Until recently, staffing shortages at Biggby Coffee were so severe that many of the chain’s 300-plus stores had to close early some days, or in some cases not open at all. But while hiring remains a challenge, the pressure has begun to ease, said Mike McFall, the company’s co-founder and co-chief executive. One franchisee recently told him that 22 of his 25 locations were fully staffed and that only one was experiencing a severe shortage.

“We are definitely feeling the burden is lifting in terms of getting people to take the job,” Mr. McFall said. “We’re getting more applications, we’re getting more people through training now.”

The shift is a welcome one for business owners like Mr. McFall. He said franchisees have had to raise wages 50 percent or more to attract and retain workers — a cost increase they have offset by raising prices.

“The expectation by the consumer is that you are raising prices, and so if you don’t take advantage of that moment, you are going to be in a pickle,” he said, referring to the pressure to increase wages. “So you manage it by raising prices.”

So far, Mr. McFall said, higher prices haven’t deterred customers. Still, he said, the period of severe staffing shortages is not without its costs. He has seen a loss in sales, as well as a loss of efficiency and experienced workers. That will take time to rebuild, he said.

“When we were in crisis, it was all we were focused on,” he said. “So now that it feels like the crisis is mitigating, that it’s getting a little better, we can now begin to focus on the culture in the stores and try to build that up again.”

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Live Updates: Ukraine Steps Up Information War, Seeking to Exploit Russian Setbacks

WASHINGTON — The strategy behind Ukraine’s rapid military gains in recent days began to take shape months ago during a series of intense conversations between Ukrainian and U.S. officials about the way forward in the war against Russia, according to American officials.

The counteroffensive — revised this summer from its original form after urgent discussions between senior U.S. and Ukrainian officials — has succeeded beyond most predictions. Ukrainian forces have devastated Russian command and control, and appear poised to capitalize on their advances in the northeast of the country and in another campaign in the south.

The work began soon after President Volodymyr Zelensky of Ukraine told his generals he wanted to make a dramatic move to demonstrate that his country could push back on the Russian invasion. Under his orders, the Ukrainian military devised a plan to launch a broad assault across the south to reclaim Kherson and cut off Mariupol from the Russian force in the east.

The Ukrainian generals and American officials believed that such a large-scale attack would incur immense casualties and fail to quickly retake large amounts of territory. The Ukrainians were already suffering hundreds of casualties a day in what had become a grinding conflict. The Russian forces were experiencing similar losses but were still inching forward, laying waste to Ukrainian towns in the eastern region of Donbas.

Long reluctant to share details of their plans, the Ukrainian commanders started opening up more to American and British intelligence officials and seeking advice.

Jake Sullivan, the national security adviser, and Andriy Yermak, a top adviser to Mr. Zelensky, spoke multiple times about the planning for the counteroffensive, according to a senior administration official. Gen. Mark A. Milley, the chairman of the Joint Chiefs of Staff, and senior Ukrainian military leaders regularly discussed intelligence and military support.

And in Kyiv, Ukrainian and British military officials continued working together while the new American defense attaché, Brig. Gen. Garrick Harmon, began having daily sessions with Ukraine’s top officers.

Time was of the essence, U.S. and Ukrainian officials believed. To mount an effective counterattack, the Ukrainians needed to move before the first snow, when President Vladimir V. Putin of Russia would be able to use his control of gas supplies to pressure Europe.

This account of the lead-up to the counteroffensive is based on interviews with multiple senior American officials and others briefed on the classified discussions between Washington and Kyiv that helped Ukrainian commanders shape the battle. Many spoke on the condition of anonymity because of the secret nature of the talks.

American officials were hesitant to judge the full impact of the counteroffensive, anxious to see how it continues to play out. For now, Kyiv has the advantage.

One critical moment this summer came during a war game with U.S. and Ukrainian officials aimed at testing the success of a broad offensive across the south. The exercise, reported earlier by CNN, suggested such an offensive would fail. Armed with the American skepticism, Ukrainian military officials went back to Mr. Zelensky.

“We did do some modeling and some tabletop exercises,” Colin Kahl, the Pentagon’s policy chief, said in a telephone interview. “That set of exercises suggested that certain avenues for a counteroffensive were likely to be more successful than others. We provided that advice, and then the Ukrainians internalized that and made their own decision.”

The stakes were huge. Ukraine needed to demonstrate that this was not going to become just another frozen conflict, and that it could retake territory, for the morale of its people and to shore up support of the West.

Throughout August, at the behest of Ukrainians, U.S. officials stepped up feeds of intelligence about the position of Russian forces, highlighting weaknesses in the Russian lines. The intelligence also indicated that Moscow would struggle to quickly reinforce its troops in northeast Ukraine or move troops from the south, even if it detected Ukrainian preparations for the counteroffensive.

“We saw the fact that the Russians actually relocated a lot of their best forces down to the south in preparation for the other counteroffensive that the Ukrainians kicked off,” Mr. Kahl said. “So we had reason to believe that because of the persistent morale challenges, and the pressure of the Ukrainians, that there might be pockets of the Russian military that are a little more brittle than they appear on paper.”

Instead of one large offensive, the Ukrainian military proposed two. One, in Kherson, would most likely take days or weeks before any dramatic results because of the concentration of Russian troops. The other was planned for near Kharkiv.

Together Britain, the United States and Ukraine conducted an assessment of the new plan, trying to war game it once more. This time officials from the three countries agreed it would work — and give Mr. Zelensky what he wanted: a big, clear victory.

But the plan, according to an officer on the general staff in Kyiv, depended entirely on the size and pace of additional military aid from the United States.

Ukraine, a former Soviet republic that had used older Soviet weapons, exhausted most of its own ammunition. Learning how to use new weapons systems in the middle of the war is difficult. But so far the risky move has proved successful. More than 800,000 rounds of 155-millimeter artillery shells, for instance, have been sent to Kyiv, helping fuel its current offensives. The United States alone has committed more than $14.5 billion in military aid since the war started in February.

Before the counteroffensive, Ukraine’s armed forces sent the United States a detailed list of weapons they needed to make the plan successful, according to the Ukrainian officer.

Specific weapons, like the High Mobility Artillery Rocket System, or HIMARS, are having an outsize effect on the battlefield. The satellite-guided rockets fired by these launch vehicles, called GMLRS, each contain a warhead with 200 pounds of explosives and have been used in recent weeks by Ukrainian forces to destroy more than 400 Russian arms depots, command posts and other targets, American officials said.

More recently, Ukrainian forces have put American-supplied HARM air-launched missiles on Soviet-designed MiG-29 fighter jets, which no air force had ever done. The missiles have been particularly effective in destroying Russian radars.

“We are seeing real and measurable gains from Ukraine in the use of these systems,” General Milley said last week in Germany at a meeting of 50 countries that are helping Ukraine with military and humanitarian aid. “They’re having great difficulty resupplying their forces and replacing their combat losses.”

Ukrainian and American officials said the now weekly or biweekly Pentagon announcements of new shipments of weapons and munitions from American stockpiles have given Kyiv’s senior commanders the confidence to plan complex simultaneous offensives.

“The importance of Western military support is not just in specific weapons systems, but in the assurance and confidence that the Ukrainians can use in their future planning,” said Jack Watling, a senior research fellow at the Royal United Services Institute in London, who recently returned from Ukraine.

As Ukrainian soldiers moved into areas in the northeast over the weekend, Russian forces crumbled. In some places around Kharkiv, Russian troops just walked away from the battle, leaving behind equipment and ammunition, according to U.S. defense officials.

The Kherson attack was never a feint or a diversion, according to people briefed on the plan. And it has succeeded in forcing Moscow to delay sham votes on whether parts of the Kherson region want to join Russia. But, as expected, the counteroffensive is moving more slowly given the much higher number of Russian forces there compared with Kharkiv.

Eventually, Ukrainian officials believe their long-term success requires progress on the original goals in the discarded strategy, including recapturing the nuclear power plant in Zaporizhzhia, cutting off Russian forces in Mariupol and pushing Russian forces in Kherson back across the Dnipro River, American officials said.

Russia has been weakened. By failing to detect Ukraine’s buildup around Kharkiv, the Russian military has demonstrated incompetence and shown that it lacks solid intelligence. Its command and control have been decimated and it is having trouble supplying its troops, giving Ukraine an opening in the coming weeks, U.S. officials said.

While Ukraine may have an opportunity to recapture more territory in the east, U.S. and Ukrainian officials say the south is the most important theater of the war.

“Kherson and Zaporizhzhia are likely potential objectives,” said Michael Kofman, the director of Russia studies at CNA, a defense research institute. “We might see further Ukrainian Army operations to achieve breakthroughs there in the future.”

The plan that emerged from the midsummer discussions relied heavily on U.S. intelligence and high-tech weaponry. But American officials insist that credit for the offensive lies fully with Mr. Zelensky and the Ukrainian military, which led a relatively small force in Kharkiv to an outsize victory.

“No one is spiking the football yet,” Mr. Kahl said. But, he added: “I think it really demonstrates to the world that the Ukrainians are capable of conducting complex, offensive operations.”

Andrew E. Kramer contributed reporting from Kharkiv, Ukraine, and Michael Schwirtz from New York.

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Third Point discloses stake of nearly $1 bln in Disney, pushes for changes

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Aug 15 (Reuters) – Hedge fund Third Point on Monday disclosed a stake of roughly $1 billion in Walt Disney Co (DIS.N) and said it plans to push the media company to make a string of changes, from spinning off cable sports channel ESPN to buying back shares and adding new board members.

Billionaire investor Daniel Loeb, who runs Third Point, made a U-turn on Disney when he built a new stake in the second quarter, not long after exiting his position months earlier when fears about rising prices and faster interest rate hikes sparked a sharp market selloff.

Now Third Point, owning roughly 0.4% of the company known for its theme parks and movies like “Aladdin” and “Frozen,” is back with praise for the company’s CEO, Robert Chapek, and a list of initiatives he and the board should pursue to boost growth.

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“Our confidence in Disney’s current trajectory is

such that we have, in recent weeks, repurchased a significant stake in the Company,” Loeb wrote to Chapek in a letter seen by Reuters. Loeb wrote after Disney said quarterly profit jumped 50% and its streaming subscriptions overtook Netflix’s. read more

Chapek has weathered criticism in Hollywood over a 2021 dispute with Scarlett Johansson, the star of the Marvel film “Black Widow,” and a political storm over the company’s response to a new education law in Florida, where the company employs some 80,000 people.

Disney initially kept quiet about the measure, which limits classroom discussion of gender identity and sexual orientation, prompting criticism from that community and some employees. It later condemned the law, causing Florida Governor Ron DeSantis to rail against “Woke Disney.” read more

Loeb wrote that management may already be considering the changes he proposed, including cost cuts, paying down debt and buying back shares.

He said Disney’s board needs to be refreshed, finding “gaps in talent and experience as a group that must be addressed.” Loeb said he has identified potential directors but declined to elaborate.

Disney said in a statement it welcomes “the views of all our investors.” It noted the company’s revenue and profit growth under Chapek’s leadership, adding that its board “has significant expertise in branded, consumer-facing and technology businesses.”

Activist investors often push their agendas by trying to win board seats either through an invitation from the company or by rallying other investors to back the directors in a vote.

A major suggestion by Loeb involves ESPN, which he thinks should be spun off to shareholders. He urged Disney to hire bankers and lawyers to “reassess the desirability of the transaction in the current environment” after Disney had already considered it.

One industry trade publication, Puck, reported last year that Disney had considered spinning off ESPN as the network lost cable subscribers. The same publication reported last month that this option was no longer under consideration, and that live sports is considered a “linchpin” of the company’s business.

Loeb also proposed that Disney accelerate the timetable for buying the remaining stake in Hulu from minority stakeholder Comcast Corp (CMCSA.O) ahead of the planned 2024 acquisition. This would clear the way for Hulu to be integrated into the Disney+ technology platform and save money.

Disney’s stock, which has fallen roughly 21% since January, was up 2.2% at $124.21 on Monday afternoon. Loeb has previously pushed for changes at companies ranging from Nestle SA (NESN.S) to healthcare company Baxter International Inc (BAX.N).

Like other prominent hedge fund managers, Loeb has weathered double-digit losses this year and tried to limit the damage by selling out of nearly all technology names earlier in the year, sources said. Third Point bought back in to Disney at a lower level than when it first invested in 2020.

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Reporting by Svea Herbst-Bayliss in Boston and Dawn Chmielewski in Los Angeles
Editing by Mark Porter and Matthew Lewis

Our Standards: The Thomson Reuters Trust Principles.

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China’s Options for Punishing Taiwan Economically are Limited

In retaliation for Speaker Nancy Pelosi’s visit to Taiwan last week, China conducted large-scale military exercises around the self-governing island democracy and suspended some trade between the sides.

The exercises led to a few shipping disruptions, but they did not affect traffic at Taiwanese or Chinese ports, analysts say. And the trade bans were notable mainly for what they did not target: Taiwan’s increasingly powerful semiconductor industry, a crucial supplier to Chinese manufacturers.

The bans that Beijing did impose — on exports of its natural sand to Taiwan, and on imports of all Taiwanese citrus fruits and two types of fish — were hardly an existential threat to the island off its southern coast that it claims as Chinese territory.

Taiwanese pineapples, wax apples and grouper fish, among other products.

a self-governing island democracy of 23 million people, as its territory and has long vowed to take it back, by force if necessary. The island, to which Chiang Kai-shek’s Chinese forces retreated after the Communist Revolution of 1949, has never been part of the People’s Republic of China.

“The political message is greater than the economic hit,” said Chiao Chun, a former trade negotiator for the Taiwanese government.

Even though about 90 percent of Taiwan’s imported gravel and sand comes from China, most of that is manufactured. China accounted for only about 11 percent of Taiwan’s natural sand imports in the first half of this year, according to the Bureau of Mines.

The two types of Taiwanese fish exports that China restricted last week — chilled white striped hairtail and frozen horse mackerel — are collectively worth about $22 million, less than half the value of the Taiwanese grouper trade that was banned earlier this year. They are also less dependent on the Chinese market.

As for Taiwan’s half-a-billion-dollar citrus industry, its shipments to China account for only 1.1 percent of the island’s total agricultural exports, according to Taiwan’s Agriculture Council. A popular theory is that Beijing singled out citrus farmers because most orchards are in southern Taiwan, a stronghold for the governing political party, the Democratic Progressive Party, a longtime target of Beijing’s anger.

Future bans may become more targeted to punish industries in counties that are D.P.P. strongholds, said Thomas J. Shattuck, an expert on Taiwan at the University of Pennsylvania’s Perry World House. There may also be less retaliation against counties run by the Kuomintang opposition party “in an attempt to put a finger on the scale for Taiwan’s local, and even national, elections,” he added.

increasingly indispensable node in the global supply chains for smartphones, cars and other keystones of modern life. One producer, the Taiwan Semiconductor Manufacturing Company, makes roughly 90 percent of the world’s most advanced semiconductors, and sells them to both China and the West.

simulated a blockade of Taiwan.

Even though some of the exercises took place in the Taiwan Strait, a key artery for international shipping, they did not disrupt access to ports in Taiwan or southern China, said Tan Hua Joo, an analyst at Linerlytica, a company in Singapore that tracks data on the container shipping industry. He added that port congestion would build only if the strait was completely blocked, port access was restricted or port operations were hampered by a labor or equipment shortage.

“None of these are happening at the moment,” he said.

Vessels that chose to avoid the Taiwan Strait last week because of the Chinese military’s “chest beating” activities would have faced a 12- to 18-hour delay, an inconvenience that would generally be considered manageable, said Niels Rasmussen, the chief shipping analyst at Bimco, an international shipping association.

If Beijing were to escalate tensions in the future, it would indicate that it was willing to put at risk China’s own economy as well as its trade and relations with Japan, South Korea, Europe and the United States, Mr. Rasmussen said by phone from his office near Copenhagen.

“That’s just difficult to accept that they would take that decision,” he added. “But then again, I didn’t expect Russia to invade Ukraine.”

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U.S. Stocks Rise As More Big Companies Report Solid Earnings

By Associated Press
August 3, 2022

Oil prices are steady after the OPEC oil cartel and its allies decided to boost production in September by a much slower pace than in previous months.

Stocks rose in afternoon trading on Wall Street Wednesday as investors reviewed another, mostly encouraging, batch of earnings from several big companies.

The S&P 500 rose 1.3% as of 12:01 p.m. Eastern. The Dow Jones Industrial Average rose 330 points, or 1%, to 32,732 and the Nasdaq rose 2.1%. The gains helped indexes recover most of this week’s losses. Technology companies, retailers and communications companies were some of the biggest winners. Sectors considered less risky, such as utilities and consumer goods makers, lagged the broader market.

Wall Street also received a surprisingly good report on a key part of the economy. The services sector, which makes up the bulk of the U.S. economy, unexpectedly grew in July, according to the Institute for Supply Management.

The yield on the 10-year Treasury rose to 2.78% from 2.73% late Tuesday.

Earnings remain in focus this week as investors parse the latest results and statements from companies to better understand how inflation is affecting businesses and consumers.

Drugstore chain CVS rose 5.5% after reporting solid financial results and raising its profit forecast for the year. Starbucks rose 3.2% after also reporting solid financial results. Nearly three-quarters of companies within the benchmark S&P 500 have reported earnings for the latest quarter and the results have mostly beaten analysts’ forecasts.

Several companies, though, have slipped amid disappointing results. Taco Bell owner Yum Brands fell 2.6% following a weak earnings report and online dating service company Match Group lost about a fifth of its value after giving investors a weak financial forecast.

PayPal jumped 9.6% on a report that activist investor Elliott Management has taken a large stake in the payment company.

Robinhood Markets, whose stock trading app helped bring a new generation of investors to the market, rose 14.2% following an announcement that it’s cutting nearly a quarter of its workforce. Crashing cryptocurrency prices and a turbulent stock market have kept more customers off its app.

Oil prices remained mostly steady following OPEC’s decision to boost production in September at a much slower pace than previous months.

Markets are also watching for potential economic fallout from China after U.S. House Speaker Nancy Pelosi’s visit to Taiwan. China claims self-ruled Taiwan as part of its territory, and banned imports of Taiwanese citrus fruits and frozen fish in retaliation for Pelosi’s visit. But it has avoided disrupting the flow of computer chips and other industrial goods, a step that could jolt the global economy.

Upcoming data on the jobs market could help investors determine how the Federal Reserve will move ahead with its interest rate policy, which has been aggressive in an effort to try and tame inflation. U.S. jobless claims numbers for last week will be released Thursday, and the government issues its July jobs report on Friday.

Additional reporting by The Associated Press.

Source: newsy.com

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China Blocks Some Taiwan Imports But Avoids Chip Disruptions

China blocked imports of hundreds of food items from Taiwan but has not disrupted the flow of processor chips and other industrial components.

China blocked imports of citrus, fish and other foods from Taiwan in retaliation for a visit by a top American lawmaker, Nancy Pelosi, but has avoided disrupting one of the world’s most important technology and manufacturing relationships.

The two sides, which split in 1949 after a civil war, have no official relations but multibillion-dollar business ties, especially in the flow of Taiwanese-made processor chips needed by Chinese factories that assemble the world’s smartphones and other electronics.

They built that business while Beijing threatened for decades to enforce the ruling Communist Party’s claim to the island by attacking.

Two-way trade soared 26% last year to $328.3 billion. Taiwan, which produces half the world’s processor chips and has technology the mainland can’t match, said sales to Chinese factories rose 24.4% to $104.3 billion.

“The global economy cannot function without chips that are made in either Taiwan or China,” Carl B. Weinberg of High-Frequency Economics said in a report.

On Wednesday, Beijing blocked imports of citrus and frozen hairtail and mackerel from Taiwan after Pelosi, speaker of the House of Representatives, arrived on the island. China has not disrupted the flow of chips and other industrial components, a step that would send shock waves through the shaky global economy.

Also this week, China blocked imports of hundreds of other food items from Taiwan including cookies and seafood, though the timing was unclear. The customs website showed their import status was switched to “suspended.”

Fruit, fish and other foods are a small part of Taiwan’s exports to China, but the ban hurts areas that are seen as supporters of President Tsai Ing-wen.

Beijing has used import bans on bananas, wine, coal and other goods as leverage in disputes with Australia, the Philippines and other governments.

Beijing also announced four days of military exercises with artillery fire in waters around Taiwan. That might delay or disrupt shipping to and from the island, one of the biggest global traders.

The potential disruption adds to concerns over weakening global economic growth, but Asian stock markets rose Wednesday after there was no immediate sign of Chinese military action.

The Communist Party says Pelosi’s visit might embolden Taiwan to make its decades-old de facto independence permanent. Beijing says that would lead to war.

The administration of U.S. President Joe Biden has tried to mollify Beijing, saying there is no change in Washington’s “one China policy.” That says the United States takes no position on the status of the two sides but wants their dispute settled peacefully.

Washington has no formal relations with Taiwan but maintains unofficial ties and is obligated by federal law to see the island has the means to defend itself.

Meeting leaders in Taiwan, Pelosi said she and members of Congress traveling with her were showing they will not abandon their commitment to the island democracy.

“America’s determination to preserve democracy, here in Taiwan and around the world, remains ironclad,” Pelosi said in a short speech during a meeting with the president, Tsai. She departed later in the day for South Korea.

“Facing deliberately heightened military threats, Taiwan will not back down,” Tsai said.

Taiwanese companies have invested nearly $200 billion in the mainland over the past three decades, according to the island’s government. Entrepreneurs, engineers and others have migrated to the mainland to work, some recruited by Chinese chipmakers and other companies that want to catch up with Taiwan.

A 2020 census found 158,000 Taiwanese living on the mainland, according to the police ministry.

Taiwan plays an outsized role in the chip industry for an island of 24.5 million people, accounting for more than half the global supply.

Its producers including Taiwan Semiconductor Manufacturing Corp. make the most advanced processors for smartphones, tablet computers, medical devices and other products.

Beijing has invested billions of dollars in developing its own industry, which supplies low-end chips for autos and appliances but cannot support the latest smartphones, tablet computers, medical devices and other products.

Chips are China’s biggest import at more than $400 billion a year, ahead of crude oil.

That concentration has fueled concern in the United States and Europe about relying too heavily on supplies from East Asia. The U.S. government is trying to expand America’s production capacity.

Overall, China is Taiwan’s biggest trading partner, taking more than twice as much of its exports as the United States, the island’s No. 2 foreign market.

Beijing has tried to use access to its markets to undermine Tsai and other Taiwanese leaders it accuses of pursuing independence.

The Communist Party also has used military action in the past to try to hurt Taiwanese leaders by disrupting the island’s economy.

The mainland tried to drive voters away from then-President Lee Teng-hui ahead of the island’s first direct presidential elections in 1996 by firing missiles into shipping lanes.

That forced shippers to cancel voyages and raised insurance costs but backfired by allowing Lee to brag about standing up to Beijing in front of cheering supporters. Lee won the four-way election with 54% of the vote.

Additional reporting by The Associated Press.

Source: newsy.com

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Loans Could Burn Start-Up Workers in Downturn

SAN FRANCISCO — Last year, Bolt Financial, a payments start-up, began a new program for its employees. They owned stock options in the company, some worth millions of dollars on paper, but couldn’t touch that money until Bolt sold or went public. So Bolt began providing them with loans — some reaching hundreds of thousands of dollars — against the value of their stock.

In May, Bolt laid off 200 workers. That set off a 90-day period for those who had taken out the loans to pay the money back. The company tried to help them figure out options for repayment, said a person with knowledge of the situation who spoke anonymously because the person was not authorized to speak publicly.

Bolt’s program was the most extreme example of a burgeoning ecosystem of loans for workers at privately held tech start-ups. In recent years, companies such as Quid and Secfi have sprung up to offer loans or other forms of financing to start-up employees, using the value of their private company shares as a sort of collateral. These providers estimate that start-up employees around the world hold at least $1 trillion in equity to lend against.

start-up economy now deflates, buffeted by economic uncertainty, soaring inflation and rising interest rates, Bolt’s situation serves as a warning about the precariousness of these loans. While most of them are structured to be forgiven if a start-up fails, employees could still face a tax bill because the loan forgiveness is treated as taxable income. And in situations like Bolt’s, the loans may be difficult to repay on short notice.

badly burned by loans related to their stock options.

Ted Wang, a former start-up lawyer and an investor at Cowboy Ventures, was so alarmed by the loans that he published a blog post in 2014, “Playing With Fire,” advising against them for most people. Mr. Wang said he got a fresh round of calls about the loans anytime the market overheated and always felt obligated to explain the risks.

“I’ve seen this go wrong, bad wrong,” he wrote in his blog post.

Start-up loans stem from the way workers are typically paid. As part of their compensation, most employees at privately held tech companies receive stock options. The options must eventually be exercised, or bought at a set price, to own the stock. Once someone owns the shares, he or she cannot usually cash them out until the start-up goes public or sells.

Uber and Airbnb put off initial public offerings of stock as long as they could, hitting private market valuations in the tens of billions of dollars.

That meant many of their workers were bound by “golden handcuffs,” unable to leave their jobs because their stock options had become so valuable that they could not afford to pay the taxes, based on the current market value, on exercising them. Others became tired of sitting on the options while they waited for their companies to go public.

The loans have given start-up employees cash to use in the meantime, including money to cover the costs of buying their stock options. Even so, many tech workers do not always understand the intricacies of equity compensation.

“We work with supersmart Stanford computer science A.I. graduates, but no one explains it to them,” said Oren Barzilai, chief executive of Equitybee, a site that helps start-up workers find investors for their stock.

Secfi, a provider of financing and other services, has now issued $700 million of cash financing to start-up workers since it opened in 2017. Quid has issued hundreds of millions’ worth of loans and other financing to hundreds of people since 2016. Its latest $320 million fund is backed by institutions, including Oaktree Capital Management, and it charges those who take out loans the origination fees and interest.

So far, less than 2 percent of Quid’s loans have been underwater, meaning the market value of the stock has fallen below that of the loan, said Josh Berman, a founder of the company. Secfi said that 35 percent of its loans and financing had been fully paid back, and that its loss rate was 2 to 3 percent.

congratulatory flourish on Twitter in February, writing that it showed “we simply CARE more about our employees than most.”

The company’s program was meant to help employees afford exercising their shares and cut down on taxes, he said.

Bolt declined to comment on how many laid-off employees had been affected by the loan paybacks. It offered employees the choice of giving their start-up shares back to the company to repay their loans. Business Insider reported earlier on the offer.

Mr. Breslow, who stepped down as Bolt’s chief executive in February, did not respond to a request for comment on the layoffs and loans.

In recent months, he has helped found Prysm, a provider of nonrecourse loans for start-up equity. In pitch materials sent to investors that were viewed by The New York Times, Prysm, which did not respond to a request for comment, advertised Mr. Breslow as its first customer. Borrowing against the value of his stock in Bolt, the presentation said, Mr. Breslow took a loan for $100 million.

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Chinese Banking Scandal Tests Faith in Communist Party’s Leadership

BEIJING — The saving opportunity with the rural bank in central China looked, to Sun Song, a 26-year-old-businessman, like a great find. It would be linked to his existing account at a large, reputable state-owned bank. The rural bank was also offering high interest rates, making it seem like an ideal place to park his roughly $600,000 in savings.

Then the bank abruptly froze his account this year, and officials said they were investigating potential fraud. “I owe money on my credit card and have to repay my car loan,” he said. “I have two sons. They’re all waiting.”

The financial scandal ensnaring Mr. Sun and thousands of others across the country could pose a serious test to the ruling Communist Party, which prizes stability and its ability to control any threats to it. While the amount of money at risk is small relative to China’s economy, it strikes at the core promise of the party that it will provide a better future for the people.

slowest rate of growth since the beginning of the coronavirus pandemic.

physically attacked by a mob of men while police officers stood by. Many protesters have since reported being harassed by the police.

“The government takes our taxpayer money and then beats us,” Mr. Sun said in a phone interview before the authorities warned depositors against speaking to the media. “My worldview has been destroyed.”

tested by the economic slowdown, born in part of the government’s draconian campaign against the coronavirus and a regulatory crackdown on the once-booming real estate industry. This banking scandal has exposed more systemic issues in China’s financial system, including potential corruption and weak regulatory oversight at rural banks.

Zhiwu Chen, a professor of finance at the University of Hong Kong. “The extent of this anxiety shared by people is increasing very fast. It’s not good for social stability.”

surveillance apparatus, it is facing growing unease about the lack of safeguards to prevent the theft or misuse of personal data. Beijing’s move to censor news about one of the largest known breaches of a Chinese government computer system showed keen awareness of how security lapses can harm its credibility.

Immediately, officials tried to silence them. Censors shut down protesters’ messaging groups. The local authorities manipulated depositors’ mobile health codes — digital indicators that China uses to track coronavirus infections — to bar them from entering public spaces. But after the manipulation attracted widespread condemnation, local officials retreated, and protesters continued to gather, including on July 10.

Many of the demonstrators presented their demands as appeals, rather than challenges, to the Communist Party’s authority. Some waved Chinese flags. Others invoked Mr. Xi’s slogan of the “Chinese Dream” or carried a portrait of Mao Zedong. They were met with ferocity all the same. Men in plainclothes began hitting and kicking the protesters.

promised last week to repay the depositors — but only those who had put in less than 50,000 yuan, about $7,500, with details for the rest to be announced later. They also said they would not repay anyone who had used “additional channels” to obtain higher interest payments or those suspected of dealing with “illegal funds.”

Those stipulations were seemingly a nod to the police’s announcement about the suspected criminal gang. According to the police, the gang’s scheme included setting up illegal online platforms to solicit new customers.

Huang Lei, a lawyer in the eastern city of Hangzhou who has worked on fraud cases, said people who had unknowingly participated in an illegal scheme should still be entitled to repayment. But he acknowledged that, in reality, they might have little recourse.

“The other party is eager to characterize it as illegal — they’ve described it four or five different ways — because they don’t want to take responsibility,” he said of the authorities. Even if the depositors sued for repayment and won, he added, the bank might not have adequate assets to make them whole, and it was unclear if the state would make up the difference.

Indeed, the scandal has raised broader questions about who is accountable for the lost money, besides the suspected criminals.

the deteriorating economy has put more pressure on those same institutions. As a result, Professor Chen said, “I expect to see more rural banks having to face the same kind of problems as the Henan rural banks.”

There are most likely hidden debts spread across China’s financial sphere. The country’s seemingly unstoppable growth over the past few decades had encouraged speculative borrowing and lending behavior by everyone from online lenders to major real estate companies.

The government has sought to downplay concerns about a broader problem. China’s central bank said last week that 99 percent of China’s banking assets were “within the safe boundary.”

Still, it will now be up to the government to decide how to address the losses both in Henan and those yet to be revealed, said Michael Pettis, a professor of finance at Peking University. Officials could allow institutions to default, hurting lenders; they could squeeze workers; they could print more money, leading to inflation. In the end, Professor Pettis said, “somebody’s got to absorb the loss.”

For the Henan depositors, the fear is that it will be them.

Wang Xiaoping, a 39-year-old software industry employee from Hangzhou, said she had put about $95,000 into one of the rural banks. But all she had to show for it was an injured chin, from being attacked by a man wearing black at the Zhengzhou protest. She tried to report the assault to the police, but they told her to go to another district, she said.

“I told the police, I’m willing to die here,” she said in an interview on July 10. “This is my entire net worth, this is all of my paychecks put together, and it’s gone just like that.”

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China’s Surveillance State Encounters Public Resistance

Chinese artists have staged performances to highlight the ubiquity of surveillance cameras. Privacy activists have filed lawsuits against the collection of facial recognition data. Ordinary citizens and establishment intellectuals alike have pushed back against the abuse of Covid tracking apps by the authorities to curb protests. Internet users have shared tips on how to evade digital monitoring.

As China builds up its vast surveillance and security apparatus, it is running up against growing public unease about the lack of safeguards to prevent the theft or misuse of personal data. The ruling Communist Party is keenly aware of the cost to its credibility of any major security lapses: Last week, it moved systematically to squelch news about what was probably the largest known breach of a Chinese government computer system, involving the personal information of as many as one billion citizens.

The breach dealt a blow to Beijing, exposing the risks of its expansive efforts to vacuum up enormous amounts of digital and biological information on the daily activities and social connections of its people from social media posts, biometric data, phone records and surveillance videos. The government says these efforts are necessary for public safety: to limit the spread of Covid, for instance, or to catch criminals. But its failure to protect the data exposes citizens to problems like fraud and extortion, and threatens to erode people’s willingness to comply with surveillance.

for mishandling data. But the authorities rarely point fingers at the country’s other top collector of personal information: the government itself.

Security researchers say the leaked database, apparently used by the police in Shanghai, had been left online and unsecured for months. It was exposed after an anonymous user posted in an online forum offering to sell the vast trove of data for 10 Bitcoin, or about $200,000. The New York Times confirmed parts of a sample of the database released by the anonymous user, who posted under the name ChinaDan.

In addition to basic information like names, addresses and ID numbers, the sample featured details that appeared to be drawn from external databases, like instructions for couriers on where to drop off deliveries, raising questions about how much information private companies share with the authorities. Of particular concern for many, it also contained intensely personal information, such as police reports that included the names of people accused of rape and domestic violence, as well as private information about political dissidents.

leaked databases used by the police in China that were left online with little to no protection; some contained facial recognition records and ID scans of people in a Muslim ethnic minority region.

Now, there are signs that people are growing wary of the government and public institutions, too, as they see how their own data is being used against them. Last month, a nationwide outcry erupted over the apparent abuse of Covid-19 tracking technology by local authorities.

Protesters fighting to recover their savings from four rural banks in the central Chinese city of Zhengzhou found that the mobile apps used to identify and isolate people who might be spreading Covid had turned from green — meaning safe — to red, a designation that would prevent them from moving freely.

“There is no privacy in China,” said Silvia Si, 30, a protester whose health code had turned red. The authorities in Zhengzhou, under pressure to account for the episode, later punished five officials for changing the codes of more than 1,300 customers.

posted on Weibo that he was refusing to wear an electronic bracelet to track his movements while in isolation, saying the device was an “electronic shackle” and an infringement on his privacy. The post was liked around 60,000 times, and users flooded it with responses. Many said the bracelet reminded them of the treatment of criminals; others called it a ploy to surreptitiously collect personal information. The post was later taken down by censors, the blogger said.

researcher on technology policy at Yale Law School and New America. “People are far more trusting overall in how government entities handle their personal information and far more suspicious about the corporate sector.”

Legal analysts said any disciplinary actions resulting from the Shanghai police database breach were unlikely to be publicized. There are few mechanisms in place to hold Chinese government agencies responsible for their own data leaks. For many citizens, that lack of recourse has contributed to a sense of resignation.

Occasionally, though, they notch small victories, as Xu Peilin did when she took on her neighborhood committee last year. She had returned to her apartment building in Beijing one day to find that the compound wanted residents to submit to a facial recognition scanner to enter.

“It was insane,” said Ms. Xu, 37, a project manager at a start-up company. She said it reminded her of one of her favorite television shows, the British science fiction series “Black Mirror.”

Ms. Xu badgered her neighborhood committee by telephone and text message until it relented. For now, Ms. Xu said, she can still enter her compound using her key card, though she believed it was only a matter of time until the facial recognition devices became mandatory again.

“All I can do for now,” she said, “is continue to resist on a small scale.”

Zixu Wang contributed reporting.

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