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  • Another top Silicon Valley investor is splitting off its China business as pressure mounts | CNN Business

    Another top Silicon Valley investor is splitting off its China business as pressure mounts | CNN Business

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    Editor’s Note: Sign up for CNN’s Meanwhile in China newsletter which explores what you need to know about the country’s rise and how it impacts the world.


    Hong Kong
    CNN
     — 

    GGV Capital, a prominent Silicon Valley venture capital firm, has become the latest big investor to break up its US and China operations into separate companies as tensions between the two countries over tech and geopolitics continue to rise.

    The firm announced Thursday that it would divide its business into two “completely independent” firms with separate new brands, which have not been revealed.

    According to the company, one side will concentrate on North America, Latin America, Europe, Israel and cross-border US-India deals, led by teams in California and New York by managing partners Glenn Solomon, Hans Tung, Jeff Richards and Oren Yunger.

    The other side will focus on China, Southeast Asia and South Asia, run from its headquarters in Singapore, by managing partners Jenny Lee and Jixun Foo.

    GGV’s existing Chinese yuan-denominated funds “will continue to be managed independently” under its Chinese brand, Jiyuan Capital, it said.

    In a statement, the firm attributed the decision to the fact that “over the last decade, the investment landscape has shifted significantly, and the operating environment has become highly complex.”

    “Against these new realities, GGV is also evolving,” it added, without elaborating further.

    The transition is expected to be completed by the end of the first quarter of next year.

    GGV Capital has approximately $9.2 billion in assets under management. The firm is known for backing tech companies around the world, such as Alibaba (BABA), Airbnb (ABNB), Slack, TikTok owner ByteDance and Chinese ride-hailing provider Didi.

    The move comes as US-China tensions continue to affect how businesses operate across the world’s top two economies.

    Last month, the Biden administration announced it would restrict investments by US venture capital and private equity firms, as well as joint ventures, in Chinese artificial intelligence, quantum computing and semiconductors.

    The executive order will exacerbate a slump in deals between the United States and China, and deliver a “major blow” to Chinese startups, analysts and investors previously told CNN.

    Asked whether the US order or wider geopolitical tensions had factored into its decision, GGV Capital declined to comment.

    The firm has recently come under greater scrutiny from US lawmakers.

    In July, a US House committee said it had sent letters to four investment firms, including GGV, “expressing serious concern and demanding information about the firms’ investments” in artificial intelligence, chips and quantum computing companies in China.

    One investment named was a GGV deal with Megvii, an AI developer. The company is best known for its facial recognition software, and has long been accused of human rights violations against Uyghurs and other members of Muslim minority groups in China’s Xinjiang region.

    Megvii was added to a US trade blacklist in 2019 over the issue and previously told CNN that there were “no grounds” for that decision.

    The ongoing pressure has already led other firms to separate their US and Chinese businesses this year.

    In June, top global venture capital firm Sequoia announced a similar decision to cordon off its operations into three entities that cover Europe and the United States; China; and India and Southeast Asia. Its China business will be run independently under its Chinese name, Hongshan.

    Leaders of the Silicon Valley firm said at the time that it had “become increasingly complex to run a decentralized global investment business.”

    In August, Dentons, a leading law firm, also said its China unit would become a standalone legal entity, in response to new Chinese regulations related to data privacy, cybersecurity and capital control.

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  • Biden cancels $72 million in student loan debt for borrowers who went to for-profit Ashford University | CNN Politics

    Biden cancels $72 million in student loan debt for borrowers who went to for-profit Ashford University | CNN Politics

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    Washington
    CNN
     — 

    Even though President Joe Biden’s student loan forgiveness program was blocked by the Supreme Court earlier this year, his administration is moving forward with more targeted student debt cancellations allowed under existing programs.

    The Department of Education said Wednesday that it is canceling $72 million in federal student loan debt for more than 2,300 borrowers who attended the for-profit Ashford University in California.

    Altogether, the Biden administration has approved the cancellation of more than $116 billion of student loan debt for over 3.4 million people – about 1.1 million of whom are borrowers who were misled by a for-profit college and granted relief under a program known as borrower defense to repayment.

    This student debt forgiveness program has been in place for decades and allows people to apply for debt relief if they believe their college misled or defrauded them.

    “My administration won’t stand for colleges taking advantage of hardworking students and borrowers. As long as I am president, we will never stop fighting to deliver relief to borrowers who need it – like those who attended Ashford University,” Biden said in a statement.

    The Department of Education found that Ashford University made “numerous substantial misrepresentations” to borrowers between March 1, 2009, and April 30, 2020. The school is now known as the University of Arizona Global Campus.

    The Education Department’s review was based on evidence presented in court by the California Department of Justice during its successful lawsuit against the school and its parent company at the time, Zovio.

    The court ruled in favor of the state in March 2022, ordering a penalty of more than $22.37 million – which is the subject of an ongoing appeal.

    “As the California Department of Justice proved in court, Ashford relied extensively on high-pressure and deceptive recruiting tactics to lure students,” James Kvaal, the US under secretary of education, said in a press release.

    Borrowers whose debt relief applications have been approved due to this action can expect to receive an email in September. They will not have to make any payments on the loans being discharged when monthly payments resume in October after the expiration of the pandemic-related pause.

    Last year, Biden announced a plan to cancel up to $20,000 of federal student loan debt for low- and middle-income borrowers. The proposal would have forgiven roughly $420 billion for tens of millions of borrowers, but it was knocked down by the Supreme Court and never took effect.

    The Biden administration has been successful in other efforts to provide narrower student debt relief. Not only has it made it easier to apply for debt cancellation under the borrower defense program, but it also expanded eligibility for the Public Service Loan Forgiveness program, which wipes away outstanding debt for public sector workers after they make 10 years of qualifying payments.

    In August, the administration launched a new income-driven repayment plan, known as SAVE (Saving on a Valuable Education), that will reduce monthly payments and the amount paid back over time for eligible student loan borrowers.

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  • 26-year-old tech CEO found dead in Baltimore with signs of blunt-force trauma | CNN Business

    26-year-old tech CEO found dead in Baltimore with signs of blunt-force trauma | CNN Business

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    CNN
     — 

    The Baltimore Police Department has announced an arrest warrant for a suspect wanted for the murder of Pava LaPere, the 26-year-old CEO of startup EcoMap Technologies, who was found dead in a downtown Baltimore apartment Monday with signs of blunt-force trauma to her head.

    Police are looking for 32-year-old Jason Dean Billingsley, Acting Police Commissioner Richard Worley said during a news conference Tuesday.

    Officers responded to a call for service at an apartment complex in the 300 block of West Franklin Street at around 11:34 a.m. Monday, according to Baltimore police. Upon arriving, the officers found LaPere with severe injuries to her head. Police have not released any further information on her death.

    The medical examiner’s office took possession of the body, and an examination is pending, police said.

    Billingsley is wanted for first-degree murder, assault, reckless endangerment and additional charges. He should be considered armed and dangerous, police said.

    “This individual will kill and he will rape. He will do anything he can to cause harm,” Worley warned.

    Baltimore police said they do not believe LaPere and Billingsley knew each other.

    The police did not say how they identified Billingsley as a suspect.

    In a message to Billingsley, Worley urged him to turn himself in. “We will find you, so I would ask you to turn yourself in to any officer, any police station,” he said.

    EcoMap was founded by LaPere and Sherrod Davis while LaPere was a 21-year-old college student at Johns Hopkins, according to EcoMap’s website. With just over 30 employees, the startup is part of the artificial intelligence wave. It sells AI tools, including a customizable chatbot, that aim to make clients’ information easier to access and customer communications more seamless, the company says.

    The company confirmed LaPere’s passing to CNN.

    “With profound sadness and shock, EcoMap announces the tragic and untimely passing of our beloved Founder and CEO, Pava LaPere,” EcoMap said in a statement. “The circumstances surrounding Pava’s death are deeply distressing, and our deepest condolences are with her family, friends, and loved ones during this incredibly devastating time.”

    In August, the company said it had reached nearly $8 million in financing.

    Earlier this year, LaPere was named on the Forbes 30 under 30 list in the social impact category.

    “Pava was not only the visionary force behind EcoMap but was also a deeply compassionate and dedicated leader. Her untiring commitment to our company, to Baltimore, to amplifying the critical work of ecosystems across the country, and to building a deeply inclusive culture as a leader, friend, and partner set a standard for leadership, and her legacy will live on through the work we continue to do,” the company said.

    The CEO of Baltimore-based company Fearless, Delali Dzirasa, served as a mentor to LaPere and remembers her as being a determined leader who was highly regarded across the community.

    “There is no person on planet Earth that could tell Pava that she couldn’t do something,” Dzirasa said. “Even though she was a force, she always made space for other people,” he told CNN.

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  • Illinois passes a law that requires parents to compensate child influencers | CNN Business

    Illinois passes a law that requires parents to compensate child influencers | CNN Business

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    CNN
     — 

    When 16-year-old Shreya Nallamothu from Normal, Illinois, scrolled through social media platforms to pass time during the pandemic, she became increasingly frustrated with the number of children she saw featured in family vlogs.

    She recalled the many home videos her parents filmed of herself and her sister over the years: taking their first steps, going to school and other “embarrassing stuff.”

    “I’m so glad those videos stayed in the family,” she said. “It made me realize family vlogging is putting very private and intimate moments onto the internet.”

    She said reminders and lectures from her parents about how everything is permanent online intensified her reaction to the videos she saw of kid influencers. “The fact that these kids are either too young to grasp that or weren’t given the chance to grasp that is really sad.”

    Nallamothu wrote a letter last year to her state senator, Democrat Dave Koehler, urging him to consider legislation to protect young influencers. Last week, her home state became the first to pass a law that establishes safeguards for minors who are featured in online videos – and how they’re compensated.

    Illinois Gov. J. B. Pritzker on Friday signed a bill, inspired by Nallamothu’s letter, amending the state’s Child Labor Law that will allow teenagers over the age of 18 to take legal action against their parents if they were featured in monetized social media videos and not properly compensated, similar to the rights held by child actors.

    Starting July 1 2024, parents in Illinois will be required to put aside 50% of earnings for a piece of content into a blocked trust fund for the child, based on the percentage of time they’re featured in the video. For example, if a child is in 50% of a video, they should receive 25% of the funds; if they’re in 100%, they are required to get 50% of the earnings. However, this only applies in scenarios during which the child appears on the screen for more than 30% of the vlogs in a 12-month period.

    “We understand that parents should receive compensation too because they have equity in this, but we don’t want to forget about the child,” Koehler told CNN.

    Many YouTube parent vloggers or social media influencers post multiple videos each month or weekly, sharing intimate details about their lives, ranging from family financial troubles and the birth of a new baby to opening new toys or going through a child’s phone or report card. Although children are predominantly featured in these monetized videos, parents have had no legal obligation to give them any portion of the earnings.

    Meanwhile, kid influencer accounts, which can at times earn $20,000 or more for sponsored posts, are typically run by parents and not often set up in the child’s name due to age restrictions on social media platforms.

    “We often see with emerging technology and trends that legislation is always a reaction to that,” Koehler said. “But we know with the explosion of social media that parents are using it to monetize kids being on videos. If money is being made and nothing is set up for the children, it’s the same thing as a child actor.”

    The new law is modeled off of the 1936 Jackie Coogan’s Law, the Hollywood silent actor discovered by Charlie Chaplin whose parents swindled him out of his earnings. That California law required parents to set aside a portion of 15% of child earnings in a blocked trust account that the child actor could access after the age of 18.

    Although similar bills have been proposed in California and Washington, Jessica Maddox — an assistant professor at The University of Alabama who studies the social media influencer community — said she’s hopeful other states will follow in Illinois’ footsteps.

    “Even though Illinois is the first state to pass such a law, this legislation is a long time coming,” Maddox said. “Social media labor and careers are becoming increasingly common and viable forms of income, and it’s important that the law catches up with technology to ensure minors aren’t being exploited.”

    Maddox said it also breathes new life into the long-simmering debate over what is appropriate for parents to document online and whether a child can really consent to participating.

    “I’ve seen organic conversations start to emerge between individuals who had been featured heavily in their parents’ social media content but are now of age to tell their stories and admit that had they really understood what was going on, they would have never consented for their lives to be broadcast for everyone.”

    Chris McCarty — the 19-year-old founder of Quit Clicking Kids, an advocacy and education site to combat the monetization of children on social media, who is helping to develop child influencer legislation in Washington State — believes that as the kids featured in family vlogs grow up and share their stories, there will be an increase in public pressure to provide more privacy protections.

    “When children are slightly older, often the narratives get increasingly personal; for example. detailing trouble with bullies, first periods, doctor’s visits, and mental health issues,” McCarty said. “A lot of consumers assume that children working in a family vlog and child actors have the same experiences. This is not the case. As difficult as it is to be a child actor, child actors are still playing a part rather than having their intimate personal details shared for entertainment and monetary purposes.”

    Nallamothu agrees that the next step is for legislation to evolve over time to include more regulations around consent.

    “I know this bill isn’t going to be perfect off the bat but I don’t want perfection to get in the way of progress because regulations have only started coming up,” she said. “I’m glad it’s getting there.”

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  • 6 takeaways from Apple’s iPhone 15 event | CNN Business

    6 takeaways from Apple’s iPhone 15 event | CNN Business

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    CNN
     — 

    Apple unveiled its iPhone 15 lineup along with other major updates during its September keynote event on Tuesday.

    The company announced it will switch to USB-C charging from its proprietary Lightning charging cable with the iPhone 15, marking a milestone for the company by adopting universal charging. The change aims to ultimately streamline the charging process across various devices — and brands.

    The company also showed off its Apple Watch Series 9 and Ultra 2 smartwatches, with new colors and features including gesture control, and a new iteration of its AirPods Pro wireless earbuds, also with USB-C charging.

    The iPhone charger update, along with changes to its design and camera system, comes as Apple looks to give consumers more reasons to upgrade their iPhones. Last month, Apple’s sales fell for the third consecutive quarter. iPhone revenue came in at $39.7 billion for the quarter, marking an approximately 2% year-over-year decline, as people update their devices less often.

    Apple on Tuesday said it will not raise prices for the iPhone 15 lineup, which could further incentivize users to upgrade.

    Here are the main takeaways from Apple’s Tuesday event:

    The latest iPhones are packed with subtle but significant design changes. To start, the iPhone 15 Pro and iPhone 15 Pro Max now feature a titanium casing, allowing the design to be slimmer and thinner than before.

    Other design changes on the premium models include a more-advanced 48 megapixel main camera with a larger sensor and a new telephoto lens for 5x optical zoom camera, exclusively on iPhone 15 Pro Max. The new Pro models’ design also features contoured edges and a customizable Action button, which gives the ring/silence button additional controls, from starting a voice memo to writing a note.

    Meanwhile, the basic iPhone 15 phones now include updated image stabilization for taking photos and videos, 2x optimization and updated portraits with richer color and better low-light performance. They will also come with the “Dynamic Island” tool – home to alerts, notifications and other controls, in place of the notch – which were previously only available on the iPhone 14 Pro.

    The iPhone 15 lineup also includes an Ultra-Wideband chip to power a handful of new features, including one that makes it easier to find friends who share their location in crowded areas.

    The iPhone 15 comes in 5 colors (white, black, pink, green and yellow) and in two sizes: A 6.1-inch screen for the iPhone 15 and 6.7 inches for iPhone 15 Pro.

    The iPhone 15 will start at $799, and iPhone 15 Pro will start at $999. The iPhone 15 models will be available for pre-order on Friday and for sale in stores on Friday, September 22.

    Perhaps the biggest change coming to the iPhone 15 models is that they will now use a USB-C charging cord, ending an 11-year run with Apple’s proprietary Lightning charging cable.

    Now Apple customers can use the same USB-C chargers to power their iPhones, iPads and Mac computers — no more scrambling to find the right charger for each device. Apple said a dedicated USB-C controller will allow for transfer speeds of up to 20 times faster than with USB-2 technology for the iPhone 15 Pro.

    The new iPhone 15 models will now use a USB-C charging cord, ending an 11-year run with Apple's proprietary lightning charging cable.

    The switch would come less than a year after the European Union voted to approve legislation to require smartphones, tablets, digital cameras, portable speakers and other small devices to support USB-C charging by 2024. The first-of-its-kind law aims to pare down the number of chargers and cables consumers must contend with when they purchase a new device, and to allow users to mix and match devices and chargers even if they were produced by different manufacturers.

    Apple will also sell a $29 USB-C Lightning adapter to let people connect their existing Lightning accessories to a USB-C-enabled iPhone or iPad to charge or share data.

    The company told CNN that iPhone users can recycle their old Lightning chargers via its in-store recycling program.

    Apple Watches are displayed during an announcement of new products on the Apple campus Tuesday, Sept. 12, 2023, in Cupertino, Calif.

    Apple kicked off Tuesday’s event by announcing the new Apple Watch Series 9, which features Apple’s in-house silicon chip and ultrawideband connectivity. The updated Apple Watch will let users log health data with their voice, use “name drop” to share contact information by touching another Apple Watch and raise their wrist to automatically brighten the display. The Series 9 will come in colors such as pink, navy, red, gold, silver and graphite.

    Apple also showed off the second iteration of its rugged Ultra smartwatch line, featuring the updated S9 custom chip and a new UWB chip. It also features more information on the display for more intensive tracking.

    The Apple Watch Series 9 will start at $399 and the Ultra is priced at $799. Customers can place orders today and they will be available on September 22.

    Apple on Tuesday announced the new Watch Series 9, with new gesture controls and improved connectivity.

    Apple is introducing an innovative and unique way to control its new lineup of smartwatches. The Watch Series 9 and high-end Ultra 2 watch will include a new gesture control called Double Tap, allowing allow users to tap their index finger and thumb together twice, to answer or end phone calls, play and pause music, or snooze alarms. The hand gesture can also scroll through widgets, much like turning the digital crown.

    The company said Double Tap is enabled by an enhanced neural engine that processes data from sensors and machine learning, and by monitoring the change in blood flow when two fingers are tapped together. It is available starting next month.

    A similar hand tap will be used to control the Vision Pro mixed reality headset when it launches next year.

    Apple’s next-generation software for the iPhone will be available to download starting on Monday, September 18. In June, the company showed off a slew of new tools coming to iOS 17, such as a more accurate autocorrect, a new feature called Live Voicemail that will transcribe a caller’s message in real time, and a NameDrop tool that lets users share their contact information by holding two iPhones close together. The iPhone’s phone app will also reposition the hang up button to the bottom right of the screen, next to other functions.

    The update will also bring adaptive audio to the AirPods Pro, which will adjust the noise cancellation and volume based on a user’s surroundings, and introduce conversation mode, which customizes the sound of what you’re listening to and softens when you start speaking to someone nearby.

    The iPhone 15 Pro is displayed after its introduction on the Apple campus, Tuesday, Sept. 12, 2023, in Cupertino, Calif.

    Lisa Jackson, Apple’s VP of environment, policy and social initiatives, said that the company’s Watch Series 9 will be Apple’s “first-ever carbon-neutral product,” thanks to efforts to reduce its carbon footprint and to offset emissions with carbon buybacks. She said this has been certified by an independent third-party.

    Doubling down on sustainability initiatives, Jackson also said the tech giant will no longer use leather in any new Apple product, including watch bands.

    Instead of leather, Apple said it will begin using a new textile that it is calling “fine woven.”

    Fine woven will be made of 68% post-consumer recycled content, giving it a significantly lower carbon footprint than leather, Apple said.

    “Beyond expected improved performance and incremental innovation embedded into Apple’s new products, it is great to see Apple communicate on sustainability as a new competitive advantage — especially with Apple’s first carbon neutral products,” Forrester Principal Analyst Thomas Husson said in emailed commentary following the event.

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  • Two brands suspend advertising on X after their ads appeared next to pro-Nazi content | CNN Business

    Two brands suspend advertising on X after their ads appeared next to pro-Nazi content | CNN Business

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    New York
    CNN
     — 

    At least two brands have said they will suspend advertising on X, the platform formerly known as Twitter, after their ads and those of other companies were run on an account promoting fascism. The issue came less than a week after X CEO Linda Yaccarino publicly affirmed the company’s commitment to brand safety for advertisers.

    The nonprofit news watchdog Media Matters for America documented in a report published Wednesday that ads for a host of mainstream brands have been run on the account, which has shared content celebrating Hitler and the Nazi Party.

    Ads for brands including Adobe, Gilead Sciences, the University of Maryland’s football team, New York University Langone Hospital and NCTA-The Internet and Television Association were run alongside tweets from the account that had garnered hundreds of thousands of views, CNN observed.

    Spokespeople for NCTA and pharmaceutical company Gilead said that they immediately paused their ad spending on X after CNN flagged their ads on the pro-Nazi account.

    “We take the responsible placement of NCTA ads very seriously and are concerned that our post about the future of broadband technology appeared next to this highly disturbing content,” NCTA spokesperson Brian Dietz said in a statement, adding that the organization had opted into X’s brand safety measures including keyword restrictions and limiting its ad placement to the “home feed of target audiences.”

    “Brand safety will remain an utmost priority for NCTA, which means suspending advertising on Twitter/X for the foreseeable future and heavily limiting NCTA’s organic presence on the platform,” Dietz said.

    A spokesperson for Gilead said the company will pause its ad spending while X investigates the issue.

    Jason Yellin, University of Maryland’s associate athletic director, expressed concern about the placement of the football team’s post on the account and said Maryland Football has not spent money on advertising on X since 2021, meaning X may have promoted the post despite it not being a paid ad.

    A spokesperson for NYU Langone said in a statement that the hospital was “completely surprised by this and are extremely concerned with any appearance of our advertising and brand next to obviously objectionable content that promotes hatred,” adding that it expects its advertising partners to “act responsibly.”

    X did not immediately respond to a request for comment from CNN. Hours after the Media Matters report was published Wednesday morning and CNN observed additional brands’ ads running on the account, the account appeared to be suspended.

    Adobe did not immediately respond to requests for comment from CNN.

    The issue comes as X has been trying to lure advertisers back to the platform after many left in the wake of Elon Musk’s takeover of the company last fall over concerns about content moderation, mass layoffs and general uncertainty over the platform’s direction. Musk said last month that the company still had negative cash flow because of a nearly 50% drop in its core advertising revenue.

    Yaccarino — who joined the company in June, just ahead of a major rebrand from Twitter to X — told CNBC in her first public interview as chief executive last week that many of the platform’s advertisers have returned and that the company is “close to break-even.” She touted the company’s “freedom of speech, not freedom of reach” policy, which aims to limit the reach of so-called lawful but awful content on the platform and to protect brands from having their ads appear alongside such content.

    X last week said it had rolled out additional brand safety controls for advertisers, including the ability to avoid having their ads show next to “targeted hate speech, sexual content, gratuitous gore, excessive profanity, obscenity, spam, drugs.” In addition to human content moderation reviewers that monitor for content that violates the platform’s rules, X says it has automated software that determines where and how ads are placed on the platform.

    “Your ads will only air next to content that is appropriate for you,” Yaccarino said during last week’s interview.

    But Wednesday’s report suggests that the company still has work to do if it wants to avoid monetizing, and placing ads alongside, objectionable content. “Media Matters and other observers have documented how X has remained a dangerous cesspool of content, especially for advertisers,” Wednesday’s report states. Media Matters says it has also documented instances of brands’ ads being placed next to content from Holocaust denial and white nationalist accounts.

    While she did not publicly comment on the ads appearing alongside pro-Nazi content, Yaccarino did post on X Wednesday that, “Sensitivity Settings is live globally in the X Ads Manager — making it even simpler for all advertisers to find the right balance between reach and suitability.”

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  • Google is laying off hundreds in its recruitment division | CNN Business

    Google is laying off hundreds in its recruitment division | CNN Business

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    New York
    CNN
     — 

    Google confirmed it will lay off hundreds of staff members who helped recruit and hire employees, as Silicon Valley continues its cost-cutting efforts.

    The latest cuts come after Google parent Alphabet in January eliminated 12,000 jobs, or about 6% of its workforce, across the company as it grappled with economic uncertainty that hit the company’s bottom line last year, especially its core advertising business.

    During Google’s July earnings call, CEO Sundar Pichai said the company was continuing to slow its “expense growth and pace of hiring.”

    “We continue to invest in top engineering and technical talent while also meaningfully slowing the pace of our overall hiring,” Google spokesperson Courtenay Mencini said in a statement Wednesday, adding that the workload for recruiters has declined as hiring slows. “To ensure we operate efficiently, we’ve made the hard decision to reduce the size of our recruiting team.”

    The layoffs were earlier reported by Semafor and CNBC.

    The cuts will affect a few hundred members of Google’s recruiting organization globally; most of the team will remain and continue hiring for critical roles such as top engineering talent, according to Google. The company did not specify the exact number of layoffs in the department.

    Google also said the recruiting cuts are not part of any wider layoffs, and that affected employees will be supported with severance offers and other benefits.

    Some Google recruiters for the company’s cloud, user experience, software engineering and other teams posted on LinkedIn, noting they had been affected by the layoffs.

    “My heart is heavy for everyone that was impacted alongside me, and I know better days are ahead for all of us as much as today doesn’t feel like it,” one affected Google recruiter wrote.

    Alphabet grew its workforce by more than 50,000 employees starting in 2021 as booming demand for its services during the pandemic boosted profits. But last year, the company’s core digital ad business slowed as fears of an economic downturn or a recession caused advertisers to pull back their spending.

    This year, the company has emphasized its efforts to cut costs as it works to stabilize its business. Google in July said its profits had grown nearly 15% year-over-year in the quarter ended in June, as the company’s Search and YouTube ads businesses continued to recover.

    As of the end of 2022, Alphabet had 190,234 employees, according to a filing with the Securities and Exchange Commission. By the end of June, its headcount had fallen to 181,798, according to its most recent filing.

    A wide range of other tech companies also made major layoffs this year as they attempt to cut costs amid economic challenges, including Meta, Microsoft and, more recently, T-Mobile.

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  • Epic Games to lay off 16% of its workforce | CNN Business

    Epic Games to lay off 16% of its workforce | CNN Business

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    CNN
     — 

    Epic Games, the maker of Fortnite, said on Thursday that it will lay off 16% of its staff, around 830 employees, as it attempts to reverse what CEO Tim Sweeney called “unrealistic” spending.

    In a letter to employees Thursday, Sweeney said the video game company had been “spending way more money than we earn, investing in the next evolution of Epic.”

    “I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic,” Sweeney said in the letter, which the company shared publicly. He added that Epic plans to divest from the online independent music platform Bandcamp, which it bought last year and which will now be acquired by the music marketplace firm Songtradr. Epic will also spin off most of its marketing division SuperAwesome into a standalone company.

    Epic’s layoffs are just the latest job cuts to hit the tech industry, which was forced to adjust after the stunning growth many companies saw during the height of the Covid-19 pandemic began to slow. Meta, Microsoft, T-Mobile, Lyft and others have all reduced their workforces earlier this year. More recently, Google parent Alphabet made its second round of layoffs of the year, eliminating several hundred recruiting jobs in September after having cut 12,000 employees in January.

    About two-thirds of Epic’s Thursday layoffs will impact employees outside the company’s “core development” teams, Sweeney said. Some laid off workers announced on LinkedIn that they had been affected, including employees working in user experience for Fortnite, production, employee engagement and recruitment.

    Laid off employees will receive a severance offer that includes six months of base pay, accelerated stock vesting and other benefits, according to Sweeney.

    “We’re cutting costs without breaking development or our core lines of businesses so we can continue to focus on our ambitious plans,” Sweeney said. “Some of our products and initiatives will land on schedule, and some may not ship when planned because they are under-resourced for the time being. We’re ok with the schedule tradeoff if it means holding on to our ability to achieve our goals.”

    The Epic layoffs also come amid the latest escalation in a protracted legal battle between the video game company and tech giant Apple. Following a yearslong back-and-forth over an antitrust lawsuit brought by Epic over Apple’s App Store payment practices, both companies have asked the US Supreme Court to review a lower court ruling in the case.

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  • Taiwan’s Foxconn to build ‘AI factories’ with Nvidia | CNN Business

    Taiwan’s Foxconn to build ‘AI factories’ with Nvidia | CNN Business

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    Taipei
    CNN
     — 

    Taiwan’s Foxconn says it plans to build artificial intelligence (AI) data factories with technology from American chip giant Nvidia, as the electronics maker ramps up efforts to become a major global player in electric car manufacturing.

    Foxconn Chairman Young Liu and Nvidia CEO Jensen Huang jointly announced the plans on Wednesday in Taipei. The duo said the new facilities using Nvidia’s chips and software will enable Foxconn to better utilize AI in its electric vehicles (EV).

    “We are at the beginning of a new computing revolution,” Huang said. “This is the beginning of a brand new way of doing software — using computers to write software that no humans can.”

    Large computing systems powered by advanced chips will be able to develop software platforms for the next generation of EVs by learning from everyday interactions, they said.

    “Foxconn is turning from a manufacturing service company into a platform solution company,” Liu said. “In three short years, Foxconn has displayed a remarkable range of high-end sedan, passenger crossover, SUV, compact pick-up, commercial bus and commercial van.”

    Best known as the assembler of Apple’s iPhones, Foxconn envisages a similar business model for EVs. It doesn’t sell the vehicles under its own brand. Instead, it will build them for clients in Taiwan and globally.

    In 2021, Foxconn unveiled three EV models, including two passenger cars and a bus, for the first time. They were followed by additional models last year and two new ones — Model N, a cargo van, and Model B, a compact SUV — during Foxconn’s tech day on Wednesday.

    Its electric buses started running in the southern Taiwanese city of Kaohsiung last year, while its first electric car, sold under the N7 brand by Taiwanese automaker Luxgen, is expected to begin deliveries on the island from January 2024.

    Foxconn has entered a competitive industry.

    Global sales of EVs, including purely battery powered vehicles and hybrids, exceeded 10 million units last year, up 55% from 2021, according to the International Energy Agency. Nearly 14 million electric cars will be sold in 2023, it projected.

    Foxconn, which is officially known as the Hon Hai Technology Group, has been expanding its business by entering new industries such as EVs, digital health and robotics.

    Analysts say its entry into the EV space is a “logical diversification.”

    Smartphones are “a very saturated market already, and the room to grow in the … industry is getting [smaller],” said Kylie Huang, a Taipei-based analyst at Daiwa. “If they can really tap into the EV business, I do think that [they] could become influential in the next couple of years.”

    During last year’s tech day, Liu told reporters that the company hoped to build 5% of the world’s electric cars by 2025. It aims to eventually produce up to 40% to 45% of EVs around the world.

    But its foray into the industry hasn’t been entirely smooth.

    Last year, Foxconn bought a factory from Lordstown Motors in Ohio that used to make small cars for General Motors. That partnership ended in June, with the American car company filing for bankruptcy protection and announcing a lawsuit against Foxconn.

    Lordstown Motors accused Foxconn of “fraud” and failing to follow through on investment promises, while Foxconn dismissed the suit as “meritless” and criticized the company for making “false comments and malicious attacks.”

    Still, it’s clear Foxconn is leaning into its expanded ambitions, including hiring two new chief strategy officers for its EV and chips businesses.

    Chiang Shang-yi is a Taiwanese semiconductor industry veteran who helped TSMC become a global foundry powerhouse, while Jun Seki, a former vice chief operating officer at Nissan Motor, leads the EV unit.

    In May, Foxconn announced a new partnership with Infineon Technologies, a German company that specializes in automotive semiconductor chips, to establish a new research center in Taiwan.

    Bill Russo, founder of Shanghai-based consulting firm Automobility, said Foxconn has the advantage of coming from a consumer electronics background, which could allow it to come up with more innovative EV products compared with traditional automakers.

    “The biggest problem with legacy automakers is that they have so much sunk investment in a carryover platform, that they typically want to start not with a clean sheet of paper, but with a highly constrained set of requirements,” he said. “Those carryover technologies bring constraints to how you think about vehicles.”

    “When Tesla started, it started by saying, ‘I’m going to challenge all of that, I’m going to blow up the basic architecture of a car and simplify it greatly,’” he added.

    “I think that’s the advantage that a technology company has … And I think that’s the way Foxconn will come at this.”

    Hanna Ziady contributed to this report.

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  • Bed Bath & Beyond is back from the dead | CNN Business

    Bed Bath & Beyond is back from the dead | CNN Business

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    New York
    CNN
     — 

    A month after Overstock.com announced it bought Bed Bath & Beyond’s brand out of bankruptcy, the company has dumped its name and morphed its website and app.

    On Tuesday, Overstock’s website relaunched as BedBathandBeyond.com, a move that merges Overstock’s online business model and merchandise categories with popular branded products favored by Bed Bath & Beyond shoppers.

    “All of Overstock’s categories will transition over and new products will also come in,” Jonathan Johnson, CEO of Overstock, said in an interview with CNN.

    The relaunched website touted a “Welcome to a bigger, better beyond” welcome message, offering deals of an extra 15%-20% off bedding, bath and furniture items.

    “Since this deal was announced, we have added over 600,000 new products to the site,” said Johnson, adding that a lot of the new products “are the name-brand products that people have always bought and expected to buy at the old Bed Bath & Beyond.”

    Overstock

    (OSTK)
    , which sells furniture, home furnishings, bath, lighting, rugs and an array of other products online at discounted prices, acquired Bed Bath & Beyond’s name, intellectual property and digital assets in June with a winning bid of $21.5 million for its assets.

    Johnson promised newness blended with familiarity for Bed Bath & Beyond customers in the latest digital-only version of the retailer.

    “It will have the same great bed, bath and kitchen items but it will also have a much bigger beyond,” he said. The “beyond” includes a wider array of linens, cookware and small appliances.

    Fans of Bed Bath & Beyond’s 20%-off a single item “Big Blue” coupon will be somewhat disappointed that it will not be resurrected.

    “I guess what I would say about the coupon is that if you like Bed Bath & Beyond coupons in the past, you will like new Bed Bath & Beyond mobile app we will be rolling out with launch in US,” said Johnson.

    He said shoppers can avail themselves of special deals and promotions through the new app, including a 25% off coupon for downloading the app and making purchases. Former Overstock.com loyalty program members will get a 20% off coupon and their membership transferred to the rebranded loyalty program.

    BedBathand Beyond.com is also reinstating up to $50 in unused loyalty rewards points for active members of the former Bed Bath & Beyond loyalty program. “Those rewards points had gone away in the bankruptcy,” he said.

    Overstock.com relaunched as BedBathandBeyond.com Tuesday.

    “We’ll still be offering coupons even if they’re not as large as the 20% coupon that people expected and frankly demanded from Bed Bath & Beyond,” said Johnson.

    What’s not coming back — at least in the foreseeable future — are physical stores.

    “Never say never,” said Johnson. “We’re focused on this transition now and we like our asset-light business model…. But never say never. We’ll look, we may test, but right now, it’s not in the current strategic plan.”

    Bed Bath & Beyond announced in April it would close all 360 of its stores and go out of business.

    One change that Overstock is contemplating is the company ticker symbol.

    “We think the corporate name, which is Overstock and ticker ‘OSTK’ is probably not a fit anymore. We’re figuring out what to do. We’re not sure we want it to be the “BBBY” tainted ticker of a meme stock gone bankrupt. We’ll find the right name in time.”

    Bed Bath & Beyond’s return comes close on the heels another iconic retail brand’s comeback.

    Babies R Us, which went out of business in tandem with its parent company, Toys R Us, in 2018, opened its new US flagship store last month at the American Dream Mall in New Jersey.

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  • Call to arms: Thousands of Revolutionary War stories are waiting to be told. A new project asks the public to help uncover them | CNN

    Call to arms: Thousands of Revolutionary War stories are waiting to be told. A new project asks the public to help uncover them | CNN

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    CNN
     — 

    The National Park Service and US National Archives and Records Administration are calling on Americans to help reveal the untold stories of the United States’ first veterans to commemorate the upcoming 250th anniversary of American independence.

    The Revolutionary War Pension Files Transcription Project aims to transcribe approximately 2.3 million original documents that correspond with more than 83,000 individual soldiers. The information spans 150 years, from wartime records to 20th century inquiries made by veterans’ descendants.

    The goal of the project is to unearth personal stories from the battlefield and home front, using information included in federal pension applications from Revolutionary War veterans and their widows, according to the National Park Service. And they need the public’s help to do it.

    “We’re asking the public in the next three years, as we lead up to the 250th anniversary of the United States, to help us transcribe the pension files to be able to unlock these stories of our first veterans,” Suzanne Isaacs, community manager for the National Archives Catalog, said.

    While the Continental Army issued signed discharge papers, veterans who served in the militia had to give oral testimonies and provide witnesses to corroborate their stories. As a result, thousands of court records have yet to be digitally transcribed in the National Archives Catalog.

    These verbal attestations were an opportunity for veterans to tell their stories in vivid detail. When pension acts were put in place in the early 19th century, many veterans were elderly and illiterate, so they gave detailed accounts in hopes of recording their life stories.

    However, relying on oral testimonies also allowed for embellished tales that were difficult to disprove.

    For example, William Shoemaker testified that he spent 18 months as a prisoner of war to receive pension pay. Historian Todd Braisted discovered, more than two centuries later, that Shoemaker joined a loyalist unit and was captive for only two months.

    When requirements for pension pay loosened in the 1830s, widows who were married before the conclusion of the war became eligible to apply. To receive funds, widows had to give oral testimonies about their husbands’ service and provide proof of their marriage.

    That means the National Archives files also include documents such as marriage licenses, wartime letters and soldiers’ diaries.

    Judith Lines applied for widow’s pension in 1837 using one of the rarest kinds of documents – a correspondence from her husband written during his service under Gen. George Washington. John Lines’ 1781 note is the only known preserved letter penned by a Black Continental soldier.

    With the help of volunteer archivists, these rare, firsthand stories from the Revolutionary War will be more accessible to the public and archived in the National Archives. Volunteers can register for a free account with the National Archives Catalog. No prior experience is required.

    “This project is a way to help make accessible the records of our first veterans, the veterans of the Revolutionary War,” Isaacs said.

    The veterans and their families might never have imagined that their accounts of the war and its effects on their lives could be so readily available to the nation. The documents included in this project offer a personal perspective that, before now, was largely unknown.

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  • Inside efforts to avert environmental ‘catastrophe’ in the Red Sea | CNN

    Inside efforts to avert environmental ‘catastrophe’ in the Red Sea | CNN

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    Editor’s Note: A version of this story appears in CNN’s Meanwhile in the Middle East newsletter, a three-times-a-week look inside the region’s biggest stories. Sign up here.



    CNN
     — 

    Moored five miles off the coast of Yemen for more than 30 years, a decaying supertanker carrying a million barrels of oil is finally being offloaded by a United Nations-led mission, hoping to avert what threatened to be one of the world’s worst ecological disasters in decades.

    Experts are now delicately handling the 47-year-old vessel – called the FSO Safer – working to remove the crude without the tanker falling apart, the oil exploding, or a massive spill taking place.

    Sitting atop The Endeavor, the salvage UN ship supervising the offloading, UN Resident and Humanitarian Coordinator for Yemen David Gressly said that the operation is estimated to cost $141 million, and is using the expertise of SMIT, the dredging and offshore contractor that helped dislodge the Ever Given ship that blocked the Suez Canal for almost a week in 2021.

    How to remove one million barrels of oil from a tanker

    Twenty-three UN member states are funding the mission, with another $16 million coming from the private sector contributors. Donors include Yemen’s largest private company, HSA Group, which pledged $1.2 million in August 2022. The UN also engaged in a unique crowdfunding effort, contributing to the pool which took a year to raise, according to Gressly.

    The team is pumping between 4,000 and 5,000 barrels of oil every hour, and has so far transferred more than 120,000 barrels to the replacement vessel carrying the offloaded oil, Gressly said. The full transfer is expected to take 19 days.

    The tanker was carrying a million barrels of oil. That would be enough to power up to 83,333 cars or 50,000 US homes for an entire year. The crude on board is worth around $80 million, and who gets that remains a controversial matter.

    Here’s what we know so far:

    The ship has been abandoned in the Red Sea since 2015 and the UN has regularly warned that the “ticking time bomb” could break apart given its age and condition, or the oil it holds could explode due to the highly flammable compounds in it.

    The FSO Safer held four times the amount of oil spilled by the Exxon Valdez off Alaska in 1989 which resulted in a slick that covered 1,300 miles of coastline. A potential spill from this vessel would be enough to make it the fifth largest oil spill from a tanker in history, a UN website said. The cost of cleanup of such an incident is estimated at $20 billion.

    The Red Sea is a vital strategic waterway for global trade. At its southern end lies the Bab el-Mandeb strait, where nearly 9% of total seaborne-traded petroleum passes. And at its north is the Suez Canal that separates Africa from Asia. The majority of petroleum and natural gas exports from the Persian Gulf that transit the Suez Canal pass through the Bab el-Mandeb, according to the US Energy Information Administration.

    The sea is also a popular diving hotspot that boasts an impressive underwater eco-system. In places its banks are dotted with tourist resorts, and its eastern shore is the site of ambitious Saudi development projects worth hundreds of billions of dollars.

    The first step of the mission was to stabilize and secure the vessel to avoid it collapsing, Gressly said. That has already been achieved in the past few weeks.

    “There are a number of things that had to be done to secure the oil from exploding,” Gressly told CNN, including pumping out gases in each of the 13 compartments holding the oil. Systems for pumping were rebuilt, and some lighting was repaired.

    Booms, which are temporary floating barriers used to contain marine spills, were dispersed around the vessel to capture any potential leaks.

    The second step is to transfer the oil onto the replacement vessel, which is now underway.

    exp Yemen tanker United Nations cnni world 072611ASEG1_00001402.png

    Oil being removed from tanker near Yemen in Red Sea

    After The Safer is emptied, it must then be cleaned to ensure no oil residue is left, Gressly said. The team will then attach a giant buoy to the replacement vessel until a decision about what to do with the oil has been made.

    “The transfer of the oil to (the replacement vessel) will prevent the worst-case scenario of a catastrophic spill in the Red Sea, but it is not the end of the operation,” Gressly said.

    While the hardest part of the operation would then be over, a spill could still occur. And even after the transfer, the tanker will “continue to pose an environmental threat resulting from the sticky oil residue inside the tank, especially since the tanker remains vulnerable to collapse,” the UN said, stressing that to finish the job, an extra $22 million is urgently needed.

    A spill would shut the Yemeni ports that its impoverished people rely on for food aid and fuel, impacting 17 million people during an ongoing humanitarian crisis caused by the country’s civil war and a Saudi-led military assault on the country. Oil could bleed all the way to the African coast, damaging fish stocks for 25 years and affect up to 200,000 jobs, according to the UN.

    A potential spill would cause “catastrophic” public health ramifications in Yemen and surrounding countries, according to a study by researchers at Stanford University School of Medicine. Yemen, Saudi Arabia and Eritrea would bear the brunt.

    Air pollution from a spill of this magnitude would increase the risk of hospitalization for cardiovascular or respiratory disease for those very directly exposed by 530%, according to the study, which said it could cause an array of other health problems, from psychiatric to neurological issues.

    “Given the scarcity of water and food in this region, it could be one of the most disastrous oil spills ever known in terms of impacts on human life,” David Rehkopf, a professor at Stanford University and senior author of the study, told CNN.

    Up to 10 million people would struggle to obtain clean water, and 8 million would have their access to food supplies threatened. The Red Sea fisheries in Yemen could be “almost completely wiped out,” Rehkopf added.

    The tanker has been an issue for many people in Yemen over the past few years, Gressly said. Sentiment on social media surrounding the removal of oil is very positive, as many in Yemen feel like the tanker is a “threat that’s been over their heads,” he said.

    The tanker issue remains a point of dispute between the Houthi rebels that control the north of Yemen and the internationally recognized government, the two main warring sides in the country’s civil conflict.

    While the war, which saw hundreds of thousands of people killed or injured, and Yemen left in ruins, has eased of late, it is far from resolved.

    Ahmed Nagi, a senior analyst for Yemen at the International Crisis Group think tank in Brussels, sees the Safer tanker issue as “an embodiment of the conflict in Yemen as a whole.”

    “The government sees the Houthi militias as an illegitimate group controlling the tanker, and the Houthis do not recognize (the government),” Nagi told CNN.

    The vessel was abandoned after the outbreak of the Yemeni civil war in 2015. The majority of the oil is owned by Yemeni state firm SEPOC, experts say, and there are some reports that it may be sold.

    “From a technical point of view, the owner of the tanker and the oil inside it is SEPOC,” Nagi said, adding that other energy companies working in Yemen may also share ownership of the oil.

    exp un yemen oil spill tanker achim steiner vause intv FST 071912ASEG2 cnni world_00003204.png

    U.N. begins high-risk operation to prevent catastrophic oil spill from Yemen tanker

    The main issue, Nagi added, is that the Safer’s headquarters are in the government-controlled Marib city, while the tanker is in an area controlled by the Houthis. The Safer is moored off the coast of the western Hodeidah province.

    Discussions to determine the ownership of the oil are underway, Gressly said. The rights to the oil are unclear and there are legal issues that need to be addressed.

    The UN coordinator hopes that the days needed to offload the oil will buy some time for “political and legal discussions that need to take place before the oil can be sold.”

    While the UN may manage to resolve half of the issue, Nagi said, there still needs to be an understanding of the oil’s status.

    “It still poses a danger if we keep it near a conflict zone,” he said.

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  • Colombia’s marijuana farmers want out of the shadows. Will the government ever legalize their harvest? | News – Medical Marijuana Program Connection

    Colombia’s marijuana farmers want out of the shadows. Will the government ever legalize their harvest? | News – Medical Marijuana Program Connection

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    Cajibio (CNN) — On a recent Friday morning, about 200 coca and marijuana farmers gathered in the small town of Cajibio, southwestern Colombia, to hear the government out.

    Colombian’s government was still licking its wounds after an initiative to legalize recreational marijuana had sunk in Congress less than 10 days before.


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  • Judge denies AMC settlement on stock conversion, shares surge | CNN Business

    Judge denies AMC settlement on stock conversion, shares surge | CNN Business

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    A judge on Friday blocked a proposed settlement on AMC Entertainment Holdings’ stock conversion plan that would allow the company to issue more shares, sending its common shares soaring and preferred shares down in after-hours trading.

    Delaware Vice Chancellor Morgan Zurn said in the ruling that she cannot approve the settlement “as submitted,” because it would release potential claims by preferred shareholders who were not represented in the lawsuit or settlement.

    AMC shares were up 69% at $7.44 in trading after the bell. Its preferred shares were down 20% at $1.43.

    The company was sued in February for allegedly rigging a shareholder vote that would allow AMC to convert preferred stock to common stock and issue hundreds of millions of new shares.

    The conversion would dilute the common stockholders’ ownership, but allow AMC to pay down some of its $5.1 billion in debt.

    AMC has told investors it is burning cash at an unsustainable rate and warned that an inability to raise capital could force the company into bankruptcy.

    It cannot carry out its plan to do so until the litigation has been resolved.

    The settlement received more than 2,800 objections from shareholders, a level of interest Zurn called “unprecedented” in her ruling on Friday.

    “AMC’s stockholder base is extraordinary,” she said, adding that many “care passionately about their stock ownership and the company.”

    The judge rejected the settlement after determining the holders of common stock could not release AMC from potential claims that belong to holders of preferred shares, an issue which objectors did not raise.

    Many objectors sought permission to opt out of the settlement and sue on their own behalf, dismissing AMC’s dire financial predictions as “fear tactics.”

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  • Biden administration announces new labels for gadgets that are less vulnerable to cyberattacks | CNN Business

    Biden administration announces new labels for gadgets that are less vulnerable to cyberattacks | CNN Business

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    CNN
     — 

    The next time you’re in the market for a smart TV, fitness tracker or other connected gadget, you could see a new US government-backed label identifying some products as being particularly hardened against hackers.

    On Tuesday, the Biden administration announced it’s moving to implement a cybersecurity labeling program aimed at helping consumers pick out trustworthy tech products that are rated as more secure than the competition.

    The program seeks to bolster the nation’s cybersecurity overall by guiding Americans who may be in the market for smart home tech or wearables toward products that meet a high standard for cybersecurity as defined by the National Institute of Standards and Technology (NIST).

    The label will appear as a “distinct shield logo,” according to the White House. Products that meet the criteria for the label could include tech that requires strong passwords and that provides regular software updates to guard against the latest threats, for example.

    A wide range of products could be covered, the administration said, including smart refrigerators, microwave ovens, thermostats, home voice assistants and — eventually — WiFi routers, after NIST finishes designing cybersecurity standards for them later this year.

    For years, cybersecurity has been an afterthought in a market for so-called “internet of things” (IoT) devices that prioritizes low costs over security, according to security experts. One of the more famous examples of IoT security failures came in 2016, when criminal hackers used an army of infected computers, known as the Mirai botnet, to disrupt access to the websites of Twitter, PayPal, and others.

    Products certified under the new program may come with a QR code that links to a national database affirming its participation, the administration added in a release.

    The launch of the program could still be as far as a year away. But the administration took its first steps toward implementation on Tuesday as the Federal Communications Commission applied for a trademark linked to the effort, known as the “US Cyber Trust Mark.”

    The FCC, which regulates wireless devices, also issued a formal proposal that will be open for public feedback on how it should manage the program.

    “This new labeling program would help provide Americans with greater assurances about the cybersecurity of the products they use and rely on in their everyday lives,” the administration said in a statement. “It would also be beneficial for businesses, as it would help differentiate trustworthy products in the marketplace.”

    The government proposal comes two years after President Joe Biden signed an executive order calling for an “‘energy star’ type of label” for tech products. At the time, the US government was still reeling from a crippling ransomware attack days earlier that had forced a temporary shutdown of Colonial Pipeline, one of the country’s largest fuel pipeline operators.

    The executive order highlighted how the administration could use product labeling, combined with the federal government’s immense procurement power, to shape commercial markets and raise the bar for companies that sell technology to both US agencies and ordinary consumers.

    Companies including Amazon, Best Buy, Cisco, Google, LG, Logitech, Samsung and others pledged to assist in the government’s labeling push by committing to increase the cybersecurity of their products, the White House said Tuesday.

    Dave DeWalt, CEO of the cybersecurity-focused investment firm NightDragon, said the government’s move could help address a “perfect storm” of billions of insecure IoT devices.

    “Market forces alone were never going to be sufficient to force manufacturers to step up and deliver more secure devices,” he said. “We’ve taken an essential step now in the right direction to put the power back in the hands of the consumers to choose better security.”

    The Consumer Technology Association said Tuesday its next annual trade show, CES 2024, will feature “certification-ready products” once the FCC finalizes its rules.

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  • Key US inflation gauge cooled last month to the lowest level in nearly three years | CNN Business

    Key US inflation gauge cooled last month to the lowest level in nearly three years | CNN Business

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    Minneapolis
    CNN
     — 

    Wholesale inflation continued its yearlong slowdown last month, rising by just 0.1% for the 12 months ended in June, according to the Bureau of Labor Statistics’ Producer Price Index released Thursday.

    The PPI index, a key inflation gauge that tracks the average change in prices that businesses pay to suppliers, has cooled significantly since peaking at 11.2% in June 2022 and has now declined for 12 consecutive months. Annual producer price inflation is at its lowest level since August 2020, BLS data shows.

    Economists were expecting an annual increase of 0.4%, according to Refinitiv.

    On a monthly basis, prices increased by 0.1%.

    Goods prices held steady for the month, after tumbling 1.6% in May, according to the BLS report. As such, prices for services — which increased 0.2% from May — were the primary driver behind June’s slight increase.

    PPI is a closely watched inflation gauge since it captures average price shifts before they reach consumers and is a proxy for potential price changes in stores.

    While the PPI doesn’t directly correlate into exactly what will come from the following month’s Consumer Price Index — a major inflation gauge that tracks price shifts for a basket of goods and services — it provides a look at whole economy inflation, minus rents, said Alex Pelle, Mizuho Securities US economist.

    And that picture right now is looking pretty sharp.

    “It’s definitely a good month for inflation,” Pelle told CNN. “You saw that in CPI, and now you’re seeing it in PPI.”

    In June, inflation as measured by the CPI cooled to 3% annually, its lowest rate since March 2021, the BLS reported Wednesday.

    Both the CPI and PPI have declined monthly since their peaks in June 2022, when record-high energy and gas prices fueled the spikes to 9.1% and 11.2%, respectively.

    As such, the base effects of year-over-year comparisons are playing a part in the indexes’ sharp retreats.

    Still, underlying inflation is showing a cooling trend as well — albeit more muted.

    In the case of PPI, when stripping out the more volatile categories of food and energy, this “core” index rose 2.4% for the 12 months ended in June. That’s a step back from the 2.6% increase seen in May and economists’ expectations of 2.6%.

    Core PPI, which ticked up 0.1% on a monthly basis, is at its lowest annual level since February 2021.

    Inflation is looking a heck of a lot better than last year, when the Federal Reserve embarked on a campaign to combat price hikes with rate hikes, but economists don’t expect the latest CPI and PPI prints will dissuade central bankers from giving another crank to tighten monetary policy.

    Starting in March 2022, the central bank rolled out 10 consecutive interest rate hikes to tame inflation, finally hitting pause last month. The Fed is widely expected to raise rates by another quarter point when it meets later this month.

    “[The June data] means that the doves are going to have a little bit better of an argument to hold sooner rather than later, so that does reduce the probability of a second hike this year,” Pelle said, noting the commonly used terms to describe Fed members’ differing monetary policy approaches.

    Doves tend to favor looser monetary policy and issues like low unemployment over low inflation, while hawks favor robust rate hikes and keeping inflation low above all else.

    But just how long a hold could last is another matter, said Pelle.

    The job market is cooling from a scorching state, but it remains historically hot and tight. Considering ongoing demographic shifts (including the massive Baby Boomer generation aging out of the workforce), that tightness could continue, Pelle said.

    “Do we really need to be cutting rates if you have GDP running around trend and the labor market still very tight,” he said. “Inflation is coming down, but the economy is maybe growing a little bit into these higher rate levels. So the hold could be longer than people expect. But we might have some of the sting out on getting even higher.”

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  • Could the June CPI report change the Fed’s rate trajectory? | CNN Business

    Could the June CPI report change the Fed’s rate trajectory? | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.



    CNN
     — 

    After the June jobs report showed a cooling but still-hot picture of the labor market, investors are looking to a key inflation report due Wednesday for more clues on the economy’s health. But some investors say the results will likely do little to sway the Federal Reserve’s interest rate trajectory.

    What happened: The labor market added just 209,000 jobs in June, below economists’ expectations for a net gain of 225,000 jobs. That’s the smallest monthly gain since a decline in December 2020.

    But beneath the surface, the jobs market remains hot. Average hourly earnings growth remained steady at 0.4% from May and also unchanged at 4.4% year-over-year, suggesting that wage inflation remains sticky. The unemployment rate also fell to 3.6% from 3.7%, though jobless rates for Black and Hispanic workers rose sharply.

    There is “nothing in the release that would change our expectation that the Fed has more work to do,” said Joseph Davis, global chief economist at Vanguard.

    Accordingly, traders continued to overwhelmingly expect a quarter-point rate hike at the Fed’s July meeting. Traders saw a roughly 92% chance of such a decision as of the market close on Friday, according to the CME FedWatch Tool.

    What’s next: The June Consumer Price Index report, a key inflation reading, is due on Wednesday.

    Economists expect a 3.1% increase in consumer prices for the year ended in June, which would be a cooldown from a 4% annual increase in May, according to Refinitiv.

    Recent data has suggested that inflation is coming down, though it remains above the Fed’s 2% target. The Personal Consumption Expenditures price index, the Fed’s favorite inflation gauge, rose 3.8% for the 12 months ended in May. That’s down from the revised 4.3% annual rise seen in April.

    But it’s unlikely that the June CPI report will change the Fed’s interest rate trajectory, barring a huge upside or downside surprise, especially considering that Fed officials in recent weeks have been vocal that more rate hikes are likely coming, said James Ragan, director of wealth management research at DA Davidson.

    Still, that doesn’t mean investors should expect infinite rate hikes from the Fed.

    “We continue to expect that [the] Fed will soon reach its terminal rate, bringing it closer toward the end of its most aggressive tightening campaign in generations,” said Candice Tse, global head of strategic advisory solutions at Goldman Sachs Asset Management.

    The Producer Price Index report for June is due on Thursday.

    UPS and the Teamsters union are in contract negotiations. Without a deal, 340,000 Teamsters could go on strike on August 1.

    Such an event could be damaging to the US economy, reports my colleague Chris Isidore.

    UPS carries 6% of the country’s gross domestic product in its trucks. The company carried an average of 20.8 million US packages a day through last year, and that number is down only slightly this year.

    In other words, the company’s services are critical to keeping the gears moving seamlessly in supply chains that saw massive snarls during the height of the Covid pandemic. A strike could potentially bring back the problems that were so prominent just a couple years ago, including shipping delays and higher prices.

    The Biden administration is keeping an eye on negotiations between both parties in “recognition of the role UPS plays in our economy and of the important work that UPS workers did through the pandemic and continue to do today,” acting labor secretary Julie Su told CNN on Friday.

    But the company and union broke off last week, with both sides claiming the other walked away from the bargaining table.

    Read more here.

    Monday: Consumer credit for May and NY Federal Reserve’s Survey of Consumer Expectations for June.

    Tuesday: NFIB small business optimism survey for June.

    Wednesday: Consumer Price Index report and housing starts for June.

    Thursday: Producer Price Index report for June.

    Friday: University of Michigan consumer sentiment and inflation expectations for July.

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  • Expect more rate hikes from the Fed after the latest jobs report | CNN Business

    Expect more rate hikes from the Fed after the latest jobs report | CNN Business

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    Washington, DC
    CNN
     — 

    An interest rate hike later this month was already in the cards for the Federal Reserve. But after the June jobs report, the timing of a second hike remains unclear.

    Job gains remain robust, wage growth is still going strong, and unemployment continues to hover near historic lows. That means the job market is still fueling demand in the economy, which the Fed has been trying to slow through rate hikes. And Fed officials have made it clear they think the central bank still has more work to do to bring down inflation, which is still running well above the 2% goal.

    Federal Reserve Bank of Chicago President Austan Goolsbee, a voting member of the Fed committee that decides interest rates, said in an interview Friday that he sees “a decent chance of further tightening down the pipeline” and that inflation “needs to come down more.”

    Other Fed officials have struck a similarly hawkish tone on inflation, hinting strongly at a hike in July.

    “I remain very concerned about whether inflation will return to target in a sustainable and timely way,” said Federal Reserve Bank of Dallas President Lorie Logan on Thursday during a meeting hosted by the Central Bank Research Association. “I think more restrictive monetary policy will be needed to achieve the Federal Open Market Committee’s goals of stable prices and maximum employment.”

    Fed officials voted last month to hold the key federal funds rate steady at a range of 5-5.25% to reassess the economy after a string of 10 consecutive rate hikes and to monitor the effects of bank stresses in the spring, according to minutes from that meeting released Wednesday.

    “We can take some time and assess and collect more information and then be able to act, knowing that we also communicated through our projections that we don’t think we’re done, based on what we know,” said New York Fed President John Williams Wednesday during a moderated discussion in New York. “And obviously we’re absolutely committed to achieving our 2% inflation goal.”

    And Fed Chair Jerome Powell himself has doubled down on the need for more rate increases in recent speeches, not ruling out back-to-back hikes, despite economic indicators showing slight progress on inflation.

    Financial markets are pricing in a more than a 90% chance of a rate hike later this month, according to the CME FedWatch Tool.

    The Fed wants to see the labor market slow down broadly, bringing it into “better balance,” as Powell has frequently described it. That means wage growth would need to cool consistently, monthly payroll growth would need to be close to a range of 70,000 and 100,000 — the smallest job gain needed to keep up with population growth — and unemployment would need to rise, according to economists. Job market conditions don’t resemble that just yet.

    “This is clearly a very tight labor market, so I expect the Fed to look at this data and say there is justification here for continued small rate increases because the labor market is not cooling enough,” Dave Gilbertson, labor economist at payroll software company UKG, told CNN.

    Labor costs are higher because of a persistent difficulty in hiring, weighing on labor-intensive service providers such as hospitals and restaurants, which has put upward pressure on consumer prices since businesses typically raise wages to address hiring challenges.

    Powell homed in on that dynamic in recent remarks, and research from top economists argues the Fed will have to slow the economy further to fully address the labor market’s stubborn impact on inflation. Whether that means a full-blown recession or a so-called soft landing remains to be seen, but some Fed officials are optimistic.

    “I feel like we are on a golden path of avoiding recession,” Goolsbee told CNBC Friday.

    And there has been some progress on bringing the job market back into better balance while inflation has come down. Job openings fell to 9.82 million in May, down from a peak of 12 million in March 2022, though they still greatly exceed the number of unemployed people seeking work. And June’s jobs total of 209,000 is still robust by historical standards.

    But Gilbertson said labor shortages have been largely driven by demographic shifts, which might keep the job market tight for the foreseeable future.

    Beyond the expected hike in July, the Fed is going to remain laser-focused on wage growth to inform its decision-making later in the year. Central bank officials will pay particular attention to the Employment Cost Index, which recently showed that pay gains picked up in the first three months of the year. The index for the second quarter will be released in late July — after the Fed meets.

    “The focus is on the path of wage inflation because of its pass-through to services inflation,” said Sonia Meskin, head of US Macro at BNY Mellon IM.

    The June jobs report showed that average hourly earnings growth was unchanged at 0.4% from the month before and also unchanged at 4.4% year-over-year — not a welcome development.

    Core inflation hasn’t decelerated as fast as the headline measure because of the tightness in the labor market. The Personal Consumption Expenditures price index, the Fed’s preferred inflation gauge, rose 3.8% in May from a year earlier, down from April’s 4.3% rise; while the core measure edged lower to 4.6% from 4.7% during the same period.

    Within the core measure, services inflation also remains sticky and Powell said in last month’s post-meeting news conference that “we see only the earliest signs of disinflation there” and that the services sector’s “largest cost would be wage cost.”

    The Fed’s strategy to address services inflation is simply by curbing demand through more rate hikes. So, in addition to the labor market, the Fed is highly attentive to consumer spending, which has cooled in the past several months, according to figures from the Commerce Department.

    Other headwinds are expected to weigh on consumers in the months ahead, such as the resumption of student loan payments and the Supreme Court blocking President Joe Biden’s student loan forgiveness program. Americans are also running down their savings accounts while racking up debt, so US consumers may need to start cutting back soon.

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  • Goodbye child care centers, hello elderly homes: South Korea prepares for aging population | CNN

    Goodbye child care centers, hello elderly homes: South Korea prepares for aging population | CNN

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    Seoul, South Korea
    CNN
     — 

    South Korea is getting older – and its care facilities are changing to match.

    The number of child care facilities in the country has shrunk by almost a quarter in just a few years, reflecting authorities’ unsuccessful campaign to encourage couples to have more babies.

    In 2017, there were more than 40,000 child care facilities, according to new government figures released Friday – by the end of last year, that number had fallen to roughly 30,900.

    Meanwhile, as the population rapidly ages, the number of elderly facilities has boomed from 76,000 in 2017 to 89,643 in 2022, according to the country’s health and welfare ministry.

    Elderly facilities include senior care homes, specialized hospitals, and welfare agencies that help the elderly navigate social services or protections. Meanwhile, the child care facilities listed include public services as well as private and corporate ones.

    The shift illustrates a years-long problem South Korea has thus far failed to reverse. It has both one of the world’s fastest aging populations and the world’s lowest birth rate, which has been falling continuously since 2015 despite authorities offering financial incentives and housing subsidies for couples with more babies.

    Experts attribute this low birth rate to various factors, including demanding work cultures, stagnating wages, rising costs of living, the financial burden of raising children, changing attitudes toward marriage and gender equality, and rising disillusionment among younger generations.

    By the late 2000s, the government had begun warning that policy measures were needed to encourage families to grow. Last September, South Korean President Yoon Suk Yeol admitted that more than $200 billion has been spent trying to boost the population over the past 16 years.

    But so far nothing has worked – and the effects have been increasingly visible in the social fabric and day-to-day life.

    Many elementary, middle and high schools are closing around the country due to a lack of school-age children, according to Korean news agency Yonhap, citing the education ministry. Figures from the country’s official statistics body show the overall number of middle and high schools have remained stagnant for years, only rising by a few dozen since 2015.

    In Daejeon, south of Seoul, one such abandoned school has become a popular spot for photographers and urban explorers; images show eerily empty hallways and a school yard overgrown by wild grass.

    A photographer outside an abandoned school near Daejeon, South Korea, on March 22, 2014.

    Similar crises have been seen in other East Asian countries with falling birth rates. One village in Japan went 25 years without recording a single birth. The arrival of a baby in 2016 was heralded as a miracle, with elderly well-wishers hobbling to the infant’s house to hold him.

    Meanwhile, South Korea’s expanding elderly population has meant an explosion in demand for senior services, placing strain on a system scrambling to keep up.

    South Korea has the highest elderly poverty rate among the OECD nations (Organisation for Economic Co-operation and Development), with more than 40% of people over 65 years old facing “relative poverty,” defined by the OECD as having income lower than 50% of median household disposable income.

    “In Korea, the pension system is still maturing, and current generations still have very low pensions,” the OECD wrote in a 2021 report.

    Experts point to other factors such as global economic trends, the breakdown of old social structures that saw children looking after their parents, and insufficient government support for those struggling financially.

    That means a number of homeless elderly people – part of a generation that helped rebuild the country after the Korean War – having to seek assistance from shelters and soup kitchens.

    The rapid rise in elderly facilities in recent years may help alleviate some of these problems. But longer-term concerns remain about the future of Korea’s economy, as the number of young workers – who are crucial in propping up the health care and pension systems – slowly dwindle.

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  • California man sentenced to over 6 years in prison for $8.7 million cow manure Ponzi scheme, US attorney’s office says | CNN Business

    California man sentenced to over 6 years in prison for $8.7 million cow manure Ponzi scheme, US attorney’s office says | CNN Business

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    CNN
     — 

    A man from California who ran a multimillion-dollar fraud scheme where he claimed to turn cow manure into green energy has been sentenced to over six years in prison, the US attorney’s office for the Eastern District of California announced this week.

    Ray Brewer, 66, stole over $8.7 million from investors, court records from between March 2014 and December 2019 showed.

    Brewer’s scam involved convincing investors he could build anaerobic digesters – large machines that create methane through microorganisms breaking down biodegradable material – on dairies in several California and Idaho counties, the US attorney’s office said in a news release. This methane can “then be sold on the open market as green energy,” the release stated.

    Brewer’s investors were meant to receive tax incentives and 66% of all net profits as part of the scheme, authorities said.

    Brewer gave the investors tours of the dairies where he claimed he’d build the digester machines and “sent them forged lease agreements with the dairy owners,” according to the US attorney’s office release.

    “He also sent the investors altered agreements with banks that made it appear as though he had obtained millions of dollars in loans to build the digesters,” the release said.

    Wanting to appear as though he had secured revenue streams, Brewer also sent investors forged contracts with multinational companies, authorities said, and showed them fake photos of the digesters under construction.

    After receiving investors’ funds, authorities said he transferred the money to bank accounts opened in the names of an alias, his relatives and different entities.

    In some cases, Brewer offered refunds that came from “newly received money from other investors who had not authorized Brewer to use their money in this way,” the US attorney’s office said.

    Brewer assumed a new identity and relocated to Montana after his investors became aware of his fraud, authorities said.

    When he was arrested, Brewer attempted to trick authorities by telling him they had the wrong person.

    He also told officers stories about being in the Navy and “how he once saved several soldiers during a fire by blocking the flames with his body so that they could escape” – tales he later admitted were lies “meant to curry favor with law enforcement,” the news release stated.

    Some of Brewer’s purchases with the stolen money included two plots of land of 10 or more acres, a custom 3,700 square-foot home and new pickup trucks, according to authorities.

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