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North American Edition
8th February 2023
 
THE HOT STORY
Former Coinbase employee pleads guilty in first crypto insider-trading case
Ishan Wahi, a former product manager at cryptocurrency exchange Coinbase, has pleaded guilty to two counts of conspiracy to commit wire fraud in connection with a scheme to commit insider trading in cryptocurrency assets by using confidential Coinbase information about which crypto assets were scheduled to be listed on the firm’s exchanges. U.S. Attorney Damian Williams said: “Ishan Wahi – a former Coinbase product manager – admitted in court today that he tipped others regarding Coinbase’s planned token listings so that they could trade in crypto assets for a profit.  Wahi is the first insider to admit guilt in an insider trading case involving the cryptocurrency markets.  Whether it occurs in the equity markets or the crypto markets, stealing confidential business information for your own personal profit or the profit of others is a serious federal crime.  The Southern District of New York has decades of experience pursuing insider trading cases, and we will continue to use our expertise to prosecute this crime no matter what form it takes and where it occurs.” A Coinbase spokeswoman said the company “takes allegations of improper use of company information with the utmost seriousness.”
GEOPOLITICAL
Pro-China deepfakes discovered on social media
Deepfake 'news anchors' are appearing in pro-China footage on social media platforms including Twitter, Facebook and YouTube, a research group says. Graphika said it discovered the deepfakes on social media while tracking pro-China disinformation operations known as 'spamouflage.' Jack Stubbs, vice president of intelligence at Graphika, said: "This is the first time we've seen a state-aligned operation use AI-generated video footage of a fictitious person to create deceptive political content." In one video analysed by Graphika, a fictitious male anchor who calls himself Alex criticizes U.S. inaction over gun violence. Graphika's report said the two news anchors were almost certainly created using technology provided by the London-based AI start-up Synthesia. Synthesia’s website advertises software for creating deepfake avatars "based on video footage of real actors."
LEGAL
Kenya labor court rules that Facebook can be sued
A labor court in Kenya has ruled that Meta, Facebook's parent company, can be sued after a former employee filed a lawsuit citing poor working conditions. Meta sought to have the case thrown out, arguing that courts in the East African country do not have jurisdiction over Facebook's operations. But Judge Jacob Gakeri said: "Since the petition has raised certain actual issues that are yet to be determined, it would be inopportune for the country to strike out the two respondents from the matter." Daniel Motaung has said that while working as a moderator for Meta in Kenya he was exposed to content including rape, torture and beheadings. He said this put his and his colleagues' mental health at risk, and Meta did not offer any support to employees. Motaung, who was employed in Facebook's African hub in Nairobi, which is operated by Samasource Ltd., also said he and colleagues were allegedly required to work unreasonably long shifts, and offered minimal pay. Amnesty International Kenya Executive Director Irungu Houghton termed the ruling as “historic,” adding “This is a significant step that ensures the authority of Kenyan courts to protect and enforce fundamental human rights . . . The social media platforms have serious impacts on people’s lives and societies. They must be more accountable.” 
Ex-Twitter privacy chief moves to BeReal
Damien Kieran, who resigned as Twitter's chief privacy officer in November, has joined Paris-based photo sharing app-maker BeReal as general counsel. "The product, the people, and the potential lured me in," he wrote on LinkedIn. BeReal strives for an authentic experience by giving platform users one random two-minute window daily in which to post an unfiltered photograph. Kieran resigned along with other senior Twitter executives two weeks after Elon Musk completed his $44bn acquisition of the platform and became CEO.

 
CNA
STRATEGY
eBay plans to lay off 500 employees
eBay has announced plans to lay off 500 employees globally, representing 4% of its total workforce. In a memo to employees, chief executive Jamie Iannone said the company decided to make cuts after examining the global macroeconomic environment over the past several months. "This shift gives us additional space to invest and create new roles in high-potential areas - new technologies, customer innovations and key markets", he added. eBay is the latest tech firm to announce major job cuts. Last month, Google revealed plans to lay off more than 12,000 workers, Microsoft disclosed plans to cut 10,000 employees and Salesforce announced plans to lay off 7,000 workers.
Boeing to axe 2,000 finance and HR jobs
Boeing plans to cut about 2,000 jobs in finance and human resources this year, as it focuses on engineering and manufacturing. The move comes as the company puts more of its resources into "products, services and technology development." It will outsource some of the roles to Tata Consulting Services, a unit of one of India's largest conglomerates. "We have and will continue to communicate transparently with our teams that we expect lower staffing within some corporate support functions," the company told the BBC. "As always, we will support affected teammates and provide assistance and resources to support their transition," it added.
Zoom cuts 1,300 jobs as demand slows
Video conferencing company Zoom is laying off 1,300 staff as the pandemic-driven boom in online meetings slows. The layoffs will hit nearly 15% of its workforce. CEO Eric Yuan said: "We worked tirelessly . . . but we also made mistakes. We didn't take as much time as we should have to thoroughly analyze our teams or assess if we were growing sustainably, toward the highest priorities.” Mr Yuan said he would also reduce his salary in the coming fiscal year by 98% and forego his bonus. Other members of the executive leadership team will see their base salaries fall by 20% and lose bonuses, he added.
CORPORATE
Bed Bath given lifeline from Hudson Bay Capital
Bed Bath & Beyond's plan to use a public stock offering to raise more than $1bn and avoid bankruptcy will be backed by investment firm Hudson Bay Capital Management. The New York fund, which isn’t related to Hudson’s Bay Co., is buying $225m in preferred convertible shares at a discount to the market price. Bed Bath said the convertible preferred shares can initially be swapped into common shares at $2.37, significantly down on the $3 they were trading at on Tuesday. Hudson Bay is also getting warrants that over time allow them to buy about $800m in additional equity securities from the company at likely discounted prices. Investors say Bed Bath still needs to reverse its losses to avoid burning through the rescue, as it did with another lifeline it received in September. To that end, the retailer, which has announced plans to close hundreds of stores, also said Tuesday it will shut dozens more stores as part of its plan to stay in business. The company now expects to keep open about 360 of its flagship locations, or about half as many as it had a year ago, and 120 Buybuy Baby stores. “This transformative transaction will provide runway to execute our turnaround plan," said chief executive Sue Gove. 
ECONOMY
More Americans dipping into 401(k)s for emergencies
Squeezed by higher prices and short on cash, more Americans are tapping their 401(k)s for financial emergencies. A record 2.8% of the 5m people in 401(k) plans run by Vanguard Group tapped their retirement savings in 2022 to cope with hardships such as medical bills, eviction or foreclosure, the company said. That is up from 2.1% in 2021 and a prepandemic average of about 2%. The rules for taking such distributions have been loosened by the U.S. government since 2018; however, Vanguard says that personal financial situations are also a factor, with U.S. households showing some signs of economic stress, noting that in December Americans saved 3.4% of monthly income, down from 7.5% a year earlier. The withdrawals are “evidence that some families may be feeling the pinch and drawing on their 401(k) balances to relieve that financial stress,” said Fiona Greig, global head of investor research and policy at Vanguard. Financial advisers say withdrawals from retirement accounts should be a last resort. Those who fail to increase their savings after taking a distribution will be poorer when they retire. They will be missing not only the money they took out but also the returns that they could have earned through years of tax-advantaged investment. Advisers recommend considering a 401(k) loan before taking a hardship distribution. The advantage is that borrowers must repay themselves with interest.
Poor childcare provisions hurt U.S. economy
A lack of access to high-quality and affordable childcare costs the U.S. economy $122bn in lost earnings, productivity and revenue every year, according to research by ReadyNation, a coalition of business executives focused on building a skilled workforce. The new total is $65bn more annually than when the organization performed the assessments in 2018. Families are losing $78bn per year in forgone earnings and job search expenses, employers are losing $23bn annually due to childcare challenges faced by their workforce, and taxpayers are losing $21bn each year in lower federal, state and local tax revenue. The Department of Labor debuted its National Database of Childcare Pricing last month and it shows costs anywhere from 8% to 19% of a family’s income for just one child, with median yearly prices surpassing $17,000. “Almost two-thirds of parents of infants and toddlers facing childcare struggles reported being late for work or leaving work early, and more than half reported being distracted at work or missing full days of work,” says report author Sandra Bishop. “An overwhelming 85% of primary caregivers said problems with childcare hurt their efforts or time commitment at work.”
WORKFORCE
Few U.S. employees have a work `best friend'
A recent Gallup poll found that just two in 10 adult U.S. employees say they have someone at work they consider to be a ‘best friend.’ The percentage under age 35 fell by three points when compared to pre-pandemic 2019, to 21% from 24%, said Gallup workplace and well-being researcher Jim Harter. There was no change for workers 35 and older, he said. “We’re seeing in the data that younger people in general are feeling more disconnected from their workplaces,” Harter observed. “You can attribute some of that potentially to remote work. If they’re less connected to their workplace, they have fewer opportunities to connect with other colleagues and to develop those kinds of friendships that they might have had in the past.”  Johnny C. Taylor Jr., president and CEO of the Society for Human Resource Management, says more companies are actively encouraging friendships. His organization is one of a growing number of employers that buy lunches for people who invite somebody they're not close with to a meal as a way to encourage new ties. “From a diversity, equity and inclusion standpoint, we're trying to get people together who have different sets of experiences, lived experiences, backgrounds, etc.,” Taylor said. “The idea is, you go to lunch with a stranger and make them a friend.”


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