Insider Finance - Business - "They will learn nothing from this"

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March 15, 2023

Hello, Insiders. Here’s what’s on the agenda today:

The collapse of Silicon Valley Bank foreshadows a bigger reckoning for the tech industry.
A laid-off Meta worker says the company paid her to not work.
Tom Sandoval's restaurant Schwartz & Sandy's is thriving despite Scandoval.

Plus, I’m sharing my take on the SVB fallout as a final thought. Let’s go.

— Nicholas Carlson

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THE LATEST

Meta layoffs & more

Meta is laying off around 10,000 workers. It’s the second wave of cuts at the company in four months. Why it’s likely to decimate morale.
The US government is looking to crack down on “forever chemicals” in tap water. What they are, where they are, and why they’re harmful.
The DeSantis administration revoked a hotel liquor license for hosting a drag show performance where minors were present. The full story.

THE BIG STORY

A replay of SVB

iStock; Rebecca Zisser/Insider

“They will learn nothing from this.”

Silicon Valley Bank imploded in part because it was a repository for the riskiest behaviors of the industry it serviced, Insider’s Linette Lopez writes in her breakdown of the past week’s mess. SVB’s growth was supercharged by tech’s clubby, insular nature, and its operation was dependent on a rising tide that was always sure to go out.

SVB helped fuel the tech bubble, and the tech bubble helped fuel SVB. In spite of this reality, there has been little self-reflection on the part of the industry that was so closely tied to Silicon Valley Bank. And in the midst of all the immature excuses from venture capitalists and the shallow recriminations from billionaire investors, the seeds of the next bubble are being planted.

Without serious accounting about Silicon Valley’s culture and the tech industry’s role in SVB’s collapse, then something ugly like this is going to happen again.

READ THE FULL STORY HERE

TOP READS

Fake work, Scandoval, & more

Eric Dietrich / Secretary of the Air Force Publishing; Arif Qazi / Insider

A missed opportunity at Google. Current and former Google employees told Insider that the company blew its chance to stave off competition from Microsoft and Zoom when it came to chat, video, and security for its collaboration software. Will AI help it stage a comeback?
A laid-off Meta worker says the company paid her to not work. Britney Levy told Insider some people were frustrated and felt that Meta was stalling their careers. “They were hoarding us like Pokémon cards,” she said. Get the full story.
Domino's ex-CEO bought nearly $4,000 worth of pizza in a year — and the company paid for it. While it’s a drop in the bucket compared to Ritch Allison’s $7.1 million salary, one of his privileges was a “personal pizza allowance.” Read more.
Japan is ditching its attack helicopters. Japan's army is planning to replace its attack and observation helicopters with drone aircraft, in another sign that one of the most important modern military weapons is losing its luster. Find out more.
Tom Sandoval's restaurant Schwartz & Sandy's is thriving. The "Vanderpump Rules" cheating news involving Sandoval and Raquel Leviss is everywhere. But business at his restaurant has apparently never been better, one source said. More here.
How a high school math and science teacher uses ChatGPT. Shannon Ahern was afraid the chatbot would take her job. But she’s been able to save hours of time by using the AI for class prep. Here’s how she does it.
What it’s like working in a naked spa: “It's exhausting and so much fun – but every now and then we have to stop people from getting intimate.” Felix Kühn told Insider about the pros and cons of managing a “textile-free” spa in Berlin. The full story.

TAKE A LOOK

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FINAL THOUGHT

SVB’s fallout

Easy come; easy go.

The expression seems to suit the whole tech industry right now, but most especially Silicon Valley Bank. That’s what I took away from Linette Lopez’s latest story on the mess.

Did you know that until 2019, SVB had just under $50 billion in deposits? That ballooned all the way to nearly $200 billion in 2021.

The money came during the huge flood of investments into the tech sector over the same period, and after some deregulation by the Trump administration.

SVB acted like that kind of money was going to keep coming in forever, and made some bets with the cash that depended on interest rates staying low.

They did not.

Then last week, pop!

Easy come; easy go, they say…

— Nicholas Carlson

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This edition was curated by Nicholas Carlson, and edited by Hallam Bullock, Lisa Ryan, Dave Smith, Nathan Rennolds, Jack Sommers, and Jack Robert Stacey. Get in touch: insidertoday@insider.com.

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