SVB Collapse, Return to the Office, Unicorns Thin the Herd, and Howard's Anti-Portfolio
Social Leverage Letter | Issue #80
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Silicon Valley Bank, which catered to the tech industry, has collapsed in the second-biggest bank failure in US history after a run on deposits doomed the lender’s plans to raise fresh capital. The bank’s deposits have been transferred to a new entity created by the Federal Deposit Insurance Corp. Insured depositors will have access to their funds by Monday morning, but depositors with funds exceeding insurance caps will get receivership certificates for their uninsured balances. The bank had a negative cash balance of nearly $1bn and couldn’t cover its outgoing payments at the Fed after customers tried to withdraw $42bn on Thursday alone. The bank’s parent company, SVB Financial Group, was racing to find a buyer after scrapping a planned $2.25bn share sale Friday morning.
II. The return to the office once seemed inevitable. A new study shows companies are already reversing course
A recent survey data from The Conference Board show that companies are not mandating a return to the office and are instead expanding their hybrid work policies. But the benefits and challenges of a hybrid workplace policy, including increased flexibility, productivity, and cost savings, as well as potential communication and collaboration issues still remain. Careful planning, advice, and training are necessary to successfully navigate the challenges of the new, hybrid workplace.
Even with U.S. unemployment rate being at a 53-year low, the tech sector has been hit hard by layoffs in recent months. Tech giants like Amazon, Google, and Facebook have cut staff, as have venture-backed startup unicorns. Layoffs have affected companies like Olive AI and Misfits Market, resulting in hundreds of job losses. Since the start of 2023, tech companies have already cut more than 100,000 jobs, and experts predict more mass layoffs to come in the tech sector this year.
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