‘Cryptowinter’ generates layoffs, the downside of the unlimited vacation model and what matters in the market

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‘Cryptowinter’ generates layoffs

Coinbase, one of the largest cryptocurrency exchanges in the world, announced this Tuesday (14) that it will lay off 18% of staff –about 1,100 employees– to cut costs in the face of bleeding in the cryptocurrency market.

What explains: The decision follows the tumble of about 80% of Coinbase shares this year. The drop was amplified after the company recorded a 35% decline in its revenue in the first quarter.

  • Persistent inflation and an expected aggressive rise in US interest rates create a sense of risk aversion in the markets. The move brings down cryptos, considered riskier, and alienates investors, generating losses for the entire sector.

Brazilian version: Mercado Bitcoin, one of the largest crypto exchanges operating in the country, announced earlier this month a cut in employees, without citing the number of layoffs.

  • The company cited as a reason the global economic scenario, which penalizes technology companies above all, and also motivated cuts in other Brazilian unicorns (startups valued at US$ 1 billion or more).

In the markets: after Monday’s bleed, bitcoin continued to decline this Tuesday, from around 4%, to US$ 21.5 thousand (R$ 110 thousand). The sector was hit harder the day before Celsius, which works as a bank for that market, freeze withdrawals and transfers.


The pitfalls of the ‘unlimited vacation’

The “unlimited vacation” initiative adopted by some Silicon Valley and Wall Street companies may seem like a pipe dream, but research and decisions by companies that have turned back show that the model has problems.

Understand: this novelty frees up employees to take as many vacation days as they wish, as long as this is agreed with their superiors. The idea is that workers can have more autonomy to manage their personal and professional lives.

The problems: what many companies realized after creating the benefit is that employees ended up taking a shorter period of vacation compared to the old model, of limited absence. Some researches have reached the same diagnosis.

  • If colleagues are only taking ten days off a year, for example, asking for more may seem inappropriate. People can still feel guilty about taking a longer period of rest or even choose to work on vacation.

Some people like: the initiative is considered positive by employees of General Electric and was praised by the CEO of Netflix, Reed Hastings.

Other priorities: the latest data shows that flexibility, including the ability to work from home, is at the top of workers’ wish lists.


Is streaming becoming cable TV?

Netflix should launch a cheaper subscription option this year and with ads, Amazon, Disney and Globoplay offer channel combos for an additional monthly fee. Is streaming in Brazil becoming cable TV?

Understand: after becoming popular with Brazilians, the giants in the sector are now betting on different strategies to retain subscribers, attract new customers and increase revenues amid high inflation.

  • As much as the model may seem new to Brazilians – Globoplay and Amazon Prime Video are the closest – in the US the strategy is already used by HBO Max and Hulu, the American brother of Star+.

On the opposite way of the cheap subscriptions, streaming has also been testing combos that are more expensive but offer more content, another well-used alternative in the US.

  • The idea is also to become the only consumer platform, based on the “winner takes all” strategy (see here).

In numbers: research by the digital media sales platform Magnite points out that 79% of Brazilians would switch from their current streaming subscription to a cheaper one with ads. 71% would like to have more services available, in addition to those they already subscribe to.

More about advertising:

Brazilian advertising advanced 29% last year, with investments from BRL 69 billionagainst a 10% drop recorded in 2020.

The video format, which considers open TV, pay TV, cinema and online videos, concentrated 63% of media purchases in 2021. The data are from a survey carried out by Kantar Ibope Media.


The pulls on the electricity bill

Every month, Brazilians share the cost of “puxadinhos” that subsidize everything from the irrigation of soy plantations to the coal used in thermal plants.

Understand: the charges are in the CDE (Energy Development Account), supplied every month for an amount paid by Brazilians in the electricity bill. According to industry experts, they are there to serve private groups and political interests.

In numbers: expenses with charges increased from R$16 billion in 2017 to R$24 billion in 2021 and this year they are at R$32 billion.

What are the pulls and how much do they cost:

  • Renewable energy parks, businesses established and used by large industries in the country, have a transmission subsidy and cost BRL 5.7 billion in 2022.
  • Distributed generation, solar projects that can be discounted from the energy tariff, are used by large consumers, by middle and high-income families and have subsidies for BRL 5 billion.
  • The biggest expense within the CDE is with fossil fuel to maintain generators and thermal plants that supply distant locations, not yet connected to the national electrical system. This year, the cost is BRL 12 billion.

More about energy:

The Chamber approved this Tuesday the basic text of the project that places a ceiling on the collection of ICMS on fuel and energy. After voting on the highlights, the proposal goes to sanction.

The text approved by the deputies is an even greater defeat for the governors in relation to the proposal that was analyzed by the Senate on Monday.


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