Happy New Year, and welcome back to Trending, the newsletter where we highlight BI Prime’s biggest tech stories of the week. I’m Alexei Oreskovic, Business Insider’s West Coast bureau chief and global tech editor.
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This week: Welcome to the ’20s
The ’20s are already off to a frenetic start, with a former auto CEO fleeing Japan stowed away in a box, a leaked internal Facebook memo about Trump, and, of course, more SoftBank drama.
As Megan Hernbroth reported this week, Zume, the SoftBank-backed startup developing pizza-making robots and valued at $1 billion, is conducting big layoffs. Big is a relative term. And in this case, it might actually under represent the situation. As Megan reported, Zume had planned to cut up to 400 employees, which would represent an astounding 80% of its staff. On Wednesday Zume convened the troops and announced that the official number of jobs cut would be 360, but apparently noted that it was creating 100 new positions in its packaging unit.
- The Asahi Shimbun via Getty Images
How a company reported to be seeking new funding at a $4 billion valuation just a few weeks ago is now in a position where it must take such extreme measures will no doubt be part of a fascinating history one day. But if you’ve been following Megan’s reporting, it was clear that the signs of trouble at Zume had been mounting.
Other big SoftBank portfolio companies have also had to make cuts, most notably WeWork and Uber. And media reports this week also flagged difficulties at GetAround, Oyo and Improbable, three other SoftBank bets.
For SoftBank CEO Masayoshi Son and his Japanese tech conglomerate, it’s a humbling turn of events after a bold effort to conquer Silicon Valley. And with reports that SoftBank has reneged on some startup investments, SoftBank risks losing goodwill in the valley.
There’s a lot at stake for Son and SoftBank in 2020. Will Son double down, as he did with WeWork last year, and try to salvage his empire? Or will he take his cue from Carlos Ghosn and make a hasty getaway from Silicon Valley in the dead of night?
Read Megan’s full story here:
SoftBank-backed robotic pizza startup Zume plans to lay off up to 400 employees – 80% of its staff- and won’t renew its Seattle lease amid widespread restructuring to stop burning cash
The deal of the decade, or maybe, the century
A new year (and decade) is a natural time for prognostications, from the slightly probable to the wildly fanciful.
As Ashley Stewart reports, Wall Street’s equity research departments are already as busy as beavers building hypothetical scenarios in the cloud-computing business. Just as Amazon’s AWS cloud business could potentially be spun out from the retail giant, it’s not unreasonable to consider Google, or Alphabet, spinning out its cloud computing business.
Even more interesting though, is the possibility for Google Cloud to go shopping. Among the potential acquisition targets bandied about by analysts are Palo Alto Networks, Workday, and ServiceNow. But as Ashley reports, RBC floats an even more eye-popping deal: Salesforce.
- Robert Galbraith/ Reuters
Such a deal would be valued at $250 billion according to RBC, making it one of the biggest acquisitions ever. And Google would need to lever itself up with debt to make it happen. But, as Business Insider first reported, Google Cloud CEO Thomas Kurian has set a goal of becoming the No.2 player in the cloud market within five years. And super-sizing with Salesforce would instantly accomplish that.
Meanwhile, Paayal Zaveri has a nice look at what observers think is in store for Salesforce this year (and getting acquired by Google doesn’t seem to be high on the list).
Read the full story here:
Google could acquire Salesforce and spin out its cloud business to catch up to Amazon and Microsoft, analyst predicts
Amazon, a decade of swole
- Drew Angerer/Getty Images
You’ll also want to check out Eugene Kim’s fascinating look at Amazon’s past decade as told through a series of charts.
Just as Jeff Bezos’s personal physique has noticeably bulked up to action-hero proportions in recent years, so has Amazon’s business gone through an amazing transformation, beefing up existing guns and popping new muscles and veins where none previously existed.
Consider: In 2010, Amazon’s headcount was roughly 34,000 employees. Today, the company employs 750,000 full and part-time workers.
If you’re in a business that competes with Amazon (and these days, who isn’t), this is a must-read.
Read the full story here:
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