PayPal is laying off nine percent of its workforce, the company’s CEO Alex Chriss told staff in a letter on Tuesday that PayPal made public hours later. The decision will impact about 2,500 employees, who will find out their fate between today and the end of the week, Bloomberg reported earlier. PayPal's layoffs come almost exactly a year after the company fired more than 2,000 workers to keep costs down. 

Despite thousands of job cuts in 2023, layoffs at tech companies have continued into 2024. On the same day as PayPal's latest layoffs, Jack Dorsey's Block, the company that owns Cash App, Foundational, and Square, conducted its second round of layoffs in two months, cutting nearly a thousand people. Earlier this month, Google laid off more than a thousand workers in its Assisstant and hardware divisions, with CEO Sundar Pichai warning employees to brace for more cuts through the year. Discord, eBay, Riot Games, TikTok, Microsoft, iRobot, Amazon, Unity, and Duolingo, among others, have collectively cut thousands of jobs in January

PayPal was one of the earliest companies in online payments industry, but in recent years, rivals like Zelle and tech companies with deep pockets like Apple, have entered the space. The competition in the payments industry is putting pressure on PayPal. Bloomberg noted that four analysts have downgraded the company’s stock this month. The company will "continue to invest in areas of the business we believe will create and accelerate growth," Chriss said in the letter. 

PayPal's layoffs are happening despite the company's strong growth throughout 2023. The company's revenue as of September 2023 was $7.42 billion, an increase of more than eight percent compared to its revenue a year before. It beat earnings expectations and reported a "double digit growth" in the number of transactions that happened over its platform. The Information noted that Chriss, who took over as the company's CEO in September 2023, said in PayPal's last earnings call in November 2023 that its costs were "too high" and were "slowing us down."

Amazon and iRobot, maker of the Roomba vacuum line, just announced that they would be dropping their proposed merger. The potential acquisition was announced back in August of 2022 and was immediately the target of antitrust watchdogs, particularly in the EU. The European Commission (the EU's executive branch) officially announced it was looking into the $1.4 billion dollar deal last July and it raised formal concerns over the potential impact on competition in November. 

iRobot also just announced a large round of layoffs now that the deal isn't going through. The company says it is laying off about 350 employees, which represents 31 percent of iRobot's workforce.

Unsurprisingly, Amazon's statement on the matter blasts regulators for the "innovation" that would come with Amazon scooping up yet another company. "This outcome will deny consumers faster innovation and more competitive prices, which we're confident would have made their lives easier and more enjoyable," said Amazon SVP and General Counsel David Zapolsky in a statement. "Mergers and acquisitions like this help companies like iRobot better compete in the global marketplace, particularly against companies, and from countries, that aren't subject to the same regulatory requirements in fast-moving technology segments like robotics."

iRobot's statement was more muted. "The termination of the agreement with Amazon is disappointing, but iRobot now turns toward the future with a focus and commitment to continue building thoughtful robots and intelligent home innovations that make life better, and that our customers around the world love," said Colin Angle, Founder of iRobot.

While the companies didn't mention the pressure from the EU specifically, Bloomberg notes that a veto looked likely. And while that might not have immediately killed the deal, Amazon and iRobot appear to have decided to shut things down completely rather than work through any proposed changes to make the deal more palatable to regulators. 

Earlier in January, the European Commission was said to have warned Amazon that the deal was on thin ice. However, according to Reuters, the company declined to offer any potential remedies to soothe the bloc's concerns over the acquisition. As outlined in the original agreement, Amazon is paying iRobot a $94 million termination fee now that the deal is dead.

This isn't exactly the first time Amazon and the EU have butted heads. They previously squared off over the company's handling of third-party seller information. In 2022, the two sides reached an agreement over Amazon's treatment of third-party sellers.

The Federal Trade Commission is launching an inquiry into massive investments made by Microsoft, Amazon and Alphabet into generative AI startups OpenAI and Anthropic, the agency announced on Thursday. The FTC said that it had issued “compulsory orders” to the companies and would scrutinize their relationships with AI startups to understand their impact on competition.

“History shows that new technologies can create new markets and healthy competition,” FTC Chair Lina Khan said in a statement. “As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity. Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition.” The companies have 45 days to respond to the agency. 

Ever since OpenAI released ChatGPT at the end of 2022, generative AI has exploded, sparking both excitement about its potential to increase productivity as well as anxiety about job losses. Against this backdrop, the world’s largest tech companies have been racing to develop their own versions of the tech as well as pouring billions of dollars into smaller startups creating it. Microsoft, for instance, invested more than $13 billion into OpenAI for a 49 percent stake, using the startup’s tech to add generative AI capabilities to Bing, its own search engine, as well as Windows and Office. Amazon and Alphabet invested $4 billion and $2 billion in Anthropic, an AI startup that makes a chatbot called Claude.

In an opinion column in The New York Times last year, the FTC’s Khan wrote that “the expanding adoption of AI risks further locking in the market dominance of large incumbent technology firms” and argued for AI regulation.

As part of its investigation, the FTC is seeking information about the specifics of Microsoft, Amazon and Alphabet’s investments, decisions around new product releases, oversight rights, analyses of market share and potential for sales growth among other details.

The US isn’t the only country examining Big Tech’s ties with generative AI startups. The UK’s Competition and Markets Authority said last month that it was examining whether Microsoft’s investment into OpenAI was subject to antitrust law.

In a post on X in December, Microsoft’s president Brad Smith characterized the company’s OpenAI investment as a partnership “that has fostered more AI innovation and competition, while preserving independence for both companies.” Microsoft currently has a non-voting observer seat on OpenAI’s board, which, said Smith, was “very different from an acquisition.”

Microsoft, Amazon, Alphabet, Anthropic, and OpenAI did not immediately respond to a request for comment from Engadget.

The Securities and Exchange Commission has approved the applications of 11 spot bitcoin ETFs in a highly anticipated decision that will make it much easier for people to dabble in cryptocurrency investing without directly buying and holding bitcoin. The approval comes one day after a hacker temporarily took over the SEC’s X account and posted a rogue tweet saying that bitcoin ETFs had been approved by the regulator.

The approval is a significant milestone for crypto investors, who for years have tried to win SEC approval for the investment funds that hold bitcoin. With the approval, 11 such funds will be listed on public stock exchanges.

United States financial regulators have long been wary of bitcoin and other cryptocurrencies and in a statement, SEC Chair Gary Gensler wasn’t exactly effusive about the merits of bitcoin. “Bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist financing,” he wrote.

“While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin. Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto.”

Gensler may have more reasons than usual to be circumspect. On Tuesday, one day before the SEC’s decision on bitcoin ETFs was due, the SEC’s official X account was hacked. The attackers posted a rogue tweet claiming the funds had been approved, causing a temporary spike in the price of bitcoin. The SEC has said it’s working with the FBI and Inspector General to investigate the matter.

Gaming software developer Unity plans to lay off 1,800 employees or about a quarter of its global workforce, according to a securities filing first spotted by The Wall Street Journal. The company said it made the move "as it restructures and refocuses on its core business" in an aim to get back to profitability. The cuts follow major turbulence in the company after it angered developers by introducing and then partially walking back a controversial runtime fee for its game engine. 

The layoffs add to the more than 1,100 jobs it has eliminated since 2021. Unity fired 265 people in November as part of what it called a company "reset," all of whom were employed as part of its 2021 Weta Digital acquisition. The company also closed down 14 offices around the world. In May of 2023, it announced it would let go around 600 employees, following layoffs of over 500 people in 2022. 

Last September, Unity rolled out some significant concessions to its developer pricing model after widespread backlash over its plan to charge developers for game installations. CEO John Riccitiello, who took much of the brunt of the criticism, stepped down shortly afterwards and was replaced by former IBM president James Whitehurst, who continues to serve as interim President and CEO.

After reporting record profits for 2022, the company has missed revenue forecasts over the last three quarters. In a shareholder letter, the company said it aims to emerge from restructuring as a "leaner, more agile and faster growing company." Unity's game engine is used in titles like Cuphead, GTFO and Kerbel Space Program. 

With game sales flat over the past year, Unity isn't the only company in that industry to see layoffs. As we detailed in our year-end video game roundup, The Embracer Group, which owns studios like Crystal Dynamics, Square Enix Montreal and Gearbox Software, laid off more than 900 people. Epic Games fired around 830 people, Sony cut 100 jobs at Bungie, CD Projekt RED and Sega laid off 100 employees each and Electronic Arts reduced 6 percent of its workforce, or around 1,130 employees. 

Tesla has unveiled its EV delivery and production figures for 2023, and the company had another banner year — but it has Chinese rival BYD close behind. Elon Musk's company produced 1.846 million EVs last year and delivered 1.809 million, besting 2022 deliveries by a wide 38 percent. Those figures include 494,989 EVs produced last quarter and 484,507 delivered.

Tesla's originally projected it would sell 2 million vehicles in 2023, but revised that figure downward in its October 2023 earnings call. It did exceed analyst expectations for Q4 2023, though, according to CNBC. 

Tesla built 476,777 Model 3 and Model Y EVs last quarter and delivered 461,538 of them. Those include sales of the refreshed "Highland" Model 3. While Elon Musk predicted last quarter that the Model Y would become "the bestselling car on Earth," the company didn't break down sales between its two most popular models. The company sold 18,212 "other models" consisting of Model S and Model X EVs. There are no sales figures yet for the Cybertruck. 

Tesla has battled some negative press with its EV lineup, particularly around its Autopilot system, which has seen regulatory scrutiny in the US and other countries. EV sales no doubt received a boost from several price drops over the last year as well, with the Model 3 and Model Y most recently dropping to $38,990 and $45,990, respectively. Tesla chalked up the price drops to "economic uncertainty, higher interest rates, and shifting consumer sentiment" in its October earnings call. 

One of Tesla's biggest markets is China, but the company is facing stiff competition there from another EV giant, BYD. That company announced sales of 3.02 million electrified vehicles in 2023, including 1.6 million were fully electric cars and 1.4 million hybrids. Most of BYD's EVs sell at significantly lower price points that Tesla's cars, however. 

After laying off nearly a quarter of its staff last year, e-scooter rental company Bird has filed for Chapter 11 bankruptcy, the company announced. Existing lenders have agreed to purchase the assets and the company is being kept afloat via a $25 million loan from Apollo Global Management (Yahoo and Engadget's owner) and second-lien lenders, according to The Wall Street Journal. 

The company will continue to operate as normal and "has sufficient liquidity to meet financial obligations to city partners, vendors, suppliers, and employees during and after the restructuring process, and will operate as usual," the company wrote. The filing doesn't affect Bird Canada or Bird Europe, which are separate organizations.

Bird aims to sell off its assets for the highest possible price via a “stalking horse” agreement that will set in motion an auction of sorts. Its current lenders will designate a baseline bid before opening the proceedings to other bidders over the next few months.

Bird went public in 2021 via a "SPAC" (special purpose acquisition company) with an implied valuation of $2.3 billion, but its stock cratered less than a year later. Founder Travis VanderZanden stepped away late in 2022, at which point his stake in the company was worth less than his Miami house, according to a Crunchbase report. Bird was forced to delist from the New York Stock Exchange this year due to a valuation that was too low. 

Bird launched in multiple cities in 2017-18 with a fair amount of hype as e-scooters were seen as a sustainable urban mobility solution. It continued to grow despite a lack of profitability (following the Uber model), but the COVID pandemic forced the company to halt operations in multiple locations around the world. Since then, cities have also become more hostile to e-scooter rentals, with some seeing them now as a potential safety hazard and eyesore. 

Etsy is the latest company to lay off staff in 2023. CEO Josh Silverman confirmed the marketplace is letting go of 11 percent of its staff (around 225 employees) in its first significant staffing cut in recent years. It’s also reshuffling its leadership, including announcing two executives’ departures at the beginning of 2024.

“After deep discussion and careful consideration, we are reorganizing our internal structure to more closely align our resources with our most important business priorities and better serve our customers,” Silverman wrote to employees. “As part of this, I’m sad to share that we must say goodbye to approximately 225 team members, reducing the Etsy workforce by ~11%. This decision was among the hardest we’ve ever made, and one that we have tried earnestly to avoid.”

The company is facing a consumer spending slowdown, as its leadership warned in its Q3 2023 earnings call in November. “There’s no doubt that this is an incredibly challenging environment for spending on consumer discretionary items,” Silverman said to investors last month. “It’s therefore important to acknowledge that the volatile macro climate is going to make it challenging for us to grow this quarter.” Etsy’s revenue growth had already stalled in recent years, with customers adjusting their spending habits post-lockdowns after a pandemic-era boom.

Etsy

Etsy’s CEO says Shein and Temu have also affected the company’s bottom line. “There’s no question that Temu and Shein are having an impact in the market,” Silverman said in the November call. “You don’t get that big that fast without taking share from many people.”

However, the two upstarts’ competition isn’t the only issue; Shein and Temu have also allegedly driven up Etsy’s advertising costs. “And the other thing that is happening is they’re spending a large amount of money on marketing, not clear that they’re using ROI thresholds to do that,” Silverman added. “And so I think those two players are almost single-handedly having an impact on the cost of advertising, particularly in some paid channels in Google and in Meta.”

Silverman plans to market the platform’s “quality, value and reliability” to help fend off the younger competitors, which specialize in cheaper goods. “I have great confidence in these plans, but we need the right structure and resources in place to successfully execute on them,” he wrote to employees.

The CEO wasn’t above talking a little smack, either. “We are the opposite of Temu,” Silverman said to investors in November. “If I had to think about what is the polar opposite of Etsy, I’d probably get pretty close to Temu.”

As part of the reorganization, Etsy’s chief marketing officer, Ryan Scott, and chief human resources officer, Kim Seymour, will leave the company on January 1. Chief operating officer Raina Moskowitz will now lead marketing teams, and chief product officer Nick Daniel inherits Moskowitz’s previous turf, overseeing payments and fulfillment teams.

OpenAI’s recent drama hasn’t only caught UK regulators’ attention. Bloomberg reported Friday that the Federal Trade Commission (FTC) is looking into Microsoft’s investment in the Sam Altman-led company and whether it violates US antitrust laws. FTC Chair Lina Khan wrote in a New York Times op-ed earlier this year that “the expanding adoption of AI risks further locking in the market dominance of large incumbent technology firms.”

Bloomberg’s report stresses that the FTC inquiry is preliminary, and the agency hasn’t opened a formal investigation. But Khan and company are reportedly “analyzing the situation and assessing what its options are.” One complicating factor for regulation is that OpenAI is a non-profit, and transactions involving non-corporate entities aren’t required by law to be reported.

In addition, Microsoft’s $13 billion investment doesn’t technically give it control over OpenAI in the eyes of the law, another factor in determining what action a governmental agency might be able to take. However, the recent ousting and re-hiring of Altman — and the integral role Microsoft played in reverting those chess pieces to its preferred positions — suggests the lack of control over the nonprofit is more a technicality than the relationship’s underlying essence.

Justin Sullivan via Getty Images

The UK’s Competition and Markets Authority (CMA) wrote earlier today that it’s considering investigating the relationship between AI’s two dominant players. It said it’s weighing “recent developments,” referring obliquely to the Altman-Microsoft drama. “The CMA will review whether the partnership has resulted in an acquisition of control — that is, where it results in one party having material influence, de facto control or more than 50% of the voting rights over another entity,” the CMA wrote in its news release.

Khan, also challenging Microsoft’s $69 billion Activision Blizzard acquisition, has previously sounded the alarm about the need for AI regulations.

“As these technologies evolve, we are committed to doing our part to uphold America’s longstanding tradition of maintaining the open, fair and competitive markets that have underpinned both breakthrough innovations and our nation’s economic success — without tolerating business models or practices involving the mass exploitation of their users,” the youngest-ever FTC chair wrote in May. “Although these tools are novel, they are not exempt from existing rules, and the F.T.C. will vigorously enforce the laws we are charged with administering, even in this new market.”

The UK is considering an investigation into Microsoft's partnership with OpenAI to decide if it has resulted in an "acquisition of control" that's subject to antitrust law, the Competition and Markets Authority (CMA) wrote today. The regulator said it's considering "recent developments," no doubt referring to the Sam Altman CEO ouster drama in which Microsoft played a large role. 

"The CMA is now issuing an ITC to determine whether the Microsoft/OpenAI partnership, including recent developments, has resulted in a relevant merger situation and, if so, the potential impact on competition," it said in a news release. "The CMA will review whether the partnership has resulted in an acquisition of control — that is, where it results in one party having material influence, de facto control or more than 50% of the voting rights over another entity."

The regulator noted that the "close and multifaceted" partnership includes a multi-billion dollar investment by Microsoft, technology development cooperation and cloud services. It added that both firms have significant activities in financial and related markets, meaning their business dealings directly affect investors. It added that Microsoft was recently involved in developments related to OpenAI's governance.

When Sam Altman was fired by OpenAI's board, Microsoft stepped in to hire him, and a majority of OpenAI's staff threatened to bolt to Microsoft as well. OpenAI's board relented soon after and Altman returned as CEO. "Microsoft executives have since concluded that the current situation [with Altman back in charge] is the best possible outcome," according to a New Yorker expose on the drama. 

The CMA is now seeking views on whether the partnership creates a relevant merger situation and how it impacts competition in the UK. If an investigation is launched, it would be the second one involving Microsoft in the last year, following the company's Activision Blizzard acquisition. The UK's probe had material effects on that merger, as Microsoft agreed to sell Activision Blizzard game streaming rights to Ubisoft to satisfy the CMA.