In the span of a few hours yesterday, these headlines flashed across our screens:

• Amazon pauses hiring for its corporate workforce.
• Lyft is cutting 13% of its workforce.
• Dapper Labs, the NFT company behind NBA Top Shot, is laying off 22% of its workforce.

But in this story, we’re going to focus on a fourth headline: Stripe lays off 14% of its workforce.

Why that one? Because Stripe’s CEO offered an unusually blunt and detailed explanation for the job cuts, giving us a window into how tech companies are grappling with what is potentially the dot-com bust 2.0.

First, what is Stripe? It’s a Silicon Valley payments giant run by billionaire entrepreneur Patrick Collison. And in a sea of unicorns in 2021, Stripe’s horn shined the brightest. It rode the Covid fintech wave to a $95 billion valuation that March, making it the most valuable startup in the US.

That’s where the problems began

In his memo to employees announcing the layoffs yesterday, Collison said Stripe leadership made two errors:

1. They were “much too optimistic” about the growth of the internet economy in 2022 and 2023.

• Remember, in March 2021, every retailer was expanding its online shopping biz, which benefited Stripe immensely as a payments processor.
• Its CFO boasted to the WSJ that Stripe was bigger now than the entire e-commerce sector in 2010, when the company was founded.

2. That optimism led to the next error in judgment: Feeling like its hot streak was never going to end, Stripe grew its operating costs too quickly, and got sloppy. “We overhired for the world we’re in,” Collison wrote.

The world we’re in

As Stripe daydreamed of a future where people bumped elbows and DoorDashed every meal, 2022 gave it a wakeup call. Inflation soared, the Fed hiked interest rates, Putin invaded Ukraine, and as a result, Stripe’s growth trajectory looked a lot more horizontal than it did peak-Covid. Which means it’s time to hit “reset,” Collison wrote.

Looking ahead…more tech layoffs are imminent. Elon Musk will begin cutting half of Twitter’s workforce today.—NF

The Brooklyn Nets suspend Kyrie Irving. The basketball star was suspended without pay for at least five games for failing to apologize for promoting antisemitic material on social media. “We were dismayed today, when given an opportunity in a media session, that Kyrie refused to unequivocally say he has no antisemitic beliefs,” the team said in a statement. On Wednesday, Irving and the Nets each donated $500,000 to anti-hate causes—but without a full apology to match, the Nets say he is “unfit” to be associated with the team.

Israel moves to the right. Benjamin Netanyahu told Lula “hold my beer” and pulled off a major political comeback of his own this week. In Israel’s fifth election in four years, Netanyahu’s nationalist and religious alliance secured a parliamentary majority, putting Netanyahu in the driver’s seat to return as prime minister of Israel within weeks. This bloc will form one of Israel’s most right-wing governments in its history, and the most cohesive government since 2019.

The UK could enter its worst recession ever. So said the Bank of England (BOE), which hiked interest rates by the most in 33 years yesterday to quell soaring inflation. BOE head Andrew Bailey warned that UK households faced a “tough road ahead,” with unemployment doubling by 2025. But, echoing his American counterpart Jerome Powell, he said failing to take bold action now would result in worse outcomes later on.

The Justice Department busted its first national catalytic converter theft ring Wednesday and seized homes, cars, and other assets totaling a ginormous $545 million. 21 people from five states were arrested for a crime that has surged since the beginning of the pandemic.

Catalytic converter theft reports jumped from 1,298 in 2018 to 52,206 in 2021, according to the National Insurance Crime Bureau.

What are those? If you’re an “ignore the check engine light until your dad sees it” type of driver, the catalytic converter is a vital piece of your car that makes pollutant exhaust less toxic.

And why the surge? Catalytic converters contain valuable metals that, because of pandemic-related shortages, have skyrocketed in value over the last few years (one can cost as much as $2,000 to replace). Plus, they’re easy to steal—it takes just a few minutes to saw one off your car.

The best detail in the case: One of the defendants, Navin “Lovin” Khanna, owned a New Jersey auto shop that allegedly bought and resold stolen converters. He posted a photo on his Instagram of a necklace with a catalytic converter pendant.—MM

Society has come a long way from seeing psychedelics purely as inspiration for figuring out what to paint on the side of your van. A new clinical study—the largest of its type ever conducted—found that psilocybin, the hallucinogen in magic mushrooms, can significantly reduce symptoms of severe depression.

The study, in which varying amounts of psilocybin were given to participants (all of whom had tried at least two antidepressants without success), found that patients given 25mg of the hallucinogen experienced mental health improvements both immediately and for up to three months.

Clinical studies of psychedelics’ effects on depression have been picking up since 2018, when the DEA eased restrictions on applications for researching Schedule I substances.

• Another recent study found that ketamine has depression symptom-reducing effects.

Zoom out: One state, Oregon, has already decriminalized psychedelic mushrooms, and it’s on the ballot in Colorado in the upcoming election.—MK

Stat: The share of first-time homebuyers just hit an all-time low, due to soaring mortgage rates and housing prices. Just 26% of all homebuyers closed on their first house in the year that ended June 2022, a drop from 34% the previous year, according to the National Association of Realtors. Plus, the age of first-time homebuyers rose to a record high (36) and the group’s racial diversity declined.

Quote: “I shouldn’t be in pain because I am stuck in a undersized seat.”

That was one of more than 25,000 comments submitted to the FAA after it requested input about the size of airplane seats. Facing heat from passengers and lawmakers, the agency is considering setting a minimum seat size for the sake of passenger health and safety. According to House Democrats, the average width of an airplane seat has shrunk from 18 inches in the 1970s to 16.5 inches today.

Read: Helping Elon Musk understand the content moderation learning curve. (Techdirt)

The feeling of getting a 5/5 on the Brew’s Weekly News Quiz has been compared to forgetting that past you bought ice cream.

It’s that satisfying. Ace the quiz.

Have you ever watched Seinfeld or Sex and the City and thought, “Ha! That’s not what city living is like now.” Well, people in the future are going to think the same thing about us.

At some point soon, we’re all going to live in “smart cities” with the most advanced technologies—vertical farming, robotaxis, and maybe even trains that run on time. To help get you up to speed on the cities of the future, the whiz kids at Emerging Tech Brew created an interactive tour.

Explore it here.

The costume that won Halloween: Read all about Heidi Klum’s worm costume.

For frequent flyers: This game asks you to identify a random flight that’s in the air.

Fulfill your childhood fantasy: Tunnel to the other side of the world.

Jigsaw: Props if you can complete today’s Louisiana State Fair jigsaw all Bayou-self. Play it here.

Friday puzzle

Split the grid into four identical regions, such that each region contains a lion and a crown.

Negotiating your salary is one of the most daunting tasks you’ll take on in your career—but that shouldn’t stop you from asking for more cash. Learn the dos and don’ts of negotiating your salary in this video.

On Business Casual: Benoni Tagoe tells Nora Ali about Raedio, his audio business with Issa Rae. Listen here.

Manifest your financial freedom. Check out the Money with Katie newsletter filled with simple ways to live a rich life.

This episode of The Crazy Ones is all about Elon Musk’s $44 billion takeover of Twitter, and the steps he’s taken to monetize the company. Listen or watch here.

(Via Puzzle Prime)