Another 6.6 million file for unemployment

Protocol Index


Good morning, and welcome to Protocol Index, your daily pop-up report about the financial movements that matter to tech during the COVID-19 crisis. Want Index in your inbox each morning? Subscribe here.

Today: Software developer hiring is way down, Alphabet may have an unusual acquisition strategy, and a day of more threats than I almost dare write about.

What Matters Today

  • 7 a.m. PDT: Brookings hosts a webinar with Federal Reserve Chair Jerome Powell, on "COVID-19 and the economy." Investors will analyze the talk for any sense of what the Fed's planning to do next. Also watch for San Francisco Fed President Mary Daly's Quora session at 1 p.m. PDT.
  • 7 a.m. PDT: The University of Michigan will release preliminary consumer sentiment and inflation expectations for April. Sentiment is forecast to plunge the most on record.
  • 7 a.m. PDT: OPEC+ hosts a video meeting, after it was delayed from Monday. All eyes are on whether Saudi Arabia and Russia can agree to a production cut, to prop up oil prices and the stock market. Another meeting is expected tomorrow.

Layoff Watch

Today's News

As of 6 a.m. PDT: Nasdaq Futures: 1.03% | Euro 600: 0.98% | Nikkei: -0.04% | Hang Seng: 1.38%




Everyone's Thinking About

Job losses

New data this morning showed that 6.6 million people filed for unemployment in the last week, well above economists' consensus of 5 million. That's slightly down on last week, and continuing claims came in below expectations (7.5 million vs. the 8.2 million expected), but make no mistake: The job market is not doing well. As POLITICO's Ben White says, the numbers are "terrible," and it's no surprise that the Fed is trying to "blast [them] out of the headlines" with the announcement of its new stimulus plan.

And tech isn't immune from the pain. Burning Glass, a job market analytics company, shared data with Protocol that shows just how badly tech's getting hit.

  • Information sector job postings declined 42% from the week of March 2 to the week of March 30, compared to 43% for the U.S. overall.
  • And software developer hiring was down across all sectors. Professional, Scientific, and Technical Services was the most affected sector, with a 46% drop in job postings, while finance and insurance saw a 45% decline.
  • The least affected sector for software developers was Public Administration, where postings were only down 7%.

Burning Glass CEO Matt Sigelman told me that this hiring pullback could have long lasting economic effects.

  • "If employers are backing off ... from making hires in fields like software and engineering," he said, that says "profound things about how employers are investing in the future or not."
  • "Pretty quickly, those sorts of things become self fulfilling prophecies. If you stop investing in the future, then inherently the future is going to be less bright and more bleak."
  • Sigelman also pointed out that it takes a long time for a tech hire to produce output — so hiring freezes today could impact growth as far away as Q2 2021.

I also asked Sigelman what he thought about the big claims that remote work is here to stay.

  • "I think some of the voices you hear on this question, frankly, I think are a bit exaggerated," he said.
  • But he thinks there'll be some change, with a "non trivial number of managers who will realize that having somebody remote is not the end of the world."
  • He doesn't expect that to lead to a hunt for cheaper developers, though. "In the knowledge economy, jobs follow skills," he said. "Those kinds of jobs move less because the talent is cheaper than because the talent is delivering higher quality output, or is more productive."

For now, everyone's going to struggle. But it could be worse:

  • People with tech skills are "eminently more secure," Sigelman said, and he expects the jobs that get eliminated to be those most vulnerable to automation.
  • "I can't predict how far the economy will fallor, when we'll start to move into recovery, what the focus of that recovery will be. But I'd rather be tech talent in that recovery than be manufacturing talent.


  • "Most of [Alphabet's acquisitions] have been dire failures … I wonder whether they meant them to fail, whether they're actually buying things and shutting them down. And whether one day as a result, we may see some great returns emerge again because they'll have killed everybody who's competing with them." — Fund manager Terry Smith, speaking at his Annual Shareholders' Meeting, highlighted the potential for regulatory concerns over Alphabet.
  • "Towards the end of the quarter, a significant amount of new business was postponed. This is reflected, in particular, in the significant year over year decrease in software licenses revenue." — SAP announced its preliminary first-quarter results.
  • "Private equity has been steadily creeping into the growth market, a trend that will accelerate as long as funds' terms permit it." — Bloomberg's Alex Webb thinks other PE firms will follow Silver Lake and Sixth Street in trying to get deals on hot tech companies.
  • "We are concerned that unless urgent changes are made … then the high-growth U.K. tech sector will be put at risk." — The CEOs of Darktrace, Graphcore, and Improbable, amongst others, asked the U.K. government to lend money to the tech industry.
  • "I am certain that of all the threats that Covid-19 poses, the threat to early-stage startups is the least we should worry about." — LocalGlobe partner Robin Klein, meanwhile, thinks the U.K. government should not do that.

Closing Bell

Travis Kalanick is very upset

On Monday, Travis Kalanick's new company sent out a press release announcing the "Internet Food Court," which is said to be a bunch of cloud kitchens — restaurants without seating — all under one roof. It's a real building in L.A., with real kitchens … but you're not supposed to know about it yet. Apparently, a rogue employee set up the brand (which included commissioning an award-winning designer!), and announced the Food Court without permission. A source told the Financial Times that "Travis wants it to be very clear that this is not something he created. He's very upset."

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