Annnnnd we're back! Nightcap took a week off for some R&R and it seems we have a lot of, um, threads to catch up on. Let's get into it. By Allison Morrow |
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| | Last updated July 10 at 7:44 PM ET | |
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While Nightcap took a holiday, Meta was busy launching its rival to (slash replacement for?) Twitter. It's hard to overstate how excited the internet was/is about this thing. ICYMI: It's called Threads, and while it looks a lot like Twitter, the vibe on the new platform is decidedly sunnier. If you're not as terminally online as I am, think of Twitter as a dimly lit snake pit and Threads as temperature-controlled den full of golden retriever puppies and soft sofas. (And if you need more on the basics of Threads, my colleague Clare Duffy has you covered here.) Threads became the most rapidly downloaded app ever, surpassing 100 million users in just five days. And what does that mean, exactly? Take a look at this chart from Morning Brew: |
Why it matters Almost immediately, Threads was being talked about as the nail destined for Twitter's coffin. Elon Musk, who purchased Twitter in October for $44 billion and has spent the past eight months gutting the joint, is clearly sweating. He even sent a cease-and-desist letter to his rival, Meta CEO Mark Zuckerberg, over what he claims is a copycat app that violates Twitter's intellectual property. (*chanting* Cage fight, cage fight, cage fight…) A wildly successful rival launch was really the last thing Twitter needed right now. Traffic has been declining for months, and advertisers have rushed the exits as Musk has all knocked down speech guardrails and welcomed back extremists and fringe politicians to tweet their hateful ideas with impunity. The Twitter site itself has been in a spiral. It's glitchier, more riddled with spam, and chronically low on the smart, funny conversations that could be found there in the past. In just a few months, one of the world's richest men has managed to execute one of the most expensive unforced errors in corporate history. (Second, perhaps, to AT&T's disastrous $100 billion acquisition to buy Time Warner in 2018...but that's a dumpster fire for another day.) Under Elon, Twitter has shed roughly 80% its staff, Musk is reportedly dodging creditors and stiffing workers on their severance pay, and he appears to have no viable plan for replacing lost ad revenues with his messily rolled-out subscription model. On top of all of that, in one of his most head-scratchy moves, Musk last week unveiled a strict cap on the number of tweets non-subscribing users (read: most people on the platform) can view in a day. That's basically the exact opposite of what you want to do if you're a media company — stop your audience from scrolling and push them to look elsewhere for news and entertainment. Meta swooped in just as frustration with Twitter was spiking — which was either very good luck or very good strategic planning by the Threads team. What's next? To quote literally every single participant ever to appear on Love Island, it's early days innit. Threads is very much the shiny new thing. Its explosive growth bodes well for its future as a rival, if not a replacement, for Twitter. It'll take time for Threads to figure out what it wants to be — simply a text-forward replica of Instagram, or something else entirely. And despite Meta's early success at making the new app a largely friendly place (the puppies, etc), trolls always find a way to troll. As for Twitter, I'm not sure anyone, least of all Musk, knows what the next play is. Some have speculated that Musk's shenanigans are all part of some plot to force Twitter into bankruptcy, which could allow him to buy up the debt for pennies on the dollar and emerge with a nimble, debt-free company. But all of that sounds far more tactical and savvy than Musk has so far shown himself to be. READ MORE: |
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The US job market cooled slightly in June, adding 209,000 jobs. And while the headline figure came in below economists' expectations, it's actually a good sign. As a reminder: The Fed is trying to execute a soft landing — tamping down economic growth, but not smothering it so much that unemployment spikes and we wind up in a recession. After 10 giant interest rate hikes, the labor market is only now showing signs of slowing. Unemployment, at 3.6%, remains near its lowest level in half a century. |
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For a consumer culture that's more reliant on ground delivery than ever, there's a looming strike that could send Americans back into, like, real, physical stores, while dealing a gut-punch to the US economy. Here's the deal: Contract negotiations between UPS and the Teamsters union failed to reach a deal last week, raising the prospect of a strike starting August 1. If the two sides can't work out a deal, 340,000 workers are set to walk off the job. Keep in mind, UPS isn't just another large shipping company. It carries 6% of America's gross domestic product in its trucks, my colleague Chris Isidore writes. It also plays a central role in the movement of goods the economy depends upon, feeding supply chains that are only recently recovering from Covid-19 disruptions.
"This strike is a serious threat to the US economy," said Patrick Anderson, president of Anderson Economic Group, a Michigan think tank. "And the degree to which the US economy has become dependent on fast delivery of small items that can be carried by UPS hasn't really been tested."
As Chris notes, the past few years have been very lucrative for UPS, thanks to our pandemic-inspired shopping habits. Last year, the company notched a a record adjusted operating profit of about $14 billion — up from $7.4 billion in 2018, the year the last labor contract was negotiated.
In that time, UPS has also expanded to six-day-a-week delivery.
While the company and the union agree progress has been made, talks ended Wednesday with both sides claiming the other walked away from the table.
One of the key demands from the union is raising the pay for part-time workers who sort packages and load trucks.
"Those trucks don't go out unless they are loaded," Teamster President Sean O'Brien told CNN Thursday. "Our part timers, the unsung heroes, they are working for poverty wages and we need to drive up the starting rates of pay and reward those people that made supply chain solutions happen."
UPS drivers are among the best-paid in the industry. Full-time drivers can make $93,000 a year, O'Brien said. But part-time package handlers make about $15.50 an hour. (UPS said despite lower starting pay, the average part-time pay is $20 an hour, and that benefits are far more generous than at most part-time jobs, including pension, no-premium healthcare and tuition reimbursement.)
Shipping isn't just important to consumers who want their toilet paper/dog food/clothing/camping gear delivered in a timely manner. Small-business owners depend on it to restock their inventories and ship to their customers. Alternatives like FedEx and USPS can only pick up so much slack.
See Chris' full story here for more on what a strike could mean for the economy. |
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It's a Thread, naturally... | |
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Last updated July 10 at 6:30 PM ET | |
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