E98: Big tech starts making cuts, Fed incompetency, global debt, Russia/Ukraine & more

**Jason Calacanis** (0:00)
Hey, everybody, welcome to episode 98 of the All-In Podcast with us again.
The Sultan of Science, the Queen of Quinoa. Looks like he brought a trucker hat. What, what, what, are you getting jealous of the Montclair hat, or are you just not bathing in it?

**David Friedberg** (0:15)
I haven't had a haircut in like six weeks. I'm getting my haircut this afternoon.

**Jason Calacanis** (0:18)
It's not going to make a difference.

**Chamath Palihapitiya** (0:19)
I think what Friedberg is trying to tell us is that he is the Zodiac Killer.

**Jason Calacanis** (0:24)
Lompet known. All right, there he is, the Unibar.
All right, and Montclair Sacks is here with his $400 Montclair hat. And of course, the dictator himself.

**Chamath Palihapitiya** (0:37)
I asked Ron, I asked Ron to cut my hair so that the white patch is more prominent. I think he did a good job.

**David Friedberg** (0:42)
Do you add the white patch with coloring or is it?

**Chamath Palihapitiya** (0:45)
No, it's natural. It's just there. It's just there nowhere else.

**Jason Calacanis** (0:48)
Why would you make it look so odd if you were doing it on purpose? It's super random.

**Chamath Palihapitiya** (0:53)
I like the way it looks. I like the way it looks.

**David Sacks** (0:56)
Jay Leno had to look like that.

**Chamath Palihapitiya** (0:57)
I'm about to go. By the way, you know this in the fall truffle season, I like to grow it so that it's more wavy.

**Jason Calacanis** (1:03)
White for white truffle season. Got it.

**Chamath Palihapitiya** (1:05)
I needed to have a reset cut so that then we could grow it wavy for the fall for truffle season.

**David Sacks** (1:11)
Listen Chamath, the only thing less relevant to us than your cashmere sweaters is your f**king haircut.

**Jason Calacanis** (1:36)
Alright Suck announced a hiring freeze and a reorg at Metta. He also said Metta will reduce head count for the first time in its history.
Metta's head count in 2023 will be smaller than it was this year. He called it the end of an era of rapid growth. This on top of Apple reporting, and Apple got walloped in the market for the first time in forever.
Apple pulled back iPhone production for the 14 after slower than anticipated demand. As I mentioned on previous episodes, they've kind of done a gentleman's layoff similar to, I think Metta in that Apple said you have to be back in the office three days a week. A bunch of people quit, so you don't have to pay them, I guess, huge packages when they quit that way. Google CEO Sundar Pichai also called out employees in July, as you guys all read.
And he wrote, there are real concerns that our productivity as a whole is not where it needs to be for the headcount. We have Google, of course, 174,000 employees. So I guess the question to half of you is, are these the last hours to fall Chamath in this pullback that we've seen? These are companies that don't need to do the layoffs. They have tons of cash. So they're obviously doing that to maintain earnings, one would, and to maybe send a signal to employees that they need to work harder. What's your read on these this past week's shoes to drop?

**Chamath Palihapitiya** (2:54)
Well, it definitely is the end of an era. I think it is sort of like the the end of this phase of big tech where you had this, you know, unfettered growth, where these business models were largely unassailable. And they, you know, we're really just fighting to grow into their valuation and just generate more revenue to justify where they where they trade it at. And now it's this next phase where they have to operate more like a cash cow business. And so, you know, it's an acknowledgement that the growth is tapering.
It's an acknowledgement that they're going to trade on a pretty tight band in terms of multiple, which means that they have to manage expenses much more tightly, which means that they can't have a really broad based surface area in which to operate an experiment, you have to keep the experiment small, you have to manage your expenses, you can't have employees basically, you know, run over the place management has to have a firm hand in dictating strategy and what people work on.
So I think all of that signals that I actually Jason, I don't think this is the end, I actually think it's the beginning because these companies, Apple, Facebook, Google, maybe a little bit Microsoft, are the most sensitive to valuation because they are the most widely held, right? These are the these are the, you know, the equivalent of US treasuries in the equity markets, the safest, most predictable safe haven in times of stress. If you want to own big chunky cash flow generating businesses that, you know, are relatively unassailable, you couldn't pick four better businesses than those. And so the fact that they see enough in the horizon to say that we need to batten down the hatches should be a warning to everybody else.