—— Alibaba Splits Into Six Units; Google Partners with Coding AI Startup; U.S. Home Prices Keep Falling in Peak Season; McKinsey to Cut 1,400 Jobs; Apple Launches Buy Now, Pay Later; Florida Attracts Waves of New Yorkers; Amazon Eyes Acquisition of AMC
1. Alibaba Splits Into Six Units
Today, China’s leading e-commerce giant Alibaba Group announced plans to split its $220 billion company into six separate units—marking the biggest corporate overhaul since its founding more than 20 years ago.
Alibaba’s core businesses—including e-commerce, media, and cloud computing—will become independent entities, gaining more operational flexibility and opening the door for potential spin-offs and IPOs.
Alibaba will become a holding company—a rare structure in the tech sector that rivals may soon emulate.
Each of the six new divisions will have its own appointed CEO.
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2. Google Partners with Coding AI Startup
Google announced a partnership with Replit Inc., a startup that helps developers write code, in a move aimed at better competing with Microsoft’s GitHub and OpenAI.
Replit’s Ghostwriter tool—used by 20 million developers—will integrate with Google’s language AI to better answer developer queries and generate code snippets.
Replit CEO Amjad Masad said in an interview that Google’s technology is “far more powerful than most people think.” Replit also hopes to use Google Cloud services to expand its user base.
As part of the partnership, Google will help promote Replit’s software.
Replit’s current users are mostly individual developers and startups, but it now aims to attract enterprise clients.
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3. U.S. Home Prices Keep Falling in Peak Season
Since last June’s peak, the S&P CoreLogic Case-Shiller Home Price Index has fallen 3%—marking seven consecutive months of declines.
Home prices in San Francisco and Seattle are down 7.6% and 5.1% year-over-year, while San Diego and Portland saw drops of 1.4% and 0.5%, respectively.
Craig Lazzara, managing director at S&P Dow Jones Indices, said the Fed’s top priority remains controlling inflation, meaning interest rates may stay high longer.
This time of year is typically peak homebuying season, with families aiming to move before the new school year. However, economic uncertainty and high mortgage rates continue to suppress demand.
Last year’s buying season saw bidding wars and a shortage of listings.
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4. McKinsey to Cut 1,400 Jobs
Consulting giant McKinsey & Company announced today that it will begin laying off approximately 1,400 employees this week—around 3% of its 47,000-person workforce.
Global managing partner Bob Sternfels wrote in a letter to staff that “the harsh reality is that we must say goodbye to many talented colleagues,” but added that McKinsey will help some employees transition into other roles.
Affected employees will start receiving notifications about layoffs or job reassignments.
Sources noted that McKinsey generated a record $15 billion in revenue in 2021 and broke that record again in 2022.
In 2012, McKinsey had only 17,000 employees—its workforce has grown dramatically over the past decade.
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5. Apple Launches Buy Now, Pay Later
This week, Apple Inc. began rolling out its Apple Pay Later feature to randomly selected users, with plans to make the service widely available in the coming months.
Apple Pay Later is integrated into the iPhone Wallet app, allowing users to borrow $50 to $1,000 and split it into four interest-free payments over six weeks.
Apple has partnered with Mastercard to incorporate installment features from the latter’s network.
The loans will be issued by Apple Financing LLC, which will conduct internal credit checks and use additional tools to manage lending.
Apple aims to challenge Affirm and Klarna in the buy-now-pay-later space.
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6. Florida Attracts Waves of New Yorkers
According to a new Redfin report, more homeowners are leaving expensive cities like San Francisco and New York in favor of Florida’s sunnier weather and more affordable housing.
Half of the top 10 U.S. cities with the most net population inflow are in Florida. In Miami, Tampa, and Orlando, most inbound buyers came from New York.
While fewer buyers planned to relocate in 2023—February’s number of movers fell 3.6% year-over-year—local move intentions also dropped 14.4%.
San Francisco, New York, Los Angeles, and Chicago saw the largest population outflows. Redfin reports Manhattan’s median home price was $485,000 in February, well below the citywide average of $640,000.
Miami is the top destination for New Yorkers, while San Franciscans prefer California’s capital, Sacramento.
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7. Amazon Eyes Acquisition of AMC
News site Intersect reported today that Amazon is exploring an acquisition of struggling theater chain AMC Entertainment Holdings.
Amazon is in talks with financial advisers to consider various deal structures. AMC’s current market cap is around $4 billion. The report pushed AMC shares up as much as 18% to a one-month high of $5.38.
Intersect said Amazon plans to release 12 to 15 original films annually, and AMC theaters could serve as exclusive venues.
Rumors of an AMC buyout by Amazon date back to 2021, when AMC’s stock surged during the meme-stock craze. The company is still struggling to return to pre-pandemic audience levels.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.