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Vox - Recode

People are using Facebook more than ever during the coronavirus pandemic — but its business is still taking a hit Apr 29th 2020, 23:00, by Shirin Ghaffary Facebook CEO Mark Zuckerberg. | Tobias Hase/picture alliance via Getty Images The company says it's seeing less money coming in from advertisers. As people around the world are shut in their homes under lockdown, they're using Facebook more than ever to share news, message their friends, and find entertaining distractions from the dullness of quarantine life. But that doesn't mean Facebook, or other social media companies like Twitter and Snap, are making more money. On Wednesday, in Facebook's first earnings statement since the pandemic hit, the company shared impressive statistics: Nearly 3 billion people now use at least one of Facebook's apps (Facebook, Instagram, Messenger, or WhatsApp) each month, an 11 percent increase year over year and the highest it's ever been. Facebook alone had 2.6 billion monthly active users, an increase of 10 percent year over year. But financially, Facebook isn't doing nearly so well. While Facebook's revenue was up overall by 18 percent year over year this past quarter, beating analysts' expectations, much of that time period didn't include the peak impact of the pandemic. Looking ahead, company executives said they're bracing for a larger economic fallout. In the last few weeks of March, after global lockdowns began to take effect, the company said it saw a steep decline in the money it makes from advertising. These declines flattened out in April. Because of ongoing uncertainty related to the pandemic, the company declined to give its usual prediction of how much revenue it will make next quarter, and instead offered the snapshot of revenue in the past few weeks of April instead. "There is a lot of uncertainty now about the world," Facebook CEO Mark Zuckerberg said as he opened the quarterly earnings call. He admitted that the impact of Covid-19 on his business "has been significant." So why is Facebook expecting to make less money on advertising than before even as it gains more users? As my colleague Peter Kafka explained in March, as industries across the economy from tourism to real estate take a major financial hit, they're in turn spending less to advertise on Facebook than they normally would. Many major brands have slashed marketing budgets for digital spending on platforms like Facebook. Facebook says advertisements coming from the auto and travel industry have been especially impacted, while other industries, like gaming, are relatively spending more. This shift isn't unique to Facebook. Twitter, Google, and virtually every other company whose main source of income comes from digital advertising are facing the same pressures. "If you're going to have a business which is primarily advertising, which is our plan for the long-term, you have to recognize that advertising is more volatile and sensitive to the macroeconomy," said Zuckerberg on the earnings call. Google's parent company Alphabet announced on Tuesday that it has faced a significant downturn in advertisement revenues in March due to the pandemic, although not as bad as analysts expected. The search giant is reportedly planning to cut its marketing budget by half and slow down some hiring in order to tighten its belt. But despite these short-term slowdowns for Facebook and Google, some argue that in the long run, the company, like the other major tech giants, could come out of this pandemic stronger. One of the biggest issues these companies previously faced pre-coronavirus was the threat of regulation. Now, the chorus of powerful voices calling to break up Big Tech has largely quieted, at least for now, as politicians face more imminent issues tied to the pandemic. Another promising area for Facebook is in its gaming products and other hardware. It reported an 80 percent increase in its revenue from sources other than advertising, such as its Oculus Quest VR headsets and Portal video calling devices. These advertising declines will also impact media companies that rely on Facebook and Google advertising for a large chunk of their revenue but don't have the same enormous scale of business. Together, Facebook, Google, and Amazon make up an overwhelming majority of all US dollar spending on advertising. Wednesday's earnings from Facebook are another example of how widely popular Facebook is and how much people are using the tool during a global pandemic. They're also a grim indication of how much the global economy is contracting. If these companies that make some of the most widely used tools in society are hurting, smaller companies will be especially hard hit in the face of a sustained global recession. Support Vox's explanatory journalism Every day at Vox, we aim to answer your most important questions and provide you, and our audience around the world, with information that has the power to save lives. Our mission has never been more vital than it is in this moment: to empower you through understanding. Vox's work is reaching more people than ever, but our distinctive brand of explanatory journalism takes resources — particularly during a pandemic and an economic downturn. Your financial contribution will not constitute a donation, but it will enable our staff to continue to offer free articles, videos, and podcasts at the quality and volume that this moment requires. Please consider making a contribution to Vox today. Amazon is cracking down on internal communication after a surge in worker activism Apr 29th 2020, 19:16, by Shirin Ghaffary Amazon and other tech employees protesting during the global climate strike in September 2019. | Karen Ducey/Getty Images The company says it's more widely enforcing rules around mass emails as part of a routine audit. Some employees see it as an attack on worker organizing.  Amazon's corporate employees have started to question the e-commerce giant's business and labor practices more than ever before. In response, the company appears to be cracking down. This week, Recode has learned that Amazon has started strictly enforcing rules that limit its employees' internal communications with each other on several large company email listservs, where workers have been criticizing how the company is treating its warehouse workers during the coronavirus pandemic and have organized protests in response. On Monday, Amazon's IT department notified some employees who manage listservs of more than 500 people that they are required to have employee moderators pre-approve any posts on their mailing lists — a rule that the company says previously existed but several sources told Recode was rarely enforced until now. Employees who create or manage listservs can pick who they want to designate as the moderators, but those moderators have to be an "L6" manager-level employee or above, limiting the gatekeepers of the discussion. A spokesperson for Amazon said that its policies about moderating large email lists are not new, but that after a routine audit, the company has started enforcing its policies for all mailing lists that either weren't following the rules or had been previously granted exceptions. Shortly after publication of this story, Amazon's IT department notified Amazon employees who run large listservs that it is delaying making any changes to email moderation in order to "minimize disruption to any business-critical email lists," per an email Recode reviewed. Amazon's listservs — which number in the thousands — are places for employees to discuss a wide range of topics, from climate change to parenting. Recently, some of these forums have also become places for workers to critique the company's operational handling of the Covid-19 pandemic, particularly in how it treats warehouse workers, who have asked for higher pay and more safety protections. Some inside the company see the new communications rules as a way to muzzle corporate employees who are increasingly organizing on behalf of their lower-paid colleagues. "It's obviously and transparently being done to shut down employee communication," said one corporate Amazon employee who spoke on the condition of anonymity because of company policies barring employees from speaking to the press without prior approval. "If we wanted to share information about a firing internally or publicize an event, we would need to convince a moderator to let us do it — and that would be mean them risking getting fired." Another corporate employee who's active on internal listservs agreed that the move appeared to be aimed at the organizers, but that there were likely other factors at play, too. Recently, there's been a rise in employees spamming these distribution lists with other kinds of requests, the employee said, and the organizers' mass invites were likely the final straw rather than the only reason for the move. Whether or not Amazon's renewed enforcement of these rules is mainly meant to restrict internal activism, many Amazon employees perceive it that way. They worry that the company's recent actions will be a barrier to having meaningful discussion on important topics like warehouse worker rights and the company's environmental policies. Amazon did not respond to a request for comment specifically about concerns that the rules are limiting employees' speech on working conditions. In recent weeks, hundreds of Amazon warehouse employees at more than 50 sites around the US have participated in protesting working conditions during the pandemic, demanding greater pay, access to protective gear, and more generous time-off policies. Amazon's corporate employees have used listservs to share their dismay over the escalating labor disputes and to organize events that bring together blue-collar and white-collar workers. In turn, the company has fired at least six employees involved in recent protests — including two longtime corporate employees, Emily Cunningham and Maren Costa. Cunningham and Costa were prominent leaders of an internal climate activism group, Amazon Employees for Climate Justice (AECJ), with an active listserv of more than 8,000 members. Last Friday, AECJ members used dozens of Amazon internal listservs to invite thousands of their colleagues to skip work in a mass sickout and instead attend a virtual panel discussion about Amazon warehouse working conditions and environmental policies. Although the invites to this event mysteriously disappeared from workers' calendars and two organizers were fired for organizing a similar event the week prior, it went on as planned with more than 300 people attending virtually. With the new enforcement about these rules on email communications, employees say it will be impossible for workers to use listservs to mobilize their colleagues in a similar fashion. "Everyone seems to acknowledge (subtly or overtly) that this was in response to the employees getting fired and the sickout," another Amazon employee told Recode. "I think part of what Amazon is trying to do is make average employees upset at AECJ because of this new inconvenience." Aside from the concerns about censorship of discussions about worker rights, several employees have also expressed concern in internal emails about how the rules will slow down forums dedicated to supporting underrepresented employee groups. Many of the most popular listservs at Amazon are ones for women in engineering and racial minorities who work at the company to virtually convene and support each other. In an internal email one employee moderator sent to a listerv for discussing diversity and inclusion, the employee acknowledged that additional requirements will cause a "slower flow of communication" and that the moderation team may start rejecting certain emails, which will be "a very different dynamic" for the mailing list. Last year, Amazon's tech giant peer Google similarly limited employee speech on internal forums following a rise in worker activism. While the move was met with a fair share of criticism, the crackdown ultimately was not enough to stop workers from continuing to organize and publicly leak controversial company initiatives. In contrast to Google, the recent organizing on Amazon's internal forums is relatively new to Amazon's buttoned-up workplace culture, particularly on the corporate level. If moderators of employee discussions find the policies too laborious, they could move the discussion to off-corporate platforms, as tens of thousands of Amazon warehouse workers have done in private Facebook groups. And while Amazon's decision may stop contentious worker discussions in the short term, it also draws more attention to worker organizing and signals how seemingly threatened Amazon's management is by open discussion among its employees. Support Vox's explanatory journalism Every day at Vox, we aim to answer your most important questions and provide you, and our audience around the world, with information that has the power to save lives. Our mission has never been more vital than it is in this moment: to empower you through understanding. Vox's work is reaching more people than ever, but our distinctive brand of explanatory journalism takes resources — particularly during a pandemic and an economic downturn. Your financial contribution will not constitute a donation, but it will enable our staff to continue to offer free articles, videos, and podcasts at the quality and volume that this moment requires. Please consider making a contribution to Vox today.

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