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Meta to cut 10,000 jobs in second round of layoffs

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Facebook-parent Meta Platforms (META.O) said on Tuesday it would cut 10,000 jobs this year, making it the first Big Tech company to announce a second round of mass layoffs as the industry braces for a deep economic downturn, Reuters reported.

Meta shares jumped 6% on the news. The widely-anticipated job cuts are part of a restructuring that will see the company scrap hiring plans for 5,000 openings, kill off lower-priority projects and “flatten” layers of middle management.

They followed the company’s first mass layoff in the fall, which eliminated more than 11,000 jobs, or 13% of its workforce at the time, after a hiring spree that doubled the employee count it had as of 2020.

Worries of an economic downturn due to rising interest rates have sparked a series of mass job cuts across corporate America in recent months. Tech companies have led the way, shedding more than 290,000 workers since the start of 2022, according to tracking site Layoffs.fyi.

Meta’s purge of employees has been one of the sector’s most pronounced. On top of inflation woes, the company is also facing down unique threats to its core digital ads business while spending handsomely on Chief Executive Mark Zuckerberg’s plans to build a futuristic metaverse.

In a message to staff on Tuesday, Zuckerberg said most of the new cuts would be announced in the next two months, though in some cases they would continue through the end of the year, read the report.

“For most of our history, we saw rapid revenue growth year after year and had the resources to invest in many new products. But last year was a humbling wake-up call,” Zuckerberg wrote.

“I think we should prepare ourselves for the possibility that this new economic reality will continue for many years.”

Zuckerberg said he planned to further reduce the size of the recruiting team, which was already hard-hit in the fall layoffs. Restructurings in the tech group would be announced in late April and cuts to business groups would come in May.

Meta also will remove multiple layers of management and ask many managers to become individual contributors, while eliminating non-engineering roles, automating more functions and at least partially reversing a commitment to “remote-first” work that Zuckerberg made amid COVID-19 pandemic lockdowns, Reuters reported.

The first of the latest wave of cuts appeared to have started even before Zuckerberg’s announcement. On Friday, Meta said it was exploring “strategic alternatives” for Kustomer, a customer service company it acquired last year.

It also disbanded its skunkworks New Product Experimentation team and reassigned leader Ime Archibong to work on product for Messenger, according to an internal memo seen by Reuters. Both changes were initially reported by the Wall Street Journal.

Investors have grown wary of Zuckerberg’s prolific spending as revenue growth from Meta’s main businesses petered out amid high inflation and a digital ads pullback from the pandemic e-commerce boom.

The company also has struggled with Apple-led (AAPL.O) privacy changes and competition for young users from short video app TikTok.

At the same time, Meta has been pouring billions of dollars into its metaverse-oriented Reality Labs unit, which lost $13.7 billion in 2022, and investing in infrastructure to support its artificial intelligence usage.

Wall Street has been rewarding Meta steadily since its November restructuring, after its share price fell more than 70% earlier in 2022. The stock received another boost in February when Zuckerberg dubbed 2023 the “Year of Efficiency,” with new cost controls and a $40-billion share buyback.

The latest downsizing indicates “how desperate the company is to get costs under control as its revenues have fallen amid declining marketing budgets,” said Hargreaves Lansdown analyst Susannah Streeter, Reuters reported.

“Virtual reality is an expensive business to be in, so while (Meta) maps out a path through an uncertain landscape, it needs to find efficiencies elsewhere,” she added.

In his memo, Zuckerberg made scant mention of virtual reality and instead emphasized the company’s focus on AI, saying Meta’s single largest investment was in “advancing AI and building it into every one of our products.”

Meta has teased AI-powered “creative aids” that can generate images, videos and text but has yet to offer any such products on its apps, even as peers have launched dueling generative AI chatbots and productivity tools in recent months.

With the latest cuts, Meta expects expenses in 2023 to come in between $86 billion and $92 billion, lower than the $89 billion to $95 billion forecast previously, read the report.

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New iPhone will use Arm’s chip technology for AI

Apple uses Arm’s technology in the process of designing its own custom chips for its iPhones, iPads and Macs.

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Apple’s latest iPhone with its A18 chip, which is set to be unveiled at an event on Monday, has been developed using SoftBank-owned Arm’s newest V9 chip design, the Financial Times newspaper reported on Saturday.

Apple is set to host its fall event on Sept. 9 at its headquarters in Cupertino, California, where it will likely unveil a series of new iPhones and updates to other devices and apps, Reuters reported.

Apple signed a deal with Arm in September last year that “extends beyond 2040” in a boost for Arm for chip technology.

Arm had said in July that its V9 chip accounts for 50% of smartphone revenue.

Arm owns the intellectual property behind the computing architecture for most of the world’s smartphones, which it licenses to Apple and many others.

Apple uses Arm’s technology in the process of designing its own custom chips for its iPhones, iPads and Macs.

The two companies have a long history – Apple was one of the initial companies that partnered to found the firm in 1990, before the release of its “Newton” handheld computer in 1993, which used an Arm-based processor chip.

The Newton flopped, but Arm went on to become dominant in mobile phone chips because of its low power consumption, which helps batteries last longer.

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Japan’s military to spend on AI, automation, perks to combat recruitment crisis

To cope with fewer recruits, the ministry said it will introduce artificial intelligence technology, allocating 18 billion yen next year for an AI surveillance system for military base security.

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Japan’s defence ministry on Friday said it will invest in AI, automation and improving troop conditions to address a worsening recruitment shortfall that has left its forces understaffed amid a build up aimed at countering China’s growing military power.

The measures, unveiled in its latest defence budget request on Friday, come after the Self Defense Forces’ (SDF) worst ever annual recruitment drive. In the year to March 31 it enrolled just under 10,000 sailors, soldiers and air personnel, half of its target, Reuters reported.

Fearful that China could use military force to bring neighbouring Taiwan under its control and drag Japan into a war, Prime Minister Fumio Kishida in 2022 announced a doubling in defense spending to stock up on missiles and other munitions, pay for advanced fighter jets and create a cyber defence force.

Japan’s falling birth rate, however, mean it is struggling more than ever to maintain current SDF troop levels at 250,000 people.

“As we increase our defensive strength, we need to build an organisation that is able to fight in new ways,” the defence ministry said in the annual budget request, which calls for a 6.9% spending increase to a record 8.5 trillion yen ($59 billion)

To cope with fewer recruits, the ministry said it will introduce artificial intelligence technology, allocating 18 billion yen next year for an AI surveillance system for military base security.

It will also buy more unmanned drones and order three highly-automated air defense warships for 314 billion yen that require only 90 sailors, less than half the crew of current ships.

To free up more troops for frontline assignments the SDF will also outsource some training and support operations to former SDF members and civilian contractors.

And in a bid to tap Japan’s shrinking pool of fighting-age people, who are also being pursued by companies able to pay more, it plans to offer financial incentives and better living conditions, such as sleeping quarters with more privacy and improved access to social media.

In particular, it is focusing on luring more women, who make less than 10% of the SDF. Attempts to boost their number have been hindered by a series of high-profile sexual harassment cases.

To help turn around that effort, Japan’s military wants 16.4 billion yen to build accommodation for female personnel, with improved toilets and showers. It also said it will hire outside councilors to support women and strengthen harassment training.

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Telegram messaging app CEO Durov arrested in France

Russia began blocking Telegram in 2018 after the app refused to comply with a court order to grant state security services access to its users’ encrypted messages.

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Pavel Durov, the Russian-French billionaire founder and CEO of the Telegram messaging app, was arrested at Bourget airport outside Paris on Saturday evening, TF1 TV and BFM TV said, citing unidentified sources.

Durov was travelling aboard his private jet, TF1 said on its website, adding he had been targeted by an arrest warrant in France as part of a preliminary police investigation, Reuters reported.

TF1 and BFM both said the investigation was focused on a lack of moderators on Telegram, and that police considered that this situation allowed criminal activity to go on undeterred on the messaging app.

Durov faces possible indictment on Sunday, according to French media.

The encrypted Telegram, with close to one billion users, is particularly influential in Russia, Ukraine and the republics of the former Soviet Union. It is ranked as one of the major social media platforms after Facebook, YouTube, WhatsApp, Instagram, TikTok and Wechat.

Telegram did not immediately respond to a Reuters request for comment. The French Interior Ministry and police had no comment.

Russian-born Durov founded Telegram with his brother in 2013. He left Russia in 2014 after refusing to comply with government demands to shut down opposition communities on his VKontakte social media platform, which he sold.

“I would rather be free than to take orders from anyone,” Durov told U.S. journalist Tucker Carlson in April about his exit from Russia and search for a home for his company which included stints in Berlin, London, Singapore and San Francisco.

After Russia launched its invasion of Ukraine in 2022, Telegram has become the main source of unfiltered – and sometimes graphic and misleading – content from both sides about the war and the politics surrounding the conflict, read the report.

The platform has become what some analysts call ‘a virtual battlefield’ for the war, used heavily by Ukraine’s President Volodymyr Zelenskiy and his officials, as well as the Russian government.

Telegram – which allows users to evade official scrutiny – has also become one of the few places where Russians can access independent news about the war after the Kremlin increased curbs on independent media following its invasion of Ukraine.

The Russian foreign ministry said its embassy in Paris was clarifying the situation around Durov and called on Western non-governmental organisations to demand his release, Reuters reported.

Russia began blocking Telegram in 2018 after the app refused to comply with a court order to grant state security services access to its users’ encrypted messages.

The action interrupted many third-party services, but had little effect on the availability of Telegram there. The ban order, however, sparked mass protests in Moscow and criticism from NGOs.

TF1 said Dubai-based Durov had been travelling from Azerbaijan and was arrested at around 8 p.m. (1800 GMT).

Durov, whose fortune was estimated by Forbes at $15.5 billion, said some governments had sought to pressure him but the app should remain a “neutral platform” and not a “player in geopolitics”.

Telegram’s increasing popularity, however, has prompted scrutiny from several countries in Europe, including France, on security and data breach concerns.

Russia’s representative to international organisations in Vienna, Mikhail Ulyanov, and several other Russian politicians were quick on Sunday to accuse France of acting as a dictatorship – the same criticism that Moscow faced when putting demands on Durov in 2014 and trying to ban Telegram in 2018.

“Some naive persons still don’t understand that if they play more or less visible role in international information space it is not safe for them to visit countries which move towards much more totalitarian societies,” Ulyanov wrote on X.

Elon Musk, billionaire owner of X, the social media platform formerly known as Twitter, said after reports of Durov’s detention: “It’s 2030 in Europe and you’re being executed for liking a meme.”

Robert F. Kennedy Jr, who on Friday abandoned his U.S. presidential campaign and endorsed Republican Donald Trump, said on X after the reports that the need to protect free speech, “has never been more urgent.”

Several Russian bloggers called for protests at French embassies throughout the world at noon on Sunday.

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