CEOs Cut Workforces & World's Biggest Illegal Sports Streaming Site Shut Down

0:00Tuesday on NBC, Jimmy Fallon and Bozma St John host the highly anticipated new competition show. I hired 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not Play Play. We're spending millions of dollars. I'm so excited to embark on this adventure with all of you. Make the best idea win! On Brand with Jimmy Fallon. Series premiere Tuesday on NBC.

0:36Good morning Brew Daily Show. I'm Neil Freiman. And I'm Kyle Hagee. Today why CEOs are cutting employees and openly bragging about it. And why watching football this year just got a little bit harder. It's Thursday, September 4th. Let's ride.

0:55Kyle, there is nothing more frustrating than buying some avocados from the store to make guac for a party, only to realize they're either too ripe or not soft enough for perfect smashing. While avocado guesswork may be a thing of the past, thanks to technology, Tesco, the UK's biggest supermarket chain, is introducing avocado infrared scanners to five of its stores to help customers gauge the ripeness of the fruit. Simply hold the avocado up to the scanner and it'll return one of two ripeness readings, whether it's ready for smashing or better for slicing. Now, this has divided a lot of people.

1:30One Tesco avocado buyer said the scanner would help people make better shopping decisions and cut down on waste. Others say it is a gimmick and that giving the avocado a quick squeeze works perfectly fine. Kyle, are you team scanner or team squeeze? Look, I'm team squeeze. We all wanted flying cars and we just got avocado scanners. Like, where is technology going? I can't imagine texting someone like, oh, sorry, baby, I'm running late. I'm in line at the avocado scanner. I'm team squeeze, Neil. All right. Well, I also am team squeeze because after, you know, a little experience and interactions with avocados, you can kind of tell whether they're ripe enough.

2:05I mean, it's not exactly rocket science. But I do want to go to bat for technology and precision in cooking. We shouldn't. I mean, I have a meat thermometer. When I'm making a medium rare steak, I put a meat thermometer in there so I can take it out at exactly 135. So I know I'm not, you know, touching it like I would an avocado. So I think there is a place for technology in cooking. This might be a road too far. There's a fine line between meat thermometer and avocado scanner. I think you're spot on. Now a word from our sponsor, Indeed. Neil, what do you envision for the future? Robots, flying cars, and space pirates.

2:39Very cool. But if you'd let me finish, I was going to say the future of hiring. Oh, well, for that, I'd turn to Indeed. They've been innovating with AI-powered solutions for job seekers and employees and reshaping the world of work. The scale of their data is unreal, and they're utilizing it to help accelerate and simplify how talent meets opportunity. They're getting into all this and more at FutureWorks September 10th and 11th, and Morning Brew will be there for it all. Learn more at IndeedFutureWorks.com slash brew. That's IndeedFutureWorks.com slash brew. Mark Benioff, the founder and CEO of Salesforce, who frequently uses the term ohana, a Hawaiian word for family, to describe his company, did something you wouldn't normally do to your family, brag about laying 4 ,000 of them off.

3:24Yes, Benioff, on a recent episode of The Logan Bartlett Show, cheered on the fact he was able to cut 4 ,000 of Salesforce customer support roles, saying, quote, I've reduced it from 9 ,000 heads to 5 ,000 heads because I need less heads, end quote. This was in reference to AI's impact on this particular function. Now, Benioff isn't the only CEO letting the world know that their companies are leaner and meaner. In June, Andy Jassy, chief executive of Amazon, released a memo saying the company's corporate workforce will shrink in coming years because of Gen AI. In July, Wells Fargo CEO bragged about being able to cut headcount for 20 consecutive quarters.

4:03And just last week, Google announced it had gotten rid of a third of its managers overseeing small teams. So what gives? Well, gone are the days of coded language like reduction in force or right sizing that were meant to downplay a company getting rid of employees and buffer the organization against negative market perception. And in are the days of the market embracing companies that are using technology to replace human employees or allow them to not backfill roles once employees leave. In the words of Hewlett Packard's finance chief, Mary Myers, quote, flatter is faster. Neil, asking for a friend here, has AI figured out how to host podcasts yet?

4:41Yes, they have. And I just hope they don't get too good while I'm still in my prime here. But it is a remarkable shift for nearly the entirety of the history of capitalism. Hiring and growing your headcount was seen as a sign of strength. And now it's seen as a sign of bloat and inefficiency. It's all about getting lean. Maybe you could call it the GLP-1ification of corporate America. And the language these CEOs are using is quite interesting to dive into. I mean, what did Mark Benioff say? He said, I need less heads. He's not even referring to these people as people. He's saying he's just calling them heads.

5:14Verizon CEO last week said they had been, quote, very, very good on headcount. Typically, that would mean, yeah, we're growing. We're adding to our headcount. But he later clarified that to mean it's going down all the time. Just a huge reversal from what we've seen for centuries. Yeah, and the CEO's job is to make stock price go up, essentially. And so the market is now responding well when companies say they're getting more efficient because of technology. It's also Benioff is talking his own bag up here because Salesforce has AgentForce, which allows companies to deploy AI for customer support and other roles.

5:49And so by him saying, wow, it's helping Salesforce internally, it's also marketing for their own product. We should be a little weary here. Klarna had made a big deal of replacing employees with AI. I think it was last year sometime. They actually had to walk that back and say, yeah, it was more efficient, but quality went down, and they ended up rehiring a lot of these people. So with a lot of companies selling AI solutions, it's critical to look between the lines here. There was a recent Stanford paper, though, that showed the effect of this on recent grads that I thought was really interesting.

6:21It showed that there's a 16 % drop in relative employment for recent college graduates, because a lot of these companies, you know, there's attrition. They're not rehiring and looking to fill those roles with technology. Let's talk about managers specifically because the old middle manager is getting absolutely walloped in this greater, you know, head force, headcount reduction environment. Google, you mentioned, has eliminated more than one third of its managers overseeing small teams. There was this corn fairy pullback in the spring of 15 ,000 global professionals. More than 40 percent said their companies has slashed management rakes.

6:56Mark Zuckerberg came out in 2003 with a year of 2023 with a year of efficiency. He sort of was the vanguard of getting flatter as an organization, not having so many direct reports or so many levels where you are constantly reporting to someone else. We'll see how that works out. But it's clearly pervaded corporate America. This idea that the middle manager is just a superfluous role. Yeah, I think the GLP oneification was spot on, Neil. And I think there's this vision that every employee is going to become this super employee that doesn't need a manager and is super powered with AI. And, you know, we'll see if that comes true.

7:30But right now we're still stuck with avocado scanners. Devastating news for people who think they're money saving geniuses by illegally streaming sports. StreamEast, the largest illegal sports streaming platform, has been shut down. And they would have gotten away with it if it hadn't been for those meddling coalition of media companies and Egyptian authorities. The sting was announced by ACE, or Alliance for Creativity and Entertainment, a group of 50 media companies, including Amazon, Apple, Netflix, and Paramount, that tackles piracy. ACE announced that in a raid last month, Egyptian law enforcement officials arrested two men on suspicion of copyright infringement outside of Cairo and seized laptops and smartphones.

8:08They found over$6 million being laundered, an additional$200 ,000 in cryptocurrency. It's a huge win for the anti-piracy movement because StreamEast is the king of illegal streams. Its network of 80 unauthorized domains received 1.6 billion visits in the past year from viewers sidestepping paid channels to watch the NFL, Premier League soccer, Champions League, NBA, MLB, UFC, and more. Which makes it a tough pill to swallow for fans who came to rely on Streamys for their football or football fix. Usage spikes in the fall when the Premier League and NFL seasons get going. Kyle, RIP Streamys. I mean, RIP to the goat.

8:44And I've heard from friends, from friends, that this was a very powerful service that allowed you to watch a lot of sports and that they'll miss having to click exit on those pop-up ads every six seconds. Interesting, some research from Brand Finance, which is a global brand valuation consultancy, they found that 43 % of 14 ,000 respondents in 13 countries considered using unofficial live stream websites rather than paying full price to watch a sport. And a 2023 study found that 11 percent of U.S. adults pirated content in the previous year. So it's a decent size of people that are going to these illegal streaming services, whether because it's free or it's just easier than navigating the 10 options you have to find football, for example.

9:29I want to say one thing. There was a LeBron meme that went pretty viral a couple of years ago where LeBron James courtside was watching Stream East, the Timberwolves versus the Mavericks. If LeBron, who has more money in the world, is still using streaming, it's like maybe something's broken on the streaming side as well. Well, we've seen the balkanization of sports rights as streaming companies have started to buy them up to buffet their services. And it has become extremely expensive to watch NFL. I mean, we were about to begin the season tonight. And there are some calculations that you would have to pay six hundred and fifty one dollars to watch every NFL game for this season.

10:07and you need at least a half dozen streaming services and YouTube TV if you don't have traditional cable. That$650 is also a very conservative estimate. That's if you find all the streaming discounts you set up in Antenna, etc. Other estimates have it at near$1 ,500 to watch every NFL game, whereas previously you would just watch it on cable or broadcast. So this is the environment in which StreamEast was a very popular go-to channel channel for people to get their sports fix without paying these absurd prices. Yeah, and you mentioned NFL. Also, Red Zone announced that it's going to have commercials this year.

10:41And in defense of the sports leagues and the streaming services, this is how they make money. We're seeing players make more and more money contract-wise. We're seeing franchise valuations skyrocket. A big part of that is deals with streaming services and deals with cable companies that pay for the whole thing. So I understand why these companies are trying to crack down on sites like StreamEast. If you're still recovering from getting kicked out of your former roommate's ex-girlfriend's Netflix login during the great Netflix password crackdown of 2023, you might want to cover your years for this segment because now Amazon is attempting to do something similar.

11:17Now, don't worry too much. The move is more limited in scope. Amazon is winding down Prime Invite Tea, which was a perk that allowed Prime members to gift one person who did not live with them free shipping, essentially a bare bones Amazon Prime. The program ran from 2009 to 2015, and anyone who received it during that time has had fast free shipping ever since. Now, this move comes amidst a backdrop of renewed focus on Amazon Prime. During the lead up to Prime Day, a four day sales event in July, the company registered 5.4 million U.S. signups, which fell short of their internal goal by over 100 ,000 signups.

11:55Prime memberships and other subscription fees account for about 7 percent of Amazon sales, which generate over 10 billion dollars a quarter. But the growth rate of Prime subscriptions has tapered off and Amazon is looking to find more customers who will sign up and pay for their own accounts, even if they have to apply a little pressure like this. Now, Amazon joins the ranks of Netflix, Disney Plus, and Hulu, Max, and other streaming giants who are cracking down on password sharing and continuously tapping the sign that says one account per person. On the bright side, if you were part of this Amazon invitee program, maybe you gave free shipping to a boyfriend or girlfriend who didn't live with you yet, Amazon is promoting Amazon Family, which allows you to share all the perks of a full Prime account with one adult in the same household.

12:37So even Amazon thinks you should move in together. Neil, be honest. How much password sharing are you doing over there? I'm doing a lot of password sharing. When I go into a streaming service, I literally have no idea what account I'm on. But the hits keep coming here, this show. I mean, first we have StreamEast going down, and now we have this Prime sharing debacle. It's not quite a debacle, but it is an indication that Amazon is perhaps getting a little nervous about its Amazon Prime numbers. As you mentioned, they had a pretty rough Prime Day sign-up period. They have Walmart Plus, which is a rival subscription service that is rolling out a bunch of new things.

13:15Walmart Plus just announced this week that they're adding Peacock to their offering. So you get free Peacock. They already offered free Paramount. That costs$98, which undercuts Amazon Prime on price. So they need to squeeze more juice. They saw it work really well with Netflix. Netflix stock went crazy after they did this password sharing crackdown because so many new people signed up. So Amazon is just looking at that and saying, let's run this playbook back. That's right. And Amazon is, again, not going as far as Netflix did with like, you know, kicking people out of prime accounts or like forcing validation.

13:44You could still share one with your family because you can use free shipping and send a package anywhere. I know many people that do something like that. But if they need to apply the pressure, there is ways exactly like Netflix did for Amazon, too. So I wouldn't be surprised in a year or two if this password crackdown continues from Amazon's POV. And the stakes couldn't be higher because Amazon Prime shoppers are so much better customers for Amazon than non-Prime. They spent an average, people with Prime memberships spent an average of nearly$1 ,200 with Amazon in 2024 compared with just$570 for non-members.

14:20So getting everyone signed up to Prime is just a huge deal for Amazon. We'll see whether this makes a dent. We're taking a quick break, but when we get back, it's Neil's Numbers. Not all leaders wear suits. Some could wear sunglasses and drive something with adaptive off-road cruise control. Those leaders take the road less traveled and drive a super sweet ride to do it. And speaking of sweet rides and trailblazing, the Range Rover Sport is refined, powerful, and built to turn heads. It's dramatic in the best way possible. It's got serious performance too, with dynamic air suspension and adaptive dynamics to keep your ride nice and smooth.

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15:32And because this is such a big topic, it'll be a main topic at Indeed Future Works. Mark your calendars, friends and fam, because soon we're heading south. No, me and Toby are not going on tour, but Morning Brew will have some friendly faces down in the Big Easy. That's right. On September 10th and 11th, Morning Brew will be at Indeed Future Works in New Orleans, Louisiana. The topic on everyone's mind is AI, and Indeed will be diving into how it's impacting the entire hiring space. Learn more at IndeedFutureWorks.com slash brew. That's IndeedFutureWorks.com slash brew. Welcome to Neil's Numbers, the segment where I share three stats from the week's news that will turn you into your trivia team's MVP.

16:15For my first number, the American dream is cooked, according to the majority of Americans. In a new Wall Street Journal NORC poll, nearly 70 % of respondents said they believe that the principle of the American dream, if you work hard, you'll get ahead, no longer holds true or never did. That is the highest level in nearly 15 years of this survey. Yes, everyone's really emo about the economy right now. The share of people who said they have a good chance of improving their standard of living dipped to 25%, a record low. And looking forward, more than 75 % said they don't have the confidence that the next generation will be better than their own.

16:51There were no clear demographic differences either. Pretty much everyone thinks the economy sucks. Men and women, younger and older adults, people with and without college degrees, and those making more or less than$100 ,000. Kyle, one of America's greatest assets has been this unbriiled optimism. The conviction that things will get better for me and my family if I put in the work. Seems we have lost that. Spot on, yeah. It feels like we lost optimism. We lost a sense of American exceptionalism. The survey, 17 percent found that the U.S. economy stands above all others in the world. Nearly 40 percent said other nations have better economies, which was a 15 point rise from 2021.

17:28Some Stanford economists also found that there is these economic metrics of GDP, other metrics that they are looking at, and then economic sentiment. Typically, those move together. They found that in 2005 until the pandemic, those went in line. After that, they diverge. So even as the economy does get better on some metrics, there is a vibe session, as Kyla Scanlon would call it, where the vibes are off and people's sentiment is lower. It also might just be catching up to the fact that, like, the upward mobility in America is not as good as a lot of people think. The World Economic Forum had us ranked 27th in the Social Mobility Index, I think behind a lot of other countries that we thought weren't as socially mobile as us.

18:08So people might just be maybe wising up to the fact that, yeah, you know, America isn't perfect. And there's some real struggles, particularly around housing affordability, which was mentioned in the survey time and time again. For my next number, Americans may be sour about the economy, but they sure do love playing the lottery. Last night, the one point four billion dollar Powerball drawing produced no winner, sending the jackpot soaring to one point seven billion dollars, the third largest in history for the next drawing on Saturday. Your local gas station is going to be busy. In 2023, the most recent year data is available, Americans spent approximately$103 billion on lottery tickets, more than they spent on movies, books, concerts, and sports tickets combined.

18:50Surveys show that about half of Americans buy a lottery ticket at least once a year, and the majority play only infrequently, like when jackpots rise to over$1 billion as they do now. So the spending is heavily concentrated in a small group of power players. The most lottery-loving state is my own Massachusetts. Despite being the 16th most populous state, Massachusetts had the fifth highest lottery revenue of$6.1 billion. Analysts think that's because people living in neighboring states come to Massachusetts to buy lottery tickets for bigger payouts at the same prices. Also, Massachusetts residents have one of the highest median household incomes in the nation, giving them more disposable income to throw away.

19:28And that's pretty much what you do when you play the lottery. of the$103 billion Americans spent on lotteries in 2023. They earned a total prize payout of$69 billion, leaving many billions going to states. On average, lottery proceeds make up 2.3 % of state revenue, not an insignificant amount. Kyle,$1.7 billion jackpot. I'm already daydreaming about what I do. I know. We need to get a ticket together. I found it interesting. Lottery proceeds, you mentioned 2.3 % of state tax revenue on average. the highest states about 7 % of state tax revenue in Rhode Island, West Virginia and South Dakota. So those states definitely love the lottery when it comes to keeping their state afloat.

20:06Let's talk about whether you're going to win or not. And the answer is no, because the odds of winning this Powerball jackpot coming up is one in two hundred and ninety two million. That is by orders of magnitude less likely than going to the ER with a pogo stick related injury, which is one in 115 ,000. You're also far more likely to birth conjoined twins than win the Powerball jackpot. The odds of birthing conjoined twins is about one in 200 ,000. So yeah, one in 292 million is almost unfathomably unlikely, but of course we're going to go buy a ticket. Yeah, you're saying there's a chance, Neil.

20:47For my final number, it's been a historically bad summer for movie theaters. In the U.S. and Canada, the box office just had its worst summer since 1981, adjusting for inflation and not including the COVID years when theaters were closed. It wasn't supposed to be this way. Back in May, AMC CEO Adam Marone told investors, we believe that a dramatic reawakening of the industry-wide domestic box office has begun, adding that the summer slate would be, quote, barn burners one after another. Yeah, that didn't happen. According to the New York Times, there were only two weeks when North American theaters collected more than$300 million, compared to nine weeks when that happened in the summer of 2019.

21:27Franchise fatigue could be one factor. This summer, 20 of the 26 movies that collected at least$20 million in North America were either a sequel, remake, spinoff, reboot, or video game adaptation. But people are simply tired of them. Half of those franchises from this summer, such as Superman, did worse than the version that came before. Kyle, a lot of people predicted the pandemic would kill off movie theaters once and for all. Theaters survived COVID, but it's clear that outside of a phenomenon like Barbenheimer, this is a leisure activity that's never going to be as popular as it once was. I agree.

21:58I don't think it's ever coming back. Netflix CEO Reed Hastings famously said, quote, sleep is their competition. I think it's the same for movies. It's not just other movies that are your competition. It's anything you can be doing. There's way more entertainment options, particularly at home. So I think movies will always have a place in American society. I mean, that buttered popcorn does slap, but there's just so many opportunities to do things outside of the movies now that I don't think they're ever coming back. What studios are doing is they're dipping into their bag of tricks by doing a lot of re-releases to generate more revenue.

22:29So what was the number two grossing movie last weekend after Weapons? It was Jaws, which came out in 1975. Universal has 12 re-releases on its 2025 slate. Disney just announced that Toy Story is coming back to theaters on September 12th to celebrate the 30th anniversary. Twilight is going back to theaters this fall to celebrate the 20th anniversary of Stephanie Meyer's original book that came out 20 years ago, two decades ago. We've already seen Black Swan, Twin Burdens, Batman movies, Clue. All these movies have come out this year that have already come out many years ago, and they're actually making a decent amount of money from this.

23:06So this is going to be a tool that these theaters use to get more people going, just playing up nostalgia and releasing all these movies from decades ago to celebrate various anniversaries. All right, let's sprint to the finish with some final headlines. Florida is aiming to become the first state to end all vaccine mandates, including for kids, which would scrap a decades long tradition in American public health to stop the spread of infectious diseases. In an announcement near Tampa yesterday, Florida Surgeon General Dr. Joseph Ladapo said, Who am I to tell you what your child should put in their body?

23:38Saying of vax mandates, every last one of them is wrong and drips with disdain and slavery. Right now, Florida law requires that children get vaccinated for measles, mumps, rubella, and other infectious diseases to attend school. And any effort to end the mandates would have to get legislative approval. The move came under swift criticism from health experts, Democrats, and even some Republicans. GOP Senator Bill Cassidy of Louisiana, who heads up the Senate's Health Committee, called Florida's plan a, quote, terrible thing for public health. And finally, the NFL season kicks off tonight in Philadelphia with the Eagles hosting the Cowboys.