Author: Jimmy Aki

Founder and former CEO of Oculus VR Brendan Iribe has joined the list of associate founders calling it quits with Facebook. While making this known on his Facebook account, he expressed profound gratitude for the cooperation he enjoyed with the rest of the team which inspired the birth of a new industry.

“I’m deeply proud and grateful for all that we’ve done together. We assembled one of the greatest research and engineering teams in history, delivered the first step of virtual presence with Oculus Rift and Touch, and inspired an entirely new industry.”

Iribe described the strides made in the course of his six-year stint at Facebook. His working relationship with the network of experts at Oculus and Facebook was a transformative experience in his career.

The reasons behind his decision to take the exit route may not be known yet, but it will be recalled that co-founder of Oculus Palmer Luckey left Facebook following his political postures which got the company on the headlines for the wrong reasons. He was said to have funded “Nimble America,” a conservative group responsible for the creation of those viral, anti-Hillary memes.

The revelation of his misogyny accounted for the resignation of many female employees who were working with Facebook.

Brendan Iribe Follows Mass Exodus Trend from Facebook

Facebook has lately been struck by the exodus of big names among whom are Instagram Co-founders Kevin Systrom and Mike Krieger in September. The pair was alleged to have bowed out due to the ensuing tension they had in management with Facebook CEO Mark Zuckerberg.

Both parties disagreed on issues concerning changes to the product, changes to Instagram personnel, and Zuckerberg’s overwhelming control over the unit.

WhatsApp co-founders Brian Acton and Jan Koum forfeited $900 million and $400 million respectively by announcing their exit from Facebook.

The pair exercised the escape clause in their contracts with Facebook following a series of differences they had with the parent company. The issues which allegedly led to their exit from Facebook looked minor on the surface but might have been more complicated.

Both parties had different opinions on bathroom designs, desk sizes, and, chairs. The spat which followed prompted Facebook executives in labeling Brian Acton as “low class.”

Threats surrounding the security and privacy of user data including the spread of wrong information perhaps accounted for a large number of issues these co-founders had with Facebook.

Last month, Facebook found security issues that gave the opportunity to access the data of millions of Facebook users. Zuckerberg described it as a dire security threat which will be addressed urgently. The disclosure further compounded the decline in Facebook shares which slipped by 2.6%. Zuckerberg noted:

“Security is an arms race, and we’re continuing to improve our defenses… This just underscores there are constant attacks from people who are trying to underscore accounts in our community.”

Facebook CEO Mark Zuckerberg acquired Oculus VR for $2.3 billion on March 25, 2014. The acquisition was met with a spate of criticisms by backers who saw it as a slap in the face to the crowdfunding used in developing Oculus Rift in 2012.

Featured image from Rappler.com

Paypal Holdings exceeded Wall Street estimates on Thursday after it reported third-quarter earnings and revenue with a significant increase in payment volume for its mobile payments service, Venmo.

Having fared better than the 54% analysts’ forecasted, the California-based company is now on course to monetizing Venmo. Revenue in the third quarter also performed better than the $3.67 billion average projection by rising 14% to $3.68 billion, while earnings rose 26%.

Peer-to-peer payment app Venmo had its total payment volume rise by 78% in the third quarter, to about $17 billion. Venmo had hitherto been unable to prove its wherewithal as a money-making enterprise for its parent company, but investors will see the rise in payment volume as a sign of more good things to come.

With the renewed momentum, PayPal CEO Daniel Schulman hinted on a call with analysts Thursday that the company’s monetization efforts are yielding the right result.

“I’m especially pleased with the strong overall momentum surrounding Venmo. While it is still early, our monetization efforts appear to be reaching a tipping point.”

Debit Cards for Venmo

In June, PayPal rolled out debit cards for Venmo to smoothen the collection of transaction fees. Prior to the company’s report for last earnings in July, billionaire Dan Loeb’s Hedge Fund Third Point disclosed a stake in Venmo and expressed optimism about Venmo’s potential to churn $1 billion in annual sales within three years.

PayPal’s marketing strategy also incorporated liaising with retailers to accept Venmo transactions carried out on mobile phones of customers. A significant leap in this aspect was made after Uber Technologies in July agreed to include Venmo among its payment options.

During the week, PayPal increased the fee for quick fund transfer to bank accounts to a percent of the transaction amount from a flat 25 cents.

With many receiving the earnings report Thursday as a welcome sign, Mr. Schulman disclosed that there had been a 185% increase in the number of people using Venmo compared to the previous month.

PayPal is keen on wringing more profit from transaction fees by encouraging people to carry out purchases using their Venmo balance instead of a credit card linked to their accounts.

The total payment volume of PayPal fell marginally short of Refinitiv analysts’ expectations of $145 billion by reaching $143 billion during the same quarter. The amount nevertheless, represents a 25% increase. 40% of the payment volume was comprised of mobile payment growth while it constituted 45% growth in mobile payment volume for the third quarter. A 27% surge in total payment transactions amounted to 2.5 total for the quarter.

Accounts added in the third quarter of the year reached an unprecedented height hitting what the company called a “record” 9.1 million accounts, 15% higher than what was reported in the last quarter. The quarter closed with a total of 254 million active accounts.

Paypal Fourth Quarter Earnings

In line with forecasts given by analysts, fourth-quarter earnings guidance was raised by PayPal to a range of between 65 and 67 cents and the company also increased quarterly revenue guidance. Full-year earnings guidance was upped to a range of between $2.38 and $2.40 per share, and this was above the consensus expectations of analysts put at $2.34 per share.

Prequel to the report on earnings made known on Thursday; announcements were made about the company’s latest features and a more robust collaboration of its existing partnership with American Express which will now enable customers of the latter to make transfers via Venmo or PayPal directly from their Annex mobile app.

Also, American Express customers will be able to pay credit card bills with existing Venmo balances as well as being able to make use of Annex Membership Reward points for purchases made on PayPal. Meanwhile, American Express also reported earnings after the bell on Thursday.

Images from Shutterstock.

Having just added India’s e-commerce retailer Flipkart to its pool of acquisitions, Walmart’s strategy is being shaped to reflect more growth than profit. The world’s largest retailer pruned down its profit forecast on Tuesday to reflect its $16 billion purchase of India’s biggest online store.

While hosting its annual investor meeting on Tuesday, the company made known how it had lowered its profit guidance for the current fiscal year within the range of $2.65 to $2.80 per share.

This is in contrast to its prior outlook which was as high as $3.05 per share. The impact of Flipkart (which is its largest acquisition ever in Walmart’s history) would take its toll on profit by 25% a share, Walmart noted.

The Bentonville-based multinational retail corporation estimates profits as high as $4.80 a share for next year which notwithstanding, is lesser than its prior forecast of up to $5.05 a share.

Ranked among the 30 largest publicly owned enterprises trading on the New York Stock Exchange, its stock rose by 3% during after-hours Wednesday as the bump suggests that the company’s investors are borrowing a leaf from Amazon investors through their readiness to make do with a profit slump in exchange for growth in market share.

Locally Sourced Products

Going by the potential hike in many consumer goods due to tariffs levied by the Federal Government, Walmart chief financial officer deemed it fit to address these concerns stating Walmart’s intention to reduce the impact of any potential hike in price to its consumers.

He further noted that two-thirds of products sold at Walmart stores were sourced within the US.

Walmart US constitutes three-fifths of the multinational sales unit and thus, the biggest unit that investors are focused on. Online sales are estimated to reach the 35% mark for the next fiscal year. The US division’s comparable sales are projected to rise by 3% for the next fiscal year.

The upward projection comes on the heels of the division’s release in August which recorded an unprecedented performance in online sales put at 40%. Ranked as the best quarterly comparable sales in over a decade, its sizable store fleet fared excellently well among other online rivals in August.

The company plans to raise its competitive edge against Amazon by focusing more on online investments as it said it plans to open less than 10 Walmart stores next year.

Coupled with online spending, Walmart revealed that about $11 billion of capital spending would be earmarked for store remodels, technology and customer initiatives.

Pickup locations are expected to rise to 3,100, catering to the grocery department— the company’s most significant product segment, which has been the vehicle of its online and store traffic.

Anticipated pickup locations as of August were put at 1,800. The delivery of groceries is expected to reach 1,600 locations; a right step in its ambition to reach 40% of the US consumer population by the end of this year.

Walmart US’s online strategy is quite multi-faceted, and apart from its emphasis on grocery, the company hopes to leverage consumers preferring the convenience and one-stop shopping with its e-commerce initiatives.

Online Acquisition

These initiatives have involved a shopping spree including this month’s purchase of online lingerie retailer Bare necessities and plus-size fashion retailer Eloquii.

Walmart has also opened an e-books store and its recently revamped Jet.com is the largest US acquisition of 2016, squarely locating it as a site to target affluent urban millennials. As part of the facelift, fashionable men’s clothing brand Bonobos which was acquired by Walmart is now being sold on Jet.com, even though it is still absent on Walmart.com.

From an international perspective, Flipkart:

“transforms Walmart’s position in a country with more than 1.3 billion people, strong GDP growth, a growing middle class and significant runway for smartphone, internet, and e-commerce penetration.”

With its sights now focused on exploiting last-mile delivery as a big differentiator for global e-commerce, Walmart in September last year, finalized agreement to purchase Cornershop, an online marketplace for crowd-sourced, on-demand delivery in Mexico and Chile.

Meanwhile, the sales index according to research firm RedSeer Consulting saw Flipkart getting the better of the market with a 51% share while Amazon had to settle for 32% of the festive October sale which began on October 9 and ended October 14.

Flipkart’s performance was put down to the high demand for smartphones and fashion verticals during the festive period.

Images from Shutterstock.

After being in denial for nearly nine years, Walmart Inc will pay thousands of its employees in a class action over cashiers standing up during work periods, according to a Fortune report.

The retailer has agreed to pay the sum of $65 million to employees after the company had denied any wrongdoing in the year-long case, which was scheduled to go to trial before the end of this year. Nisha Brown filed the lawsuit in 2009.

A federal judge must approve the proposed settlement, and its outcome could affect about 100,000 current and former Walmart employees. The deal would cover cashiers employed by the retailer between June 11, 2008, to the date when the settlement is approved.

According to an attorney to the plaintiffs, some cashiers will be eligible to receive more than $1,000 each.

California’s Private Attorney General Act

This is the first time a lawsuit that requires seating for employees would be brought under a California regulation “when the nature of the work reasonably permits.” As per the settlement, the company would also begin providing seats for its cashiers in California.

According to Walmart’s spokesman, Randy Hargrove:

“both sides are pleased to have reached a proposed resolution.”

The settlement, if it eventually gets approved by a federal judge, would be the largest settlement under California’s unique Private Attorney General Act which gives workers the right to sue employers on behalf of the state and keep a quarter of that money.

The regulation which was initially adopted in 1911 only applied to women working in the retail company. However, the law was later amended several times in the following century.

The retailer’s argument against the lawsuit was that placing stools at the point of payment or cash registers could be unsafe, and even reduce workers’ productivity. It added that the nature of a cashier’s work did not require them to sit down because they needed to scan large items, perform duties away from registers, and stretch to view the bottom of shoppers’ cart.

The retailer also argued that it had a policy of providing stools to cashiers that suffer from certain medical conditions or disabilities. Nonetheless, the provision of these stools is often based on a manager’s discretion on a case by case basis.

In a similar case, Bank of America paid a settlement of $15 million to for not allowing their cashiers to sit while they worked. Other companies like CVS Health Corp, AT&T Corp, JPMorgan Chase Bank NA, and Home Depot Inc have also been slammed with similar lawsuits.

Pregnancy-Related Restrictions

Just last month, Walmart was also accused of discriminating against pregnant employees and violating federal law by failing to consider workers’ pregnancy-related restrictions.

The lawsuit filed by the Federal Equal Employment Opportunity Commission (EEOC) stated that Alyssa Gilliam and some other pregnant employees at the Walmart’s Distribution Centre in Wisconsin were not included in the company’s light-duty program, which was established to restrict workers with medical conditions from dangerous tasks.

Julianne Bowman, the EEOC’s district director in Chicago who managed the investigation had stated:

“What our investigation indicated is that Walmart had a robust light-duty program that allowed workers with lifting restrictions to be accommodated. But Walmart deprived pregnant workers of the opportunity to participate in its program. This amounted to pregnancy discrimination, which violates federal law.”

In response to the allegation, Walmart spokesman Randy Hargrove stated that Walmart is a “great place for women to work,” but noted that the company would defend itself against the accusations.

Hargrove added that the retail company has over the years amended its accommodations policy. He argued that the company’s policies:

“have always fully met or exceeded both state and federal law, and this includes the Americans with Disabilities Act and the Pregnancy Discrimination Act.”

Featured image from Pixabay.