Hey Cowboys,
Happy Wednesday! We’re bringing you a fresh round of DTC, retail, tech, and ecommerce news to unpack.
We’re kicking things off with the biggest stories, trends, and moves operators should have on their radar this week.
Today’s lineup 👇 and stories.
From Building Cult Brands to Building Audiences
Today we’re chatting about how to earn attention, turn it into customers, and build brands that people actually care about.
Jared Gutstadt - Founder, Rebel Audio
Matt D’Elia - Writer/Director & Host, "Matt D'Elia Is Confused"
JT Sarafa - Founder, JTS Growth; Co-Owner, Pop Daddy Snacks
Alex McEchern - Head of Marketing, Intelligems
Zuckerberg's Secret Plan to Replace Meta Staff With AI
Meta's Project OT, a plan hatched at Mark Zuckerberg's January leadership retreat in Hawaii to make the company "AI native" by having AI take over much of the daily work of thousands of employees, with scenario planning that explored slashing some teams by as much as 60% across two layoff waves. Hours before the first wave hit on May 20, Zuckerberg called off the second round planned for November, as employees openly revolted and internal data showed the AI agent technology at the center of the strategy was failing to deliver.
The Rundown:
Project OT, short for Organization Transformation, envisioned virtual AI workers overseen by smaller "talent-dense" cadres of humans, with cuts one HR executive projected could match or exceed Meta's roughly 25% reduction of 2022-2023
The plan called for two waves: a May purge followed by a November shake-up, supplemented by closing open roles and pushing out perceived low performers
Meta proceeded with the May 20 layoff of 10% of employees but Zuckerberg killed planning for the November wave the night before
By June at least 11 units had adopted small "tech pods" of two to three engineers plus a designer running four-week sprints, with traditional titles replaced by "builder" and middle management layers eliminated
A "village approach" put performance ratings in the hands of "Org Leads" overseeing 30 to 50 people, supported by HR and unspecified "AI systems"; Meta insists ratings decisions are made by people, not AI
Meta mandated tracking software on U.S. employees' devices to capture keystrokes and mouse clicks to train AI agents, leading staff to conclude they were training their own replacements; the program was later paused
Employees flooded Workplace with elephant photos symbolizing the layoffs as the elephant in the room, clashed with CTO Andrew Bosworth, and internal favorability dropped from 74% to 55% as labor organizing gained momentum
The tech underdelivered: AI-generated code changes rose 220% year over year but user-facing feature changes rose only 36%, while technical and security incidents spiked 40% and firefighting time rose 70%
Hackers exploited Meta's AI customer support bot in June to access high-profile Instagram accounts, including the dormant Obama White House page
Zuckerberg conceded miscalculations at a July town hall, saying AI agents had not accelerated as fast as anticipated, then launched a "betting on people" PR blitz and a 6,500-word essay predicting company sizes may shrink but jobs will not
Meta confirmed Project OT existed, acknowledged the 60% scenarios, and said it never intended to cut 60% of its full workforce; the company faces a cash squeeze with at least $130 billion in planned AI infrastructure spend this year
Meta ran the most aggressive AI workforce replacement experiment of any major tech company and hit the wall within five months, undone by a workforce in revolt and agent technology that generated more code, more incidents, and little measurable productivity. Zuckerberg's careful "company-wide" and "this year" phrasing on future layoffs leaves the door open to team-level cuts, and with $130 billion in AI spending eating Meta's operating cash, the pressure that produced Project OT has not gone anywhere.
Top Stories: Meta’s $16B Settlement, Apple’s Slop Ad, and Bad Bad Golf
Meta $16B Settlement - Meta agreed to pay up to $16.7 billion to settle claims from 29 states that Facebook and Instagram harmed children and misled users about safety. The settlement would limit teens to two hours of daily use, block access from midnight to 6 a.m., and add stronger age verification. Meta’s stock rose 4.4% following the announcement.
Apple’s Slop Ad Goes Viral - Apple’s handcrafted claymation ad for the new Mac mini has gone viral, with Tim Cook’s post reaching 8.7 million views. The company also released a behind-the-scenes video showing animators sculpting and painting the entire spot by hand. The campaign highlights traditional stop-motion production as AI-generated advertising becomes more common.
Good Good Loses Retail - Good Good is facing a major retail and sponsorship fallout after a co-branded Callaway ad showed co-founder Garrett Clark shoving creator Alexis Miestowski to the ground. Callaway CEO Chip Brewer said the company approved the ad and has launched internal and external investigations. Golf Galaxy and Dick’s Sporting Goods have pulled Good Good merchandise, while Golf Channel postponed its Big Break x Good Good premiere.
Make SMS Your Biggest Revenue Channel with Postscript
Make SMS your biggest revenue channel.
You’re leaving money on the table when your customers text you back.
In a channel built for immediacy, 76% of brands can’t respond to customers in real-time. Postscript's AI Shopper is your always-on 1:1 shopping assistant that instantly answers questions and drives sales through meaningful customer engagement.
Nate Lagos was just on our show, he turned on AI Shopper made an additional $17K in one day while completely off-line. Needless to say, it works. The customers who text you back are one answer away from buying.
→ Get the Conversational Report — directtoconsumer.co/theconversationalreport
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See you on the stream,
Ecomm Cowboy Team