Silicon Valley Tech News Roundup – March 19th

U. S. government wants a change of ownership of TikTok – 3/17

Based on the report published by the Wall Street Journal, the U. S. government wants TikTok sold, or the app is facing a possible ban in the country. TikTok confirmed the news to the BBC.

According to the report, the Biden administration wants ByteDance to divest itself from TikTok. The government believes that would create a clean break from China. However, the company claims the sale would not affect the access or data flow. The Committee on Foreign Investments in the United States (CFIUS), tasked to oversee potential national security risks, unanimously recommended the proposed divestiture.

TikTok spokesperson confirmed the news. However, according to them, the Wall Street Journal’s reporting is overstated. The spokesperson said: “If protecting national security is the objective, divestment doesn’t solve the problem: a change in ownership would not impose any new restrictions on data flows or access… The best way to address concerns about national security is with the transparent, US-based protection of US user data and systems.”

Shou Zi Chew (Chief Executive Officer at TikTok) will testify in front of Congress next week.

TikTok’s influencer-led lobbying effort planned for next week – 3/17

TikTok is planning an influencer-led lobbying effort in Washington D. C. next week. The move comes after the Biden administration announced it wants ByteDance (the Chinese parent company of TikTok) to divest itself from TikTok. If the company refuses, TikTok faces a national ban in the United States due to national security concerns.

According to anonymous sources, TikTok is covering the cost of travel for dozens of its content creators, who will stay in Washington D. C. for three days and hold a press conference on Capitol Hill on Wednesday.

Jamal Brown (TikTok spokesperson) confirmed the news and stated: “Lawmakers in Washington debating TikTok should hear firsthand from people whose lives would be directly affected by their decisions… We look forward to welcoming our creators to our nation’s capital, helping them make their voices heard, and continuing to drive meaningful impact in their lives and for their communities.”

SVB Financial Group files for bankruptcy protection – 3/17

On Friday, SVB Financial Group (the parent company of Silicon Valley Bank) announced its plans to conduct court-supervised reorganization to find buyers for its assets under Chapter 11 bankruptcy protection.

Californian financial regulators closed the Silicon Valley Bank last Friday in the biggest financial crisis since 2008. The Federal Deposit Insurance Corporation (FDIC) now controls the bank, which is not a part of the bankruptcy. Emergency measures conducted so far failed to ease worries about financial contagion. In the premarket trading on Friday, the shares of the largest U. S. banks fell between 1.5% and 2%.

After a rise in yields eroded the value, Silicon Valley Bank had to sell a portfolio of mortgage-backed securities and treasuries to Goldman Sachs at a $1.8 billion loss. In a bid to make up for the loss, SVB Financial Group tried to raise $2.25 billion in common equity and convertible stock. However, clients pulled the deposits from the bank, which led to a $42 billion outflow in a day. On Friday, the company said it has $2.2 billion of liquidity.

Google refuses to pay medical leave for laid-off employees – 3/17

This week CNBC published a report that revealing Google decided against paying for remaining time off for all laid-off employees on medical or maternity leave at the time of their termination. People affected by the decision include former employees on maternity leave (or approved for one), medical, personal, caregiver, or baby bonding leave.

Over a hundred former employees founded a group called “Laid off on Leave.” They are asking for payment for the remainder of their approved time off before the company announced new job cuts in January. The group contacted top Google executives (including Sundar Pichai and Fiona Cicconi) on three separate occasions but is yet to receive a response. The former employees also lost access to One Medical facility at Google on the same day layoffs were announced.

In January, Alphabet (Google’s parent company) announced it would cut 12,000 (or an estimated 6% of its workforce). Sundar Pichai (the CEO of Google) stated the company would extend all parental leave to 18 weeks (24 for birth parents) for full-time staff and that terminated employees would get 16 weeks of severance pay plus two weeks for each additional year they worked at Google. The company also said the severance would include paid time off. The former workers are urging the executives to clarify the matter since severance terms are expected on March 31st.

In an email to CNBC, Google confirmed laid-off workers are eligible for salary and stock for a “60+ day notice period.” Likewise, the spokesperson confirmed 16 weeks of pay plus two weeks for each additional year at Google. However, the company did not clarify if it would cover medical leave on top of severance.