Welcome to a brand new week with FinSoar! An odd week for the U.S after a massive soccer/football defeat in USA V Belgium, 4,800 jobs cut by Microsoft, and Elon Musk facing legal action over Twitter:
Microsoft Cuts 4,800 Jobs and Resets a Struggling Xbox
Microsoft reported it would eliminate 4,800 jobs, about 2.1% of its global workforce, in its latest cost-cutting move as it pours billions into AI and overhauls a struggling Xbox division. The cuts hit the commercial and Xbox organizations hardest, with the gaming unit losing about one-fifth of its staff. The Xbox restructuring is the deepest in its history. The division will shed 3,200 roles across fiscal 2027, starting with 1,600 on Monday, and divest up to five studios. Compulsion Games and Double Fine will go independent, while Ninja Theory and Undead Labs move to new owners. Xbox CEO Asha Sharma told employees the business is "not healthy," operating at margins 3 to 10 times lower than comparable platform and publishing rivals. The Activision bet has underwhelmed. Nearly three years after the $69 billion acquisition of Activision Blizzard, the game-portfolio and streaming strategy has not closed the gap with Sony and Nintendo. Sharma said Game Pass and studio acquisitions "did not grow at the pace we expected." The memory crunch compounds the pain. The same AI-driven chip shortage squeezing Apple forced Microsoft to raise Xbox console prices by $100 to $150 from August 1, just as demand was already soft. Big Tech's AI outlays are set to top $700 billion this year, pressuring firms to show returns. Microsoft has forecast $190 billion in 2026 infrastructure spending, and trimming headcount has helped it fund that buildout. Chief People Officer Amy Coleman insisted the eliminated roles are "not being replaced by AI," though automation is changing how work gets done. The market was unimpressed. Microsoft shares slipped about 1% Monday after a 19% first-half slide, the worst among megacap tech, on fears AI could upend its software business. Microsoft is managing down its workforce to pay for AI, resetting a gaming unit one analyst called "almost irrelevant," and betting focus beats sprawl. For investors, the Xbox reset matters less than whether Azure and AI can justify the $190 billion bill. |
Judge Upholds Musk's Twitter Fraud Verdict
A federal judge rejected Elon Musk's bid to void a jury verdict finding he defrauded Twitter investors by trying to drive down the company's stock after agreeing to his $44 billion takeover. US District Judge Charles Breyer in San Francisco denied Musk's motion to set aside the March verdict in most respects, though he found Musk not liable for one of the two tweets. Breyer also denied Musk's motion to decertify the investor class and granted the plaintiffs prejudgment interest. A lawyer for the investors estimated damages could total about $2.6 billion. The judge's framing was pointed. "Buyer's remorse is not an exception to the securities laws," Breyer wrote, adding that the laws are essentially about trust in fair, honest, and transparent markets. Even a change of heart, he noted, does not justify lying to the investing public. The case centers on two 2022 tweets. Musk's May 13 post said the deal was "temporarily on hold" pending proof that bots represented less than 5% of users, which investors said drove Twitter's share price down 18% over two trading days. Breyer found the first tweet damning. He cited "substantial evidence of falsity," noting Musk never actually told his team or lawyers to stop working on the deal. A banker testified the tweet surprised her and that Musk never put the deal on hold, supporting an inference he used bots as a pretext to exit. The one concession was narrow. Breyer agreed the lack of market reaction to the May 17 tweet meant it did not cause investor losses, since prices were already depressed after May 13. Plaintiffs' lawyer Mark Molumphy said the ruling does not change the damages calculation, which rests on the initial tweet. Musk's lawyers also argued jurors were "mocking" him by writing $4.20 in blue ink on the verdict form. Breyer called that "defies common sense," quipping that a San Francisco jury may simply have appreciated the joke. Twitter is now X, folded into SpaceX, and Musk faces a separate Manhattan suit alleging he defrauded investors by disclosing his initial stake too late. Fresh off becoming the world's first trillionaire, Musk has a pattern of fighting shareholders rather than settling. This ruling keeps a multibillion-dollar judgment intact and headed toward appeal. |
Trump's Red-Card Gambit Backfires as Belgium Routs the US
The US men's national team crashed out of its home World Cup on Monday, losing 4-1 to Belgium in the Round of 16, days after President Trump personally intervened to clear a suspended American striker to play. Belgium was dominant from the start, with Charles De Ketelaere scoring twice and Romelu Lukaku sealing it late. The controversy set the stage. Striker Folarin Balogun had drawn a red card against Bosnia and Herzegovina, triggering an automatic one-game ban, before a FIFA panel took the unusual step of delaying the suspension a full year so he could play. Trump then confirmed he had called FIFA president Gianni Infantino to push for a review. Balogun played but made no difference. He recorded no goal or assist, though he won the free kick that Malik Tillman converted for the Americans' lone goal. The match itself was ugly. The US played sloppy, lax soccer, with every starter performing below their best. Sergiño Dest was pulled at halftime, and goalkeeper Matt Freese's disastrous error outside his box gifted Belgium's third goal. Coach Rudi Garcia positioned his side as defending the sport itself against Trump and Infantino, resting stars Lukaku, Jérémy Doku, and Kevin De Bruyne while organizing to frustrate the US press. The trolling followed. The Belgian federation's account posted "Overturn this" over an image of Lukaku celebrating, plus a jab crossing out "soccer" in favor of "football." The exit fits a pattern. It marks the fourth time in five World Cups the US bowed out in the Round of 16, and all three co-hosts — Canada, Mexico, and the US — are now gone. Belgium advances to face Spain on Friday. The broader damage may be reputational. As Robert Reich wrote, the intervention raises the question of how anyone can trust a US victory as fair again. The episode has drawn calls from European lawmakers for a FIFA ethics investigation, adding institutional scrutiny to sporting embarrassment. |
That’s all for today!/
