Big Business

Despite borrowing a combined $53 billion from the federal trust fund to pay unemployment benefits, California is projected to surpass $24.3 billion in unemployment insurance deficit by the end of this year, as stated in the budget report published this May. The amount borrowed so far accounts for more than 40% of the total loan given to 19 US states. The COVID-19 pandemic has had a severe impact on the state’s economy, hitting small businesses hard and causing unprecedented joblessness.  With the unemployment rates remaining high, business leaders warn state officials that the projected budget surplus won’t be enough to mitigate the financial hit on employers. Namely, borrowing from the federal unemployment trust fund further to cover unemployment benefits results in higher payroll taxes.  “If they don’t do anything more, businesses are going to end up having to pay that tax at a critical time of our economic recovery,” said the president of the California Business Roundtable, Rob Lapsley, on Friday, June 18. “If some are teetering on the edge of a fiscal cliff, it could drive them right over the edge, and they go out of business.” California’s governor, Gavin Newsom, has already tackled the issue in his last month's budget proposal, projecting a tax windfall of $76 billion and proposing $1.1 billion of the federal funds to be used for covering unemployment costs. Even though the proposal is considered a step in the right direction, business leaders advocate a more aggressive approach in paying off debts and suggest allocating $2 billion in payroll tax credits spread over 10 years to small business owners. That, and leaning on insurance providers might help small companies survive these unprecedented times.  The crisis seen during the 2008 recession caused the state to borrow $10.7 billion from the federal trust fund, and it took it eight years to repay the debt, from 2011 to 2018. 

By Milja June 25,2021

T-Mobile, a subsidiary of the German telecommunications company Deutsche Telekom AG,  announced the launch of its new service for small businesses, the Business Unlimited smartphone plan. With this new service, business users will get unlimited 5G access, more significant premium data, and high-speed hotspot data to speed up their businesses’ performance. T-mobile has also added the Small Business Internet service with reliable and fast connectivity to provide its business users with all the benefits of 5G speeds with no data caps. The Small Business Internet tiers don’t require signing an annual contract. Another privilege T-Mobile offers to the small business users who qualify is Facebook and Instagram advertising worth $200 with digital marketing expert advice and up to three one-on-one consultations to boost their businesses.  The company’s move came as a response to the pandemic forcing small businesses to suddenly switch to remote work, making it difficult for them to adapt business strategies to the online mode.  To help small businesses develop a mobile-first strategy and focus their digital transformation on remote work and mobile devices, T-Mobile aims to enable them to conduct operations from anywhere and around the clock using unlimited 5G data. Having such connectivity will help these companies remain competitive and operate at their best under the given circumstances. The EVP of T-Mobile for Business, Mike Katz, explains it in a blog post: “At T-Mobile, we have always believed that small businesses are the lifeblood of vibrant, thriving communities. So, with the nation’s fastest, largest, and most reliable 5G network, we are excited to provide the connectivity backbone that they will need to flourish in a world transformed by the pandemic.” T-Mobile’s Unlimited business plans come in three pricing tiers to fit everyone’s needs and budget: Business Unlimited Select costs $25, Business Unlimited Advance is $30, and Business Unlimited Ultimate comes at the cost of $40. The prices are per line in the case of six or more subscribed lines. Apart from introducing a fast and unlimited internet connection into their small businesses, entrepreneurs can improve their daily operations and cut costs further by opting for one of the virtual phone number systems currently available on the market. 

By Milja June 25,2021

As Amazon’s Prime Day megasale is approaching, the nation’s biggest online retailer shows no signs of stopping. Amazon is predicted to be raking in more than 40% of the nation’s eCommerce sales by the end of 2021, according to eMarketer research.Such a steep growth trajectory aligns with the online shopping boom following the devastating COVID-19 impact on brick-and-mortar store sales. The eCommerce share in total retail sales started at a modest 3.6% in 2008, but grew slowly over the years, only to jump to 14% in 2020. The pandemic influenced the shift towards online spending and the emergence of eCommerce platforms worldwide to cater to the consumers in lockdown.The eCommerce market is forecasted to account for 23.5% of all retail sales by 2025, as consumers are unlikely to abandon the convenience of online shopping even after physical stores reopen fully.In second place, but miles behind Amazon, the big-box chain Walmart is struggling to remain competitive by holding sale events coinciding with Amazon’s Prime Day. On the other hand, with a predicted digital retail share of around 7%, Walmart should have almost double the grip on the market eBay - the third-ranked online retailer - will. Next in line are Apple, Home Depot, Target, and Best Buy.Postponed last year due to the pandemic, Amazon’s traditional Prime Day shopping extravaganza has moved up this year. This June’s event should overcome the sales made on Amazon’s Prime Day in October 2020 by 18.3% and reach $7.31 billion. The event is also subject to eMarketer research, which predicts Prime Day will boost total online sales in the US by 17.3% year over year.Marketing experts agree that Amazon is trying to boost spending in the summer months, traditionally a slower time for retailers, perhaps even kicking off back-to-school shopping much earlier than usual.

By Milja June 22,2021

NextSilicon, an Israeli computer chip startup, recently unveiled a solution for boosting the processing power of semiconductors in supercomputers. Despite the company’s revolutionary accomplishments and the fact that it is valued at approximately $1.5 billion, the startup is still relatively unknown in wider tech circles. Recently, NextSilicon completed its third funding round, which raised $120 million. Its principal investor was Third Point Ventures, an investment firm that focuses on enterprise, healthcare, fintech companies, and mobile advancement. In total, the three funding rounds provided NextSilicon with over $200 million, which is enough to enable the company to operate and grow over the next five years. NextSilicon was founded in 2018 by Elad Raz, who sold his previous startup called Integrity-Project to Mellanox in 2014 for $10 million. The company employs 150 people in offices based in Tel Aviv, Jerusalem, Yokneam, and Be'er Sheva, and it’s currently looking to expand its team by recruiting hardware and software engineers. “NextSilicon is a unique company in the semiconductor startup industry. Its technology leverages software algorithms as the main driver to speed up compute-intensive applications," said Raz, NextSilicon’s Chief Executive Officer. The promising startup works with some of the world’s top supercomputer computing centers on scientific projects that involve discovering new vaccines, providing early indicators of forest fires and storms, studying DNA sequencing, and more. The fact that the world is currently in the middle of a computer chip shortage makes NextSilicon’s solution even more relevant. Namely, all types of electronics, from smartphones to refrigerators, require this small piece of technology to run. According to the latest statistics, the chip shortage will most likely continue into 2022 and maybe even as late as 2023. The primary culprit is the outbreak of the COVID-19 pandemic, which caused the demand for electronic devices to skyrocket worldwide. People started ordering unprecedented amounts of hardware such as laptops and printers for their businesses, which now had to adapt to the new remote working conditions.

By Julija A. June 18,2021

Owners of New York-based small businesses can now apply for a COVID-19 recovery grant provided by the state. Those eligible can get up to $50,000. The funds can only be used for covering losses or expenses related to the pandemic and incurred between March 1, 2020, and April 1, 2021. Some of these are payroll, utility, equipment, insurance, commercial rent and mortgage, as well as heating, air conditioning, and ventilation costs. Business owners mustn’t use this money for paying off loans obtained from a federal COVID-19 relief package. Eight hundred million dollars has been allocated for this endeavor, which will last until the sum is depleted. Seeing as the available funds are limited, business owners who are in some way socially or economically disadvantaged will be given preferential treatment, while entities such as nonprofits, churches and other religious institutions, landlords, as well as illegal enterprises will not be able to qualify at all. Annual gross receipts from 2019 will be used for calculating grant amounts. Those amounts are: -$5,000 for businesses whose annual receipts equal $25,000 to $49,999.99-$10,000 for businesses whose annual receipts equal $50,000 to $99,999.99-$50,000 for businesses whose annual receipts equal $100,000 to $500,000 “Small businesses are one of the most critical components of New York’s economy and were disproportionately impacted by the economic devastation resulting from the COVID-19 pandemic,” said Andrew Cuomo, the governor of New York. The state has also announced several additional pandemic relief programs. However, considering the vast impact the virus has had on the US economy, it’s unlikely that every single company in need of financial aid will be able to receive it. Luckily, there are alternatives, as more and more lenders have started offering affordable bad credit loans for business.

By Julija A. June 17,2021

On Sunday, June 12, the leaders of the G7 - a political forum of the world’s leading industrial nations that comprises Canada, Germany, France, Italy, Japan, the United Kingdom, and the United States - agreed to increase climate finance. They renewed their pledge to raise $100 billion per year to help financially less stable countries reduce carbon emissions. However, many environmental groups have expressed concerns regarding the G7’s promise, the first being the likelihood of it falling through. After all, the original $100 billion pledge, made in 2009, wasn’t met, and after the summit concluded, only two countries offered specific details regarding the amount of money they would contribute. Canada stated that it would provide $4.4 billion over the next five years, while Germany committed to submitting $7.26 billion each year. The second major issue highlighted by the green organizations is that funding projects such as those dedicated to combating climate change is expensive, and with the amount of work that needs to be done, the discussed sum simply won’t be enough. “The G7’s reaffirmation of the previous $100 billion a year target doesn’t come close to addressing the urgency and scale of the crisis,” said Teresa Anderson, the climate policy coordinator at ActionAid. The 2021 G7 summit was held in Cornwall, United Kingdom, on June 11-13, and it was attended by the following representatives: -Justin Trudeau, the Prime Minister of Canada-Emmanuel Macron, the President of France-Angela Merkel, the Chancellor of Germany-Mario Draghi, the Prime Minister of Italy-Yoshihide Suga, the Prime Minister of Japan-Boris Johnson, the Prime Minister of the United Kingdom-Joe Biden, the President of the United States-Ursula von der Leyen, the President of the European Commission-Charles Michel, the President of the European Council 

By Julija A. June 17,2021

In a recent report, JPMorgan Chase & Co. predicted that Amazon is likely to become the largest retailer in the US by 2022. This would place it ahead of its current main competitor Walmart. According to JPMorgan’s estimates, Amazon’s gross merchandise volume has been growing by 41% for several years now and has reached $316 billion in 2020, while Walmart’s GMV has risen by 10% year after year and was at $439 in 2020. One of the main reasons Amazon has been so successful is due to the COVID-19 outbreak. The pandemic has caused many to turn to online shopping instead of going to physical stores where they might get infected. Even as the virus crisis is dying down as more and more people are getting vaccinated, it’s clear from Amazon’s latest quarterly results that the eCommerce giant is still hugely popular among consumers. For instance, compared to the first quarter of 2020, the company’s net sales increased by 44% in the first quarter of 2021. Although, as is apparent from JPMorgan’s research, Walmart isn’t struggling, it was, to a certain extent, negatively affected by the pandemic. Namely, the retail corporation had to set aside additional funds for providing its employees in department stores with certain means of compensation for working in a high-risk environment. As of now, no other US-based brand has managed to build an eCommerce presence as widespread and versatile as Amazon’s. It dominates the US information technology industry along with Google, Apple, Microsoft, and Facebook. Amazon is also the number one internet company in the world in terms of revenue and market capitalization. Amazon was founded in 1994 by Jeff Bezos as an online marketplace for books. In 1998, Bezos began selling music and videos as well. By the end of that year, he had expanded the company’s assortment of goods to include numerous other products. Today, Bezos’s net worth equals more than $190 billion, making him the richest man on the planet.

By Julija A. June 16,2021

Virtual reality and augmented reality are taking ground with the retail sector, according to recent research conducted by ICX Association. The report shows a clear upward trend, with the value of this technology in the retail sector estimated to reach $1.6 billion by 2025.The IoT market was valued at more than $94 billion by the same report, so it’s no surprise that the retail sector would adopt and benefit from this technology. Walmart and Target are pioneering the field by using and investing in emerging technologies to grow their businesses. Target implemented AR technology to help back in 2017 when it allowed shoppers to use their smartphone cameras to see how Target furniture would look in their homes. It also experimented with virtual makeup applications online, as well as training employers with the help of VR. With the COVID-19 pandemic changing the way retail functions, these experiments turned out to be a much-needed trial for such technologies, allowing businesses to better cater to customers. Walmart took an essential step toward implementing these technologies when it recently acquired Zeekit. This five-year-old virtual fitting room startup allows you to be your own model and see whether an article of clothing fits before purchasing it. Zeekit’s app is already used by Macy’s and many other fashion brands. By applying and further developing Zeekit’s technology, Walmart has a chance of overcoming the most significant issue customers have with online shopping in times of the pandemic: not being able to try clothes on. According to Yael Vizel, Zeekit’s founder, the benefits are crystal clear: the technology reduces the average return rate from 38% to just 2%. This is just one example of how retail could benefit from AR/VR and IoT. Gartner estimated in 2019 that nearly 100 million consumers would have a better experience shopping thanks to these implementations. The number was based on a survey Gartner conducted in 2018, which indicated that by 2020, 46% of retailers planned to adopt and deploy such solutions to meet customer requirements. AI has already been deployed to identify and monitor shoppers’ habits, create software that allows retailers to keep track of their inventories, and implement BOPIS (buy online, pick up in-store) systems. The current challenge technology providers have to overcome is the lack of reliable retail data that could allow them to create suitable solutions. According to Charu Thomas - the CEO of tech startup Ox, which provides AR-based order fulfillment software - the most significant challenge is inventory accuracy. Accomplishing accurate inventory tracking typically requires heavy infrastructure to be made possible. Thomas also pointed out that: “The time for testing these emerging technology applications is up,” and that companies looking to compete in the pandemic-changed world should try and leverage these technologies in their business operations to improve performance.

By Julija A. June 11,2021

A recent survey by CreditKarma has revealed that the majority of unemployed Americans - 80% of them - are not taking advantage of the available COVID-19 relief options, even though they are aware of the opportunity. The poll, which surveyed 1,037 adults, explains the reasons for numerous Americans struggling through the pandemic without availing themselves of the much-needed financial aid. There were multiple explanations in the questionnaire for participants to choose from, and they could select more than one. Sixty-two percent of the respondents said that they knew about this option but were confused about where and how they should apply for it, 7% percent of them noted that the overall process was “too confusing” or expected the waitlist to be too long. Twenty-seven percent believed they wouldn’t qualify, so they didn’t attempt to apply, while 16% were “overwhelmed by information.” Eight percent didn’t want to take the needed funds from someone who might need it more. Only 20% of unemployed Americans who completed the survey applied for, received, and used financial help during the pandemic. Authors of the survey also pointed out that some of the respondents did not understand that the funds they received throughout the pandemic - such as stimulus checks and boosted unemployment insurance - were part of the federal COVID-19 relief efforts. Out of people who participated in the survey, 68% said stimulus checks were the most helpful in maintaining financial stability throughout the pandemic. Forty-eight percent thought the same about unemployment benefits, and 28% felt it was the suspension of student loan payments that helped them stay afloat. It might still not be too late to qualify for assistance. If you haven’t received your stimulus check or filed your taxes yet, you can adjust the tax filings and claim the money as a fully refundable tax credit. If you are a small-business owner, check with your bank whether there are some benefits you could apply for. The best banks for small business offer their own COVID-19 relief options you might be eligible for.

By Julija A. June 10,2021

The US housing market has been steady for several years now, with home prices climbing year after year. However, the recent pandemic brought certain changes, and while it’s almost certain there won’t be a serious market crash, several states have been experiencing significant shifts in their numbers. GOBankingRates has evaluated over 500 cities, and Florida came out as the unlucky winner with the highest rates of underwater mortgages and foreclosures, followed closely by Illinois. Here are the cities whose housing markets have the highest chances of experiencing a downturn. 1. Fort Myers, FloridaWith the median list price of $249,999, Fort Myers experienced a 1.4% drop in prices in the last two years. The percentage of underwater mortgages in Fort Myers is 6.9%, comparable to the national average. However, the number of days a home lingers on the market is 105 days - much longer than the nationwide average of 66 days. In terms of foreclosure, however, the situation in Fort Myers is not that unfavorable, with one in every 1,921 homes ending up foreclosed. 2. Peoria, IllinoisPeoria has the highest chances of its housing market turning ugly. With a 16% drop in prices over the last two years, the median home list price is $124,450. The percentage of underwater mortgages is also alarmingly high - 21%, which is more than double the national average. While not the highest on our list, its foreclosure rate of one in every 932 homes is also problematic. 3. Portsmouth, VirginiaThe unflattering title of the city with the highest foreclosure rate goes to Portsmouth, Virginia. Here, one in every 730 homes ends up getting foreclosed. At 19.4%, its rate of underwater mortgages is also high compared to that of other cities on this list. The median list price in Portsmouth is $165,700 - a 1.5% increase over the past two years. 4. Miami Beach, FloridaMiami Beach, a popular resort, made this list because houses here spend the most time on the market - 225 days on average. A 5% drop in prices over the last two years is another worrisome statistic, mainly because it’s in stark contrast with the rising home prices across the US. The median list price of $499,000 may be the silver lining in this case, along with a low rate of foreclosures, with just one in 2,374 homes getting foreclosed. It seems that Miami might not be in such big trouble and that it could benefit from its real estate agents simply employing better tactics or real estate software. 5. Waterbury, ConnecticutBeing close to New York City didn’t bring much to Waterbury in the last couple of years. It has the highest percentage of underwater mortgages of all the cities listed in the research - 29.4%. Even though the median list price has risen 11.9% and is currently standing at $125,000, there are still reasons to worry. Luckily, the number of foreclosures is moderate - one in every 1,159 homes gets seized and sold to set off outstanding mortgage payments. 6. Sarasota, FloridaHouses for sale in Sarasota currently have a relatively high median list price - $359,000, which is a 5.6% increase from 2019. Underwater mortgages stand at 4.5%. One in every 1,520 homes gets foreclosed. The time a house spends on the market waiting for the buyer is similar to Fort Myers, merely a week shorter. 7. Dayton, OhioAt first glance, Dayton, Ohio, is doing just fine. The prices have increased 16.5% since 2019, and the houses are still affordable at the median list price of $67,000. However, the percentage of underwater mortgages is 27.6% - the second-highest on our list. What’s more, the foreclosure rate here is higher than the national average. 8. Fort Lauderdale, FloridaThe median list price of a house in Fort Lauderdale is currently $499,900, 0.2% lower than two years ago. The foreclosure rates in this city on Florida’s southeastern coast are similar to those in Sarasota. Still, the number of days houses stay on the market in Fort Lauderdale is 133 days, which is more than double the national average. 9. Valdosta, GeorgiaValdosta’s low foreclosure rates may make someone wonder why it made this list, considering that only one in 3,304 homes ends up getting foreclosed. But if we look at other relevant numbers, the picture looks a lot less bright. The prices in Valdosta fell 6% last year, and the median list price is $154,900. This in itself wouldn’t be too problematic if it weren’t for the double-digit underwater mortgage rate of 22.7%. 10. West Palm Beach, FloridaWest Palm Beach seems to be suffering from a high foreclosure rate: One in every 1,297 homes gets seized from defaulting mortgagors. Home prices have gained 1.4% and currently stand at $298,000. The average time a home stays on the market in this city north of Miami is 119 days. The Bottom LineThe housing markets we have reviewed here struggle with high rates of foreclosure and underwater mortgages, as well as sluggish or even negative home price growth. However, looking at the broader picture, we can see that the US housing market might, in fact, be in overdrive as millions of Millennials have reached first-home buying age and are looking to settle somewhere without having to go through another tenant screening procedure.

By Julija A. June 10,2021

Facebook has been paying hundreds of independent contractors to listen and transcribe audio content collected from the users of its Messenger app without the users' direct consent.Bloomberg was the first to report the story on Tuesday after it obtained information from workers tasked with transcribing the audio snippets. The outsourced workers say they were not given any details on how and where the audio material had been recorded. They were only assigned with transcribing the sometimes vulgar content without receiving further instructions.The transcribers who came forward to Bloomberg after realizing the origin of the material they had been working on asked to remain anonymous for fear of losing their jobs.Facebook confirmed it had been using transcription services to improve the quality of its artificial intelligence software. It said contractors had been reviewing the transcription work carried out by the AI, only using the data gathered from users who chose the option to have their Messenger voice chats transcribed. However, due to an opaque privacy policy, users were lead to believe machines, not people carried out the transcription. Facebook said that the audio material reviewed by humans was masked to protect the users' identity, adding it halted the practice last week. Other tech giants developing their own AI don't shy away from such practices either. Amazon, Apple, and Google have all been under public scrutiny for collecting audio clips from users, transcribing them using AI technology, and later subjecting those clips to human review.In April, the news of Amazon employing thousands of workers in various countries to listen to Alexa voice requests broke. The company justified the act using the same explanation Facebook gave now - the human review was necessary for improving the software. Soon after, Google was put under the spotlight when some of its Dutch language audio snippets were leaked. Belgian broadcaster VRT NWS got hold of more than 1,000 recordings collected by the search engine company through its Google voice assistant. Some of the leaked audio clips contained personal information that could be used to identify the person speaking. Google said it has put this practice on pause worldwide while it investigates the Dutch leaks.Apple also adopted the practice of subjecting sensitive user information to human review without the users' knowledge, to develop its digital assistant Siri. The iPhone maker said it has stopped the practice for now but plans to reintroduce it after asking for explicit permission from users.Critics of this, apparently, widespread practice warn that once human beings process the information, there's no way of ensuring it stays contained."We feel we have some control over machines," Jamie Winterton, director of strategy at Arizona State University's Global Security Initiative told ABC News. "You have no control over humans that way. There's no way once a human knows something to drag that piece of data to the recycling bin."The Irish Data Protection Commission, the regulatory authority that oversees Facebook in Europe, said it was "seeking detailed information from Facebook on the processing in question."In the light of yet another user privacy violation, Facebook shares dropped 2.2% at 10:02 a.m. in New York trading.

By Ivana V. August 15,2019

Does Amazon, the world’s largest online retailer, use unfair practices to remain ahead of the smaller sellers on the marketplace platform? Today the EU's Competition Commission opened a formal investigation into possible anti-competitive conduct of Amazon.The goal of the investigation is to establish whether Amazon's use of sensitive data from independent retailers who sell on its marketplace is in breach of EU competition rules.This is the second big hit Amazon has taken in a matter of days. Yesterday employees of the company in Germany and Minnesota rallied to protest against low pay and poor working conditions.One of the questions being investigated is: Is the e-commerce giant using merchant data to gain a competitive advantage? European Commissioner Margrethe Vestager believes that due to an increase in online shopping, e-commerce has boosted competition, bringing better prices and more choices. “We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behavior,” said Vestager. “I have therefore decided to take a very close look at Amazon's business practices and its dual role as marketplace and retailer, to assess its compliance with EU competition rules.”The probe may eventually lead to formal charges and orders to change business practices and fines. It could also be dropped. The company owned by Jeff Bezos released an official statement, responding to the news: “We will cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow.”Amazon did, however, update their service agreement today. It’s still uncertain how this will affect the European Commission’s investigation.Margrethe Vestager has been involved in the Amazon case since last September when a preliminary look at the e-commerce giant’s data collection practices was taken. During her five year tenure as the Competition Commissioner on the European Commission, she became known for fining most of the major tech giants, including Google, Facebook, and Apple. A ruling by Vestager lead to Apple being forced to pay back a staggering $15.4 billion in taxes. So far, Amazon has avoided being fined, but only the European Commission can determine whether that will remain as it is.

By Ivana V. July 17,2019