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When Microsoft announced this week that it was laying off 10,000 employees, it wasn’t exactly a shock. Other big companies, including Salesforce, Amazon and Meta, have already been down that road, and the news leaked far and widebefore the official announcement on Wednesday. Alphabet joined in today, announcing another 12,000 job cuts.

Like these other companies, Microsoft is facing a shifting economic landscape and making adjustments to a workforce that was pumped up after the early days of the pandemic. Each of these companies added tens of thousands of employees to the payroll, and with the current economic uncertainty, they decided to dial it back (or at least use it as an excuse to cut costs).

Consider that Microsoft had over 220,000 employees at the end of last year, according to Statista. That’s up from 163,000 in 2020 and 181,000 in 2021, meaning the company added more than 57,000 employees in a two-year period before cutting 10,000 this week.

It’s not clear where the cuts are coming from, and there has been no official word from Microsoft. Bloomberg reported that engineering groups would be cutwhile also reporting that the HoloLens group took a hit after losing a big defense contract. Geekwire reported that there were big cuts to the Nokia group. Microsoft wouldn’t comment when asked by TechCrunch where the cuts were taking place.

Microsoft hasn’t exactly been doing poorly, earning over $200 billion last year while committing $69 billion to pay for gaming company Activision Blizzard almost exactly a year ago. Today, it has a market cap of over $1.7 trillion — that’s with a T. In a filing with the U.S. Securities and Exchange Commission reporting the layoffs, the company indicated that it will write off $1.2 billion in costs related to the layoffs in the second quarter.

All of this is to say that this layoff represents a drop in the bucket for Microsoft financially, but it has a very real impact on the 10,000 people who were told they would be let go this week. If it was to impress investors, so far it’s not working — its stock ticked down in the days following the announcement before rebounding Friday.

With all of those financial resources, the question is why. What does Microsoft gain by cutting its workforce 5%? We spoke to a few analysts to try to figure it out.

A pretty good year

First, let’s take a quick look at Microsoft’s financials. Companies usually cut costs because the business no longer supports the workforce, but Microsoft has had a pretty decent year, as the chart below shows:

Microsoft joined the layoff parade. Did it really have to? by Ron Miller originally published on TechCrunch

You know what it’s like – you’ve been on vacation and you’ve taken twenty-eight million photos, and you just want to select the best 12 so you can make a calendar. Ain’t nobody got time for that – and that’s what GoodOnes is here to help you with. The app is in early access mode at the moment, and just closed a $3.5m round of seed funding to continue its march toward launch.

In a nutshell, GoodOnes connects with your Google Photos or iCloud Photos account and helps you select the ‘best’ photos from your enormous library of images. The idea isn’t new, we’ve seen a number of apps try to clean up the mess of images. One example was EyeEm’s The Roll, which made a similar attempt, fueling its business model of turning everyone into a stock photographer.

At least The Roll made sense as a marketing stunt for EyeEm’s core business. What is less clear is how GoodOnes has a path to generating revenue.

“We’re really thinking about a subscription layer on top of this product. We saw a lot of willingness to pay from users, especially for the target segment of parents, and grandparents,” explains Israel Shalom, co-founder at GoodOnes, in an interview with TechCrunch. “We have not finalized our subscription model yet. Our primary focus at this point is to build a good user base and get all the feedback to improve it.”

The company raised its round from TLV Partners with participation from Liquid2 Ventures (Joe Montana’s fund), as well as Rich Miner (former co-founder of Android), and Peter Welinder (founder of Carousel, sold to Dropbox), as well as many more seasoned operators and funders. With the funding, the company is planning to expand its engineering team.

In a world where Google, Apple, and the other photo-keeping apps are already making efforts to surface good and interesting photos, is there really space for GoodOnes in the market?

“The reality that these apps have been around for a decade, both on the Apple side and on Google side. What they are doing well is offering safe storage for all your photos,” says Shalom, pointing out that to the degree that the competitor apps are surfacing photos, they aren’t doing a particularly good job, and that his solution is much more customizable. “What’s different about what we’re doing, is that we are leaving you in the driver’s seat.”

The app works by learning your preferences, and using your swipe-left-i-love-this and swipe-right-ugh-get-out-of-my-face to train your tastes on an AI. From there, it starts creating galleries of photos that it thinks you like the best. The final gallery or album is created and presented back to the user.

“We’re thinking that there’s a room for another player big player here. The same way that Netflix is synonymous with streaming and Spotify synonymous with music,” says Shalom,” We would like GoodOnes to be the place where you consume your most personal and most valuable information, which is your personal photos and videos.”

“With the creation of mobile platforms, we ended up delivering powerful computers, digital cameras and streaming devices in everyone’s pocket– we could never have anticipated the volume of new content that would be created,” says Rich Miner, who co-founded Android, and is an angel investor into GoodOnes’ round, said in a statement. “GoodOnes brings powerful curation to the deluge of photos we’ve all come to accumulate. I’m very excited about this tool & tech, which is why I was thrilled to invest.”

GoodOnes raises to help make sense of your mess of a camera roll by Haje Jan Kamps originally published on TechCrunch

Due to a phenomenon called semantic satiation, if you repeat a word or phrase too frequently, it can sometimes lose all meaning.

That’s what happened to “unicorn:” We wore it out like a pair of sneakers that leak in the rain but are too comfortable to part with.

In fact, most of the startups in CB Insights’ unicorn index are on the bubble and “are actually hovering right at the $1 billion mark,” reports Rebecca Szkutak.

“How many of these will stay unicorns through this calendar year?” Out of 35 investors she surveyed, “the vast majority felt the herd has likely already been winnowed,” she found.

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“It’s not just about whether they’ll still command ‘unicorn status,’ but rather whether or not they will be fundable, at any value, period,” said Harley Miller, founder and managing partner at Left Lane Capital.

By all accounts, the IPO window is nailed shut. Any startups that hope to weather this downturn must raise additional funds.

I’m sure the hunt is already on for another mythical animal that best represents startup attainment in a down market, like ‘ARRmadillo.’ You can have that one for free.

My greater hope: investors and founders will use this era of austerity as an opportunity to create value, and not just wealth.

Thanks very much for reading,

Walter Thompson
Editorial Manager, TechCrunch+
@yourprotagonist

Teach yourself growth marketing: How to boot up an email marketing campaign

In the third article of a five-part series, growth marketing expert Jonathan Martinez (formerly of Uber, Postmates and Chime) explains how to create and optimize email campaigns that will “push consumers through your funnel and drive conversions.”

Martinez shares fundamentals for segmenting customers and anticipating where leaks will occur along the funnel you’re developing. Startups that recapture these users can eke out higher ARR, and every little bit counts.

“It is crucial to distill user segments as much as possible because we must ensure that we’re sending the right messaging to the right consumers.”

Putting numbers on the global venture slowdown

According to CB Insights’ State of Venture report, VC funding fell 35% in 2022. Although estimated deal count didn’t drop proportionately, “global venture funding was down by 19% quarter over quarter in Q4 2022,” reports Anna Heim.

“How long things will take to improve is anyone’s guess, so we will be looking forward to more data as the year progresses,” she writes.

Dear Sophie: What are some fast options for hiring someone on an expiring grace period?

Dear Sophie,

I’m a co-founder of a very early-stage startup. My co-founder and I are considering bringing on a third co-founder, who was recently laid off. She is currently in the United States on an H-1B with a grace period that will expire soon.

What are the fastest, least risky immigration options that we should consider? What’s going on with potential increases to USCIS filing fees?

— Careful Co-founder

Pitch Deck Teardown: Scrintal’s $1M seed deck

Visual collaboration tool Scrintal says it has more than 40,000 people on its waitlist, but that didn’t stop its founders from raising €1 million.

Co-founders Ece Kural and Furkan Bayraktar shared their pitch deck with TC+ — click through to learn why their value proposition, vision and product plans connected with investors:

Cover slide
Problem slide part 1
Problem slide part 2
Solution slide part 1
Solution slide part 2
Value proposition slide
User testimonials slide
Traction slide
Revenue slide
Retention slide
User profile slide
Growth projection slide
Vision slide
The ask slide
Contact slide
Appendices cover slide
Appendix 1: Why now?
Appendix 2: Competitive landscape
Appendix 3: Product and growth model

TechCrunch+ roundup: 2023 unicorn slump, global VC slowdown, email marketing 101 by Walter Thompson originally published on TechCrunch

Even as VC funding dries up across the world, development finance institutions (DFIs) from Europe are looking to African startups to deploy their dry powder.

British International Investment (BII), a DFI from the UK, told TechCrunch recently that it will deploy $500 million into startups by the end of 2026, and half of that amount has been earmarked for African tech companies. In addition to backing VC funds in the region, the organization aims to make more direct equity investments in startups, adding to the four African companies it invested in last year.

Formerly known as the Commonwealth Development Corporation, the BII is not alone: The World Bank’s International Finance Corporation (IFC) and the Netherlands’ Dutch Entrepreneurial Bank (FMO) have each invested in more than 10 startups over the last four years. The IFC also recently launched a $225 million fund to back early stage startups in Africa, Central Asia, Middle East, and Pakistan.

Often attached to countries that had colonized big parts of the continent and still have financial, social and historical ties to countries in the region, these funding initiatives are complementing and offsetting slowing investment from VC funds and other institutional investors.

“It’s a paradigm shift, where ‘development finance’ looks at private enterprise as a vehicle of socio-economic development,” said Dario Giuliani, founder and director of research firm Briter Bridges.

BII’s decision follows plans to double down on its efforts and invest some $6 billion in Africa across five years, and invest $100 million in Egyptian startups. The organization has invested in eight African startups since 2020.

But what’s driving these organizations to invest in Africa despite investors across the world preferring to invest only in safer bets? It seems they’re attracted to tech that enables wider socio-economic development because it offers a scalable and efficient way to make an economic impact.

Investing in tech to meet development goals

Usually deploying capital from national or international development funds, DFIs back development and private-sector projects in less industrialized economies to promote job creation and sustainable economic growth. Keen to align with those missions, these organizations seek to back tech startups that can make an impact — for example, tech that grants and increases marginalized populations’ access to financial services, food and energy.

Why international DFIs are looking to African startups to scale impact investing efforts by Annie Njanja originally published on TechCrunch

Netflix reported its Q4 2022 financial results yesterday, topping 230 million global subscribers, up from 223.09 million, thanks to the addition of 7.7 million subs. During the earnings call, Netflix co-CEO Sarandos said the company is “keeping an eye” on a free ad-supported TV (FAST) option, a move that many media companies are considering as more consumers shift to FAST services.

“We’re open to all these different models that are out there right now, but we’ve got a lot on our plate this year, both with the paid sharing and with our launch of advertising and continuing to this slate of content that we’re trying to drive to our members. So, we are keeping an eye on that segment for sure,” Sarandos said.

While a Netflix FAST channel offering probably won’t happen anytime soon, Sarandos isn’t dismissing the possibility that there’ll be one in the future. When and if Netflix goes through with a FAST option, the move will most likely boost its ad business significantly. According to nScreenMedia, the FAST industry will reach 216 million monthly active users in 2023, driving $4.1 billion in ad revenue.

Netflix is known to be slow to follow industry trends. It took many years for former co-CEO Reed Hastings, who just announced he would step down yesterday, even to consider launching a cheaper ad-supported plan. Hulu is the third-oldest streaming service next to Netflix and Amazon Prime Video (formerly Amazon Unbox) and has offered an ad tier for over a decade.

Netflix is counting on its ad business to be a big source of income, estimating $8.17 billion in revenue for Q1 2023.

However, it’s looking like Netflix’s “Basic with Ads” plan isn’t paying off as much as it anticipated, according to a recent Kantar report. Despite being satisfied with the growth of its ads business, which Netflix President of Worldwide Advertising, Jeremi Gorman noted during an interview at Variety’s Entertainment Summit atCES, Kantar data shows that Netflix “Basic with Ads” now accounts for 12% of its subscriber base. Although Netflix intended for the new tier to entice new subscribers, it appears only a few current customers traded down to the $3 plan.

In the letter to shareholders yesterday, Netflix wrote that the launch of its ad-supported tier was successful, however, the company admitted it had “much more still to do.”

It’s likely that more subscribers will consider the cheaper tier when the company adds all its content to the plan. As of now, 85% to 95% of Netflix’s content is available. The company is currently renegotiating deals with studios.

Also, the ad tier is not available in every region. “Basic with Ads” is only available in the U.S., the U.K., France, Germany, Spain, Italy, Australia, Japan, Korea, Brazil, Canada and Mexico. The company has no immediate plans to expand, but it has future plans to target larger ad markets.

Netflix CFO Spencer Neumann said in yesterday’s earnings call, “We wouldn’t get into a business like this if we didn’t believe it could be bigger than at least 10% of our revenue and hopefully much more over time in that mix as we grow.”

Overall, the company admits that “2022 was a tough year,” Netflix wrote in its letter to shareholders. The streaming giant had two painful quarters in 2022, losing over a million global subscribers.

In Q4, the company reported $7.85 billion in revenue, adding to its recent trend of slowing revenue growth. For comparison, the company brought in $7.93 billion in Q3 2022 and $7.97 in Q2.

“We believe we have a clear path to reaccelerate our revenue growth: continuing to improve all aspects of Netflix, launching paid sharing and building our ads offering,” the company added in yesterday’s letter.

This year and beyond are shaping up to be a pivotal time for Netflix. The company is set to launch its password-sharing offering and livestreaming capability in 2023.

Netflix says it’s open to adding free streaming ‘FAST’ channels to grow its ads business by Lauren Forristal originally published on TechCrunch

While the bulk of commercial space launch activity is happening just south of its border, Canada is tired of watching from the sidelines and wants in on the action: The country’s federal transport ministry announced that it intends to support commercial space launches in the near future.

The plan is for Canada to hose commercial launch activities starting essentially immediately on a “case-by-case basis,” using the existing regulatory framework to govern how, where and when those launches take place. That ad-hoc method is expected to last approximately three years, with the intent bing that Transport Canada will spend that time working with other relevant federal agencies and regulators to create a framework specific to modern space launch activities within the country.

It’s not as if Canada doesn’t already participate in the space economy: To the contrary, Transport Canada said that aerospace commercial activity contributed more than $22 billion to in GDP to the country’s economy in 2020. The commercial launch sector is obviously heating up, however, and Canada believes that its geographically and strategically well-positioned to capitalize.

Already, some homegrown startups are experimenting with the possibilities of small payload launch from Canada, including SpaceRyde, which uses ballon-lofted small rockets to make the relatively short trip to low-Earth orbit. But opening up commercial activities more broadly could help Canada court existing commercial launch entities, including SpaceX, Rocket Lab, and the other companies looking to join their ranks, as an additional North American take-off option.

Canada wants to support commercial space launches by Darrell Etherington originally published on TechCrunch

Starting on February 21, Amazon’s Music Unlimited streaming service will increase by $1/£1 in the U.S. and the U.K. The Amazon Music Unlimited Individual Plan is increasing from $9.99 (£9.99) to $10.99 (£10.99) per month, whereas the student plan is changing from $4.99 (£4.99) to $5.99 (£5.99) per month.

The company noted the price changes on its support page, which was first noticed by Billboard. “To help us bring you even more content and features, we’re updating the prices of select Amazon Music Unlimited plans,” Amazon wrote.

While the company mentions price hikes to its Individual Plan and Student Plan, the prices for the Family Plan ($15.99/month) and Single-Device Plan ($4.99/month) appear to remain unchanged.

It’s only been eight months since Amazon last raised its prices. In May, the discounted Amazon Music Unlimited plan for Amazon Prime customers increased from $7.99 to $8.99 per month. Non-Prime members didn’t experience a change this time and still had to pay $9.99 per month.

Amazon also offers an Amazon Music Prime tier, which is included free with Prime subscriptions and offers ad-free listening. However, if users want HD, Ultra HD and Spatial Audio, they have to subscribe to Music Unlimited.

The e-commerce giant is currently in the middle of a cost-cutting spree, which includes the recent closure of its charity donation program AmazonSmile, and the decision to lay off 18,000 employees earlier this month.

Amazon’s decision to jack up the cost comes on the heels of Apple increasing its rival music streaming subscription, Apple Music, by $1 for individual subscribers and $2 for families in the U.S. Apple Music alsoquietly increased the price of its student planin the U.S., Canada and the U.K. in June 2022.

Spotify is also considering raising its subscription price in the U.S., which CEO Daniel Ek noted during the company’s earnings call in October. “[Price increases] is one of the things that we would like to do,” Ek said. “I feel really good about sort of this upcoming year and what that means in pricing in relation to our service.” This would be a notable move for the company since it hasn’t raised its standard subscription cost since launching in 2011 at $9.99 per month in the U.S.

Amazon’s Music Unlimited quietly gets a price hike in the US and UK by Lauren Forristal originally published on TechCrunch

Merriam-Webster, the Encyclopædia Britannica subsidiary best known for its online dictionary, has acquired a popular Wordle clone called Quordle. Terms of the deal have not been disclosed.

Little fanfare has been made around the acquisition, but the Quordle website now redirects to its own space on the Merriam-Website website, while Quordle creator Freddie Meyer quietly issued this statement at the top of the Quordle tutorial section.

I’m delighted to announce that Quordle was acquired by Merriam-Webster! I can’t think of a better home for this game. Lots of new features and fun to come, so stay tuned!

Quordle is one of a number of knock-offs that emerged in the wake of Wordle’s rise to world fame. Wordle, for the uninitiated, is a simple web-based game that gives users six attempts to guess a five-letter word, with color-coded clues served as feedback if they get any of the letters correct. The New York Times snapped up Wordle last January for a seven-figure sum, and in the intervening months the game has apparently attracted millions of new subscribers to the NYT’s Games offering. The media giant later integrated Wordle into its crossword app, and even turned Wordle into a physical board game.

Quordle, for its part, builds on the basic Wordle concept, except there are four five-letter words to guess at once, with just nine tries. Each guess must be a genuine word, and each guess applies to each of the four words — the tiles change color to tell the user which guesses are correct, and whether a letter exits in that word but in a different position.

Wordle’s wake

After arriving on the scene last February, just one month after the NYT Quordle had reportedly conjured up 1 million players within two months. But similar to Wordle, Quordle wasn’t much more than a passion project, with creator Meyer saying that he had “no plans to monetise Quordle,” according to reports at the time. That said, the developers did include some ads on the page as an alternative to soliciting donations to cover costs.

Fast-forward to today, and Quordle is now in the hands of Merriam-Webster, a brand that has evolved beyond its printed-dictionary foundations that started nearly two centuries ago, to include its first website back in 1996, followed by numerous tangential language-focused digital services such as vocabulary app for kids. Among its online properties is an NYT-style Games & Quizzes portal, which is where Quordle will now reside.

It’s also worth noting here that Spotify acquired a Wordle-inspired music guessing game called Heardle last summer, if we needed any further evidence of Wordle’s long-tail cultural and technological impact.

TechCrunch has reached out to Merriam-Webster for comment, and will update if — or when — we hear back.

Wordle clone Quordle acquired by Merriam-Webster by Paul Sawers originally published on TechCrunch

It has been nearly four months since Brett Harrison stepped down as president of FTX US, the American division of the now-bankrupt crypto exchange. Now, he has raised $5 million for his own startup, Architect, which aims to make trading infrastructure for large crypto investors.

“It’s a software company aiming to build institutional-grade infrastructure to connect various crypto venues across decentralized and centralized exchanges,” Harrison told TechCrunch. “We’re trying to make it easy to interface with either qualified custodians or self-custody. We’re building this single interoperability platform across crypto services with a focus on trading.”

The startup has raised capital in a pre-product financing round from Coinbase Ventures, Circle Ventures, SV Angel, SALT Fund, P2P, Third King Venture Capital and Motivate Venture Capital. Angel investors Shari Glazer, the CEO of Kalos Labs, and Anthony Scaramucci, former White House communications director and founder of Skybridge, are also among its investors.

Prior to FTX, Harrison worked at traditional financial institutions like Citadel Securities and Jane Street. He also spent about 11 years developing algorithmic trading software for global equities and derivatives markets.

“Talking with many past clients of FTX and thinking about my own background, one of the biggest barriers of entry to people for trading is building the infrastructure to access all these different venues,” Harrison said. “There’s a huge technological learning curve to doing so.”

Architect aims to appeal to anyone from large traders and hedge funds to trading firms, asset managers, VCs or “anyone who has to build infrastructure for crypto on more than one exchange,” Harrison said.

A startup like this could meet current market demand from big players for more unified and accessible platforms to connect their crypto services, instead of having a handful of tabs and servers open. The startup is launching pre-product, so its flagship service will have to be seamless and provide an easier user experience to trump other crypto services out there.

The capital will be used for hiring and product development. Architect’s will first develop “adaptable infrastructure products” so institutions can trade across both centralized and decentralized crypto markets. The company plans to launch its service in the second quarter of this year.

“I thought that we could make a difference in increasing the security and maturity of the space by helping traders adapt with the evolution of crypto market structure without having to build that software themselves,” Harrison said. “So traders and trading firms can focus on monetization, alpha and building core components.”

Coinbase and others back ex-FTX US president’s crypto trading infra startup Architect by Jacquelyn Melinek originally published on TechCrunch

Hello and welcome back toEquity, a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines.

This week,Natasha Mascarenhas,Mary Ann AzevedoandRebecca Szkutak jumped on the mic to talk through a diverse news week. Shoutout to our producer, Theresa Loconsolo, for putting together a script, and TC’s Andrew Mendez for this feedback: “Y’all slayyyed that recording and honestly can’t wait toyou all up on social media when this episode drops.”

Yes, we’re talking about Gen Z, and yes, if you can’t already tell, we had fun on this week’s recording:

Deals of the week included a new Trust Fund, a $29M raise from a proptech started by the co-founders of cloud computing company DigitalOcean and a $27M bet by some U.S.-based VCs on an African gaming startup, Carry1st.
Then we got into the state of fintech funding in 2022. Spoiler alert: It wasn’t pretty. We compared fintech’s year to that of global startups as a whole, and Becca gave us a lesson on the difference between structured rounds and down rounds.
We had a blast discussing a new trend of compliment-based teen social media apps, including Gas, which recently got acquired by Discord, and Slay, a German startup that just raised $2.63 million.
And finally, we discussed Microsoft’s latest round of layoffs, which we found both unfortunate and a bit perplexing.

On that note, we appreciate you all and thank you for the refreshing flood of feedback and compliments to start off the year. It always makes our days, and we hope we can lighten up and inform yours.

Equity drops at 10:00 a.m. PT every Monday and at 7:00 a.m. PT on Wednesdays and Fridays, so subscribe to us onApple Podcasts,Overcast,Spotifyandall the casts. TechCrunch also has agreat show on crypto, ashow that interviews founders, one thatdetails how our stories come together, and more!

Gas, Slay, what’s next? Fire? by Natasha Mascarenhas originally published on TechCrunch