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July 1, 2020 – Airbus cuts jobs, Tribune Publishing fights off certain death and Tik Tok prepares to battle fake accounts.

Today’s newsletter 1,320 words, a 9-minute read. Let’s get to it:

Airbus Plans to Cut 15,000 Jobs, Citing Impact of Coronavirus Pandemic

It was only a matter of time. Airbus SE announced it was cutting 15,000 jobs across its commercial aircraft division, mostly at Airbus’ main manufacturing sites in France and Germany. The move represents the most significant restructuring in the company’s history, a direct result of Covid-19’s impact on the aviation industry.

Why It Matters

“The aviation industry has been suffering as border restrictions and fears by passengers of contracting the virus have stymied air travel. Airlines aren’t expecting a full recovery soon, with the economic fallout from the pandemic set to weigh on demand in the coming years,” The Wall Street Journal writes.

And Airbus isn’t the only company to feel the economic pressures in the form of its workforce. It’s just the latest to jump on the trend. Boeing outlined plans to slash its workforce by 10 percent. British Airways cut 12,000 jobs. Australia’s Qantas dropped 6,000. Deutsche Lufthansa AG said it might need to eliminate as many as 22,000 positions.

The aviation industry isn’t expected to recover until at least 2023, and as late as 2025, which could be a devastating run of survival for the industry.

Numbers to Consider

  • 11 Percent â€“ The share of Airbus’ workforce it plans to cut.
  • 2,600 â€“ The number of jobs reduced by a separate restructuring of Airbus’ defense and space business.
  • $84.3 Billion â€“ How much airlines are expected to lose in 2020, according to the IATA.

Read More: (WALL STREET JOURNAL)

Tribune Publishing in Talks to Give Hedge Fund Alden Global Another Board Seat

Tribune Publishing Co. is seeking another stay of execution. The embattled publisher, which owns the Chicago Tribune and Baltimore Sun, is in talks to add the co-founder of Alden Global Capital to its board as part of a deal that would prevent the hedge fund from making a hostile bid to buy the company in the short term.

Why It Matters

A deal like this would give Tribune Publishing some breathing room, which it desperately needs right now. Even before the pandemic slashed advertising rates, the newspaper industry was crumbling. Covid-19 has complicated things further.

Alden Global publishes more than 60 other daily newspapers held under MediaNews Group. And while a play to add Tribune’s 11 big-market daily newspapers to that stable would make it the second-largest newspaper group in the country by circulation, Alden has a reputation for gutting the titles it owns. The fear of drastic cost cuts is so prevalent, “staffers at several Tribune papers have campaigned for the company to sell them to local owners before Alden could take further control,” according to The Wall Street Journal.

Any potential acquisition of the entirety of Tribune Publishing will have to wait, though. Alden recently informed the board it didn’t intend to move quickly because of the “instability triggered by the pandemic.”

Numbers to Consider

  • 50 Percent â€“ The expected decline in advertising revenue in the newspaper industry this year.
  • 32 Percent â€“ Alden Global Capital’s share in Tribune Publishing, the most substantial chunk held.
  • $365 Million â€“ Tribune Publishing’s market capitalization as of Tuesday.

Read More: (WALL STREET JOURNAL)

TikTok Vulnerable to Fake Followers, Security Firm Warns

It’s time for TikTok to fortify its defenses. While the short-form video app, which has exploded in popularity in the last few years, has mostly circumvented the use of fake accounts on its platform, the potential for exploitation could cost TikTok its edge.

Why It Matters

There’s no more straightforward way to put it – fake accounts are bad. As bots flood the platform, they can manipulate the algorithm and influence what users see. The risk at hand could create a breeding ground for misinformation and political disinformation. Computer-generated views could also damage TikTok’s advertising business, which made an estimated $200 million to $300 million worldwide in 2019.

The more TikTok grows, the more incentive there is to exploit its code. Other social media companies like Facebook have taken aggressive steps to wipe out bots, increasing the threshold of account verification and even taking legal action against bot operators.

Right now, bots only comprise a small percentage of TikTok’s userbase, and it’s still roughly five times easier to purchase fake views on Instagram versus TikTok. But fewer bots do not necessarily equal better security. It’s more of a reflection of TikTok’s newness. 

Numbers to Consider

  • 2 Billion â€“ The number of users to download the app since 2018, according to Sensor Tower.
  • $75 Billion â€“ The estimated valuation of ByteDance, TikTok’s parent company.
  • 1.9 Percent â€“ The approximate share of accounts on TikTok that are bots.

Read More: (THE INFORMATION)

A Quick Look

Senate Agrees to Extend Paycheck Protection Program

  1. The Senate unanimously approved last-minute legislation to extend the Paycheck Protection Program through Aug. 8. The federal government had allocated over $600 billion for the program, but over $100 billion was still available for companies.
  2. PPP provides emergency loans to businesses struggling as a result of the Covid-19 pandemic. “The loans carry a one percent interest rate and don’t need to be repaid the borrower uses the money within 24 weeks and spends 60 percent on payroll,” The Information writes.

Source: (THE INFORMATION)

Worth Your Time

Rocket Men: There are at least 20 modern inventions we can thank space travel for, and with the help of NASA, that should increase. NASA announced its latest batch of small business grants, providing $51 million in “crucial early-stage funding” to 300 businesses. Among the new innovating projects are high-power solar arrays, a smart air traffic control system for urban flight, a water purification system for the moon and a compact sterilizer for spacecraft materials that could also apply to health care. (TECH CRUNCH)

Half The World Away: Apple’s 2020 Worldwide Developer Conference last week may have lacked the shine of the event in a typical year, but it taught a valuable lesson. Virtual tech conferences can work. This year’s iteration ditched the pricy fees and made the event free, opening up to an even wider audience than in years past. As Microsoft and other tech giants plan out how to arrange their developer conferences later this year, Apple’s WWDC offers a template for operating at a high level in a virtual setting. (WALL STREET JOURNAL)

Looking Through the Glass: Google announced its spending $180 million to buy North, a smart glasses startup company. It’s an attempt to build on the company’s existing augmented reality product, Glass, and forging a new competitive advantage. Apple and Facebook plan to release augmented reality products in the next few years, turning up the pressure if Google wants to own a significant piece of the space. (THE INFORMATION)

Abandon Ship: Following Amazon’s $1 billion-plus acquisition of self-driving car developer Zoox, two of the company’s senior engineers have jumped ship. The top talent joined Waymo, a subsidiary of Alphabet and competitor in the space. According to The Information, “the moves could reflect uncertainty about Zoox’s new owner, Amazon, and the financial rewards early employees could reap from the deal and from staying on.” (THE INFORMATION)

Tidbits

Facebook co-founder Eduardo Saverin is back in the news after raising $820 million for his venture capital fund.

Speaking of Facebook, the platform announced it was banning users tied to the “boogaloo” network, citing the informal organization as an extremist group promoting violence.

The U.S. is loaning $700 million in coronavirus stimulus funds to trucking company URC Worldwide Inc. in exchange for a 29.6 percent equity stake in the firm.

A Couple Cents Content

Justin Oh explores the best value fast food items (TIK TOK), how to evaluate stock options (TIK TOK) and looks at the five richest finance billionaires (TIK TOK).

From last night’s live show, you can check out Justin Oh’s thoughts on Alibaba/Tencent/Amazon (YOUTUBE), how institutional money invest their money (YOUTUBE) and a market update (YOUTUBE).

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See you tomorrow!

— Justin Birnbaum

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