fortune--2020-06-09--After record primary turnout, Iowa senate Republicans try to limit vote-by-mail in presidential elec

After record primary turnout, Iowa senate Republicans try to limit vote-by-mail in presidential election

Iowa set a new record for primary election turnout this month after secretary of state Paul Pate sent applications for mail-in ballots to all registered voters. More than 520,000 ballots were cast, according to Pate’s office, beating the previous record of 450,000 set in 1994.
Now, Republicans in the state senate are trying to prevent him from doing the same in the general election this November.
The Iowa Senate State Government Committee advanced a 30-page bill on a party-line vote late last week that would prohibit Pate, also a Republican, from proactively sending applications for mail-in-ballots to all registered voters. Anyone who wanted a mail-in ballot would need to submit a written request on their own and show proof of valid voter identification.
The bill would prohibit the secretary from taking emergency election action in response to the COVID-19 pandemic. The secretary can make changes in cases of extreme weather or during wartime, it says, but not during a health crisis. It also prevents Pate from making any changes to the early or absentee voting process, even in an emergency.
In addition, the bill would require election offices to send reminder notices to any voter who misses one general election and would require his or her status to be updated to “inactive” before the notices are sent. Current law says that notices should sent after four years of no voting, with no change in status unless the post office returns the notice as undeliverable.
According to Johnson County elections worker John Deeth, this could affect the status of hundreds of thousands of voters who only participate in presidential elections, rendering them “inactive,” which is the first step toward canceling a voter’s registration.
Senator Roby Smith, who proposed the bill, says that the changes come in response to fears of voter fraud. “This ensures Iowa registered voters continue to have safe, secure, and reliable elections,” the senator told Iowa Public Radio.
There have been 23 people convicted of voter fraud in the state over the past five years, according to The Gazette.
The Iowa State Association of County Auditors, a nonpartisan group, expressed confusion over the purpose of the bill.
“County auditors, as local commissioners of elections, are baffled by this,” wrote president Roxanna Moritz in a letter to Iowa lawmakers. “The 2020 primary was very successful, based on a variety of metrics, largely due to the steps taken by the secretary. Counties experienced record or near-record turnout. Election Day went very smoothly. Results were rapidly available. Why would the state want to cripple the process that led to such success?”
Moritz added that the bill would hurt the state’s ability to prepare for elections in the midst of the COVID-19 pandemic.
“Nothing about this is righteous. Nothing about this adds value. Nothing about this promotes voting,” tweeted Deidre DeJear, a Democrat running for Iowa secretary of state.
Smith later defended his bill, saying that local election officials and campaigns could still send out applications for ballots, and that his plans would just limit the secretary of state from doing so. His legislation, he said, would also extend application request deadlines for those who are hospitalized and would provide an extra week after elections for voters who fail to sign their envelopes (typically these voters are contacted by an election board and are asked to provide another signed document).
“This will actually expand absentee voting, and more absentee votes will be counted under this proposal,” he said.
But Smith has a history of limiting access to vote-by-mail and absentee ballots. Let America Vote, a national political action group that advocates for voter rights, added Smith to its “Voter Suppression Hall of Shame” in October for introducing a bill that would require absentee votes to be turned in by Election Day and that would close polling stations at 8 p.m. instead of 9 p.m. The bill would have also banned early satellite voting in state-owned buildings, like certain college campuses.
Senate Democrats also remained unconvinced.
“If a pandemic isn’t bad enough to go to an absentee ballot program, I don’t know what is. The attack on the secretary of state is unfair. He did a great job, a lot of people voted, and there has been no evidence of fraud,” Tony Bisignano, the top Democrat on the committee, told the Waterloo–Cedar Falls Courier.
The bill comes as President Donald Trump has repeatedly claimed that voting by mail-in ballot will lead to widespread voter fraud. The President has threatened to “hold up” federal funding to states like Michigan and Nevada because of their use of voting by mail to decrease large gatherings of people during the pandemic.
In California, the Republican National Committee, National Republican Congressional Committee, and California Republican Party have filed a lawsuit against Gov. Gavin Newsom and secretary of state Alex Padilla, calling the governor’s order to send mail-in ballots to every registered voter an illegal “usurpation of the legislature’s authority” to plan the “time, place, and manner” of the election.
But vote-by-mail fraud in the United States is exceedingly rare. One study found just 491 cases of absentee ballot fraud from 2000 to 2012 during a period where “literally billions of votes were cast,” according to election law professor Richard L. Hasen. There is no evidence that suggests that sending in ballots by mail results in a systematic bias toward either party.


fortune--2020-06-09--Could Windows PC makers follow Apple’s lead away from Intel chips?

Bristol Myers Squibb CEO : Why the COVID-19 pandemic has me optimistic about the future of medical research

Intel has been able to weather significant product delays and technology missteps in recent years without much impact on its sales. But Apple’s expected decision to shift its line of Mac computers from Intel processors to its own homegrown alternative could set off a more damaging chain of defections, some analysts warn.
Apple has used Intel processors in Mac desktop and laptop computers since 2006 after it abandoned the PowerPC chip architecture made by IBM and Motorola. At the same time, Apple has been designing its own chips for iPhones and iPads, relying on some underlying technology from ARM and manufacturing by Taiwan Semiconductor.
Now Apple plans a grand chip convergence. At its Worldwide Developers Conference (WWDC) on June 22, Apple plans to announce that it will begin using its own processors in new Macs in 2021, similar to the chips in its iPhones, Bloomberg reported on Tuesday.
Apple and Intel declined to comment to Fortune.
While Apple accounts for only a small portion of Intel’s overall revenue, which is expected to total almost $74 billion this year, it has long been a design leader for the entire PC industry. If Apple switches from Intel’s x86 line of chips and gains better performance and battery life, Windows PC makers like Samsung or HP could follow suit, especially now that Microsoft is optimizing its software for ARM-based devices (including its own Surface X tablet).
Apple’s shift, if successful, could be “opening up the floodgates to greater acceptance of more non-x86 alternatives,” Bernstein Research analyst Stacy Rasgon wrote in a recent report.
Several major PC makers asked about the issue by Fortune said they already had a few models running ARM-based processors. HP’s Envy 2 two-in-one laptop and Acer’s Chromebook R13 used ARM-based chips from Qualcomm and Mediatek, respectively, the companies said. Dell, which did not mention an ARM product yet, noted: “We continue to evaluate all CPU options as part of our roadmap plans.”
Lenovo and Samsung did not comment. Samsung’s Galaxy Book S and Lenovo’s Yoga 5G laptop run on ARM chips from Qualcomm.
Intel has been in a rut for several years amid difficulty moving its chip manufacturing to the latest technology. Taiwan Semi has had no such problems, fueling the performance of Apple’s mobile chips and those from other Intel rivals like Advanced Micro Devices and Qualcomm.
Apple’s chip transition announcement at WWDC will be delivered to an audience of developers who will have to rewrite their software to be compatible with the new chips. That could take a long time, reducing the appeal of Apple’s new devices during that period. When Apple moved from PowerPC chips to Intel, it provided a way for customers to run older software on new devices through software called Rosetta. But Apple hasn’t yet disclosed whether it will offer something similar this time around.
Still, even if Apple’s own transition is successful, the shift by other PC makers is hardly assured. While Apple’s iPhone and iPad chips have outpaced Intel chips on some benchmarks, recent Windows-based devices running on similar ARM-based chips from Qualcomm have not fared as well, and reviewers found them, at times, laggy and underwhelming.
That may be why Intel’s stock barely budged following the report about Apple’s chip plans. Shares of Intel, which have gained 6% in 2020, were down about 1% on Tuesday in midday trading. Apple shares, which have gained 16% this year, were up 3%, possibly as investors grew excited about in-house chips reducing cost and boosting profit margins.
Over the past year, Apple has had some turnover in its chip efforts, which are overseen by senior vice president Johny Srouji. Lead chip architect Gerard Williams III left last year to create chip startup Nuvia. Apple responded by suing, claiming Williams was poaching Apple employees. Apple hired one of ARM’s lead architects, Mike Filippo, after Williams left.
(This story was updated on June 10, 2020 with additional comments from PC makers.)


fortune--2020-06-09--How Instacart fixed its A.I. and keeps up with the coronavirus pandemic

Like many companies, online grocery delivery service Instacart has spent the past few months overhauling its machine-learning models because the coronavirus pandemic has drastically changed how customers behave.
Starting in mid-March, Instacart’s all-important technology for predicting whether certain products would be available at specific stores became increasingly inaccurate. The accuracy of a metric used to evaluate how many items are found at a store dropped to 61% from 93%, tipping off the Instacart engineers that they needed to re-train their machine learning model that predicts an item’s availability at a store. After all, customers could get annoyed being told one thing—the item that they wanted was available—when in fact it wasn’t, resulting in products never being delivered. “A shock to the system” is how Instacart’s machine learning director Sharath Rao described the problem to Fortune.
The reason is that the data Instacart fed into its machine learning models about shopping habits failed to take into account the new coronavirus reality. Normally, Instacart customers would buy products like toilet paper only occasionally. But then, almost overnight, it was like they were preparing for a months-long camping trip and wiped out store supplies. Many customers stockpiled bathroom tissues, wipes, and hand sanitizer gel, as well as staple foods like eggs and cheese.
Rao explained several things Instacart did to fix the problem. It’s a lesson that other businesses that use machine learning could learn from.
Instead of training a machine-learning model based on several weeks of data (in this case, the items that delivery people mark “as found” or “not found” at stores), Instacart now uses up to ten days of data. While weeks of data may provide insights about long-term trends, sifting through data only from recent days provides more accurate results because people’s shopping habits are in flux. As he explained, Instacart had to make a tradeoff between the volume of data used to train its model and the “freshness” of data.
In the last week alone, the nationwide protests over the death of black Minneapolis resident George Floyd while in police custody had a big impact on shopping patterns, whether grocery stores were open, and whether they were fully stocked.
“The world is changing so fast,” Rao said. “Every day looks like a Monday for Instacart,” referring to every day being increasingly busy.
Instacart also increased the number of times it “scores” its model for predicting the likelihood that a certain product will be in stock. Before, Instacart would typically score its model (based on hundreds of millions of items) every three hours, but it now does so every hour to better take into account the fast-changing world. An item like a case of soda that’s marked with a lower “score,” indicates a lower chance it will be at the store when the delivery person arrives, prompting Instacart to suggest that users mark a potential replacement item.
Instacart also performed a wonky task known as “hyper-parameter optimization,” which required its machine learning engineers to adjust certain settings of the model that influence the accuracy of its predictions. Although this task requires machine learning expertise, it can be likened to someone “pushing buttons” to get a device to work properly, Rao explained. Think of an airplane pilot who knows how to “press the right buttons” in a complex aircraft control system to ensure a smooth landing during a sudden storm.
For all of its efforts, Instacart’s technology still isn’t as accurate as before the pandemic. The metric used to evaluate Instacart’s model that predicts an item’s availability is now correct about 85% of the time, according to an Instacart graph. As that metric continually changes, Instacart’s team needs to continually train its machine learning models to keep up.
Additionally, while Instacart’s machine learning model may have been working well on the old data it was trained on, in practice it was not actually very “accurate” as the world kept changing.
It’s part of the challenge of fine-tuning a machine learning model amid uncertainty.
Jonathan Vanian
@JonathanVanian
jonathan.vanian@fortune.com
Story updated at 2:30 PM ET on Tuesday with more information about Instacart’s metrics.
A.I. IN THE NEWS
IBM waves goodbye to facial recognition. IBM said it would no longer sell facial-recognition and related analysis technology. The company announced the decision as part of a letter to Congress in which it proposed policy recommendations "to advance racial equality in our nation." We'll discuss this a bit more in the Brain Food section of this week's Eye on A.I. newsletter.
The limits of self-driving cars. A study by the Insurance Institute for Highway Safety said that autonomous vehicles won’t be able to prevent all auto accidents that are caused by human error, the Associated Press reported. While self-driving cars can prevent accidents involving “sensing and perceiving” errors, which include accidents caused by distracted or intoxicated drivers, they’ll have a tougher time preventing accidents caused by “prediction,” “planning,” and “execution” errors, which include “incorrect evasive maneuvers or other mistakes controlling vehicles,” the article said. From the article: “For example, if a cyclist or another vehicle suddenly veers into the path of an autonomous vehicle, it may not be able to stop fast enough or steer away in time…”
Robot chef gets the axe. Food delivery company Deliveroo has ended a research lab that was developing robotic food preparation technology, including “fryer bots,” The Telegraph reported. The move was part of a plan to cut costs, the report said, and underscores the challenges facing companies attempting to create capable robots that can make pizzas and cappuccinos, among other meals and drinks.
Healthcare A.I. coming to Dubai. Heatlhcare IT firm Cerner said it would debut over the next few months an A.I. research center in the United Arab Emirates by partnering with American Hospital Dubai. Cerner said the research firm will focus on creating healthcare technology for people at home and improve care related to the Covid-19 pandemic. From Cerner: The AI research center will also allow American Hospital Dubai to leverage big data analytics to better understand the healthcare needs of the UAE population.
Government wants to get cloudy. Federal lawmakers have debuted legislation intended to spearhead the creation of a “national cloud computing infrastructure” for A.I. research, according to a report by Nextgov. The goal is to ensure that the U.S. leads China in A.I. efforts, with the lawmakers warning that “China could overtake the United States in R&D spending within the next decade.” It’s unclear from the report whether any specific cloud computing vendors would be involved with the proposed project.
EYE ON A.I. TALENT
WarnerMedia hired Richard Tom to be the media giant’s chief technology officer. Tom was previously the CTO of digital entertainment at Verizon and CTO and senior vice president at Hulu.
Cerner Corp. picked Jerome Labat to be the health care IT firm’s CTO. Labat was previously the CTO of IT company Micro Focus and CTO of Hewlett Packard Enterprise’s software unit.
The International Research Centre for AI under the auspices of UNESCO appointed Mark Minevich to the chair of the AI Policy Committee. Minevich is an advisor to Boston Consulting Group the chief AI officer and venture advisor for Canadian Growth Investments.
EYE ON A.I. RESEARCH
Deep learning comes to architecture. Researchers from the University of Victoria in British Columbia, Canada published a paper about using deep learning to identify symbols (drawings that represents objects like kitchen sinks, entry doors, and ovens) in architectural floor plans. One of the deep learning system’s highlights is that it can still accurately identify a symbol even when it might be covered or cluttered by other markings in the architectural floor plans, the paper’s authors wrote. The researchers also said they are “currently in the process of securing permissions from various architectural firms to release a public dataset of real-world architectural plans.” The paper was accepted to the upcoming CVPR2020 Workshop on Text and Documents in the Deep Learning Era online conference.
A.I. to help you stand up straight. Researchers from Northwestern Polytechnical University in Xi’an, China and The City College of the City University of New York published a paper in the Computer Vision and Image Understanding journal that surveys the various deep learning systems used to measure people’s posture in photos and videos. The paper’s authors said measuring posture in images and videos can benefit a number of tasks, including improving the quality of human motion-capturing systems used in movies and animations; aiding physicians involved with rehabilitation and physical training; and creating more capable self-driving car systems that “can respond more appropriately to pedestrians and offer more comprehensive interaction with traffic coordinators”
FORTUNE ON A.I.
How do you move a technology conference with 30,000 attendees online?—By Jeremy Kahn
After the tragedy of George Floyd’s death, where do A.I. and policing go from here?—By Jonathan Vanian
The digital transformation is no joke—By Adam Lashinksky
Facebook to label state-owned media outlets’ posts, pages, and ads—By Danielle Abril
BRAIN FOOD
A.I. in the aftermath of George Floyd. The recent protests related to George Floyd, who died after being pinned to the ground by a white police officer, has put the spotlight on A.I., which over the years researchers like Joy Buolamwini and Timnit Gebru have identified can be prone to bias, specifically facial-recognition technology that works better on white men than women and people of color. Now, as my colleague David Meyer reports, IBM has ended the practice of selling facial recognition technology—" the boldest move yet by a Big Tech firm to repudiate the discriminatory use of the technology.”
In a letter to lawmakers, IBM CEO Arvind Krishna said that the company “firmly opposes and will not condone uses of any technology, including facial recognition technology offered by other vendors, for mass surveillance, racial profiling, violations of basic human rights and freedoms, or any purpose which is not consistent with our values and principles of trust and transparency,”
Krishna also supported parts of a new bill proposed by lawmakers that would “reform police rules, in order to combat misconduct and racial discrimination,” in the aftermath of George Floyd’s death.
As CNBC notes, "IBM’s facial recognition business did not generate significant revenue for the company," so making the decision to end the practice of selling tech was likely easier to do considering it wasn't a huge business. But it's still a big deal, considering the business of selling facial recognition tech could eventually become a big money-maker if more companies adopt the technology.
For an interesting look at the history of how technology can perpetuate racism, read this piece in MIT Tech Review by New York University professor Charlton McIlwain.
From the article:
If we don’t want our technology to be used to perpetuate racism, then we must make sure that we don’t conflate social problems like crime or violence or disease with black and brown people. When we do that, we risk turning those people into the problems that we deploy our technology to solve, the threat we design it to eradicate.


fortune--2020-06-09--41 states are seeing a drop in unemployment. How does your state stack up?

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The number of Americans dropping off unemployment rolls is now outpacing new benefit claims. Since peaking at 24.9 million the week of May 9, the number of Americans receiving unemployment insurance—known as continuing claims—has fallen 3.4 million to 21.5 million as of May 23.
A drop in the number of Americans receiving unemployment benefits is another sign that employers are bringing workers back, and the economy is growing again.
Just as states ease their lockdowns at difference paces, recoveries are also happening at varying rates. Florida, which reopened much of its economy on May 4, leads the nation with a 1.5 million drop in the number of residents on its unemployment rolls. And it should drop further when Disney World partially reopens on July 11.
Chart by Fortune California saw the second-biggest drop in workers seeking unemployment at –791,411. It was followed by Washington (–530,995), Ohio (–156,409), and New York (–106,232). The drop in New Yorkers receiving benefits comes despite New York City just starting Phase 1 of easing its lockdown on Monday. While most of the country is seeing a drop in residents receiving unemployment benefits, the District of Columbia and nine states saw increases. The biggest upticks were in Oregon (139,925), Texas (128,834), Maine (68,975), Oklahoma (32,770), and Pennsylvania (17,453). But as states reopen, they risk increasing the spread of the virus. Many states in the South and Southwest are now seeing increases in COVID-19 cases, including Florida. New coronavirus cases reported in the Sunshine State increased an average of roughly 46% over the past week.


fortune--2020-06-09--Daniel Radcliffe speaks out in support of trans women following J.K. Rowling’s tweets

Harry Potter star Daniel Radcliffe has officially addressed the controversial anti-trans tweets author J.K. Rowling posted over the weekend.
“Transgender women are women,” the actor said in a Trevor Project blog post Monday. The organization offers crisis intervention and suicide prevention services to LGBTQ youth. “It’s clear that we need to do more to support transgender and nonbinary people, not invalidate their identities, and not cause further harm.”
Radcliffe’s post went up two days after Rowling’s series of tweets, which started with a link to an opinion piece titled, “Creating a more equal post-COVID-19 world for people who menstruate.” While posting the link, Rowling tweeted: “‘People who menstruate.’ I’m sure there used to be a word for those people. Someone help me out. Wumben? Wimpund? Woomud?”
When Twitter users said her comment was “anti-trans” and “transphobic,” Rowling doubled down, tweeting: “If sex isn’t real, there’s no same-sex attraction. If sex isn’t real, the lived reality of women globally is erased. I know and love trans people, but erasing the concept of sex removes the ability of many to meaningfully discuss their lives. It isn’t hate to speak the truth.”
As criticism of Rowling’s remarks grew, LGBTQ rights group GLAAD also took to Twitter, saying, “JK Rowling continues to align herself with an ideology which willfully distorts facts about gender identity and people who are trans. In 2020, there is no excuse for targeting trans people.”
“According to The Trevor Project, 78% of transgender and nonbinary youth reported being the subject of discrimination due to their gender identity,” Radcliffe said in his post. He also said he himself had much to learn, while encouraging the public to educate itself “about transgender and nonbinary identities.”
Radcliffe—who starred as Potter in eight films based on the book series—isn’t the only actor from the films to throw his support behind the transgender community. Katie Leung, who played Cho Chang, posted links to organizations supporting black transgender people.
Meanwhile, Radcliffe also acknowledged the impact Rowling has had on his own life, while saying he was sorry for Harry Potter fans who felt Rowling’s comments “tarnished or diminished” their love of the series.
“I really hope that you don’t entirely lose what was valuable in these stories to you,” he said. “If you found anything in these stories that resonated with you and helped you at any time in your life—then that is between you and the book that you read, and it is sacred. And in my opinion nobody can touch that.”


fortune--2020-06-09--Insurtech Lemonade looks for sugar in IPO markets. Its biggest expense? Marketing

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“Harness technology and social impact to be the world’s most loved insurance company,” Insurtech Lemonade’s Monday filing for an initial public offering reads.
But for a company aiming to disrupt the sleepy insurance industry with machine learning, marketing and sales remains the real bread and butter.
Lemonade, which sells renters’ and homeowners’ insurance, more than doubled its sales and marketing expenses in 2019 to $89.1 million. Its technology development spend, despite also nearly doubling, stood at a mere fraction of that: $9.8 million.
As a direct-to-consumer brand, Lemonade spent heavily on marketing in a bid to spread its brand’s name, promoting largely through the internet as it sought to compete against incumbents.
In the filing, the five-year-old startup paints its marketing spend as a metric that has improved over time, adding that its subscription-based model means its marketing spend could have a longer tail. Each dollar spent on marketing translates to $2 of in-force premium.
“Given our subscription-based model, we believe that the lifetime value of our customers is significantly higher than our cost of acquiring them, and our ability to acquire them earlier, at a stage that incumbents struggle to, should pay dividends for decades to come,” the prospectus reads.
We’ll see if investors bite in this environment where they seem hungry for IPOs. The growth numbers are certainly attractive: The company’s revenue grew by nearly threefold to $67.3 million, outpacing the growth of its losses: over double in 2019, to $108.6 million.
But will they bite at a desired valuation? Last valued at $2 billion, Lemonade is backed by SoftBank, Sequoia Capital, Aleph, and General Catalyst. It filed raise $100 million, though the figure is likely a placeholder.
The mega pharma deal that may never be: Over the weekend, Bloomberg reported that British drug giant AstraZeneca had approached California-based Gilead in a deal that would have created the “biggest health care deal on record.”
As exciting as it all sounds, it seems like a pretty questionable tie up? For starters, the cross-border element of their union harkens back to the scuttled $160 billion deal between Pfizer and Allergan in 2016. Moreover, Gilead investors are pretty pleased with the healthcare company—and don’t need a dramatic strategic shift in the form of M&A to reinvigorate their interest. Even if the duo never progress to marriage though, do expect more tie-ups in healthcare. Read more.
VENTURE DEALS
- PatientPing, a Boston-based healthcare e-notifications platform, raised $60 million in Series C funding. The round was co-led by Andreessen Horowitz, F-Prime Capital, GV, and Transformation Capital.
- HistoSonics, an Ann Arbor, Mich. and Minneapolis, Minn.-based developer of a robotic platform and sonic beam therapy, raised $40 million Series C1 funding. Yonjin Venture led the round and was joined by investors including Varian Medical Systems, Johnson & Johnson Innovation, Venture Investors, Lumira Ventures, and the State of Wisconsin Investment Board.
- Lilium, the Munich-based aviation company, raised $35 million from Baillie Gifford as part of a $275 million round.
- Wahed, a New York-based investment platform geared toward Muslim populations, raised $25 million in funding led by Saudi Aramco Entrepreneurship Ventures. Existing investors BECO and CueBall Capital participated. Read more.
- NFlection Therapeutics, a Wayne, Penn.-based biopharma targeting disease pathways to fight rare disease, raised $20 million in Series A funding from venBio Partners and F-Prime Capital.
- ADDI, a Bogota-based provider of point-of-sale lending for Latin America, raised $15 million in a Series A extension. Quona Capital led the round and was joined by existing investors Andreessen Horowitz and Monashees, and new investors S7 Ventures, Foundation Capital and DST partner Tom Stafford.
- Concourse Labs, a New York-based automated cloud governance company, raised $15.2 million in Series A funding. ForgePoint Capital led the round and was joined by investors including existing investors 83North and Capri Ventures.
- NYMBUS, a Miami-based financial services platform, raised $12 million in funding. Insight Partners and Vensure Enterprises led the round.
- Whatifi, a Los Angeles-based interactive movie maker, raised $10 million in funding led by Andreessen Horowitz who was joined by investors including Matrix Partners, David Wells (ex-CFO of Netflix), Ilkka Paananen (Supercell), Max Levchin (Paypal, Affirm), Marc Pincus (Zynga), Michael Birch (Bebo), Taavet Hinrikus (Transferwise), Josh Hannah (Betfair), and Jon McNeill (Tesla, Lyft).
- Ambler, a Paris-based maker of a platform connecting healthcare transporters and institutions, raised €6 million ($6.8 million) in funding. Investors included Bpifrance, Idinvest Partners, Partech and Kima Ventures.
- ClassTag, a New York-based communication platform between teachers and parents, raised $5 million in seed funding. Investors include AlleyCorp, Contour Ventures, Founder Collective, John Martinson, Newark Venture Partners, Smart Hub and TMT Investments. Read more.
- Reveal, a Woodside, Calif.-based startup that deploys AI for national security, announced today raised $2.5 million in seed funding. Defy Partners and 8VC led the round.
- Silverfin, a Belgian maker of cloud services for accounting firms, raised $30 million in Series B funding. Hg led the round. Read more.
PRIVATE EQUITY
- The Carlyle Group acquired four Mesa mobile home parks for $230 million.
- ECI Software Solutions, a portfolio company of Apax Partners, settled its lawsuit against Prosperity Computer Solutions and agreed to acquire all the assets of Prosperity, a Big Sandy, Texas-based software company serving the lumber and building materials industry. Financial terms weren't disclosed.
- Silversmith Capital Partners invested $49 million in Appfire, a Boston-based provider of apps for software development teams.
- Orion Innovation has acquired Zodiac Systems, a New York-based video service delivery software company. Financial terms weren't disclosed.
- Therma Holdings, backed by Gemspring Capital, acquired Gilbert, a Minneapolis-based provider of mechanical, electrical, plumbing, controls and fire protection services. Financial terms weren't disclosed.
- Kinderhook Industries acquired Paramount Specialty Pharmacy and PharmBlue Holdings, and combined the duo with Avitas/Longs and PharMedQuest to create Avita. Avita is composed of 63 pharmacies total. Financial terms weren't disclosed.
- Brynwood Partners will acquire the North American business of Buitoni pasta, a pasta maker, from Nestlé SA. Read more.
OTHERS
- Starboard acquired a 9.3% stake of Commvault (NASDAQ: CVLT), an enterprise software company.
- PT Indofood CBP Sukses Makmur, owned by Indonesian billionaire Anthoni Salim, plans to acquire Pinehill Co., a producer of instant noodles in Africa and the Middle East for $3 billion. Pinehill Corpora and Steele Lake are the sellers.
IPOs
- The AZEK Company, a Chicago-based maker of outdoor living products also known as CPG Newco, plans to raise $625 million in an offering of 31.3 million shares priced between $19 to $21. The company posted revenue of $794.2 million and loss of $19.3 million in the year ending in September. Ares Management and Ontario Teachers Pension Plan back the firm. It plans to list on the NYSE as “AZEK.” Read more.
- Vroom, a New York-based online used car marketplace, plans to raise $468 million in an IPO of 21.3 million shares priced at $22 apiece. It posted revenue of $1.2 billion and losses of $275.7 million in 2019. L Catterton, General Catalyst, and T. Rowe Price back the firm. It plans to list on the Nasdaq as “VRM.” Read more.
- Vaxcyte, a Foster City, Calif.-based biotech developing pneumococcal vaccine, plans to raise $6210 million in an offering of 14 million shares priced between $14 to $16. Abingworth Bioventures, Longitude Venture Partners, and Roche Finance are among the investors. It plans to list on the Nasdaq as “PCVX.” Read more.
- Avidity Biosciences, a La Jolla, Calif.-based biotech developing antibody therapies for muscle disorders, plans to raise $150 million in an offering of 10 million shares priced between $14 to $16. RTW Investments (14.5% pre-offering), Cormorant Asset Management, and Eli Lilly and Company (10.4%) back the firm. It plans to list on the Nasdaq as “RNA.” Read more.
- Generation Bio, a Cambridge, Mass.-based biotech developing gene therapies for rare diseases, plans to raise $126 million by offering 7.6 million shares priced between $16 to $18. Atlas Venture Fund (37% pre-offering), Fidelity Investment (15%) and T. Rowe Price (8.9%) back the firm. It plans to list on the Nasdaq as “GBIO.” Read more.
- Jinke Properties Group Co., listed in Shenzhen, is preparing for an IPO of its property management unit that could raise at least $500 million in Hong Kong. Read more.
F+FS
- Wing closed its third fund with $450 million in commitments. Read more.
- Cathay Capital, in conjunction with Total Carbon Neutrality Ventures and Hubei High Technology Investment Guiding Fund Management, raised $120 million for their Smart Energy Fund.
- HarbourVest Partners raised $288 million for its Harbourvest Adelaide fund. Read more.


fortune--2020-06-09--What is the real unemployment rate? Your questions about that shocking jobs report, answered

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The shock of Friday’s U.S. jobs report is still rippling through economic circles, politics and financial markets.
The 2.5 million increase in payrolls and decline in the unemployment rate—albeit to a still-sky-high 13.3%—confounded expectations for another sharp deterioration in both measures.
Beyond how economists flubbed the forecasts, the report has spurred many other questions, from how to reconcile the figures with jobless-claims numbers showing about 9 million more claiming unemployment insurance benefits, to what to make of a recurring data-collection issue by the Labor Department, to how many jobs the federal Paycheck Protection Program actually saved.
Below, we try to answer some of these questions:
Wait, so is the real unemployment rate 16%?
Kind of. As the Bureau of Labor Statistics detailed, survey-takers misclassified a lot of people—around 5 million—as employed but absent from work, rather than unemployed on temporary layoff. If you counted those people as unemployed, the jobless rate would have been about 3 percentage points higher on an unadjusted basis — or about 16%.
The April report said the unemployment rate would have been almost 5 percentage points higher—or approaching 20%. So both of these statements are true: the rate fell in May, and the real (unofficial) unemployment rate was higher than the given figure in both months.
The jobs report showed 21 million Americans unemployed, but the weekly jobless claims report said 30 million are claiming continuing unemployment benefits in all programs. What gives?
It’s not actually 21 million, even though that’s the official number. If you adjust the figures for the misclassification detailed above, the true number of unemployed is closer to 26 million or 27 million, according to Nick Bunker, an economic research director for the jobs website Indeed.
OK, so we’re still off by 3 million or 4 million. What explains the rest of the gap?
There are several possibilities.
First, many states have waived the requirement that one be searching for work to be eligible for unemployment benefits. Yet, if people aren’t searching for work, the BLS doesn’t typically count them as unemployed—instead they’re considered “not in labor force,” with such outsiders still numbering 6.7 million people more than before the pandemic. Workers expecting to be recalled from temporary layoff are counted as unemployed whether or not they have engaged in a specific job-seeking activity.
Another potential culprit is that many of the self-employed and gig workers who are out of work and on the new federal Pandemic Unemployment Assistance benefits—10.7 million people as of the week ended May 16—are being classified as something other than unemployed, according to Betsey Stevenson, a University of Michigan economist and former U.S. Labor Department chief economist.
“It’s difficult to say how they would be coded in the BLS survey, but I would count them as on temporary layoff,” Stevenson said. “But given the drop in unemployment and the numbers that the BLS survey is capturing, my guess is that many of the 10.7 million were not counted as unemployed.”
Is it possible that the BLS survey wasn’t fully representative of the population?
Yes. While it’s true that the response rates for both the establishment survey—which produces the payroll number—and the household surveys were lower than their pre-pandemic levels, the BLS said both surveys met standards for accuracy and reliability.
Still, Stevenson said the low response rates “could cause problems because they are unlikely to be a random sample of people who are missing. If they are different in important ways that aren’t visible in the data, then the BLS would not have been able to adequately compensate for them.”
What about the ADP report, which said businesses cut 2.8 million jobs?
Many economists discount the ADP figures—based on the payroll company’s customer records—as an unreliable predictor of the government’s jobs report, typically coming two days later. But Mark Zandi, chief economist at Moody’s Analytics, which compiles the ADP report, said the ADP number actually provides a better representation of the reality of the May job market as of the BLS survey week than the BLS number itself.
In fact, a Federal Reserve research paper from 2019 found that pooling the BLS payroll numbers and a series derived from ADP could come closer to the true state of employment. So it’s possible that the truth for May was somewhere in between the ADP and BLS numbers.
So, what really happened in the labor market in May?
Probably two things, assuming the BLS’s snapshot matches reality: an unusually large number of people being recalled or hired, and an unusually large—but smaller—number of people losing their jobs.
“We saw a tremendous amount of churn,” said Erica Groshen, a former BLS commissioner appointed by President Barack Obama.
Economists may have in particular underestimated the number of people rehired under the PPP aid program. Holly Wade, director of research and policy analysis at the small-business group National Federation of Independent Business, said a mid-May survey of members found that 73% said they rehired or retained workers specifically due to PPP.
Groshen also cautioned that the weekly jobless claims figures produced by a different agency in the U.S. Labor Department, while relevant, aren’t necessarily directly comparable as an indicator with the monthly employment surveys produced by the BLS.
In any case, even with some improvement in May, the unemployment rate remains extremely high—much higher than any rate seen in the Great Recession—and economic activity is nowhere close to where it was pre-pandemic.
“The U.S. labor market, while showing some signs of bouncing back from the coronavirus shock, is still in a pretty dire spot,” Indeed’s Bunker said.


fortune--2020-06-09--Should Apple buy its own search engine?

Should Apple buy its own search engine?

This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
Some people bake bread during a pandemic. Others up their revolutions on the Peloton. Tech analysts at Bernstein, the research-focused brokerage, apparently sit around thinking deep thoughts about the future of mega-cap tech companies.
A troika of analysts unveiled a new report about a trio of tech giants—Google, Apple, and Microsoft—that asks a compelling question: Should Apple buy its own search engine?
The logic is compelling, convoluted, and potentially expensive. Here’s the short version: Google currently pays Apple in the neighborhood of $8 billion annually to be the default search engine on iPhones and other Apple devices. The Bernstein analysts reckon that figure isn’t so much a function of the economics to Google as what Google is willing to pay to keep Microsoft and its Bing search engine—which still exists, apparently—off Apple’s phones.
That’s an enviable position for Apple, but one the Bernstein analysts think could be jeopardized if Google decided to go it alone and if Microsoft chose not to step in at the same dollar value. Their prescription is for Apple to buy DuckDuckGo, the No. 4 U.S. search engine, which I confess I’d never heard of or forgotten about if I had. DuckDuckGo highlights its focus on privacy, making it a good fit for Apple.
It’s food for thought rather than market intelligence.
***
I wasn’t sure what to expect last November when I traveled (through the airport in Wuhan) to Guangzhou for the Fortune Global Tech Forum, an event predicated on engagement between China and the West, particularly the U.S. What I found, at least in spirt, was business as usual. The Chinese and Western executives came to do business, as they’d been doing for years, despite the bellicosity coming from Washington and Beijing. Reading this riveting excerpt from the new book by Wall Street Journal reporters Bob Davis and Lingling Wei, I’m not so sure how long business as usual will last.
***
My article in February about the state of San Francisco and its government prominently featured the downtrodden Tenderloin neighborhood. As Heather Knight, the city’s most influential newspaper columnist, describes in this sad account, conditions in the Tenderloin have deteriorated during the pandemic. In other words, they’ve gone from bad to horrific. And this is amid the backdrop of city officials having done a laudable job at keeping the overall city safe from Covid-19.
Adam Lashinsky
@adamlashinsky
adam.lashinsky@fortune.com
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Out of sight. In one of the most concrete reactions in tech to the current protests against racism and police brutality, IBM said it was dropping all facial recognition applications. “IBM firmly opposes and will not condone uses of any technology, including facial recognition technology offered by other vendors, for mass surveillance, racial profiling, violations of basic human rights and freedoms, or any purpose which is not consistent with our values and principles of trust and transparency,” CEO Arvind Krishna wrote in a letter to Congress explaining the decision.
Good night and good luck. Disappointed and delayed too many times by Intel, Apple is on the verge of announcing a switch to its own processors, Bloomberg reports. Software developers at WWDC will hear on June 22 about the new Macs with Apple-designed processors arriving for consumers next year. In other debut news, Sony says its delayed Playstation 5 game unveiling event will take place on Thursday.
The perfect storm. On Wall Street, online used-car market Vroom went public, pricing its shares at $22, higher than the anticipated range of $18 to $20. Trading starts later on Tuesday under the symbol VRM. Fintech startup Lemonade filed to go public, revealing that its revenue tripled to $67 million last year.
Gravity. The vice chairman of Samsung, Lee Jae-yong, won't be going back to jail, at least not right now. A South Korean court rejected an arrest warrant for Lee, the grandson of Samsung's founder, over alleged financial fraud. Prosecutors say they are still investigating Lee, who served a year in prison on a related bribery charge.
Men who stare at goats. No, 5G doesn't cause coronavirus, but you knew that. Now Twitter is adding its "get the facts" label to tweets that allege a connection. Meanwhile, a new study from NYU's Stern Center for Business and Human Rights urges social media companies to greatly increase the size of their content moderation workforces and stop using outside contractors for the function. And on Reddit, some 300 moderators sent a letter to CEO Steve Huffman calling for the site to ban racism and hate speech.
The monuments men. Yesterday, we mentioned a lawsuit filed by several Amazon workers in New York charging that the company was not following government health guidelines in its warehouses during the COVID-19 pandemic. Later on Monday, Amazon sent a statement saying it has followed the guidance of all federal and local health authorities and that its facilities have passed all 91 inspections made by state health and safety regulators.
(Headline reference explainer/some diverting cinema recommendations for you from the George Clooney oeuvre.)
FOOD FOR THOUGHT
Some day, lockdowns will end and we will go back to work and to some of our other favorites places to hang out and get stuff done. My friend and author Eric Weiner has written an ode to working in the coffee shop, sometimes known as the "third place" besides your home and your office.
When we think of the ideal place for contemplation, we tend to imagine quiet ones, a belief drilled into us by legions of shushing librarians. But quiet, it turns out, isn’t always best. A team of researchers, led by Ravi Mehta of the University of Illinois at Urbana-Champaign, found that those exposed to moderate noise levels (seventy decibels) performed better on a creative-thinking exam than those exposed to either high levels of noise or complete silence. Moderate noise, Mehta believes, allows us to enter “a state of distracted, or diffused, focus,” the ideal mindset for creative breakthroughs. It’s called the “Starbucks Effect,” and explains a lot about why you find so many writers and entrepreneurs camped out at coffee shops.
ON THE MOVE
A little excitement for our executive moves section today. Former Amazon Web Services vice president of product marketing Brian Hall jumped to Google Cloud–and Amazon is suing, saying Hall violated a non-compete agreement...Speaking of Google, Twitter named former Google CFO Patrick Pichette as its new board chair. Pichette, who left Google in 2015, has been a board member for three years...At Microsoft, LinkedIn SVP Ryan Roslansky is taking over as CEO of that unit from Jeff Weiner, who becomes executive chair...US Cellular named AT&T Mexico boss Laurent Therivel as its new CEO. Outgoing CEO Kenneth Meyers is retiring...Dish Network hired longtime T-Mobile executive Dave Mayo as EVP of network development as it tries to crack the mobile phone market.
IN CASE YOU MISSED IT
Tesla stock closes at an all-time high on bullish sales data out of China By Anne Sraders
Stitch Fix’s new growth strategy: Letting non-clients shop directly, too By Phil Wahba
‘Not an easy decision.’ How Alexis Ohanian justified his departure from the Reddit board By Lydia Belanger
Facebook and Google preach racial equality. But they lack it on their leadership teams By Danielle Abril
White female founders face a reckoning over racism By Emma Hinchliffe
An inclusion expert and a CEO on how businesses can keep the anti-racist momentum going By McKenna Moore
The stock market’s breathtaking rally has some investors worried about another correction By Rey Mashayekhi
(Some of these stories require a subscription to access. There is a 50% discount for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.)
BEFORE YOU GO
We may have to send Adam out on assignment to confirm this story, but apparently the Golden Gate Bridge is now making sounds like the background music in a David Lynch film. Listen and see if you agree. Replacement handrails changed the flow of air across the span, resulting in the moody new soundtrack.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com


fortune--2020-06-09--In a first, Apple plans to shift to its own processors to power new Mac computers

Apple is preparing to announce a shift to its own main processors in Mac computers, replacing chips from Intel Corp., as early as this month at its annual developer conference, according to people familiar with the plans.
The company is holding WWDC the week of June 22. Unveiling the initiative, codenamed Kalamata, at the event would give outside developers time to adjust before new Macs roll out in 2021, the people said. Since the hardware transition is still months away, the timing of the announcement could change, they added, while asking not to be identified discussing private plans.
The new processors will be based on the same technology used in Apple-designed iPhone and iPad chips. However, future Macs will still run the macOS operating system rather than the iOS software on mobile devices from the company. Bloomberg News reported on Apple’s effort to move away from Intel earlier this year, and in 2018.
Apple is using technology licensed from Arm Ltd., part of Japanese tech conglomerate SoftBank Group Corp. This architecture is different from the underlying technology in Intel chips, so developers will need time to optimize their software for the new components. Cupertino, California-based Apple and Santa Clara-based Intel declined to comment.
This will be the first time in the 36-year history of the Mac that Apple-designed processors will power these machines. It has changed chips only two other times. In the early 1990s, Apple switched from Motorola processors to PowerPC. At WWDC in 2005, Steve Jobs announced a move from PowerPC to Intel, and Apple rolled out those first Intel-based Macs in January 2006. Like it did then, the company plans to eventually transition the entire Mac lineup to its Arm-based processors, including the priciest desktop computers, the people said.
Arm-based chips
Apple has about 10% of the PC market, so the change may not cut into Intel sales much. However, Macs are considered premium products. So if the company moves away from Intel for performance reasons it may prompt other PC makers to look at different options, too. Microsoft Corp., Samsung Electronics Co. and Lenovo Group Ltd. have already debuted laptops that run on Arm-based chips.
Apple’s chip-development group, led by Johny Srouji, decided to make the switch after Intel’s annual chip performance gains slowed. Apple engineers worried that sticking to Intel’s road map would delay or derail some future Macs, according to people familiar with the effort.
Inside Apple, tests of new Macs with the Arm-based chips have shown sizable improvements over Intel-powered versions, specifically in graphics performance and apps using artificial intelligence, the people said. Apple’s processors are also more power-efficient than Intel’s, which may mean thinner and lighter Mac laptops in the future.
Apple’s move would be a highlight of this year’s WWDC, which will be held online due to the Covid-19 pandemic. Because of the fluid nature of the global health crisis and its impact on Apple’s product development, the timing of the chip announcement could change.
At the conference, Apple is also readying updates to its other operating systems — iOS, iPadOS, tvOS and watchOS — with changes to augmented-reality capabilities, deeper integration with outside apps and services, and improved Apple Watch fitness features. A big priority is improving the performance of its mobile software after last year’s release, iOS 13, suffered from several issues.
The company is working on at least three of its own Mac processors, known as systems-on-a-chip, with the first based on the A14 processor in the next iPhone. In addition to the main central processing unit, there will be a graphics processing unit and a Neural Engine for handling machine learning, a popular and powerful type of AI, the people said. In the past, Apple has made chips for specific Mac functions, such as security.
Intel has faced more competition as its lead in production technology — a key way to improve semiconductor performance — has slipped. Taiwan Semiconductor Manufacturing Co. makes processors for many of Intel’s rivals using a more advanced process.
TSMC will build the new Mac processors using a 5-nanometer production technique — the same approach as for the next iPhones and iPad Pros. Intel rivals Qualcomm Inc. and Advanced Micro Devices Inc. also use TSMC to make their chips.
The Apple chip project has been in the works for several years and is considered one of the company’s most secretive efforts. In 2018, Apple successfully developed a Mac chip based on the iPad Pro’s processor for internal testing, giving the company confidence it could announce such a shift this year.


fortune--2020-06-09--White female founders face pressure over racism

Good morning, Broadsheet readers! Coronavirus disrupted the world’s sexual health supply chain, Stitch Fix has a new growth strategy, and white female founders reckon with racism. Have a thoughtful Tuesday.
– Reformation, Refinery29, and racism. As companies posted their support for the Black Lives Matter movement over the past two weeks, Instagram comment sections quickly filled up with allegations of hypocrisy from former employees and stories of racist behavior by those same company leaders now espousing their support.
One of the highest-profile reckonings came at Reformation, the eco-conscious women’s clothing brand founded by CEO Yael Aflalo. After being accused of racism by a former employee, Aflalo acknowledged that she had “failed” in “treating people equally…especially the black community.” (Aflalo is still CEO but took what the company calls a “step back” from the role in 2018.)
A similar incident played out at the stationery brand Ban.do, founded by Jen Gotch. Also accused of racism, Gotch admitted that she was “guilty” of “creating and helping to propagate a racist company culture.” She resigned as chief creative officer.
And at the women’s news and lifestyle site Refinery29, former employees wrote on Twitter about their experiences there with racism and discrimination; cofounder Christene Barberich stepped down as editor-in-chief Monday morning. Vice Media CEO Nancy Dubuc announced that the company would commit to an “inclusive hiring process with a diverse slate of candidates” for the next editor of the site it acquired in 2019.
All three of these companies have participated in—and benefitted from—the language and branding of equality and feminism, from Refinery29’s coverage to Ban.do’s empowerment-themed notebooks. That record made wrongdoing and hypocrisy on racism even more apparent—and frustrating to past employees.
The world is experiencing an unprecedented social movement, where white leaders are facing consequences for racist behavior en masse for the first time; in a way, it’s reminiscent of the early days of the #MeToo movement, when the dominoes fell fast and furiously. Other companies have been confronted with similar pressures; these three are just among the first to acknowledge them.
Read the rest of my story about the white female founders facing a reckoning over racism here.
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
ALSO IN THE HEADLINES
- Too late to apologize? The U.S. Women's National Team is asking U.S. Soccer to apologize to black players for banning athletes from kneeling during the national anthem. U.S. Soccer created the policy after Megan Rapinoe kneeled in solidarity with Colin Kaepernick's protest against police brutality in 2016. BuzzFeed
- Fix this. Stitch Fix, led by CEO Katrina Lake, has a new growth strategy: letting non-subscribers shop through its platform. Stitch Fix president Elizabeth Spaulding tells Fortune's Phil Wahba that the plan is part of "a future for Stitch Fix ... where many clients may want to join for the ‘fix’ experience and then shop, and where others may want to start with the shopping experience without beginning with a fix." Fortune
- DNA results. 23AndMe, the genetic testing company led by CEO Anne Wojcicki, studied how a person's blood type can affect their reaction to contracting COVID-19. The study's preliminary results suggest that type-O blood is especially resistant to the virus. Bloomberg
- Supply chain crisis. The coronavirus crisis has disrupted the world's sexual health supply chain. Women in developing countries are struggling to access condoms and other forms of birth control. The Atlantic
IN CASE YOU MISSED IT
- NOW this. An investigation by The Daily Beast unearthed allegations of racism within the National Organization for Women. Women of color report being heckled, disparaged, and silenced at NOW meetings and in the organization's office. Nine board members are now calling on NOW president Toni Van Pelt to resign. The Daily Beast
- Tech vs. Trump. Ivanka Trump was scheduled to give a commencement address at Wichita State University Tech. The school pulled the recorded speech because of the Trump administration's response to nationwide protests over racism and police brutality. Trump then released the speech online herself, blaming WSU Tech's decision on "cancel culture." New York Times
- Gaga, ooh la la. Lady Gaga's Chromatica has landed her with the biggest release for a female artist so far in 2020. The record is Gaga's sixth No. 1 album and a return to dance-pop stardom. New York Times
ON MY RADAR
Democrats’ sweeping new police reform bill, explained Vox
A feminist history of bike-riding LitHub
New Zealand says it’s eliminated all coronavirus cases and is resuming normal life Fortune
U.S. demands Britain hand over Prince Andrew to be quizzed over Epstein link CNN
PARTING WORDS
"For those of you who feel invisible: Please know that your story matters."
-Former First Lady Michelle Obama in her commencement address to the class of 2020


fortune--2020-06-09--Macy’s share price jumps to pre-pandemic levels after 450 stores reopen

Macy’s Inc. surged as much as 17% in early trading after announcing it has reopened 450 stores in some capacity and expects to exit the second quarter with a “clean inventory position.” This shows the U.S. department store chain may be bouncing back faster than expected from the Covid-19 outbreak that upended the retail world this year.
As expected, the company posted a steep revenue decline, with net sales plunging 45% to $3 billion in the quarter ended May 2 amid U.S. lockdown measures that shuttered the company’s stores. Excluding some items, the company’s net loss was $630 million. Key Insights Macy’s inventory outlook means it won’t exit the lockdown burdened with difficult-to-sell merchandise. Investors have been concerned about the rising level of goods sitting in the hundreds of retail stores that closed in mid-March in an effort to stem the spread of the coronavirus outbreak. For Macy’s, having less seasonal inventory would be beneficial to setting it up for the important holiday season.
Chief Executive Officer Jeff Gennette said reopened stores are performing better than anticipated, while “strong digital business sales trend continued throughout May.” Gennette and the company’s interim chief financial officer, Felicia Williams, will speak during a retail event today at 11 a.m.
Macy’s also used it inventories to help boost liquidity. The department store chain on Monday announced a credit line of $3.15 billion backed by its inventory, which brought its total new financing to $4.5 billion. The company said because of these new financings it expects “sufficient liquidity to address the needs of the business.” Market Reaction Macy’s shares surged as much as 17% in early trading in New York.


fortune--2020-06-09--With coronavirus in retreat, Amsterdam locals believe they can now reclaim a city center lost to ove

With coronavirus in retreat, Amsterdam locals believe they can now reclaim a city center lost to overtourism

As the coronavirus pandemic raged in March and April, the 500-year-old Amsterdam city-center became a ghost town: The scantily clad sex workers in brothel windows in small alleys like Stoofsteeg in the red-light district were gone, as were the hordes of tourists who come there to gawk at them; Coffee shops on historic plazas like Rembrandtplein and Leidseplein didn’t get the visitors who descend upon the city by the thousands for the cannabis they sell.
By driving away the more than 1 million tourists the city gets on average each month — surpassing its population — the virus lifted the veil on something that had been in plain sight for years: local Amsterdammers have lost the city’s historic center.
Now, a fight is on to reclaim it.
“It painfully showed how few people actually live in the center and how little it has to offer locals,” said Mascha ten Bruggencate, who chairs the council of Amsterdam’s central district. “We need to change that.”
Cities and countries across the world are studying what they need to do differently in the post-Covid19 era. For Amsterdam, whose 19 million annual tourists bring in more than 6 billion euros ($6.8 billion) in revenue, that will mean striking a better balance between visitors and locals in its city center.
Amsterdam Mayor Femke Halsema laid out a plan at the end of May to do just that. Among measures she listed in a letter to the local council include buying property and limiting permits to ensure that the old city is not just dotted with shops selling souvenirs, cannabis and Nutella-lathered waffles but has companies where residents can work, houses where they can live and grocery stores and outlets that cater to them.
It won’t be the first time such efforts have been made. But the virus crisis underlined “the urgency to think about the city center of the future,” Halsema said in the letter, noting just how over-reliant on tourists it has become, and the need to diversify.
A triumph for the city came at the end of April, when Adyen NV, one of the country’s most successful fintech firms, said it will rent a 17,000 square-meter office in the heart of the city. The company, which processes payments for the likes of Uber Technologies Inc., Ebay Inc. and Booking.com Ltd., said it was drawn by the neighborhood’s retail activity.
Adyen’s young employees “like to work in a city that is vibrant, so they can, for example, visit a book store during their break or grab a drink together on a nearby terrace after a hard day of work,” said Chief Financial Officer Ingo Uytdehaage.
The local government has been actively trying to attract firms there, said Angelique Schouten, an executive at Ohpen, another fintech company that moved a few doors down eight years ago.
“There has been an exodus of companies here in the last 15 years,” she said. “With the arrival of Adyen, the balance is back on our street.”
What to do about the brothels
A key piece of the government’s plan to reconfigure Amsterdam is to get brothels to move out of the old city and curb coffee shops that serve tourists. That won’t be easy.
The liberal approach to sex, drugs and parties, not to mention old Amsterdam’s quaint cobbled streets, canals and narrow colorful town houses, make the city a popular tourist destination. But over the years, like in Venice and Barcelona, floods of visitors have overwhelmed local lives — from puking stoners to prostitute stalkers.
Things got so bad, some residents pasted photos of themselves in their windows with a sign that said, “I Live Here.”
“The street cleaning car has to pass by multiple times a day here to clean away the mess,” says Paul, a 52-year-old, who has been living in one of the many alleys in the red-light district for 16 years. A self-employed consultant who didn’t want to give his last name, Paul says he’s sick of the ever-increasing numbers of tourists who urinate or vomit by his doorway. He wants the local government to close window prostitution and coffee shops, and bring back local retailers.
“They have to give back this area to citizens, because if they don’t do it now, it will never happen,” he said.
That may be easier said than done. Local authorities have discussed and implemented multiple ideas over the years, like restrictions on tourist rentals and a ban on stores that cater to them. The council has even tried to buy out brothel owners to get them to move out.
“The tipping point was around 2014,” said Geerte Udo, CEO of amsterdam&partners, the city’s branding agency. “Everybody started to realize that more is not always better. Serving the tourist economy had become the sole purpose of the most crowded locations.”
Amsterdam’s famously liberal approach to sex and drugs has made the city’s Red Light District a haven for tourists. Wire photography: Pierre —Getty Images. Pierre Crom—Getty Images
Brothels that thrive on tourists are not keen to leave. Prostitutes who work in the 330 window brothels in the red-light district consider the area, full of cameras, as a safe place, and see tourists as their biggest income stream.
The pandemic has hit the sex business hard. Many sex workers have gone back home to eastern Europe or work illegally. And although brothels are set to reopen in September, they expect to generate only 30% of normal revenue as tourists mostly stay away.
“Things are not going well with us,” said Masten Stavast, the head of Agapi, a company that rents 31 window brothels to prostitutes.
While the financial pain of window brothel rental companies might have provided the city an opportunity to buy them out, local government coffers are themselves depleted. Also, that may not be a winning strategy. An effort over a decade ago to buy out more than 100 window brothels backfired as the value of the property tumbled with no high-end businesses wanting to move in.
“Let’s face it; prostitutes need tourists, and the tourists want to see Amsterdam, and what else is Amsterdam other than old Amsterdam?” Stavast said.
Cannabis-selling coffee shop owners are similarly wary of efforts to curb sales to tourists. Paul Wilhelm, the co-owner of two coffee shops, one of which is among Amsterdam’s oldest, says it would be terrible for business.
With foreign tourists gone, his shops — one of which was the location for a scene shot in 2004 with Brad Pitt and Matt Damon for the movie “Ocean’s Twelve” — have lost 50% of their revenue. Many coffee shops will fold because they couldn’t muster any local sales, he said.
He warns that the authorities may go too far to limit coffee shops — which may go underground and be criminalized.
“A tourist might be initially attracted by the coffee shops, but these people also book a hotel, visit a restaurant and will go on a round-trip boat ride in the canals,” he said. “They spend money. Economic times are going to be very tough in the years ahead, we also need jobs. You can’t have the idyll of a small village and be an economic metropolis at the same time.”
For some, tourism is not the problem. What the city needs is rigorous enforcement to keep the rowdy elements in check, says 81-year-old pensioner Jan Dorreboom, who has lived in the red-light district for 45 years.
“Joints and window prostitution are a part of Amsterdam; just live with it,” he said.
City officials don’t disagree. They just want more homes instead of only hotel rooms, and more bars and restaurants for locals, Ten Bruggencate said.
“My dream is that the city center will continue to be a vibrant place, but one where visitors are visitors, and not the main event,” she said. “It should be a place where locals live, work and do their thing.”


fortune--2020-06-09--How to counter vaccine skepticism if a coronavirus vaccine becomes available

The race for a COVID-19 vaccine underscores the role of vaccination in protecting the health of individuals and communities and maintaining the functions of modern society. The most humane and efficient way to move past the coronavirus pandemic will be to develop, test, manufacture, distribute, and administer a safe and effective vaccine to billions of people around the globe.
Yet the desperate search for a vaccine against the novel coronavirus comes when hesitancy and skepticism about long-established and highly effective vaccines is a real and present danger to health. Just last year, the U.S. had its highest number of measles cases since 1992, concentrated in communities with low immunization rates. Similar outbreaks have occurred in Europe, Asia, and Latin America. More complete acceptance of the safe and effective measles vaccine would have prevented these tragedies.
Across the globe, undervaccination arises from vaccine shortages, low-quality services, inconvenience, or lack of affordability. More recently, physical distancing in response to COVID-19 has likely led to the dramatic drop in vaccination rates as parents defer well-baby visits. In addition to these barriers, a more worrisome, long-term decline in vaccine uptake is a consequence of complacency and loss of confidence in the drug companies that produce vaccines and the experts who recommend them.
Although vaccination remains the prevailing social norm, falsehoods about vaccine risks have been widely disseminated on social media, fueled by skepticism and distrust in government, industry, and science. These falsehoods threaten to erode public confidence in the value of vaccination against infectious diseases.
Our new report, Meeting the Challenge of Vaccination Hesitancy, produced by the Sabin-Aspen Vaccine Science & Policy Group, focuses on the factors that influence vaccine decision-making, the spread of misinformation through social networks and social media, and the research necessary to understand the sources of vaccine hesitancy and the best ways to counter it.
To their credit, a number of social media platforms have been responsive to calls to stem the flow of vaccine misinformation. Recognizing that tech companies have deep intelligence on the spread of digital memes on their respective platforms—and the capacity to influence public understanding—our report calls for a deepened partnership between immunization programs and social media to advance vaccination acceptance in communities around the world.
The coronavirus crisis is a clarion call to confront the problem of misinformation and mistrust about vaccines. As scientists race toward development of a COVID-19 vaccine, any shortcuts in evaluation of safety and efficacy risk setting back control of the coronavirus and perversely adding to distrust of all vaccines. A lot depends on getting the COVID vaccine right—available as quickly as it can be demonstrably safe and effective.
The gravity of the current COVID-19 pandemic, ongoing measles outbreaks throughout the world, the hard last mile of polio eradication, and the resurgence of other vaccine-preventable diseases reinforce the need to act now to bolster vaccine acceptance everywhere. Vaccines are not only our best hope to emerge from the coronavirus pandemic. Vaccines are the prime tool to protect everyone against the numerous preventable infections that threaten humanity.
Harvey V. Fineberg is president of the Gordon and Betty Moore Foundation and cochair of the Sabin-Aspen Vaccine Science & Policy Group, a joint initiative of the Sabin Vaccine Institute and the Aspen Institute.
Shirley M. Tilghman is president emerita and professor of molecular biology and public affairs at Princeton University and cochair of the Sabin-Aspen Vaccine Science & Policy Group.


fortune--2020-06-10--Small-business owners considering bankruptcy may be shocked to learn they could lose their homes

Sweden to drop daily coronavirus briefings as scandal grows over its loose handling of the pandemic

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Though coronavirus lockdowns are beginning to ease, small businesses such as restaurants, laundromats, and florists will continue struggling with the devastating fallout from months of, at best, seriously curtailed revenue. While the PPP small-business loan program has kept some of those businesses nominally solvent in the short term, a wave of small-business bankruptcies is imminent once such support runs out.
But experts say many small business owners who consider bankruptcy will discover a devastating trap. The bankruptcy code in many states could force small-business owners to give up their homes to resolve business debts, potentially robbing them of the solid footing needed to rebuild.
The problem arises from two intersecting factors. First, many small businesses are unincorporated sole proprietorships, meaning the businesses’ debts aren’t legally separate from the owners’ personal finances. Even small businesses that are incorporated often rely on owners’ personal guarantees for loans, leases, or other financing, leaving them personally on the hook.
Compounding that reality is the fact that many states have very low caps on the so-called homestead exemption allowed by their bankruptcy codes. In theory, the exemption prevents a primary residence from being handed over to creditors. But it’s no longer working as intended.
“In many states, if not most, the amount of the homestead exemption has lagged far behind the cost of owning a home,” says Ike Shulman, head of the National Association of Consumer Bankruptcy Attorneys. “Over decades, it’s not even close.”
In a 2019 report, the National Consumer Law Center (NCLC) graded states’ homestead protections for debtors: 22 states earned an “F” grade, including Alabama, with an exemption of just $15,500 for an individual; and Kentucky, with an exemption of just $5000 for an individual. California also earned an “F”: Though its homestead exemption tops out at $100,000 for married couples, that’s a small fraction of the statewide average home value of $578,267 (according to data from Zillow), and even less relative protection for homeowners in expensive markets such as San Francisco.
Bankruptcy codes run according to a complex mix of state and federal rules, and many states, particularly in middle America, do have strong homestead exemptions. Florida, Iowa, Kansas, and Texas are among those with unlimited homestead exemptions, enabling bankruptcy filers to protect their home regardless of its value.
In some states, homeowners can choose to use the federal homestead exemption instead of the state exemption. But the federal exemption, too, is meager—around $25,000 for an individual, variable according to inflation.
When bankruptcy filers have equity in their home above homestead exemption limits, Shulman says it is common for bankruptcy trustees to sell the home, give homeowners cash for the exempt amount, then use the rest to pay creditors. That, Shulman says, undermines the basic point of the bankruptcy code.
“It’s so people don’t just leave bankruptcy wearing a barrel,” says Shulman. “They should be able to get a fresh start with something.”
Instead, small-business owners who file for bankruptcy in states with low exemptions could lose both the roof over their head, and the financial security they thought they had been building. “That house is their life savings,” says Shulman.
According to John Rao, an attorney specializing in mortgage and bankruptcy issues for the NCLC, that makes it “very likely” that at least some business owners who need bankruptcy restructuring will not seek it. That will leave them with long-term personal liabilities, and could prevent them from rebuilding their businesses and bringing back the jobs they created.
The problem is partly a result of inertia and neglect. Some states, Rao says, have not adopted federal rules that keep the exemption in line with inflation, leaving its real value to wither over the years.
But in other cases, Shulman says, the problem has been actively prolonged by the banking and debt-collection industry. Shulman was part of a 2016 effort to expand California’s homestead exemption, which he says was actively opposed by lobbyists from those industries, and ultimately defeated.
Rao expects a ramp-up in efforts to reform state and federal homestead exemptions as coronavirus-related bankruptcies accelerate. Such efforts weren’t significant after the Great Recession, he says, because the crash in housing prices left many homeowners with little equity to protect. “This crisis is potentially much different, because home values haven’t dropped.”
More generally, Shulman thinks attitudes about bankruptcy are poised to change, potentially spurring more reform.
“People aren’t thinking of bankruptcy as something that people they know might need,” he says. “Coronavirus might bring that into focus, if people end up losing their homes because their businesses failed through no fault of their own.”
Correction: This article previously included incorrect information on Deleware’s bankruptcy homestead exemption. The state’s exemption is $125,000.


fortune--2020-06-10--The founder of wellness startup Golde on launching a business inspired by personal experience

Small-business owners considering bankruptcy may be shocked to learn they could lose their homes

This is an installment of Startup Year One, a special series featuring interviews with founders about the major lessons they have learned in the immediate aftermath of their businesses’ first year of operation.
Trinity Mouzon Wofford first got into wellness through her mother, who suffers from an autoimmune disease. When Wofford was a teenager, her mother went to see a more holistically minded physician who offered alternative treatments, which Wofford says, fueled a massive improvement in her mother’s symptoms.
“That really inspired me, and I decided medicine would be my career path,” Wofford says. And she was a premed student at New York University—up until the moment she heard that her mother had been forced to stop seeing that doctor because she couldn’t afford it anymore: “I realized that I didn’t want to practice holistic care just for the folks who could comfortably afford it without insurance. Following graduation, I sort of ‘fell’ into a marketing career at a tech startup in the city. I absolutely loved it—the brand building, startup life—but I knew I had to come back to the wellness piece.”
That led to Golde, a superfood health and beauty brand, which Wofford founded in 2017. It is available direct-to-consumer online but also at Sephora, Goop, The Wing, and more retail partners.
Wofford shared more with Fortune this week about her first few years in business and the hurdles she has encountered so far, including what it has been like running a wellness startup during a pandemic.
This interview has been lightly edited and condensed for clarity.
Golde founder Trinity Mouzon Wofford Courtesy of Golde
Fortune: The wellness industry is hotter than ever, but it’s also crowded. What inspired the launch of Golde? What makes it stand apart?
Wofford: Golde was inspired by my own experiences as a consumer in the wellness space. I felt really caught between that sort of crunchy, granola stuff I’d grown up with in New York’s Hudson Valley, and the new trending prestige offerings that I simply couldn’t afford. Golde is really the first wellness brand to be centered in community, which is huge.
Our consumers are largely Generation Z and millennial women who feel the same way I did: They’re eagerly building out their self-care routines, but they’re still searching for a brand that really speaks to their values. Our products are affordable and simple. Our mission isn’t weight loss or detox; it’s for every member of our community to feel like their best selves.
Based on the art direction of the website and the product packaging, Golde looks ideal for the social media generation. How has technology shaped the development of Golde?
My cofounder, Issey Kobori, and I do all of the art direction and packaging design ourselves. I think that is a big piece of Golde’s success; it feels like it authentically speaks to that generation because it was created for and by us. You can put as many experts in a room to try to define what young folks want out of their wellness experience, but you can’t reverse engineer authenticity.
Social media has been a massive factor in our success to date. We self-funded our business for over three years, and so we had no choice but to rely 100% on organic word of mouth. When we launched in 2017, Instagram was really the ideal channel for that. Within our first year, we had retail inquiries from Goop, Sephora, Nordstrom, and Urban Outfitters. So many of them told me that they had found out about us while browsing through Instagram. Today, that’s still our biggest channel for discovery.
What were some of the biggest hurdles you faced in the last year? What surprised you the most?
As a largely self-funded business, cash flow is always a hurdle. I don’t mind paying myself bottom of the barrel wages, but it’s tough when you start to build out a team and need to make sure they have the resources they need to be successful. The past year was a lot of telling folks: “Yeah, we’ll be able to invest in something like that one day.”
What’s really surprised me the most is the extent to which our community will rally behind us, which has really been our saving grace considering that we haven’t raised millions in venture capital funding to date. They know we’re a small business, and they will show up in droves to support anything we put out there.
What kind of feedback have you received from your customers? Are there any particular wellness products that seem to resonate the most? Anywhere you’d found you need to make adjustments?
Everything we do is a test-and-learn opportunity. In 2019, we expanded into skin care with the launch of two topical face masks made with 100% pure superfood powders. We weren’t sure what the reaction would be.
Today, the Clean Greens mask, in particular, continues to be one of our top sellers. We’ve made a lot of packaging tweaks over the past few years. Most recently we rebranded our Turmeric Tonics to Superfood Lattes, which has been a huge hit. It was extremely nerve-racking to make a change like that, but we’ve found that in wellness the best thing you can do is make your product easy to understand. We’ve consciously tweaked anything that felt a little too “woo woo.”
Over the past several days, there has been a much stronger and more concerted effort on social media to encourage consumers to support black-owned businesses. At the same time, there is the worry that while this might offer a much-needed sales bump during an economic downturn, nonblack consumers will not commit to this effort in the long term. What can other members of the business community do to amplify and sustain support for black-owned businesses?
Word of mouth is an insanely powerful thing. Since this movement started, we have sustained 10 times our usual sales numbers. The other day I was DM-ing with Kourtney Kardashian. It’s bananas.
To me, it really proves the power of conversation and network recommendations. Yes, this can be powerful for mega-influencers, but it’s also extremely effective on the micro-sale, with the type of recommendations you might make to a friend or family member. Talking about black-owned brands is a meaningful place to start.
That said, there is so much more to do. Black entrepreneurs need equal access to capital and business resources. We’ve been ignored in the mainstream business community in spite of the rise of other movements celebrating female founders. These female founders are overwhelmingly white and of high-SES [socioeconomic status] backgrounds, so it sort of defeats the idea of celebrating diversity through that initiative. We all need to hold ourselves accountable to level that playing field.
It’s not just about “doing what’s right.” It’s about ensuring that tomorrow’s businesses have the toolbox they need to speak to an increasingly diverse country. How many businesses have faced outrage in the past few months due to exposure of racial inequalities in their operations? How much of that could have been avoided by all of us making a conscious effort to empower diverse teams?
Wofford’s business is focused on making superfood-boosted essentials for health and beauty. Courtesy of Golde
Obviously, amid the coronavirus pandemic, consumers’ purchasing habits and practices are going to change. How does Golde plan to adjust its business plan for the immediate future?
Because we’re in the wellness and beauty space, we actually saw a big increase in our online business following the rise of COVID-19. Folks want to be able to have their favorite matcha latte at home, or they’re looking for immunity boosters.
The challenge, of course, was navigating relationships with our brick-and-mortar retail partners, so many of whom have been struggling through this time. We really pivoted toward leaning into our digital channels, and it’s helped us rise to this exceedingly unprecedented occasion. Because we have so much experience staying lean, we are already profitable. A lot of brands freaked out when the economy started to fall because it meant that outside investor funding had dried up. We have no issues with hunkering down.
I think the brands that show the greatest resiliency during this time will be the ones with one, an extremely dedicated digital community that will rally behind them through good times and bad, and two, the ability to pivot to an ultra-lean capital plan that prioritizes profits without overly sacrificing growth opportunities.
At the same time, how does a shutdown of this nature affect the future of the business, from product development to raising capital?
We were raising our first round of investor capital when the pandemic shut everything down. It was a small round to begin with, and then we ended up only closing 10% of what we had planned on. That sucked, but we knew how to keep it lean. The money we raised has gone into development of a few new SKUs that we’re really excited to be launching in the near-ish future.
As an entrepreneur, unexpected things are always happening, so this just felt like another situation to push through. In hindsight, I’m glad it worked out this way. We had just enough capital to put into much-needed expansion opportunities, and the rest can be raised down the road at a higher valuation than what we could command this past spring.
Looking beyond the post-pandemic era—which could be anywhere from a year to a few years from now—how do you plan to grow Golde and what do you want the business to look like five years from now?
We’re really centered on community-powered wellness. Every decision we make comes back to the community, and what they’re looking for. We want to get them more involved in the business, because it really is a collaborative process at this point. Product development is the next big thing that we want to bring everyone into. Accessibility is at our core, so retail expansion is another one that we’re very excited about. We want everyone to know and love Golde.


fortune--2020-06-10--Sweden to drop daily coronavirus briefings as scandal grows over its loose handling of the pandemic

Sweden’s top health authority will drop daily press briefings that had provided updates on the country’s Covid-19 infection rate and death toll.
The decision comes amid a furore over Sweden’s strategy to fight the pandemic, after state epidemiologist Anders Tegnell admitted his approach was flawed. Instead of every day, updates will now only be provided on Tuesdays and Thursdays.
Sweden’s softer lockdown has resulted in one of the world’s highest death rates, relative to its population. But both Tegnell and Prime Minister Stefan Lofven have insisted there’s no need to change strategies. The controversy had turned the briefings into public grillings during which Tegnell was increasingly pressed to explain himself.
The development has embarrassed the government and led to a dramatic slump in Swedish support for the country’s Covid response. During a debate with party leaders on Wednesday, Lofven acknowledged Sweden should have conducted more tests for the virus.
Meanwhile, members of the opposition have stepped up their attack. Jimmie Akesson, the leader of the populist Sweden Democrats, accused Lofven of “hiding behind” the country’s health experts.
According to a statement published by the Public Health Agency of Sweden, the decision to drop daily briefings takes effect “from now,” and will continue to apply “during the summer.”


fortune--2020-06-10--Lessons from Asia’s reopening

Lessons from Asia’s reopening

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
A quartet of Asia’s most successful business leaders shared lessons from their post-pandemic reopening with members of the Fortune CEO Initiative yesterday. My takeaways:
1) Digital transformation is accelerating everywhere.
“During the pandemic, all the brick and mortars moved to online, and all of them turned to online sales, not as an option, but as a necessity…This pandemic enhanced people’s online shopping habit and expanded their options from clothing and electronics to daily necessities like food and groceries…….Every single brick and mortar store has become a forward warehouse or forward kitchen to fulfill and deliver online orders.”
–Alibaba CEO Daniel Zhang
“Customers are very ready to order on their mobile phones…double what it used to be. Mom and pop shops, hair salons, everybody is going for digitization.”
–Yum China CEO Joey Wat
“You see the acceleration of digitization happening tremendously, especially with SMEs. Southeast Asia is probably ten years behind China in digitization, but Covid accelerated everything.”
–Grab CEO Anthony Tan
2) Travel is suffering.
“In Japan, our e-commerce business is up 50%, our travel business is down 90%.”
–Rakuten CEO Hiroshi Mikitani
“Our business in transportation hubs…of course those businesses are still struggling to recover.”
–Wat
3) Cleanliness is the new differentiator.
“Companies with good credibility on health and safety and food safety are viewed more positively.”
–Wat
“Contactless deliveries, making sure there are partitions, masks…if you stand out as a brand of safety and hygiene–here is how you can differentiate.”
–Tan
4) Cash is over.
“Cash is almost gone for the vast majority of Chinese citizens….People are very, very cautious about cash exchanges.”
–Zhang
“People kind of hesitate to touch physical coins and bills, and the government will try to encourage people to use digital payment in stimulating consumption.”
–Mikitani
“Touching cash is considered dirty and it might actually spread the virus. In the Philippines we have made every ride only cashless. These are tough decisions, because cash is still king in Southeast Asia.”
–Tan
5) Workers’ buy-in and welfare are crucial.
“I made it mandatory for everyone to join our morning hallo and at the end of our day what I call our afternoon hallo… The other thing is I started to do a lecture to all the new people who are joining our company, 30 minutes every day…[In a virtual all-company meeting] people started to participate and get more engaged than when doing it physically.”
–Mikitani
“When Yum China made the decision about what to do back to January, we made a clear decision that whatever decision we do we need to look after our employees first, customers, our community and then our environment. All are important…Social responsibility matters a lot…For many companies, including our company, [the task] this year is to build a brand. It’s not about making money, but hopefully we can build a brand and help shareholders make money for the next 100 years.”
–Wat
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
Many companies are speaking out against racial injustices right now. But how do they fare in their own workplaces? Black employees in the corporate world, we want to hear from you: Please submit your anonymous thoughts and anecdotes here.
TOP NEWS
Inditex loss
Inditex, the world's largest fashion group, has reported a quarterly loss for the first time. That's despite a 50% jump in online sales during its Q1. The Zara owner's net loss ran to $465 million for February through April, and Inditex blamed the coronavirus panemic. In May, the company said, its store sales halved. CNBC
5G revenues
A new KPMG report predicts beneficial economic effects from the spread of 5G, but not a huge boost to the revenues generated by wireless carriers. The consultants forecast that just 7% of spending from the introduction of 5G would go to connectivity—bad news for carriers that have already been struggling to charge consumers more for the super-fast mobile technology. Fortune
Trump troops
President Trump's advisers and allies reportedly had to talk him out of firing Defense Secretary Mark Esper last week, after Esper expressed opposition to the idea of using active-duty troops to quell protests in the U.S. Esper is already the fourth defense secretary in this, Trump's first term. According to this Journal piece, he was preparing to resign over the protest disagreement, but his own aides and advisers talked him down. Wall Street Journal
Recovery warning
The OECD has warned that the coronavirus recession will leave deeper scars on rich nations' economies than any peacetime recession in the last century. The organization said there will probably be a quick bounce back, but living standards won't return to pre-pandemic levels in the next few years. OECD chief economist Laurence Boone: "Most people see a V-shaped recovery, but we think it’s going to stop half way…By the end of 2021, the loss of income exceeds that of any previous recession over the last 100 years outside wartime, with dire and long-lasting consequences for people, firms and governments." Financial Times
AROUND THE WATER COOLER
Olof Palme
The assassination of former Swedish Prime Minister Olof Palme some 34 years ago has finally been solved, according to Swedish prosecutors, who say the evidence points to a "witness" of the shooting, Stig Engström. Engstrom killed himself in 2000. Palme's murder on a busy street was one of the greatest mysteries of modern times, with various theories involving South Africa, India and the Kurdish militant group PKK. BBC
Abandoning emirates
The United Arab Emirates is losing a lot of foreign workers at the moment, partly due to a precarious lack of benefits and state support in these hard times, and the loss of high earners will have particularly painful effects on places like Dubai. Stratfor analyst Ryan Bohl: "An exodus of middle class residents could create a death spiral for the economy. Sectors that relied on those professionals and their families such as restaurants, luxury goods, schools and clinics will all suffer as people leave. Without government support, those services could then lay off people who would then leave the country and create more waves of exodus." Bloomberg
Insurance redlining
The insurance industry is poised to pay for most of the losses incurred by businesses that were affected by incidences of looting and arson during the George Floyd protests. But many smaller businesses aren't sufficiently insured, and may struggle to reopen their doors—resulting in a lack of services for disadvantaged communities. And the reason they aren't insured may come down to the insurance industry's tendency to discriminate against poorer neighborhoods. Fortune
Vaccine confidence
How best to counter vaccine skepticism when a COVID-19 vaccine makes its appearance? According to the Sabin-Aspen Vaccine Science & Policy Group's Harvey V. Fineberg and Shirley M. Tilghman, the answer lies in a "deepened partnership between immunization programs and social media to advance vaccination acceptance in communities around the world." Fortune
This edition of CEO Daily was edited by David Meyer.