to themselves. Um I 0:01:55.960 --> 0:02:01.040 mentioned data exfiltration, and that's when people toward emails to 0:02:01.080 --> 0:02:03.960 their personal accounts or maybe a copy and paste of 0:02:04.040 --> 0:02:08.600 spreadsheet with contact details or client contracts, and that puts 0:02:08.639 --> 0:02:11.639 companies at risk of obviously losing business if that person 0:02:11.720 --> 0:02:14.880 takes that with them to another company, but also regulatory 0:02:14.919 --> 0:02:19.079 and confidentiality issues as well, Margie, we we've got to 0:02:19.080 --> 0:02:22.280 ask ourselves why we're discussing this story. Fantastic work in 0:02:22.320 --> 0:02:26.280 business Week magazine and an analysis of what happens when 0:02:26.280 --> 0:02:30.480 we hear about jobs being cut layoffs in the technology 0:02:30.480 --> 0:02:33.040 industry to the tunes of thousands, the kind of the 0:02:33.080 --> 0:02:35.440 anecdote that you guys uses coin based right when it 0:02:35.440 --> 0:02:40.800 announced its layoffs and Brian or Armstrong basically explaining that 0:02:40.880 --> 0:02:44.640 by the end of the day, UH employees would receive 0:02:45.200 --> 0:02:49.320 notifications their personal email addresses, and it was very abrupt 0:02:49.320 --> 0:02:50.880 and he said, look, we kind of have to do 0:02:50.919 --> 0:02:54.400 this because our customer information is key. We have to 0:02:54.440 --> 0:02:58.959 protect that customer data. What kind of serious steps have 0:02:59.080 --> 0:03:01.600 you report it on that companies are taking to kind 0:03:01.600 --> 0:03:04.520 of safeguard themselves and their customers when they go through 0:03:04.520 --> 0:03:07.840 a random lyoffside this. Well, yeah, as you mentioned the 0:03:08.320 --> 0:03:10.600 case with coin base, it was, you know, employees were 0:03:10.639 --> 0:03:13.960 waking up to already having their email shut off, which 0:03:14.200 --> 0:03:18.280 sounds incredibly callous and was criticized, you know for kind 0:03:18.320 --> 0:03:21.160 of having lacking that personal touch to realize that you've 0:03:21.160 --> 0:03:24.079 been completely wiped from a company. But more and more 0:03:24.120 --> 0:03:26.360 companies are having to do this because the risk is 0:03:26.400 --> 0:03:29.360 just so high. It's so easy for employees to just 0:03:29.400 --> 0:03:32.080 simply forward an email, you know, they if they've got 0:03:32.160 --> 0:03:35.560 a few hours left, they'll just be kind of sending 0:03:35.640 --> 0:03:39.760 stuff to to their own personal gmails and not. You know, 0:03:39.840 --> 0:03:42.320 you've got some people who are obviously irritated that they're 0:03:42.320 --> 0:03:46.040 fired and maybe want to do something really kind of 0:03:46.080 --> 0:03:48.320 bad with that and leak it. But often people don't 0:03:48.360 --> 0:03:51.160 even realize that what they're doing is it is against 0:03:51.160 --> 0:03:54.240 their employment contract, and they simply want to kind of 0:03:54.440 --> 0:03:57.360 better themselves and then next employment because they're scared they've 0:03:57.400 --> 0:04:01.040 they've just been let go. Um. But largely we're seeing 0:04:01.080 --> 0:04:04.160 companies just really cracked down and shut down from the 0:04:04.240 --> 0:04:09.040 minute people are being laid off and being very very cold, 0:04:09.120 --> 0:04:13.960 I guess, but but extremely secure just because the risks 0:04:13.960 --> 0:04:16.839 are so high. We've seen issues with coin Base, um, 0:04:16.880 --> 0:04:19.760 you know, it had that an employee was accused of 0:04:19.800 --> 0:04:23.400 insider trading because they were sharing some information. That was 0:04:23.400 --> 0:04:29.400 the famous case with Waymo, which was Google's driverless car 0:04:29.640 --> 0:04:35.200 arm Anthony Levandarsky he famously went to ub was defected 0:04:35.680 --> 0:04:38.840 and he took company's secrets with him and it was 0:04:38.880 --> 0:04:43.760 an extremely long court case and had serious ramiflications for Google. 0:04:44.520 --> 0:04:48.760 So the stakes are really really high, alright, Bloomberg Margie 0:04:48.800 --> 0:04:52.400 Murphy just terrific reporting on air and also in business. 0:04:52.400 --> 0:04:55.200 We check out that story on Bloomberg dot com. Now, 0:04:55.240 --> 0:04:58.920 as we've been discussing, Amazon and Microsoft are laying off 0:04:59.080 --> 0:05:01.720 some of their work force. This is part of a 0:05:01.760 --> 0:05:04.440 wider wave of job cuts that are hitting the tech 0:05:04.520 --> 0:05:07.680 industry right now, already facing of course, the chance of 0:05:07.720 --> 0:05:11.200 recession globally. Here's what some of our guests across Bloomberg 0:05:11.200 --> 0:05:16.440 Television have been talking about. We've not been positive on 0:05:16.560 --> 0:05:18.560 Big Deck for I don't know a year, a year 0:05:18.640 --> 0:05:21.360 and a half. We do believe that there is still 0:05:21.400 --> 0:05:23.880 some deflation to come out of this market after the 0:05:23.920 --> 0:05:26.480 exuberence of twenty one. I actually think that the tech 0:05:26.520 --> 0:05:29.239 sector is one of the few sectors that is really 0:05:29.279 --> 0:05:33.520 discounting a recession in its outlook. The longer the macro 0:05:33.600 --> 0:05:36.520 volatility persists, we do expect early stage and seed to 0:05:36.960 --> 0:05:39.280 start to see that crunch that the late stages is 0:05:39.320 --> 0:05:40.719 seen right now, and there is going to be some 0:05:40.760 --> 0:05:44.800 amount of normalization of the demand. Uh. Quite frankly, we 0:05:44.920 --> 0:05:47.400 in the tech industry will also have to get efficient, right. 0:05:47.400 --> 0:05:49.919 It's not about everyone else doing more with less. We 0:05:49.960 --> 0:05:53.280 will have to do more with less. All right, So 0:05:53.360 --> 0:05:56.400 let's bring in Bloomberg's Austin car who has been writing 0:05:56.400 --> 0:05:59.720 about why behind the job cuts, and you heard their 0:05:59.720 --> 0:06:02.040 auster and from a rural range of names across venture 0:06:02.080 --> 0:06:06.800 capital public markets also sat in Adela on why we're 0:06:06.839 --> 0:06:10.520 seeing these layoffs in the technology industry. Rapp all of 0:06:10.600 --> 0:06:13.400 this together, because you've been writing about this also in 0:06:13.440 --> 0:06:17.480 Business Week. So what we saw over the last year 0:06:17.560 --> 0:06:20.080 or two was just as one of those analysts had 0:06:20.120 --> 0:06:23.120 noticed at this exuberance coming out of the COVID nineteen pandemic, 0:06:23.200 --> 0:06:26.120 where the tech sector, more than any other industry, had 0:06:26.120 --> 0:06:30.600 really bet big on this new revenue acceleration being permanent. 0:06:31.160 --> 0:06:34.320 And we've seen that course correction happened quite harshly in 0:06:34.360 --> 0:06:40.160 more recent days and months, with Amazon and Microsoft announcing 0:06:40.160 --> 0:06:43.400 sort of headline grabbing uh layoffs in the you know, 0:06:43.560 --> 0:06:47.720 ten eighteen thousand range figures. And what's totally remarkable about 0:06:47.800 --> 0:06:49.360 that is how it compares to the rest of the 0:06:49.440 --> 0:06:53.600 US economy. Job cuts in two were actually up and 0:06:53.680 --> 0:06:57.919 the tech sector six compared to the previous year, whereas 0:06:58.000 --> 0:07:00.000 in the rest of the economy was only the layoffs 0:07:00.000 --> 0:07:02.760 we're only up. So what you saw is all these 0:07:02.800 --> 0:07:05.599 tech companies betting huge on that COVID error growth remaining 0:07:05.640 --> 0:07:08.720 and and being a much longer term phenomenon, and we're 0:07:08.720 --> 0:07:10.800 now seeing a sort of big course correction from other 0:07:10.840 --> 0:07:13.760 big tech companies, and only is trying to understand firstly 0:07:13.760 --> 0:07:16.440 whether it's a bell weather, but also also why it's 0:07:16.480 --> 0:07:18.520 not really showing up in the big data at the moment. 0:07:18.520 --> 0:07:21.600 Many hypothesize that these people are highly talented, highly skilled, 0:07:21.600 --> 0:07:24.160 and people still want them in the other industries, so 0:07:24.200 --> 0:07:26.520 they're snapped up very quickly rather than showing up in 0:07:26.560 --> 0:07:29.600 the BLS data for example. But go to also where 0:07:29.600 --> 0:07:32.000 they might add jobs, because I thought that was interesting 0:07:32.000 --> 0:07:35.360 from SATI in a data and Amazon and Microsoft at large, 0:07:35.520 --> 0:07:39.160 they are still going to be hiring in some spaces, right, Well, 0:07:39.160 --> 0:07:41.920 that's the narrative that they sold Walter on this sort 0:07:41.920 --> 0:07:45.320 of high growth, higher risk, big return investments. So they 0:07:45.320 --> 0:07:47.760 can't just stop all of those moonshots that they've been 0:07:47.760 --> 0:07:49.880 investing in for the last couple of years and let 0:07:49.880 --> 0:07:53.720 go of that very high caliber, expensive engineering talent. So 0:07:53.760 --> 0:07:56.520 you're seeing sort of this balance between tech companies trying 0:07:56.520 --> 0:07:58.640 to give off some signal that they're going to be 0:07:58.640 --> 0:08:01.240 a little bit more financially prudent and conservative while not 0:08:01.280 --> 0:08:04.280 giving up on some of those longer term bets. With Microsoft, 0:08:04.280 --> 0:08:06.640 for example, such an Adela saying we're going to double 0:08:06.640 --> 0:08:08.720 down in core businesses, but we're going to continue to 0:08:08.760 --> 0:08:11.760 invest in high growth areas like AI or with Amazon, 0:08:12.080 --> 0:08:15.880 they're seeing layoffs happen in the retail division or in 0:08:15.960 --> 0:08:18.960 some of their devices, sort of the risky or hardware 0:08:18.960 --> 0:08:21.280 bets that they've been making with Alexa Advices. But at 0:08:21.320 --> 0:08:23.800 the same time he's also saying Andy Jassy, the CEO, 0:08:23.920 --> 0:08:25.880 has said we're still going to invest in high growth 0:08:25.880 --> 0:08:29.080 areas like groceries or B two B services, third part 0:08:29.120 --> 0:08:31.480 of party seller markets, So they're really trying to sort 0:08:31.480 --> 0:08:33.960 of balance that that sort of risk and reward. Right now, 0:08:35.480 --> 0:08:37.640 I want to bring up this terminal chart again which 0:08:37.640 --> 0:08:42.120 we showed earlier in the show. Um Amazon's total global 0:08:42.200 --> 0:08:46.240 head count, right so eighteen thousand jobs. It's it's a 0:08:46.280 --> 0:08:50.679 striking headline, but it's one percent of its global workforce. 0:08:50.720 --> 0:08:53.599 And I think there's discussion about this from market participants 0:08:53.600 --> 0:08:56.800 in our in our reporting, right Austin, what does that 0:08:56.880 --> 0:09:00.479 what does that tell us the difference between the headlines 0:09:00.679 --> 0:09:04.360 and the reality and how this period, this economy of 0:09:05.080 --> 0:09:07.320 three might be different to the dot com bubble, even 0:09:07.360 --> 0:09:11.280 the two thousand and eight financial crisis. Yeah, it indicates 0:09:11.280 --> 0:09:13.920 so far that just given how wired big tech is 0:09:14.000 --> 0:09:16.040 into the rest of the global economy, it's a lot 0:09:16.040 --> 0:09:18.480 different than it was during the dot com crash two 0:09:18.480 --> 0:09:21.400 decades ago. Uh. You know, all these companies around the 0:09:21.400 --> 0:09:25.400 world are much more dependent on Silicon Valley software, their hardware, 0:09:25.480 --> 0:09:30.080 their chips, their cloud computing services, their enterprise services as well. 0:09:30.320 --> 0:09:32.480 So it's not the case that as much as these 0:09:32.480 --> 0:09:35.320 headline grabbing numbers are are pretty massive, there's still a 0:09:35.360 --> 0:09:38.840 small percentage of of Amazon's overall workforce, or for Microsoft, 0:09:38.920 --> 0:09:41.000 the ten thousand cuts that they announced, that's I think 0:09:41.000 --> 0:09:43.680 only five percent of their overall workforce. So it's a 0:09:43.679 --> 0:09:46.560 lot smaller. Uh. And it's also in specific areas, at 0:09:46.640 --> 0:09:49.240 least from our sources we're hearing from HR and recruiting 0:09:49.840 --> 0:09:52.439 rather than some of the high, high caliber, expensive talent 0:09:52.480 --> 0:09:55.240 and engineering. They're sort of can double down for their 0:09:55.280 --> 0:09:58.040 core businesses that they want to continue invest in. But 0:09:58.080 --> 0:10:00.640 again it's always that balance. With Mark zucker Burke, he said, 0:10:00.640 --> 0:10:02.439 you know what, we're still going to invest more. We're 0:10:02.440 --> 0:10:04.959 going to reprioritize our adversis, but we're still going to 0:10:05.040 --> 0:10:08.079 make that that bet in engineering talent, our metaverse, which 0:10:08.160 --> 0:10:11.439 is that longer term bet that they're they're making. It's nuanced, 0:10:11.600 --> 0:10:13.320 and you do it so well for us, Austin, thank 0:10:13.360 --> 0:10:16.439 you very much. Indeed, Austin car it's a great read. Meanwhile, 0:10:16.440 --> 0:10:19.280 we'll one sector in technology that's really been letting go 0:10:19.320 --> 0:10:21.320 of a lot of staff is crypto, and in fact, 0:10:21.400 --> 0:10:23.680 crypto firm Genesis is one of those, and it's also 0:10:23.679 --> 0:10:26.840 said it's preparing now we understand for bankruptcy filing as 0:10:26.840 --> 0:10:29.240 early as this week. They're lending unit of Barry Silbert's 0:10:29.240 --> 0:10:33.800 Digital Currency Group. Genesis is in confidential negotiations with various 0:10:33.800 --> 0:10:38.200 creditor groups amid a liquidity crunch. Genesis suspended withdrawals in November, 0:10:38.480 --> 0:10:41.640 soon after ft X men bankrupt course. On Tuesday, Digital 0:10:41.640 --> 0:10:45.000 Currency Group told shareholders that it's suspending quarterly dividends in 0:10:45.040 --> 0:10:48.880 an effort to conserve cash. Coming up, Well, now, what 0:10:49.040 --> 0:10:53.120 access to TikTok at universities in Texas? What impact could 0:10:53.120 --> 0:11:05.760 that ban have? We'll discuss this Blue beg I think 0:11:05.800 --> 0:11:09.439 the national security issue of our time is the technology 0:11:09.480 --> 0:11:13.480 competition with China. We've already seen that around things like 0:11:13.600 --> 0:11:17.480 five G Semiconductors were now looking at issues like new 0:11:17.600 --> 0:11:21.760 energy and synthetic biology because in China we have a 0:11:21.760 --> 0:11:26.040 competitor that's investing at a rate that's commensurate with what 0:11:26.160 --> 0:11:29.640 we're investing. And uh, I'm all for innovation, but I've 0:11:29.640 --> 0:11:36.040 been particularly concerned about TikTok. My fears one TikTok collects 0:11:36.080 --> 0:11:39.360 more information about you as a user than virtually any 0:11:39.360 --> 0:11:44.040 other site around your keystrokes, your facial expressions, and I'm 0:11:44.080 --> 0:11:47.160 horribly afraid that that's being stored somewhere in besion. I'm 0:11:47.200 --> 0:11:51.520 also concerned about it being an ability to manipulate um 0:11:51.559 --> 0:11:55.480 the flow of information to you. I was Senator Mark 0:11:55.559 --> 0:11:59.200 Warner that and look, speaking of TikTok, some universities in Texas, 0:11:59.280 --> 0:12:01.880 like the University of North Texas among others, there are 0:12:01.960 --> 0:12:04.440 said to be blocking access to the video sharing app 0:12:04.440 --> 0:12:08.480 TikTok on its WiFi and wide networks to comply with 0:12:08.600 --> 0:12:12.360 quote Governor Abbot's directive to all state agencies banning employees 0:12:12.400 --> 0:12:15.800 from using or downloading TikTok on all state issued or 0:12:15.840 --> 0:12:19.120 managed devices and environments. That's according to a statement shared 0:12:19.160 --> 0:12:22.080 with Bloomberg. Now, Rumberg's Alex Brinka is here to break 0:12:22.120 --> 0:12:24.200 it all down. And what's so interesting to me, Alex 0:12:24.280 --> 0:12:29.400 is basically the university's front running the rest of the state. Oh, 0:12:29.440 --> 0:12:31.079 I think we've got a technical glitch. We're gonna be 0:12:31.080 --> 0:12:32.720 getting to Alex in a moment. Who's out in l A. 0:12:32.800 --> 0:12:35.800 But ed, first, let's bring in what our audience said, 0:12:35.840 --> 0:12:38.760 because yes, it seems as though we're seeing a front 0:12:38.840 --> 0:12:42.040 running in certain institutions in a state versus the state 0:12:42.040 --> 0:12:45.640 itself and states themselves front running the federal government. But 0:12:45.760 --> 0:12:48.000 we are sked ultimately our audience as to whether this 0:12:48.080 --> 0:12:50.600 is going to make any difference. And well, many seem 0:12:50.640 --> 0:12:52.800 to think VPNs are going to come to the rescue 0:12:52.800 --> 0:12:56.080 in some way. Yeah. Look, there's two sides to this debate. 0:12:56.160 --> 0:12:59.480 Right in Texas, what you see is university is essentially 0:12:59.520 --> 0:13:04.040 public entities enacting the directive from the governor and putting 0:13:04.080 --> 0:13:07.840 that into practice. And that manifests itself by the universities 0:13:08.040 --> 0:13:11.480 not allowing students or anyone on campus to access the 0:13:11.480 --> 0:13:14.840 TikTok app through the WiFi network. Well, they can probably 0:13:14.840 --> 0:13:17.280 still access if they turn off WiFi and use their 0:13:17.280 --> 0:13:20.960 five G network. But it's it's the debate around who 0:13:20.960 --> 0:13:24.080 should be acting on this, because the buying administration and 0:13:24.120 --> 0:13:27.160 the federal government have been leading a security view of 0:13:27.160 --> 0:13:30.960 TikTok and other cyber screty threats for some time. And 0:13:31.000 --> 0:13:33.360 there's the answer, right Carol. For the eight percent of 0:13:33.360 --> 0:13:35.880 the respondents we polled said this isn't going to fix 0:13:35.920 --> 0:13:39.920 anything bank the specifics of not allowing TikTok access on 0:13:40.040 --> 0:13:44.160 campus in Texas universities. But they are following through in 0:13:44.200 --> 0:13:47.240 the governor's directive. They are, And let's get to Alex. Now, 0:13:47.320 --> 0:13:50.440 I think technology issues solved on this technology show. Tell 0:13:50.559 --> 0:13:53.439 us Alex about whether you're surprised that some of these 0:13:53.480 --> 0:13:57.480 institutions are going headlong into these sorts of bands. It 0:13:57.559 --> 0:14:00.400 is a little interesting how they're interpreting this right. They 0:14:00.440 --> 0:14:03.560 actually University of Texas at Austin, for example, doesn't have 0:14:03.600 --> 0:14:06.680 a specific directive to move forward in this um. In 0:14:06.720 --> 0:14:09.760 this way, Texas Tech is waiting until they get more 0:14:09.800 --> 0:14:13.480 guidance from the state. So it's interesting to see Texas, Georgia, 0:14:13.600 --> 0:14:17.520 Alabama really being front footed here. And following along what 0:14:17.600 --> 0:14:21.200 we heard at the top from Senator Warner basically saying, 0:14:21.240 --> 0:14:24.680 we're worried about data sharing on TikTok and potential data 0:14:24.720 --> 0:14:27.080 sharing with the Chinese government, and we're going to lock 0:14:27.160 --> 0:14:31.040 this down now. Ed what you said, um about students 0:14:31.080 --> 0:14:35.560 potentially looking for workarounds accessing TikTok on their cellular data 0:14:35.640 --> 0:14:39.200 and not on the WiFi words band, That's exactly what's happening. 0:14:39.240 --> 0:14:41.080 I've been chatting to folks who are on the ground 0:14:41.240 --> 0:14:43.920 at u T Austin in particular, who have said, look, 0:14:44.000 --> 0:14:46.400 we have other ways we're gonna access this app. I 0:14:46.480 --> 0:14:49.680 use it for entertainment, I use it for educational content. 0:14:50.040 --> 0:14:53.080 So they're on TikTok anyways, even if it's not on 0:14:53.120 --> 0:14:56.080 the WiFi at the university. Yeah. Quite. I think it's 0:14:56.080 --> 0:14:59.200 also an educational issue, right understanding why is this a 0:14:59.280 --> 0:15:02.800 security skin and conveying that to uses of all social 0:15:02.840 --> 0:15:06.080 media platforms. That seems to be what we're hearing from 0:15:06.240 --> 0:15:09.280 users of that particular platform. Bloombergs, Alex Barrinka, thank you 0:15:09.360 --> 0:15:14.640 very much. Now. Cisco CEO Chuck Robbins spoke to Bloombergs, 0:15:14.680 --> 0:15:17.440 David Weston and Davos about tech layoffs, the impact of 0:15:17.480 --> 0:15:20.280 COVID nineteen on the tech sector, but first about their 0:15:20.320 --> 0:15:25.560 investment into software. Have a listen. Well, there's a few 0:15:25.560 --> 0:15:28.720 things we've done. We've added a lot of our cybersecurity 0:15:28.800 --> 0:15:31.440 technology is just pure software, right, I mean, that's just 0:15:31.520 --> 0:15:34.560 the nature of the industry and how we're defending against threats. 0:15:35.320 --> 0:15:38.600 Collaboration is a lot of software. Our web ex portfolio 0:15:38.680 --> 0:15:42.320 and the meeting capability, so those are just natural software 0:15:43.240 --> 0:15:47.480 products that we then also begun to sell subscriptions on 0:15:47.480 --> 0:15:51.320 our hardware platforms, and that's been a transition we started 0:15:51.360 --> 0:15:54.880 back in two thousand, seventeen or eighteen and uh last quarter, 0:15:55.320 --> 0:15:59.480 recurring revenue including software and services represented our business, which 0:15:59.520 --> 0:16:03.080 is significantly different than where we were five, six, seven 0:16:03.120 --> 0:16:06.080 years ago. You mentioned earlier the pandemic and what that did. Intact, 0:16:06.080 --> 0:16:08.960 I didn't change your business, and maybe over the longer term, 0:16:09.000 --> 0:16:11.320 maybe not just over the short term, but we're their 0:16:11.320 --> 0:16:15.480 fundamental shifts in the use of technology that fect Cisco. Well, 0:16:15.480 --> 0:16:19.160 I think it became clear. I really believe that prior 0:16:19.200 --> 0:16:22.240 to the pandemic, every executive believed technology was strategic. Right. 0:16:22.280 --> 0:16:24.520 We've a decade or fifteen years ago, we moved from 0:16:24.520 --> 0:16:28.000 it being an operational productivity driver to really being a 0:16:28.000 --> 0:16:32.680 strategic enabler and a strategic differentiator for our customers. During 0:16:32.680 --> 0:16:36.360 the pandemic, it just elevated. I mean everyone's eyes were 0:16:36.400 --> 0:16:39.920 open as to I mean, we kept the world running 0:16:40.840 --> 0:16:43.240 when everyone was at home, We kept everyone productive, and 0:16:43.240 --> 0:16:45.520 I think no one believed that was possible, including a 0:16:45.560 --> 0:16:47.960 lot of people in tech, and uh, we've never tried 0:16:48.000 --> 0:16:50.080 it before, so doing it at that scale, and I 0:16:50.080 --> 0:16:52.920 think what that did is it gave So I think 0:16:52.920 --> 0:16:56.560 it gave our customers this incredible confidence and investing in 0:16:56.640 --> 0:16:59.360 technology and listening to their teams who are bringing them 0:16:59.400 --> 0:17:02.360 these new, crazy creative projects around what they want to 0:17:02.360 --> 0:17:04.840 do with technology, and they go, well, I've seen this, 0:17:05.080 --> 0:17:06.879 I've seen it work here, so I'm gonna trust you 0:17:06.920 --> 0:17:09.159 and believe you. So I think that's one piece of it. 0:17:09.200 --> 0:17:11.800 And I think from a cultural perspective, I think every 0:17:11.840 --> 0:17:15.640 company's culture was magnified during the pandemic, and I think 0:17:15.680 --> 0:17:18.600 that we'll never go back to the way we were. 0:17:18.640 --> 0:17:22.240 I think, uh, we're gonna operate in environments where employees 0:17:22.800 --> 0:17:25.920 want to have human, authentic conversations, just like we did 0:17:25.920 --> 0:17:27.960 over video while everybody was at home, and so I 0:17:28.000 --> 0:17:30.280 think it changed how we engage with our employees as well. 0:17:30.320 --> 0:17:33.120 Tell you what new crazy creative projects in teach. There's 0:17:33.119 --> 0:17:35.680 a lot of talk around here about open AI, artificial 0:17:35.680 --> 0:17:38.200 intelligence and by the way, quantum computing. I'm not sure 0:17:38.200 --> 0:17:40.240 exactly what those mean, but there's a lot of talk 0:17:40.280 --> 0:17:43.320 about them. Is that going to fundamentally change your business? Well, 0:17:43.359 --> 0:17:46.520 it's we're working on quantum networking today because when you 0:17:46.680 --> 0:17:49.119 have big networks of quantum computers, you have to be 0:17:49.160 --> 0:17:51.840 able to connect them and actually move the bits at 0:17:51.920 --> 0:17:53.960 at rates that are commensurate with the speed of the computers. 0:17:53.960 --> 0:17:55.600 So there's a lot of research that we're engaged in 0:17:55.720 --> 0:17:57.840 right now. So we're in the early days. We have 0:17:57.880 --> 0:18:01.160 team of people doing research on quantum networking, so absolutely 0:18:01.200 --> 0:18:02.639 that will be a part of our business. And then 0:18:02.680 --> 0:18:05.160 these open AI and things like chat, GPT, and then 0:18:05.920 --> 0:18:08.720 that's something that I actually had a conversation with my 0:18:08.760 --> 0:18:11.080 team about and I think it's it's amazing how fast 0:18:11.119 --> 0:18:14.119 it went from sort of being exposed to all of 0:18:14.160 --> 0:18:16.720 a sudden My guess is my next board meeting, we'll 0:18:16.760 --> 0:18:19.800 have a conversation about chat GPT and open AI, and 0:18:20.240 --> 0:18:22.359 we think we're there's lots of great use cases that 0:18:22.400 --> 0:18:25.119 we can leverage that technology for, and there's also a 0:18:25.119 --> 0:18:29.560 lot of uh under probably some understood and some not understood, 0:18:29.920 --> 0:18:34.280 unintended consequences from that technology. Think you'd very fundamentally disruptive. Absolutely, 0:18:35.080 --> 0:18:45.560 I don't think there's any doubt. Want to own a 0:18:45.600 --> 0:18:48.639 piece of Silicon Valley history, Maybe you now do. Because 0:18:48.680 --> 0:18:51.760 Twitter was opening off it's old office supplies at the 0:18:51.880 --> 0:18:54.760 six thirty one lots on offer, and some of them 0:18:54.760 --> 0:18:58.040 went the tens of thousands of dollars, for example, a 0:18:58.080 --> 0:19:01.160 blue Neon light, the Twitter about itself, maybe an apt 0:19:01.240 --> 0:19:03.800 sign that was a planter, all of these going for 0:19:03.920 --> 0:19:07.000 big bucks. The auction house behind it says that this 0:19:07.040 --> 0:19:09.879 isn't actually to secure the financing of Twitter itself, although 0:19:09.920 --> 0:19:13.119 we do know is in a relatively precarious situation at 0:19:13.160 --> 0:19:15.520 least to be paying down debt, and Elon Musk himself 0:19:15.680 --> 0:19:17.560 is or not paying some of the rents over in 0:19:17.600 --> 0:19:21.000 San Francisco. But for now the auction is done, and 0:19:21.040 --> 0:19:25.760 maybe you now have a piece of corporate history and 0:19:25.880 --> 0:19:27.879 you've checked it out, because I think it's stopped the 0:19:27.920 --> 0:19:31.240 auction twenty seven hours long, finished at ten am Pacific time. 0:19:31.280 --> 0:19:34.159 Your time ed right thirty two thousand or there or 0:19:34.200 --> 0:19:37.879 thereabouts for that Neon sign. This is kind of trophy stuff, 0:19:37.920 --> 0:19:40.359 particularly if you work there. So I love that you 0:19:40.480 --> 0:19:43.600 focused on kind of more glitzy, shiny items. What I 0:19:43.640 --> 0:19:47.800 loved was just the endless thumbnails showing tables and chairs 0:19:47.840 --> 0:19:50.159 and if you really wanted, you could buy a full 0:19:50.400 --> 0:19:53.960 office set to furnish your office from Twitter issue. I 0:19:53.960 --> 0:19:56.639 actually know a guy who's been in that building a 0:19:56.680 --> 0:19:59.840 few times, Bloomberg Newses Kurt Wagner, who joins us now. 0:20:00.000 --> 0:20:02.359 Because on top of that news, the report by the 0:20:02.400 --> 0:20:05.920 Information that Twitter's revenue dropped as much as thirty five 0:20:06.000 --> 0:20:10.800 percent last quarter from the same period a year ago. Goss, Twitter, 0:20:11.160 --> 0:20:15.440 You and I we've had a rough two navigating this. 0:20:15.600 --> 0:20:17.800 Let's let's start with the financials and we'll get to 0:20:17.840 --> 0:20:22.320 the furniture. A drop in revenue as reported by the Information, 0:20:23.040 --> 0:20:25.120 I mean, what's happening in sure? Yeah, I mean we've 0:20:25.160 --> 0:20:27.040 been talking about this for a while, right, which is 0:20:27.080 --> 0:20:31.560 that roughly of Twitter's revenue comes from advertising, and if 0:20:31.560 --> 0:20:34.119 you're an advertiser right now, Twitter is a sort of 0:20:34.119 --> 0:20:38.400 a scary place. It's not a comfortable, a safe environment 0:20:38.440 --> 0:20:41.320 to be spending your money. Um, And so I don't 0:20:41.359 --> 0:20:43.080 think any of us are shocked. We've we've seen the 0:20:43.119 --> 0:20:45.720 headlines and news about a lot of these big advertisers 0:20:45.720 --> 0:20:48.200 who are step have stepped back from Twitter, and so 0:20:48.320 --> 0:20:50.399 the reality that this hit them very hard, especially in 0:20:50.440 --> 0:20:52.600 the fourth quarter, when you know a lot of the 0:20:52.640 --> 0:20:55.280 marketing budgets usually come about, is not a super big 0:20:55.320 --> 0:21:00.280 surprise to me. How is Twitter in chief dealing all 0:21:00.320 --> 0:21:03.159 of this because many it sort of commented that the 0:21:03.160 --> 0:21:06.119 tweets coming from Elon Musque have got a little less 0:21:06.720 --> 0:21:08.800 well controversial, shall we say, of late, But how is 0:21:08.840 --> 0:21:10.600 he trying to ensure that people are coming back to 0:21:10.600 --> 0:21:13.920 the platform wanting to advertise for him. Yeah, it does 0:21:14.000 --> 0:21:17.520 seem like he has sort of maybe redirected some of 0:21:17.560 --> 0:21:21.440 his attention, right and and perhaps that means to Tesla. Obviously, 0:21:21.520 --> 0:21:23.200 at the end of the year beginning of this year, 0:21:23.240 --> 0:21:26.359 there was a lot of um frustration from Tesla investors 0:21:26.400 --> 0:21:29.280 that that he was not paying closer attention to the company. 0:21:29.280 --> 0:21:31.600 And so this may just be simply that you know, 0:21:31.720 --> 0:21:33.280 he he got there, He did a lot of the 0:21:33.320 --> 0:21:35.639 budget cuts that he was planned, the layoffs that were planned, 0:21:35.920 --> 0:21:38.120 and now he feels like he can sort of redirect 0:21:38.119 --> 0:21:42.000 attention elsewhere, right, But I think like bringing people back, unfortunately, 0:21:42.000 --> 0:21:44.080 that just takes time and it takes trust if you're 0:21:44.119 --> 0:21:47.040 an advertiser, and I'm not sure that Twitter has really 0:21:47.080 --> 0:21:50.800 earned um the trust back from those big brand marketers. 0:21:51.000 --> 0:21:52.520 And it's probably the kind of thing that will take 0:21:52.560 --> 0:21:54.320 a while and they'll have to watch and say, like, 0:21:54.520 --> 0:21:56.520