One quick thing: Meta has found a powerful ally as the tech giant tries to make its ambitious vision for the metaverse a reality.

• Microsoft is bringing its prominent services - Microsoft 365, Windows 365, Teams, and even Xbox Cloud Gaming - to Meta Quest VR devices.

Meta also debuted its first high-end VR headset and bought three game studios, Camouflaj, Twisted Pixel, and Armature Studio, to help its Oculus Studio unit.

In today's newsletter:

• Massive job cuts at Byju’s
• Wipro, HCLTech Q2 report card
• Fireside ammo for Indian startups

Just when we thought layoffs were becoming a thing of the past, the world's most valued edtech startup has announced more job cuts and a massive reorganisation. 

Byju's is laying off 2,500 employees as it looks to cut costs amid mounting losses and a global funding crunch. This represents about 5% of the company's 50,000-strong workforce. We first reported this development in July. 

• Byju's said it will rationalise jobs across product, content, media and technology teams "in a phased manner"

Byju's K-10 business which includes Toppr, Meritnation, TutorVista, Scholar, and HashLearn will be consolidated as one business unit.

• Aakash and Greater Learning, however, will continue to function as separate organisations.

Meanwhile, Byju’s underwhelming FY21 results that were released last month have made investors re-evaluate growth potential for consumer-facing edtech companies in India.

 Byju’s revenue dropped during the year, albeit marginally, but at a time when almost every internet company grew manifold thanks to stay-at-home Covid-19 restrictions.

• Read: Byju’s: How does it earn money and where does it spend?

As a result, investors are turning to startups, questioning their growth projections, despite the fact that these companies have raised millions of dollars at exorbitant valuations in the last two years, projecting strong growth.

 Thus, it may be difficult for startups to raise capital in the current environment at higher or comparable valuations.

Education is a very sensitive sector, especially in a young country like India, and the fight for survival for edtechs will have an impact on innovation.

Thus, the 'tech' in edtech may not see further innovation.

 Investors believe that as the pandemic subsides, edtech startups will be forced to improve their quality or tech capabilities in order to retain students.

 But if startups can't raise money, it will be hard for them to invest heavily in growth and innovation, which means they might not be able to grow. It's a vicious circle!

Wipro announced its fiscal second-quarter results, with some numbers meeting expectations but others falling far short. Its consolidated net profit for the quarter fell 9.27 percent year on year, while revenue increased 14.6 percent.

Chief executive Thierry Delaporte said there has been no slowdown in demand so far, but there is uncertainty due to macroeconomic concerns. He stated that the projection of bookings for the coming quarter is strong, but it is too early to tell if there is a decision-making lag.

• Attrition continued to fall sequentially, with 23 percent compared to 23.3 percent in the previous quarter. However, net headcount addition fell dramatically to 605, compared to 15,000-plus in Q1.
  
  
• After not giving variable pay to mid and senior employees last quarter and reducing it to 70 percent for junior employees, Wipro will give 85 percent of employees full variable pay in Q2.

Wipro reaffirmed its stance on moonlighting, which has been a hot topic since Chairman Rishad Premji's comments and the company's termination of 300 employees. However, Delaporte emphasises that the main issue is a conflict of interest, not anyone taking on any side gig.

HCLTech, which also reported its earnings today, made it clear that it does not approve of employees moonlighting. The company expects employees to honour exclusivity and non-compete clauses in contracts.

The consolidated net profit of India's third-largest IT services firm increased 7.05 percent to Rs 3,489 crore for the quarter from Rs 3,259 crore in the same quarter last year.

• Operational revenue was Rs 24,686 crore, up 19.5 percent from Rs 20,655 crore the previous year.
  
  
• Operating margin increased significantly to 18 percent, exceeding analyst expectations of 17.5 percent.

In Q2FY23, the firm won new deals with a total contract value (TCV) of $2.38 billion. The company won 11 large deals, eight of which were for services and three for products.

The IT services major added 8,359 employees during the quarter, taking the total headcount to 219,325. The attrition rate remained flat sequentially at 23.8 percent on the last twelve months (LTM) basis. HCLTech also added its highest-ever number of freshers historically in Q2 coming in at 10,339.

Fireside Ventures, a venture capital firm focused on direct-to-consumer brands, has raised $225 million in its largest-ever India-focused fund, joining the ranks of Sequoia Capital, Accel, and others.

• The Fireside Fund III will be deployed into new companies and the firm plans to invest in 25-30 startups over the next three years. 
• So far, the firm has closed three funds, with the VC managing assets totalling $395 million (Rs 3,000 crore).
• The revenue of its portfolio companies from its first fund was up 21 times, while its second-fund portfolio companies were up by 4-5 times.

The VC firm intends to double down in the D2C (direct-to-customer) space, looking into areas such as wellness and other niche areas where such brands can excel.

Data shows that 12 India-focused PE/VC firms raised more than $6.5 billion in limited partners in 2022. However, while these investors made more bets in the 2021-22 period, the cheque sizes seem to have gotten smaller.

Scamsters are creating fraudulent or catfishing accounts in the name of celebrity traders to steal money and securities from demat accounts.

• What’s staggering is the effort that is going into creating these accounts, tracking the most vulnerable targets and mimicking the celebrity trader’s real account. 

These incidents have an impact on both the people who lose their money and assets and the celebrity traders who are constantly defending themselves against unfair charges.

Do read our special story

• Indian crypto exchanges cheer OECD's new tax reporting framework amid a decline in trading volumes. They hope the OECD's Crypto-Asset Reporting Framework (CARF) will prompt India to frame its own regulations and lower taxes, reviving the crypto market.
  
  
• Google will begin accepting cryptocurrency payments for cloud services early next year. The tech firm announced that it will accept cryptocurrency payments via an integration with the cryptocurrency exchange Coinbase.
  
  
• US authorities fined cryptocurrency exchange Bittrex $24 million for assisting clients in evading US sanctions in places such as Syria, Iran, and Crimea.
  
  
• Morgan Stanley said in a report that the crypto ecosystem is becoming less decentralised. The blockchains themselves may be decentralised, but the report said that as crypto regulation develops, the need to run a large part of the blockchain on a single or small group of cloud providers could be a risk.

For the fourth consecutive quarter, the global PC market saw a decline in shipments, and this decline was the steepest on record due to economic uncertainty and an excess of unsold inventory.

• Desktop and laptop shipments worldwide fell 19.5% in the third quarter of 2022, according to research firm Gartner.

It was the biggest drop Gartner has seen in more than two decades of tracking the market.

Despite a 15% drop in shipments, Gartner reports that Lenovo Group Ltd. is still the world's largest PC maker in the third quarter. The third quarter was the worst for all of the top five vendors, but HP Inc. was hit the hardest, down 28%.

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