Tech’s new era — Fraud reckoning — China’s grim omen

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On the agenda today:

Up first: It was a big week for tech earnings. Senior tech reporter Diamond Naga Siu, who writes our 10 Things in Tech newsletter, is here to break it all down.

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Breaking down Big Tech earnings

Tim Cook

Amazon, Apple, Alphabet, and Meta each reported quarterly earnings this week — reflecting the current struggle in tech while giving a preview of what's to come, Insider's Diamond Naga Siu writes.

Google and Amazon, which both saw their largest layoffs ever in January, emphasized reprioritization and cost-cutting measures. Meta CEO Mark Zuckerberg stoked employee fears of more layoffs to come by dubbing 2023 the "year of efficiency," prompting its stock to soar.

Apple meanwhile retained its crown as the only Big Tech giant that hasn't conducted mass layoffs within the past year. During its call, CEO Tim Cook emphasized that Apple plans to invest in "innovation, in people." That said, the iPhone maker isn't immune to what's been going on — its holiday sales dropped for the first time since 2019.

Prepare for a tidal wave of corporate fraud

A hand knocking over a line of dominos leading to a house of cards

Financial conditions are tight this year, and the market is exerting significant pressure on corporate balance sheets. This, in turn, will increase the risk that companies move from funk to fraud, Insider's Linette Lopez writes.

The years of free-flowing money are over. Interest rates are higher. Profit margins declined for the sixth-straight quarter across the board. 

Corporate executives are feeling the heat to deliver — either for Wall Street or for their own compensation, which is often linked to a company's stock price. And if they have the power to manipulate financial metrics, or even just an opportunity, they may do just that.

Read all about the Great Fraud Reckoning

Read more:

China's population decline is a grim omen

Flag map of China shrinking on blue grainy background

China is home to 1.4 billion people — nearly one out of every five people on Earth — but its population actually shrank last year. The UN estimates that at its current trajectory, China will lose nearly half its population by the end of this century.

China has become the world's factory in recent years; many countries rely on its manufacturing prowess and role in supply chains. That means its shrinking working-age population will have a substantial impact on the global economy. 

Many other countries are also contending with the specter of population decline. But the problem exists on a far more dramatic scale in China, and the problem could spell disaster for the global economy.

Why this is bad news for the rest of us

Read more: 

Digital-health startups fight for survival

A stethoscope that looks like a downward trending line chart

It's not just tech and finance — experts say digital health is going to take a beating this year. Healthcare startups are already tightening their belts, laying off employees, and canceling plans to go public in an effort to preserve cash as investors get picky.

This is a sea change from last year, when investors were falling over each other to back startups that aimed to drastically change how healthcare delivery works in the US.

This new era will leave many companies vulnerable — and for many startups, consolidation, or being acquired, is inevitable. 

Why 2023 will separate the winners from losers

Read more:

Silicon Valley is done pampering its workers

Facebook founder and CEO Mark Zuckerberg at the company's first conference dedicated to messaging

For many years, Silicon Valley was in an arms race to provide the best employee perks. But 2023 is a different story. 

Last month, the biggest tech companies laid off tens of thousands of workers. Mark Zuckerberg says to expect more cuts in the year ahead — and during Meta's earnings call this week, he declared this a "year of efficiency."

That means reining in costs, stripping back perks, and upending the office culture that's defined the world of Big Tech for so long.

How Big Tech's coming back down to earth

Read more:

This week's quote:

"At 11 p.m., I come out of my fugue state and realize I've eaten 15 pounds of the alfredo and feel horrific. I once again find myself praying."

More of this week's top reads:

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