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Crypto companies are tempting top talent away from Big Tech to build ‘Web3’

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Executives at tech giants like Google, Facebook and Amazon are quitting to take jobs in the buzzy world of crypto.

Blockchain platforms such as Polygon and Circle have hired top talent from Big Tech firms lately, enticing them with the pitch of working on the next “big thing” in tech — Web 3.0, or Web3.

Ryan Wyatt left YouTube earlier this month to lead a new gaming studio from Polygon. Wyatt had joined the Google-owned video site back in 2014 to head up a push into video games content and compete more aggressively with Amazon’s Twitch platform.

“When I started at YouTube Gaming almost eight years ago, I was the first person there,” Wyatt told CNBC in an interview. “We didn’t have a team. People were really starting to show interest in gaming video.”

“I look at this opportunity very much the same way,” he added, describing the current stage of blockchain development as “early” and “exciting.”

The buzz surrounding Web3 has attracted some of the brightest minds in tech. The Web3 movement proposes overhauling the internet in a way that would move popular online services over to decentralized technologies like blockchain.

The list of Silicon Valley talent jumping ship for crypto also includes Sherice Torres, the former chief marketing officer of Facebook’s crypto and payments unit, Novi. She was hired by Circle in January. And Amazon cloud exec Pravjit Tiwana fled to join crypto exchange Gemini as its chief technology officer.

David Marcus, the former head of Novi, resigned late last year. While he’s yet to unveil his next move, Marcus has been singing the praises of Web3 on Twitter.

“I’ve never felt this connected to a community of builders like the crypto/web3 one,” Marcus tweeted last month.

Experts say tech executives are being drawn to the burgeoning industry in part due to its rapid growth.

“Naturally, people will want to work on what they view as the most exciting and innovative developments in the technology space, and currently, that is crypto and Web3,” Alex Bouaziz, CEO and co-founder of payroll software firm Deel, told CNBC.

“Many are seeing it as the future of the tech industry, in the same way that Facebook and Amazon were attractive in the past.”

Potentially lucrative career move
There’s another thing that’s attracting talent at Big Tech companies to Web3: money.

According to data from Blind, a social network for tech professionals, bitcoin exchange Coinbase offers as much as $900,000 a year for software engineers.

Investment into crypto companies has surged, meaning they’ve got much more cash to spare on lucrative compensation packages for big hires. Blockchain start-ups raised a record $25 billion in venture capital last year, according to CB Insight figures.

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Tech start-ups also typically let staff own a piece of their company through stock option schemes. With valuations for private crypto companies soaring, that means early employees could be in line for a big payout in the event of a takeover or initial public offering.

And the trend doesn’t just apply to the U.S.

Recruitment firm Hays says it’s seeing crypto companies target talent from the likes of Facebook, Amazon and Apple in the U.K. and Ireland, too.

“As more crypto/Web3 companies emerge, we expect the market for tech talent across all levels to become even more competitive,” James Hallahan, director of U.K. and Ireland for Hays’ technology division, told CNBC.

Web3 has its skeptics
Web3 is still a loosely defined term. It broadly refers to initiatives aimed at building a decentralized version of the internet based around crypto networks.

In theory, platforms could reward users for their posts through blockchain-native tokens, flipping the advertising-fueled model of services like Facebook and YouTube on its head.

But Web3 has drawn criticism from some big names in Silicon Valley. Twitter co-founder Jack Dorsey argues it’s too centralized and controlled by a handful of venture capitalists, while Tesla CEO Elon Musk views it as more of a “marketing buzzword” than reality.

However, Wyatt said that when he started at YouTube, people were skeptical about the idea of watching others playing video games — even “endemic gamers.” Now, gaming is the second-biggest vertical on YouTube, according to Wyatt.

Similarly, he thinks that some of the backlash against crypto and Web3 will subside as more fleshed-out experiences, like blockbuster video games and social apps, start to get rolled out.

But don’t expect tech giants to take the challenge lying down.

Meta started developing its Novi crypto wallet in 2019, and is reportedly considering rolling out new tools for non-fungible tokens, or NFTs.

BUSINESS

US stocks suffer biggest daily drop in almost two years

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US stocks posted the biggest daily drop in almost two years as investors assess the impact of higher prices on earnings and prospects for monetary policy tightening on economic growth. The dollar and Treasuries gained amid a pickup in haven bids.

The selloff sent the S&P 500 down 4%, with the plunge in consumer shares surpassing 6%. Target Corp. tumbled more than 20% in its worst rout since 1987, after trimming its profit forecast due to a surge in costs. Shares of retailers from Walmart Inc. to Macy’s Inc. were caught in the downdraft. The Nasdaq 100 fell the most among major benchmarks, dropping more than 5% as growth-related tech stocks sank. Megacaps Apple Inc. and Amazon.com Inc. slid at least 5%.

Treasuries rose across the board, sending the 10- and 30-year Treasury yields down as much as 11 basis points. The dollar rose against all of its Group-of-10 counterparts, except the yen and Swiss franc. Gold caught bids in the move into havens.

The benchmark S&P 500 is emerging from the longest weekly slump since 2011, but any rebounds in risk sentiment are proving fragile amid tightening monetary settings, Russia’s war in Ukraine and China’s Covid lockdowns.

In some of his most hawkish remarks to date, Federal Reserve Chair Jerome Powell said Tuesday that the US central bank will raise interest rates until there is “clear and convincing” evidence that inflation is in retreat. Chicago Fed President Charles Evans said Wednesday he sees a half-point rate increase at next month’s meeting and “probably thereafter.”

In Europe, new-vehicle sales shrank for a 10th month in a row as the industry remains mired in supply-chain crises, while euro-area inflation plateaued at a record high. Meanwhile, UK inflation rose to its highest level since Margaret Thatcher was prime minister 40 years ago, adding to pressure for action from the government and central bank.

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BUSINESS

Netflix lays off 150 employees due to slow revenue growth and business needs

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Netflix is reportedly laying off nearly 150 employees in the coming days due to disappointing earnings and slow revenue growth.

According to a Variety report, the Amazon Prime Video rival might also terminate its contract with contractual contributors.

The layoffs are about 2 per cent of Netflix’s US workforce. “As we explained [in reporting Q1] earnings, our slowing revenue growth means we are also having to slow our cost growth as a company. So sadly, we are letting around 150 employees go today, mostly U.S.-based,” a Netflix spokesperson said.

The statement further revealed that the decision was primarily driven by business needs rather than individual performance. Netflix reported $7.87 billion in Q1, which was short of Wall Street’s estimates of $7.93 billion.

The report further reveals that nearly 70 part-time employees in Netflix’s animation studio will have to pack up and leave. A report by The Verge stated that about 26 contractors working on Netflix’s fan-focused Tudum website might see a termination.

“A number of agency contractors have also been impacted by the news announced this morning. We are grateful for their contributions to Netflix,” the company said.

Netflix, in its recent earnings call, revealed that it lost thousands of subscribers, which is a first for the company in over a decade.

The company expects to lose an additional 2 million in the next quarter due to the ongoing war between Russia and Ukraine. Netflix has shut shop in Russia following the country’s invasion of Ukraine.

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BUSINESS

Dollar breaks N600/$ ceiling ahead of party’s presidential primaries

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Less than two weeks to the presidential primaries of the political parties ahead of the 2023 elections, the US dollar has broken the N600/$ mark at the parallel market and set the tone for a possible uptick in the coming days.

The black market rate had traded between N570/$ and N590/$ since the beginning of the year while the Central bank of Nigeria (CBN)’s intervention at the Nigerian Autonomous Foreign Exchange (NAFEX) has kept its rate under N420/$.

With the latest slump of the naira, the arbitrage between the parallel and NAFEX, which is regarded as the official window, is now inching close to N200/$. The spread measures the deviation of the controlled official rate from the real rate of exchange, with experts calling for liberalisation of the market to enable naira to find its true value.

The World Bank and the International Monetary Fund (IMF) have also warned of the repercussions of sustaining an artificially high naira while calling on the CBN to embark on market reform.

But the CBN has maintained that Nigeria, with the current high level of importation and underperformance of the industrial sector, cannot afford to float the naira completely as the exchange rate could spill out of control.

At the Lagos street market, yesterday, naira traded between N595/$ and N600/$ band. With the presidential primaries of the two leading political parties scheduled for Abuja next weekend, there is an expectation the demand pressure has not peaked, suggesting that naira is in for a protracted pressure.

At peer-to-peer (P2P) trading platforms, the dollar has been trading above N600 in the past three weeks, which had signaled that the black market rate could break through the psychological ceiling.

With that eventually happening, naira could be on a renewed free fall.

But there is also hope that it is a season to offload warehoused hard currencies for political campaigns to possibly shore up supply.

Experts are not sure where rising demand and supply of foreign exchange would lead the naira to, but the interplay between the movements of the two variables is a key factor in predicting the value of the naira in the tense political season. Godwin Owoh, a professor of applied economics, advised Nigerians to prepare for a steeper fall of the local currency, saying partisan politics and intra-party meetings, which are highly dollarised would bring much pressure to bear.

The CBN has promised to continue to protect the naira but its ability could be constrained by the equally falling reserve. For the first time in eight months, the gross reserves dropped below N39 billion on Monday, when CBN data put the figures at N38.92 billion. Effectively, the country’s reserves have depleted by $160 billion year-to-date.

Bismarck Rewane, an economist, had projected the reserve to collapse to $32 billion in the year as he expected the CBN to spend $8 to $10 billion defending the naira, which is taking much pressure from excessive importation.

The value of Nigeria’s imports increased by 64 per cent last year to N20.84 trillion. Sadly, the value of exports increased at a slower rate – 51 per cent – to N18. 91 trillion in the same period. The falling reserves and rising imports have put the apex bank in dire straits in its efforts to continue to defend the naira.

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