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Protocol Index: Tech workers are worried about automation

Pepper robot

Good morning! This Monday, KPMG's Tim Zanni explains why tech workers are scared about automation, more companies want to buy Grubhub, and the uncertain future of location-based VR. Want Index in your inbox each morning? Subscribe here.

What Matters This Week

  • The Fed's Open Market Committee will make an interest rate decision on Wednesday, with the majority of investors expecting no change. There's a 9% probability of a rate hike though, according to the CME FedWatch tool, with some people emboldened after Friday's better-than-expected jobs report.
  • We've got earnings from Stitch Fix on Monday, Chewy on Tuesday and Adobe on Thursday.
  • Over in Taiwan, TSMC will report May's sales on Wednesday, following its annual general meeting on Tuesday. Expect investors to quiz executives on its new Arizona fab and the impact of Huawei sanctions. MediaTek, which hosts its AGM on Thursday, will be asked similar questions: The company is reported to be a big beneficiary of the sanctions.
  • NetEase lists its shares in Hong Kong on Thursday. The company is set to raise $2.7 billion in the listing. Its performance could affect the burgeoning trend for Chinese companies to list in the region.

Today's News

As of 4:40 a.m. PDT: Nasdaq Futures: 0.11% | Euro 600: -0.08% | Nikkei: 1.37% | Hang Seng: 0.03%

OPPORTUNITIES

THREATS

DEALS

  • Just Eat Takeaway.com and Delivery Hero have reportedly both expressed interest in buying Grubhub.
  • Chegg acquired Mathway, an online math problem solver, for $100 million.
  • Abu Dhabi Investment Authority invested $750 million in Jio Platforms. Silver Lake and its co-investors are also increasing their stake by an additional $601 million. Jio has now raised almost $13 billion in seven weeks, selling off 21% of the company.
  • Asana reportedly raised around $200 million in convertible debt, with billionaire founder and CEO Dustin Moskovitz its main lender. The company may list later this year, Bloomberg reports.
  • Shift4 Payments' shares closed up 46% after it raised $345 million in its IPO.
  • Dada Nexus, a Chinese ecommerce firm, saw its shares close below its offer price upon its debut.
  • Yatra, an Indian travel-booking platform, terminated its merger with U.S.-based insurance software firm Ebix. Yatra also sued Ebix, which was set to acquire Yatra for $338 million, citing "breaches of its representations, warranties and covenants in the merger agreement

Interview

Tech workers are worried about automation

We've talked before about the perils of automation coming out of this crisis, with most of the focus on factory and warehouse workers. But a recent KPMG survey found that tech workers are scared, too.

  • 67% of tech workers are concerned about their job being replaced due to technology, compared to just 44% of the wider population.
  • "I think they can foresee the future," KPMG Global and US Technology Leader Tim Zanni recently told me. Tech workers "have a unique understanding" of what tech can do, more so than people in other industries who don't see tech until it's actually deployed. That foresight might play a part in their increased worries.

But there's more to it than that. Tech workers are more worried in general about job losses, with 70% concerned about their job being eliminated compared to 57% of all workers.

  • That could be because of the death of offices, Zanni said. "Tech workers have a tremendous identity attached to their physical workplaces," he said, saying that they might fear that their "job security might be a bit challenged" if they're not going back to their big campuses.

Wage arbitrage could become more important in tech, too.

  • Going into the pandemic, "the narrative of the cheaper employee … was starting to fade a bit," Zanni said, with employers more concerned about productivity and availability of labor.
  • "The equation changes significantly coming out of this," he thinks. "I think the cost comes back into play … [and] the availability part of the equation might look a little bit different" now that remote work means employers can look for talent outside of the most expensive locations.

Overheard

  • "We're not ruling out going public this year and we're not committing to it." — Brian Chesky said an Airbnb listing could still be in the cards.
  • "With fully or partially automated lines, operations can be profitable in Japan." — Rohm President Isao Matsumoto said automation provides an opportunity to bring chip manufacturing back from China.
  • "Too often, on the African-American side, the company is sold, we didn't have equity, so then we go get another job." — Hypergiant Industries' Will Griffin thinks equity stakes are a key part of improving diversity in tech.
  • "Dave, you're the kind of customer I'm happy to lose." — Jeff Bezos shared hate mail he received from a customer, saying "it's important to make [the hate] visible."

Closing Bell

Can location-based VR survive this?

The single best entertainment experience I've had in recent years was The Void's Star Wars: Secrets of the Empire, where I strapped on a VR headset in a busy shopping mall and, thanks to a custom-built set, truly felt like I was in another world. I, along with many others, was convinced that it was the future of entertainment. But as Protocol's Janko Roettgers reports, the pandemic has badly hurt companies like The Void. "We are all collectively suffering right now," said Sandbox VR CEO Steve Zhao. Greenlight analysts said they say the market will eventually recover, though who knows how long that will take. I, for one, hope it's soon — I'm itching to "travel" again.

Thoughts/feedback/tips? Email me — shakeel@protocol.com — or anonymously contact Protocol. And subscribe to get Index in your inbox each morning. Thanks for reading, see you tomorrow.

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