Ford to lay off 1,000 employees / European travel set to hit Americans in their wallets / Brookfield offers to purchase AEL

Also, pickleball injuries could cost Americans a lot

Inside Business For June 27, 2023

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Hey Insiders, Are you heading to Europe this summer? Get ready to pay a lot, as airfare and hotel pricing are at their highest in the past few years. Plus, Diageo has ended its 15-year partnership with Diddy after his racial discrimination lawsuit.  ALSO: we want to hear from you! Tell us what you think the most important stories of 2023 have been so far, and vote here! Christopher p/chris951156

1 Ford is expected to lay off 1,000 salaried and contract workers, people familiar with the situation have said. It is the latest proposal to try to counterbalance the high costs of creating electric vehicles. More: The cuts will mostly come in North America, as Ford began alerting salaried workers on Monday.  The planned layoffs are going to be from the engineering sector of the company. Ford is targeting costs across the business units to save money. Ford has made several rounds of global layoffs over the last year, including a 3,000-person reduction last summer in the U.S. and a large layoff in Europe earlier this year. Ford has around 28,000 salaried employees in North America.

2 What the numbers say: The average cost of airfare from the U.S. to Europe this summer is the highest it's been in six years. European flights have skyrocketed in price since 2021, when airlines were begging travelers to get back on planes. But COVID-19 restrictions limited a lot of the travel. Now that they are lifted, an average flight to Europe is just shy of $1,200. Relevance: Many Americans have listed Europe as their top summer vacation destination, and airlines and accommodations are charging a premium price. According to a study done by Hopper, airline tickets from the U.S. to Europe are averaging 12% higher than last summer. Sicily is seeing a huge jump because of the popularity of HBO's hit show, "The White Lotus." Attractions like Paris's Louvre Museum and the Vatican in Rome are expected to have near-record wait times. Hotel data: Hotel rates have risen since last year for much of Europe. Hotels in Rome are seeing a 63% jump in pricing, and Madrid is seeing a 41% increase. On average, it will cost travelers $246 to spend a night in a London hotel this summer.

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3 Canadian-based private capital manager Brookfield has offered to purchase American Equity Investment Life for $4.3B. American Equity Investment Life lifted a standstill provision that allows Brookfield to purchase more company shares than the 20% it already owns. More: A definitive deal could be signed by the end of next week, according to sources. AEL, which is based in Des Moines, Iowa, is one of the few independent annuities operators remaining, as many private equity companies have been buying up similar businesses. Under terms of the proposed transaction, Brookfield's listed insurance affiliate, Brookfield Reinsurance, would acquire AEL shares for cash and stock for $55 each, boosting a premium 35% to what Friday's closing price was. Almost $40 of the per-share consideration is said to be in cash. Zoom Out: This deal would end a public dispute between the two companies, as a former Brookfield executive resigned from the AEL board a year ago amidst criticisms of the change of strategy of the company.

4 In retaliation for workers striking, Starbucks filed charges with the National Labor Relations Board over Starbucks Workers United's allegations that multiple cafes were instructed not to display Pride decorations in June. Starbucks has claimed that the union's actions have "ignited and inflamed workplace tension and division." More: Starbucks Workers United has alleged that managers of stores in at least 22 states told baristas they weren't allowed to put up Pride decorations.  Other cafes have said that Pride flags were taken down after they were put up. Employees at some Starbucks locations began picketing last Friday, and more than 150 stores have pledged to join the strike around the country. That would represent roughly 3,500 employees. Starbucks also filed a second NLRB charge responding to the union's depiction of benefits for LGBTQ+ workers.  "Starbucks continues to provide its partners with industry‐leading gender-affirming care benefits. The union has knowingly and falsely stated that Starbucks eliminated or changed the benefits coverage for its LGBTQIA2+ partners," the company said.

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5 Diageo has ended its 15-year working relationship with Sean "Diddy" Combs following the racial discrimination lawsuit he filed against the company. Diageo has called his claims "baseless" and said his bad-faith actions "clearly breached his contracts." More: Diddy claimed that Diageo neglected and underpromoted his DeLeón tequila, branding it as an "urban" product in its marketing. He accused Diageo of failing to market his spirits, which includes Ciroc vodka, in the same way that it promoted Casamigos and Don Julio. In the lawsuit, Diddy claimed that Diageo "kneecapped DeLeon's sales growth for nearly a decade" because it considered it a "Black" brand. Diageo has filed a motion to dismiss the lawsuit while stating that he "repeatedly undermined our partnerships and threatened to publicly defame Diageo if we did not meet his unreasonable financial demands."

6 Walgreens saw its stock sink on Tuesday after the company warned that its profits are expected to be lower this year amid dwindling demand for COVID-19 vaccines. It also cited a weaker consumer spending environment as a reason for adjusting its earning projections. More: Walgreens cited in its third-quarter earnings call that it administered 800,000 COVID-19 booster shots, an 83% decrease YoY. Walgreens cut its full-year adjusted earnings per share guidance to a range of $4.00-$4.05 from a range of $4.45-$4.65. Shares in the company, Walgreens Boots Alliance, dropped nearly 10% after the earnings call. It did slightly beat estimates for revenue, coming in at $35.42B in the quarter, more than the projected $34.21B. But the company's gross margins came in at 18.8%, which was below the Street consensus of 20.6%.

7 Quick Hits: Kubernetes doesn't need to be complex. Join us for a conversation about how to increase developer productivity & reduce your pull request time by 75%.* Pickleball injuries could cost Americans nearly $400M this year. The trucking company Yellow, after receiving a $700M bailout, may file for bankruptcy. Florida Governor Ron DeSantis has filed for immunity from the Disney lawsuit that claimed he punished the company for its stance on the "Don't Say Gay" bill.  It's never been easier for your sales organization to accelerate growth. Learn how AI and more can help you sell in a whole new way.* *This is a sponsored post.

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Christopher Hachey Freelance Editor Christopher Hachey is a freelance writer and editor based in the New York City area. He has spent most of the past 15 years in newsrooms covering all kinds of topics like sports, tech, business, finance, and commerce. He's now returning to his broadcast journalism roots by diving into podcasting news. Reach out to him at chris@inside.com This newsletter was edited by Aaron Crutchfield

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Social media app IRL to shut down / EV maker Lordstown files for bankruptcy / TikTok Now is coming to an end

Plus: Meta is launching a VR game subscription service

Inside Tech For June 27, 2023

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Hey Insiders,  Welcome to Inside Tech! Here's our rundown of the day's top stories: Social app IRL has shut down as only 5% of accounts are confirmed as real. Electric truck startup Lordstown Motors has filed for bankruptcy. TikTok Now, inspired by the BeReal app, is being discontinued. Scroll down for some quick hits, and then let us know what other content you'd like to see in future issues!  Beth p/beth-duckett

1 Social media app IRL, which claimed to have 20 million users, has shut down after an internal investigation revealed that over 95% of its accounts were "automated or from bots." IRL, which positioned itself as an event-focused alternative to Facebook, was once valued at $1.17B. More: Based on the investigation's findings, shareholders concluded that the company's future prospects were unsustainable. IRL faced mounting issues when a former employee alleged that the company had inflated user counts using bots. Other employees also voiced similar concerns, prompting the SEC to investigate potential securities law violations. In April, IRL's CEO Abraham Shafi was suspended by a special committee of the board of directors after an investigation revealed a pattern of misconduct. Zoom out: IRL, founded in 2016, received significant funding, including a $170M Series C round in 2021 led by SoftBank's Vision Fund 2. Its parent company, Live Awake, also operates the app Memix, which is still active.

2 The news: Precision Neuroscience's neural implant system was recently used on conscious patients in West Virginia, generating what's believed to be the highest-resolution recording of human thought.  Details: In the pilot clinical study, Precision's system was briefly placed on the brains of three patients during tumor removal neurosurgery, and two of the patients were awake to communicate while their brain activity was recorded. Following the success, the company will conduct additional human testing and has set its sights on obtaining FDA clearance for its initial device next year. Why it matters: Precision Neuroscience, founded in 2021 as a rival to Elon Musk's Neuralink, aims to help paralysis patients operate digital devices by decoding their neural signals. Unlike competitors, its brain-computer interface is designed to conform to the brain's surface without causing tissue damage. Precision aims to restore communication abilities for patients with degenerative diseases like ALS by enabling them to control cursors, type, and access social media using their minds. Eventually, the company wants to offer its treatments to help the millions of people with neurological illnesses globally.

A message from our sponsor, Remote. Remote makes it easy for any company to hire and pay anyone, anywhere in the world.  Your trusted HR team in every country! As the Employer of Record, Remote fully owns and operates entities in the markets we serve so you don’t have to. You’ll save time and money while protecting your business and employees. We offer comprehensive coverage at rates meant for larger groups — even if you’re still a small team.  Get personalized service from our HR and legal experts during every step of your global hiring journey. We do the work to understand and proactively act on local labor and tax law requirements. Our fair price guarantee means that you can say goodbye to 3rd party markups and hidden fees. Retain full ownership of your IP and invention rights in every country where you operate.  We help you understand tax treatment in each country so you can offer the best plans and packages. For employees looking to apply a special tax regime in their country, which will help them maximize their take-home pay, we have an expert team to help them navigate the process free of charge. We're proactive and not reactive about our customer service. We care for you, the customer, and that is why we make every interaction count. Start onboarding your team in a few clicks! Start today

3 Electric truck startup Lordstown Motors has filed for bankruptcy and also sued partner Foxconn, accusing the contract manufacturer of fraudulent conduct and breach of contract. Lordstown intends to restructure by auctioning its assets, including the rights to its Endurance EV pickup truck. The company plans to seek a buyer but doesn't have offers yet. More: In 2019, Lordstown Motors acquired General Motors' Ohio factory to manufacture electric pickup trucks. Two years later, Lordstown sold that factory to Foxconn, a top iPhone manufacturer and one of the world's biggest electronics manufacturers. Under their partnership, Foxconn agreed to manufacture the Endurance electric pickups at the factory and make additional investments. After closing the initial deal in 2022, Lordstown and Foxconn entered into a second agreement where Foxconn would invest up to $170M in Lordstown, acquiring a 19.3% stake. Foxconn paid the first installment of $52.7M but failed to pay the remaining $47.3M. Foxconn accused Lordstown of breaching the agreement by allowing its stock price to drop below $1 per share. Zoom out: Lordstown, which went public through a SPAC in 2020, previously saw a significant rise in its stock value, fueled in part by former President Donald Trump's endorsement. However, investor focus shifted to profitability, and the company struggled to deliver on sales.

4 TikTok Now, the platform's BeReal-inspired in-app feature and standalone app, is being discontinued. Despite heavy promotion, the feature failed to gain user traction and is now being phased out less than a year after it was first announced. More: TikTok Now allowed users to capture daily moments using their phone's front and back cameras, replicating BeReal's daily photo prompts that are designed to promote authenticity. TikTok prominently featured its Now feature as one of five buttons on the app's bottom navigation bar. According to user notifications from TikTok, the Now feature is being discontinued, but users can still access their previous posts without the ability to create new ones.  Zoom out: The decision comes as interest in BeReal has waned since its recognition as Apple's iPhone app of the year in 2022. TikTok's discontinuation now aligns with BeReal's reported 61% drop in daily active users from October 2022 to March 2023, although BeReal disputes these figures.

A message from our sponsor, RYSE. Invest in the company that won over the Dragons The pioneer in smart-doorbell technology, Ring, pitched their business on the hit show Shark Tank at a valuation of just $7 million - the sharks shut them down.  5 years later, the company sold to Amazon for more than $1 Billion, turning the 10% stake initially offered to the sharks from $700K to $100M! A similar story is brewing up in the Smart Shades segment of the industry, with a company called RYSE pitching on the Canadian version of Shark Tank called Dragon’s Den. The difference? They actually received offers from two of the veteran investors and have an addressable market that could be significantly larger than that of Ring’s. The Dragons believe that RYSE has the products, technology, and the team to become the market leader for Smart Shades, and their recent deal with Best Buy has put them miles ahead of the competition. Invest in RYSE alongside the Dragons. Learn More

5 Meta is launching a VR game subscription service ahead of the release of its Quest 3 headset this fall. The Quest Plus service offers two curated Quest games each month for $8 per month or $60 annually. More: Users can download those titles and keep them for as long as they're a subscriber. The first titles for July will be "Pistol Whip" and "Pixel Ripped 1995." "Walkabout Mini Golf" and "Mothergunship: Forge" will be added in August. The service is compatible with Quest 2, Quest Pro, and the upcoming Quest 3. Zoom out: The Quest 3 has a new Qualcomm Snapdragon chip, with two times the graphics performance and a 40% thinner design than the Quest 2. At $499, it will have redesigned controllers and color passthrough cameras for improved mixed-reality experiences. Apple recently announced its own VR headset, the Vision Pro, with greater capabilities at a higher price point.

6 Databricks is acquiring MosaicML, a generative AI startup, in a deal valued at $1.3B. This partnership aims to empower businesses to create their own language models using proprietary data, rather than relying on third-party models trained on public data. Key points: The acquisition will offer enterprises a unified platform for managing data assets and building secure generative AI models.  MosaicML, specializing in cost reduction for generative AI, will operate as a standalone service under Databricks. Databricks' Lakehouse platform will integrate MosaicML's large language models. The MosaicML team, including CEO Naveen Rao, will join Databricks after the acquisition. MosaicML, based in San Francisco and founded in 2021, has raised $64M in funding from investors like Lux Capital and DCV.

7 QUICK HITS Kubernetes doesn't need to be complex. Join us for a conversation about how to increase developer productivity & reduce your pull request time by 75%.* Meta announced the launch of new parental controls for Messenger, Instagram, and Facebook. The Messenger supervision controls, initially launching in the U.S., the U.K., and Canada, lets parents monitor their teens' privacy settings, app usage time, and more. Apple Arcade, its video game subscription service, will release new titles in July, including "Stardew Valley," "Slay the Spire," and "Ridiculous Fishing." Microsoft announced a public preview of Azure Remote Rendering support for Meta Quest 2 and Quest Pro, enabling real-time streaming of complex 3D content from the cloud.  It's never been easier for your sales organization to accelerate growth. Learn how AI, and more can help you sell in a whole new way.* *This is a sponsored post.

Upcoming Events JUN 27 The No Code Revolution Virtual Register Here JUN 28 Dev Talk: Run apps at scale without K8 expertise* Virtual Register Here JUN 29 Inside.com Book Club - Automate Your Busywork (June 2023) Virtual Register Here * This is a sponsored event

Knowledge Hub Term of the Day Assessed value: The assessed value is an official estimate of a property's worth that is used to determine the appropriate tax rate for the property.  Read More Question of the Week How do you feel about the phrase "The customer is always right"? Join the conversation

INSIDE TECH LEADERBOARD (7 DAYS) 🥇 Lydia Sugarman (18) 🥈 Radhika Sarma (18) 🥉 Mike Bal (12)

Beth Duckett AI and technology writer Beth is a writer and editor at Inside.com covering artificial intelligence and daily technology news. She has written the Inside AI newsletter since 2019. You can reach her at Beth.Duckett@inside.com. This newsletter was edited by Eduardo Garcia

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