Etsy is laying off 11 percent of its staff

Posted on 13/12/2023 by Will Shanklin

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’s headquarters, inside view. A commons area includes benches and tables with pillars and buffet stations behind. Art decorates the walls. — Etsy’s Brooklyn headquarters

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.

This article originally appeared on Engadget at https://www.engadget.com/etsy-is-laying-off-11-percent-of-its-staff-201545615.html?src=rss

The FTC is reportedly looking into Microsoft’s $13 billion OpenAI investment

Posted on 08/12/2023 by Will Shanklin

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.

SAN FRANCISCO, CALIFORNIA - NOVEMBER 06: Microsoft CEO Satya Nadella (R) speaks as OpenAI CEO Sam Altman (L) looks on during the OpenAI DevDay event on November 06, 2023 in San Francisco, California. Altman delivered the keynote address at the first ever Open AI DevDay conference. (Photo by Justin Sullivan/Getty Images) — OpenAI CEO Sam Altman (left) and Microsoft CEO Satya Nadella

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.”

This article originally appeared on Engadget at https://www.engadget.com/the-ftc-is-reportedly-looking-into-microsofts-13-billion-openai-investment-185201614.html?src=rss

The UK’s competition regulator is reviewing Microsoft’s links to OpenAI

Posted on 08/12/2023 by Steve Dent

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.

In a statement, Microsoft told Engadget that its relationship with OpenAI keeps both companies independent. "Since 2019, we’ve forged a partnership with OpenAI that has fostered more AI innovation and competition, while preserving independence for both companies," said Microsoft's vice-chairman and president, Brand Smith, in a statement. "The only thing that has changed is that Microsoft will now have a non-voting observer on OpenAI’s Board, which is very different from an acquisition such as Google’s purchase of DeepMind in the UK. We will work closely with the CMA to provide all the information it needs.”

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.

This article originally appeared on Engadget at https://www.engadget.com/the-uks-competition-regulator-is-reviewing-microsofts-links-to-openai-115248453.html?src=rss

Microsoft joins OpenAI board as Sam Altman returns as CEO

Posted on 30/11/2023 by Richard Lai

Following Sam Altman's rollercoaster of a return as OpenAI's CEO, the company announced that it will now include Microsoft as a non-voting observer on its board. The question remains as to why the firm's largest investor wasn't on its board in the first place, but this seems to be somewhat addressed for now, at least. Altman is joined by co-founder Greg Brockman who resumes his role as President, whereas Mira Murati, who very briefly served as interim CEO throughout the drama, will return to her role as CTO.

The announcement also confirms a new board consisting of former Salesforce CEO Bret Taylor (chair), former Clinton Treasury Secretary Larry Summers, and original member Adam D'Angelo, who is also Quora's co-founder and CEO. It was earlier rumored that Altman's exit was partly influenced by D'Angelo's seeming conflict of interest, as OpenAI was developing a potential competitor to Quora's Poe service — the latter offers OpenAI's ChatGPT and GPT-4, along with several other text-generating AI models.

I recognize that during this process some questions were raised about Adam’s potential conflict of interest running Quora and Poe while being on the OpenAI Board. For the record, I want to state that Adam has always been very clear with me and the Board about the potential…
— Sam Altman (@sama) November 30, 2023

D'Angelo's presence on OpenAI's new board came as a surprise, and Altman took to X to address the elephant in the room. "Quora is a large customer of OpenAI and we found it helpful to have customer representation on our Board." The exec added that D'Angelo "has always been very clear... about the potential conflict and doing whatever he needed to do," including offering to leave the board, if necessary. As to why the original board wanted Altman out, he said "it is clear that there were real misunderstandings between me and members of the board."

OpenAI co-founder and chief scientist Ilya Sutskever was a former board member who allegedly led the ouster of Altman. The exec later openly admitted that he "deeply regret my participation in the board's actions" (with Elon Musk begging for attention in his thread), and he had since voiced his support for Altman's return as CEO. In his open message, Altman says "I harbor zero ill will towards him," and that his team is figuring out a way to let Sutskever continue his work at OpenAI.

In the same official announcement, OpenAI's new Chair, Taylor, assured that the company will "enhance the governance structure," and put together "an independent committee of the Board to oversee a review of the recent events," for the sake of the organization's stability.