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  • Take MarketWatch’s 2023 Financial Literacy Quiz. Will you get 10/10?

    Take MarketWatch’s 2023 Financial Literacy Quiz. Will you get 10/10?

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    April is National Financial Literacy Month. To mark the occasion, MarketWatch will publish a series of “Financial Fitness” articles to help readers improve their fiscal health, and offer advice on how to save, invest and spend their money wisely. Read more here.

    Do you know the difference between a stock and a bond, or a mutual fund and an exchange-traded fund? MarketWatch put together a meat and potatoes — although that’s always relative — quiz for our savvy readers. We’ve stuck to some familiar topics — taxes, stocks, interest rates, savings and inflation. There are 10 questions — with one bonus question thrown in for good measure.

    You don’t know what you don’t know until you get an incorrect answer in a financial literacy quiz. Some of the questions are tricky, but we hope they are fun and that — most importantly — readers learn something new. Financial literacy helps us to plan for the future, gives us peace of mind and brings more understanding and less fear about the complex world of investing and retirement.

    Our aim is to raise awareness of Financial Literacy Month. If you get 10/10, including the bonus question, buy yourself (and a friend) a popsicle. If you didn’t answer all the questions correctly, buy yourself a popsicle anyway. We, at MarketWatch, aim to democratize and demystify financial news, and make this sometimes intimidating subject as accessible as possible.

    If you found it useful and/or entertaining, share it with a friend.

    –Quentin Fottrell

    Question 1: What is the difference between a tax deduction and a tax credit? 

    (a) A tax deduction reduces your income taxes directly. A tax credit reduces your taxable income. 

    (b) A tax deduction reduces your taxable income. A tax credit reduces your income taxes directly.

    (c) Both reduce your income taxes directly.

    Question 2: Which way do bond prices move when interest rates rise? 

    (a) Bond-market prices fall as interest rates rise. Bond prices rise when interest rates decline.

    (b) Bond-market prices rise as interest rates rise. Bond prices fall when interest rates decline.

    (c) Bond-market prices fall as interest rates rise, but bond prices also fall when interest rates decline.

    Question 3: What has been the average annual total return, with dividends reinvested, for the S&P 500 over the past 30 years? 

    (a) 9.7%, according to FactSet.

    (b) 3%, according to FactSet.

    (c) 6.5%, according to FactSet.

    Question 4: What is compound interest and how does it work? 

    (a) Compound interest reflects the linear gain that comes from all the reinvested interest of your savings and investments, which allows your initial investment/deposit to gain value regardless of the amount of interest you pay.

    (b) Compound interest reflects the exponential gain that comes from all the reinvested interest of your savings and investments, which allows your initial investment/deposit and the additional interest to increase in value.

    (c) Compound interest reflects the amount of interest you pay every month on a loan, and the total amount of interest you have paid over the lifetime of that loan.

    Question 5: What is APR and how is it different from a regular interest rate?

    (a) APR is the annual interest on a loan calculated on the initial loan, including additional costs and fees, but not on the accumulated interest incurred on the loan. 

    (b) APR is the annual interest on a loan calculated on the initial loan and the accumulated interest over the first year.

    (c) APR is the annual interest on a loan calculated on the initial loan, including additional costs and fees, and the accumulated interest over the lifetime of the loan loan.

    Question 6: What percentage of your income should you spend on rent?

    (a) Most real-estate experts say you should spend no more than 20% of your income on housing costs, which is considered to be a tipping point for becoming “cost-burdened.”

    (b) Most real-estate experts say you should spend no more than 50% of your income on housing costs, which is considered to be a tipping point for becoming “cost-burdened.”

    (c) Most real-estate experts say you should spend no more than 30% of your income on housing costs, which is considered to be a tipping point for becoming “cost-burdened.”

    Question 7: What’s an ETF? 

    (a) ETFs, or Exchange-Traded Funds, are baskets of investments — stocks, bonds, or commodities — that investors can buy throughout the trading day like stocks. 

    (b) ETFs, or Exchange-Traded Funds, are baskets of investments — stocks, bonds, or commodities — that investors can only buy at the end of the trading day. 

    (c) ETFs, or Exchange-Traded Funds, are baskets of investments — stocks, bonds, or commodities — that investors can only buy during or at the end of the trading day.

    Question 8: What is the difference between a stock and a bond? 

    (a) A stock is a temporary investment in a company, while a bond is issued by a company to reward shareholders. 

    (b) A stock is a share in the ownership of a company, while a bond is issued by a company to finance a loan. 

    (c) A stock is a share in the ownership of a company, while a bond is issued by a company to finance the stock.

    Question 9: If you were born in 1960 or later, at what age can you receive your full Social Security in the U.S.? Bonus question: At what age can you receive your maximum Social Security benefit?

    (a) Full retirement age in the U.S. is 65 for those born in 1960 and after. While you can start collecting your Social Security retirement benefits as early as 62, your benefits are permanently reduced. Your Social Security benefits max out at age 70. By delaying until 70, your benefit is 76% higher than if you had claimed at the earliest possible age (62).

    (b) Full retirement age in the U.S. is 65 for those born in 1960 and after. While you can start collecting your Social Security retirement benefits as early as 62, your benefits are permanently reduced. Your Social Security benefits max out at age 67. By delaying until 67, your benefit is 76% higher than if you had claimed at the earliest possible age (62).

    (c) Full retirement age in the U.S. is 67 for those born in 1960 and after. While you can start collecting your Social Security retirement benefits as early as 62, your benefits are permanently reduced by a small percentage each month until you reach 67. Your Social Security benefits max out at age 70. By delaying until 70, your benefit is 76% higher than if you had claimed at the earliest possible age (62).

    Question 10: What is the Federal Reserve’s desired rate of inflation? 

    (a) 2%

    (b) 3%

    (c) 2.5%

    Bonus question! What is considered a good credit score?

    (a) 560

    (b) 680

    (c) 800

    If you get 10/10, including the bonus question, buy yourself a popsicle.


    Getty Images/iStockphoto

    Answer 1: 

    (b) A tax deduction reduces your taxable income. A tax credit reduces your income taxes directly.

    Answer 2: 

    (a) Bond-market prices fall as interest rates rise. Bond prices rise when interest rates decline. 

    Answer 3: 

    (a) 9.7%, according to FactSet. 

    Answer 4: 

    (b) Compound interest reflects the exponential gain that comes from all the reinvested interest of your savings and investments, which allows your initial investment/deposit and the additional interest to increase in value.

    Answer 5: 

    (c) APR is the annual interest on a loan calculated on the initial loan, including additional costs and fees, and the accumulated interest over the lifetime of the loan. 

    Answer 6: 

    (c) Most real-estate experts say you should spend no more than 30% of your income on housing, which is considered to be a tipping point for becoming “cost-burdened.”

    Answer 7: 

    (a) ETFs are Exchange-Traded Funds. These are baskets of investments — stocks, bonds, or commodities — that investors can buy or sell throughout the trading day.  

    Answer 8: 

    (b) A stock is a share in the ownership of a company, while a bond is issued by a company to finance a loan. 

    Answer 9: 

    (c) Full retirement age in the U.S. is 67 for those born in 1960 and after. While you can start collecting your Social Security retirement benefits as early as 62, your benefits are permanently reduced. Your Social Security benefits max out at age 70. By delaying until 70, your benefit is 76% higher than if you had claimed at the earliest possible age (62).

    Answer 10: 

    (a) 2%

    Answer for bonus question! 

    (b) 680. Although credit scores vary depending on the model, according to Experian, credit scores between 580 and 669 are considered “fair,” scores between 670 and 739 are regarded as “good”; 740 to 799 are considered “very good”; and scores of 800 and above are considered “excellent.”

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  • S&P 500 books back-to-back loss as recession worries return

    S&P 500 books back-to-back loss as recession worries return

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    U.S. stocks closed mixed on Wednesday as weaker economic data weighed on equities and focus among investors returned to recession concerns. The Dow Jones Industrial Average
    DJIA,
    +0.24%
    gained about 80 points, or 0.2%, ending near 33,482, according to preliminary FactSet data, but the S&P 500 index
    SPX,
    -0.25%
    and Nasdaq Composite Index
    COMP,
    -1.07%
    fell 0.3% and 1.1%, respectively. That left the S&P 500 down for two straight days and the Nasdaq lower for a third day in a row. Investors were focused on an ADP report showing that private-sector employers added 145,000 jobs in March, well below the 210,000 expected by economists surveyed by The Wall Street Journal. Also, the bellwether Institute for Supply Management’s service sector activity index showed business conditions at U.S. companies fell to a three-month low of 51.2% in March.

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  • U.S. private-sector ‘pulling back’ adding 145,000 jobs in March, ADP

    U.S. private-sector ‘pulling back’ adding 145,000 jobs in March, ADP

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    The numbers: U.S. private payrolls climbed by 145,000 in March, according to the ADP National Economic report released on Wednesday. 

    Economists polled by The Wall Street Journal had forecast a gain of 210,000 private sector jobs.

    The private sector added a revised 261, 000 jobs in January.

    Key details: Service sector providers added 75,000 jobs in March. Leisure and hospitality added 98,000 workers. Meanwhile, goods producers added 70,000 jobs. Manufacturing shed 30,000 jobs.

    By company size, small businesses added 101,000 private-sector jobs in March while medium businesses added 33,000. Large-sized businesses added 10,000 jobs.

    Pay growth decelerated for both job stayers and job changers, ADP said.

    For job stayers, year-over-year gains fell to 6.9% from 7.2%. For job changers, pay growth was 14.2%, down from 14.4%.

    Big picture: The job market has been strong, with jobless claims trending below 200,000. Companies seem wary of letting workers go.

    Economists are forecasting that the U.S. Labor Department’s employment report will show the economy added 238,000 jobs in March. That estimate includes government jobs. If the data comes in as expected, it could show over one million jobs created in the first three months of the year.

    What ADP said: “Our March payroll data is one of several signals that the economy is slowing,” said Nela Richardson, chief economist, ADP. “Employers are pulling back from a year of strong hiring and pay growth, after a three-month plateau, is inching down.”

    Market reaction: Stocks
    DJIA,
    +0.24%

    SPX,
    -0.25%
    were set to open lower after the data. The yield on the 10-year Treasury note
    TMUBMUSD10Y,
    3.282%
    fell to 3.32% after the data was released.

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  • How will the IRS spend $80 billion in new funding? The Treasury Department is dropping hints.

    How will the IRS spend $80 billion in new funding? The Treasury Department is dropping hints.

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    Details about the Internal Revenue Service’s spending plans for a major cash influx are about to come to light, Treasury Secretary Janet Yellen said Tuesday.

    More than half a year after Congress authorized $80 billion in new funding for the tax-collection agency over the next decade, Yellen said details are coming this week on how the IRS will put the money to use in improving customer service, upgrading internal technology and making sure the richest taxpayers are paying their fair share.

    The $80 billion infusion is part of the Inflation Reduction Act, which passed Congress last summer without Republican support and plenty of GOP skepticism that the additional funding would be used appropriately, depicting it instead as engendering a sort of tax-collection police state in which middle-income individuals could find themselves targeted by armed IRS agents.

    From the archives (August 2022): Fact check: No, the IRS is not hiring an 87,000-strong military force with funds from the Inflation Reduction Act

    Yellen spoke Tuesday at the swearing-in ceremony for Danny Werfel, the newly confirmed IRS commissioner. Werfel “will lead the IRS through an important transition” after a period during which the agency “suffered from chronic underinvestment,” Yellen said in prepared remarks.

    During Werfel’s confirmation hearing in February, senators from both parties pressed him about how he would oversee the new money’s use.

    The U. S. House of Representatives is under Republican control, and observers expect lawmakers to give hard looks at the funding of the IRS. The House, in fact, voted in January to repeal the $80 billion. The measure isn’t expected to go further, with Democrats retaining control in the Senate and President Joe Biden, a Democrat, in the White House.

    Some of the money will go toward modernizing the taxation experience. Within the first five years of the decade-long plan, taxpayers should be able to file all of their tax documents and respond to all IRS notices online, according to a Treasury official.

    There are a handful of IRS notices for which taxpayers currently have that capacity. By the end of fiscal 2024, another 72 notices, which include Spanish-language notices, will add online capacity, the official said.

    By the end of fiscal 2025, taxpayers, along with accountants and other professional tax preparers, should be able to peruse their accounts and view and download information, including payments and notices, the official said.

    The IRS has already been hiring more staff, including 5,000 customer-service representatives to improve phone service, which has fallen off during the pandemic.

    Tax Day is weeks away, on April 18. As of late March, income-tax refunds are 11% lower than they were last year. They are averaging $2,903 versus $3,263 at the same point last year. It’s an outcome many tax-code watchers predicted after pandemic-era boosts to certain tax credits went away.

    The same day Yellen spoke, a new watchdog report said the IRS still has plenty of work to do processing the backlog of tax returns that built up during the pandemic.

    During last year’s tax-filing season, the IRS hired 9,000 employees and shifted more than 2,400 workers from other areas to cut the backlog, according to Treasury’s inspector general for tax administration.

    By last July the IRS had transcribed all tax-year 2020 paper returns but still had 9.5 million unprocessed 2021 paper returns. “The inability to timely process tax returns and address tax account work continues to have a significant impact on the associated taxpayers,” the report said.

    At this point, the IRS says it has processed all paper and electronically filed returns that it received before this January. The agency said it still has 2.17 million unprocessed tax returns from the 2022 tax year and 2021 returns that needed fixes and corrections.

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  • China is not only asserting itself geopolitically but openly questioning the U.S.’s central role on the world stage

    China is not only asserting itself geopolitically but openly questioning the U.S.’s central role on the world stage

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    It’s been a busy few months for China — and sobering ones for the United States.

    Days later, Beijing announced it had brokered a deal that will see Persian Gulf rivals Saudi Arabia and Iran normalize relations, a shocking diplomatic coup in an area long dominated by the United States. Xi was reportedly personally involved in the negotiations.

    “This landmark agreement has the potential to transform the Middle East by realigning its major powers,” the journal Foreign Affairs declared, adding that the gambit is “weaving the region into China’s global ambitions. For Beijing, the announcement was a great leap forward in its rivalry with Washington.”

    But the biggest news came two weeks ago, when Xi flew to Moscow and met with Vladimir Putin, just days after the International Criminal Court in the Hague issued an arrest warrant for the Russian president on charges of war crimes in Russia’s year-old invasion of Ukraine.

    “ ‘China has seen a space where it is hard for the West to really block off — heading into issues [that the Western powers] feel are too intractable or too toxic to touch and trying to demonstrate that there might be a different way to mediate or involve yourself in these problems.’ ”


    — Kerry Brown, King’s College London

    “There are changes coming that haven’t happened in 100 years,” Xi told Putin as the self-described “dear friends” concluded their talks. “When we are together, we are driving these changes.”

    China’s assertiveness comes after three years of COVID restrictions that saw the country close off from the world in an attempt to tame the virus, a policy that was suddenly scrapped in December.

    “It has sunk in that China needs friends. It has ended up too isolated, and that has cut across the narrative of the Xi third term, which was due to be somewhat more sunny,” Kerry Brown, director of the Lau China Institute at King’s College London, told MarketWatch.

    Others agreed. “China certainly is exiting a period of diplomatic isolation during the height of COVID,” said Victor Shih, the Ho Miu Lam chair in China and Pacific relations at the University of California, San Diego, and an expert on Chinese elite politics.

    That exit has been swift, with Beijing taking concrete steps toward a belief that previously had been mostly rhetoric — that the U.S.-led global system is not the only path.

    “China has seen a space where it is hard for the West to really block off — heading into issues [that the Western powers] feel are too intractable or too toxic to touch and trying to demonstrate that there might be a different way to mediate or involve yourself in these problems,” Brown said.

    Those sentiments are increasingly pervasive across China, particularly in government, academia and media.

    “The U.S., which is accustomed to enjoying the spotlight, is now puzzled for it never thought that one day China would be more popular than it,” state tabloid Global Times said in a front-page story last Thursday.

    Wang Yong, director of the Center for International Political Economy and the Center for American Studies at Peking University, told MarketWatch, “The rise of China as a great power is facing an increasingly complicated situation, mainly because U.S. elites judge China as the foremost strategic and systemic threat, and attack China’s development.”

    Wang highlighted concerns over Washington’s policy toward self-ruled Taiwan, which Beijing claims as a renegade province.

    In fact, Taiwanese President Tsai Ing-wen is stopping over in the U.S. this week after visits to the island’s few remaining allies in Central America. Beijing has threatened for weeks against her being welcomed by any high-level American officials.

    Those threats turned to ire on Monday, when Republican House Speaker Kevin McCarthy said he would meet with Tsai on Wednesday in California. China said this could lead to “serious confrontation” and that Beijing would “resolutely fight back” — without giving specifics.

    “ ‘Why is it assumed we live in a U.S. world?’ ”


    — Alan Ma, graduate student, Tsinghua University.

    “Gradually deviating from the past promise of ‘one China,’ promoting Taiwan independence and using Taiwan to contain China’s development — these could trigger a China-U.S. war,” Peking University’s Wang said from Beijing.

    See: U.S. tells China not to ‘overreact’ to Taiwan leader’s stopover

    Average citizens including younger people expressed frustration with U.S. policy.

    Taiwan’s president, Tsai Ing-wen, arrives on Thursday at her hotel in New York.


    AP/John Minchillo

    “Why isn’t it China’s time to lead? Why is it assumed we live in a U.S. world?” asked 27-year-old Alan Ma, a graduate student in politics at Beijing’s Tsinghua University.

    Other areas are reaching heightened levels of tension. China’s military said last month it drove out an American destroyer ship that had “illegally” entered the South China Sea. And the CEO of Chinese-owned video sensation TikTok appeared before U.S. lawmakers in hopes of preventing an American ban on the app over national-security concerns.

    Context: Biden White House and bipartisan group of 12 senators back TikTok ban

    Also: TikTok is the next Chinese product the U.S. could shoot down

    But China’s rise, however rapid, must be put in a realistic context, experts said.

    “I don’t think that we can say China has entered a new period as a global power until it has deployed large troop contingents overseas on its own,” said UC San Diego’s Shih.

    Tanner Brown covers China for MarketWatch and Barron’s.

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  • Virgin Orbit stock plunges after report says company will cease operations

    Virgin Orbit stock plunges after report says company will cease operations

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    Virgin Orbit Holdings Inc. plans to cease operations, according to a CNBC report Thursday afternoon.

    Virgin Orbit stock
    VORB,
    -16.02%
    plunged 45% in after-hours trading after declining 16% in Thursday’s regular session.

    The company is making the move after failing to secure necessary funding, Chief Executive Dan Hart told employees at an all-hands meeting, according to the report.

    Virgin Orbit disclosed in a Thursday afternoon filing with the Securities and Exchange Commission that it would lay off about 675 employees, representing roughly 85% of the company’s workforce, “in order to reduce expenses in light of the company’s inability to secure meaningful funding.” The layoffs impact “all areas” of the company.

    The company expects to incur $15 million in charges related to the layoffs. Virgin Orbit disclosed that it sold and issued a $10.9 million convertible note and would use the net proceeds to help fund severance and other related costs.

    Virgin Orbit didn’t immediately respond to MarketWatch’s request for comment and confirmation of the reported plans to cease operations.

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  • Wall Street bonuses fall by the most since 2008 as policy makers mull economic impact

    Wall Street bonuses fall by the most since 2008 as policy makers mull economic impact

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    Wall Street bonuses fell 26% in 2022, the largest drop since the collapse of Lehman Brothers in 2008, as New York state and city officials dial back their expectations for the economic impact of the securities industry.

    While many people bemoan the salaries commanded by the Big Apple’s white-shoe bankers, the financial sector provides an economic boost to city and state budgets, helping to find public services that touch the lives of residents.

    Now, with the banking sector absorbing the impact of the collapse of Silicon Valley Bank and Signature Bank in recent weeks and of a lack of investment bank deal-making, 2023 isn’t looking particularly strong. The current malaise may signal what’s in store for bonuses and employment in the coming year.

    Rahul Jain, state deputy comptroller, said state and city official are baking in conservative projections for a decline in Wall Street profits and bonuses in 2023 partly because much remains unknown such as when the Fed will pause its interest rate hikes or possibly cut them.

    “What we can’t tell is what the Fed will do with interest rates,” Jain told MarketWatch. “It doesn’t seem like we’ll return to the levels of 2020 and 2021, but there’s hope that 2023 will level off near 2022.”

    While Wall Street and the banking sector is challenged, the overall economy remains relatively healthy, as other sectors such as travel make up for weakness in the securities industry in the New York area.

    “The broad economy still matters and it’s still resilient,” he said. “People still want to do things.”

    Like the FDIC and other regulators, the comptroller’s office is keeping an eye on the commercial real estate market, which will hinge on how much credit is available for loan refinancings.

    “Any kind of credit crunch would make the situation worse,” Jain said.

    The average Wall Street banker’s bonus dropped by $63,700 in 2022, to $176,700, the New York State Comptroller’s Office reported Thursday. That figure does not include regular salary.


    Terrence Horan/MarketWatch

    Even with the cut, the bonus alone eclipses average U.S. wages. Full-time employees in management, professional and related occupations have the highest median weekly earnings reported by the Bureau of Labor Statistics, and the median income for this group across the U.S. was $1,729 a week, or $89,908 a year, in the fourth quarter of 2022 for men, and $1,316 per week, or $68,432 per year, for women.

    Wall Street banker bonuses jumped by 28% in 2020 and grew by another 12% in 2021, only to fall 26% in 2022. That is the largest drop since the 43% fall in 2008, the year Lehman Brothers collapsed and triggered a global financial crisis.

    At the same time, employment in the securities industry climbed to 190,800 by the end of 2022, the highest level in at least 20 years and surpassing the previous 20-year high of 188,900 in 2007.

    Collectively, Wall Street firms generated $25.8 billion in profits in 2022, less than half the $58.4 billion produced in 2021 as the impact of inflation, the war in Ukraine and supply constraints bit into deal-making.

    The securities industry accounted for about $22.9 billion in state tax revenue, or 22% of the state’s tax collections in fiscal 2021-’22, and $5.4 billion in city tax revenue, or 8% of total tax collections over the same period.

    New York State Comptroller Thomas P. DiNapoli estimated a drop of $457 million in 2022 tax income for the state and of $208 million for New York City, when measured against the lucrative year of 2021.

    With recession in the headlines and markets selling off in 2022, however, policy makers have already adjusted their expectations for tax income.

    New York Gov. Kathy Hochul’s proposed budget assumes that bonuses in the broader finance and insurance sector will drop by 25.2% in 2022-’23, while the city’s 2023 financial plan assumes a decrease of 35.6% for the securities industry.

    “While lower bonuses affect income tax revenues for the state and city, our economic recovery does not depend solely on Wall Street,” DiNapoli said in a statement. “Employment in leisure and hospitality, retail, restaurants and construction must continue to improve for the city and state to fully recover.”

    The fate of Wall Street’s bonuses in 2023 remains tied up in what markets and interest rates do for the balance of the year. Based on the storm clouds over the banking sector now, it’s possible bonuses could fall again.

    In one positive sign, the equities market has managed to post gains so far in 2023 after bruising losses in 2022. At last check, the S&P 500
    SPX,
    +0.57%
    is up 5.6% in 2023, while the Nasdaq
    COMP,
    +0.73%
    has risen 14.9%. The Financial Select Sector SPDR exchange-traded fund
    XLF,
    -0.22%
    is down 6.6% so far in 2023.

    After Wall Street bonuses fell 43% in 2008, they rebounded by 39% in 2009. Such a rapid recovery may not be in the cards for the coming year, however.

    Member firms at the New York Stock Exchange generated profits of $13.5 billion in the first half of 2022, down by more than half from year-ago levels, according to an October report on the securities industry in New York by the comptroller’s office.

    Revenue on trading, underwriting and securities offerings dropped about 48% over the same time period, while global debt offerings dropped by 17%.

    At the same time, interest-rate expenses tripled as the U.S. Federal Reserve boosted interest rates.

    “Despite this uncertainty, the city’s latest forecast predicts annual profits to average $21 billion over the next five years, comparable to the 10-year pre-pandemic average of $20.3 billion,” the study said.

    The bonus pool of $33.7 billion in 2022 fell 21% from 2021’s record of $42.7 billion, the largest drop since the Great Recession.

    Also read: Jobs added at Morgan Stanley, Bank of America, Citi and JPMorgan but cut at Wells Fargo and Goldman

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  • Roku to lay off 200 employees, exit some leases to cut costs

    Roku to lay off 200 employees, exit some leases to cut costs

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    Shares of Roku Inc.
    ROKU,
    +5.46%
    rallied 2.7% in premarket trading Thursday, after the streaming-media company disclosed that it would lay off 200 employees, or about 6% of its workforce as part of a cost-cutting plan. The plan will also include the exit and sublease, or cease the use of, certain office facilities. The company expects to record charges of $30 million to $35 million as a result of the plan, which will include severance payments, notice pay and employee benefit contributions. Most of the charges will be recorded in the fiscal first quarter, and the job cuts will be “substantially complete” by the end of the second quarter. The stock has soared 57.0% over the past three months but has tumbled 50.8% over the past 12 months, while the S&P 500
    SPX,
    +1.42%
    has lost 12.5% over the past year.

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  • EA Lays Off Almost 800 People Weeks After Posting Huge Profits

    EA Lays Off Almost 800 People Weeks After Posting Huge Profits

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    Image: EA

    Publishing giant Electronic Arts announced today that approximately 6% of its global workforce, or between 700-800 people, will be laid off as the company drives “greater focus across our portfolio”.

    This Mini Sega Arcade Cabinet Packed With Retro Games Would Make A Great Gift

    In a post on EA’s website, CEO Andrew Wilson writes that the publisher has taken a look at its upcoming projects, restructured some teams and even reviewed their “real estate footprint”. In the wake of that, the decision was made to lay off “approximately six percent of our company’s workforce”.

    As we drive greater focus across our portfolio, we are moving away from projects that do not contribute to our strategy, reviewing our real estate footprint, and restructuring some of our teams. These decisions are expected to impact approximately six percent of our company’s workforce. This is the most difficult part, and we are working through the process with the utmost care and respect. Where we can, we are providing opportunities for our colleagues to transition onto other projects. Where that’s not possible, we are providing severance pay and additional benefits such as health care and career transition services. Communicating these decisions began earlier this quarter and we expect them to continue through early next fiscal year.

    Electronic Arts generated approximately $7 billion in net revenue last year, as reported on January 31, 2023, with gross profits of over $5 billion (an increase of 18% over the year before). In 2022 CEO Wilson, who described this move as “the most difficult part”, made approximately 172 times the median EA employee’s total compensation. Or 636 times what some customer service staff had been paid (before they were laid off, anyway).

    This announcement comes just a month after 200 testers working on the company’s Apex Legends series were laid off via Zoom call (though given Wilson’s comments that “these decisions began earlier this quarter”, those may have been part of this overall count).

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    Luke Plunkett

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  • EA laying off 6% of staff in cost-cutting push for videogame publisher

    EA laying off 6% of staff in cost-cutting push for videogame publisher

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    Electronic Arts Inc. on Wednesday announced intentions to slash 6% of its workforce as the videogame publisher looks to cut costs.

    “As we drive greater focus across our portfolio, we are moving away from projects that do not contribute to our strategy, reviewing our real estate footprint, and restructuring some of our teams,” Chief Executive Andrew Wilson said in a note to employees that was also shared publicly.

    Wilson…

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  • Micron Sales Plunge 53%. It Is Cutting More Staff. Better Days Lie Ahead.

    Micron Sales Plunge 53%. It Is Cutting More Staff. Better Days Lie Ahead.

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    Micron


    Technology shares are modestly higher in late trading Tuesday after the memory chip company posted financial results for its fiscal second quarter ended March 2 that were about in line with expectations, as a weak market for PCs and smartphones continued to weigh on the company’s results. Micron also said that as part of its cost-reduction program, it will reduce staff by about 15%—up from a previous plan to cut heads by 10%.

    But there are some promising signs for the memory chip maker.

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  • Disney begins layoffs of 7,000 this week in first of three phases

    Disney begins layoffs of 7,000 this week in first of three phases

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    Walt Disney Co. will begin the process of eliminating 7,000 jobs this week, company Chief Executive Bob Iger said in a memo to staff Monday.

    “This week, we begin notifying employees whose positions are impacted by the company’s workforce reductions,” Iger wrote in the memo, obtained by MarketWatch. “Leaders will be communicating the news directly to the first group of impacted employees over the next four days. A second, larger round of notifications will happen in April with several thousand more staff reductions, and we expect to commence the final round of notifications before the beginning of the summer to reach our 7,000-job target.”

    Disney’s
    DIS,
    +1.64%
    three-phase layoff is “part of a strategic realignment of the company, including important cost-saving measures necessary for creating a more-effective, coordinated, and streamlined approach to our business,” said Iger, who returned last year as CEO following the ouster of Bob Chapek.

    Disney’s stock was up 1.4% in early-afternoon trading Monday. So far this year, shares have advanced 10% compared with the S&P 500 index’s
    SPX,
    +0.16%
    gain of 3.8% over the same period.

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  • Sen. Sherrod Brown: American consumers losing power over their savings and paychecks is an emergency, too.

    Sen. Sherrod Brown: American consumers losing power over their savings and paychecks is an emergency, too.

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    The collapse of Silicon Valley Bank sent shockwaves through the global economy and had the makings of another crisis. Depositors raced to withdraw money. Banks worried about the risk of contagion. I spent that weekend on the phone with small business owners in Ohio who didn’t know whether they’d be able to make payroll the next week. One woman was in tears, worried about whether she’d be able to pay her workers. 

    The Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve responded quickly, took control of the bank, and contained the fallout. Consumers’ and small businesses’ money was safe. That Ohio small business was able to get paychecks out.

    The regulators were able to protect Americans’ money from incompetent bank executives because when Congress created the Federal Reserve in 1913 and the FDIC in 1933, it ensured that their funding structures would remain independent from politicians in Congress and free from political whims. 

    But now, as the U.S. Supreme Court considers the case of Community Financial Services Association v. CFPB, these independent watchdogs’ ability to keep our financial system stable faces an existential threat.

    The Consumer Financial Protection Bureau is the only agency solely dedicated to protecting the paychecks and savings of ordinary Americans, not Wall Street executives or venture capitalists. Corporate interests have armies of lobbyists fighting for every tax break, every exemption, every opportunity to be let off the hook for scamming customers and preying on families.

    “ The CFPB’s funding structure is designed to be independent, just like the Fed and the FDIC. ”

    Ordinary Americans don’t have those lobbyists. They don’t have that kind of power. The CFPB is supposed to be their voice — to fight for them. The CFPB’s funding structure is designed to be independent, just like the Fed and the FDIC. Otherwise, its ability to do the job would be subject to political whims and special interests — interests that we know are far too often at odds with what’s best for consumers.

    Since its creation, the CFPB has returned $16 billion to more than 192 million consumers. It’s held Wall Street and big banks accountable for breaking the law and wronging their customers. It’s given working families more power to fight back when banks and shady lenders scam them out of their hard-earned money. 

    The CFPB can do this good work because it’s funded independently and protected from partisan attacks, just as the Fed and the FDIC are. So why, then, does Wall Street claim that only the CFPB’s funding structure is unconstitutional?

    Make no mistake — the only reason that Wall Street, its Republican allies in Congress, and overreaching courts have singled out the CFPB is because the agency doesn’t do their bidding. The CFPB doesn’t help Wall Street executives when they fail. It doesn’t extend them credit in favorable terms or offer them deposit insurance like the other regulators do. The CFPB’s funding structure isn’t unconstitutional — it just doesn’t work in Wall Street’s favor.

    If the Supreme Court rules against the CFPB, the $16 billion returned to consumers could be clawed back. What would happen then — will America’s banks really go back to the customers they’ve wronged with a collection tin?

    “ Invalidating the CFPB and its work would also put the U.S. economy — and especially the housing market — at risk. ”

    Invalidating the CFPB and its work would also put the U.S. economy — and especially the housing market — at risk. For more than a decade, the CFPB has set rules of the road for mortgages and credit cards and so much else, and given tools to help industry follow them. If these rules and the regulator that interprets them disappear, markets will come to a standstill. 

    By attacking the CFPB’s funding structure and putting consumers’ money at risk, Wall Street is putting the other financial regulators in danger, too. 

    The Fifth Circuit’s faulty ruling against the CFPB is astounding in its absurdity — the court ruled that the authorities that other financial agencies, like the Federal Reserve and the FDIC, have over the economy do not compare to the CFPB’s authorities. In other words, the court is claiming that the CFPB supposedly has more power in the economy than the Fed.

    That’s ridiculous. Look at the extraordinary steps taken to contain the failures of Silicon Valley Bank and Signature Bank — the idea that the CFPB could take action even close to as sweeping is laughable.

    But we know why the Fifth Circuit put that absurd assertion in there — they recognize the damage this case could do to these other vital agencies, and to our whole economy.

    “ Imagine what might happen if another series of banks failed and the FDIC did not have the funds to stop the crisis from spreading.”

    The FDIC’s own Inspector General has stated that the Fifth Circuit ruling could be applied to their agency. If that happens, the FDIC and other regulators could be subject to congressional budget deliberations, which we all know are far too partisan and have resulted in shutdowns. Imagine what might happen if another series of banks failed and the FDIC did not have the funds to stop the crisis from spreading, or the Deposit Insurance Fund to protect depositors’ money. Imagine if politicians caused a shutdown, and we were without a Federal Reserve. 

    U.S. financial regulators are independently funded so that they can respond quickly when crises happen. It’s telling, though, that plenty of people in Washington don’t seem to consider the CFPB’s issues in the same category. Washington and Wall Street expect the government to spring into action when businesses’ money is put at risk. But when workers are scammed out of their paychecks, that’s not an emergency — it’s business as usual. 

    When Wall Street’s abusive practices put consumers in crisis, the CFPB must have the funding and strength it needs to carry out its mission — to protect consumers’ hard-earned money. 

    U.S. Sen. Sherrod Brown (D-OH) is chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs.

    More: Supreme Court to hear case that will decide the future of consumer financial protection

    Also read: Senate Banking Chair Sherrod Brown sees bipartisan support for changes to deposit insurance

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  • Week In Review: March 26, 2023

    Week In Review: March 26, 2023

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    Read more…

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  • NPR Launches New Podcast Exploring Lives Of Employees They Just Laid Off

    NPR Launches New Podcast Exploring Lives Of Employees They Just Laid Off

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    NEW YORK—In the wake of a cost-cutting decision to terminate roughly 10% of its workforce, National Public Radio announced Friday that it had launched a new podcast exploring the lives of employees they just laid off. “Although the decision to eliminate roughly 100 employees was not taken lightly, we are so excited to announce our next groundbreaking podcast series, which follows several NPR correspondents, researchers, and audio engineers on their gripping and often heartbreaking journey through unemployment,” said CEO John F. Lansing, adding that the 10-part, hour long series called Down And Out will feature many listeners’ favorite correspondents from podcasts like Invisibilia, Louder Than A Riot, and Rough Translation struggling to pay rent, go to the doctor, or put food on the table. “While NPR did provide employees with severance, that will eventually run out, and that’s where the podcast truly begins. Will our former employees ever be able to get another job? Will they have to move home with their parents? Might they even leave the media industry entirely? Tune in for our first episode—featuring a surprise guest who lost his job after 40 years of working at NPR—to find out!” At press time, Lansing announced that the entire Down And Out production team had been let go.

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  • U.S. economy speeds up in March, S&P finds, but so does inflation

    U.S. economy speeds up in March, S&P finds, but so does inflation

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    The numbers: The U.S. economy accelerated in March, S&P Global surveys showed, but so did inflation as companies raised selling prices.

    The S&P Global Flash U.S. services-sector index rose to an 11-month high of 53.8 from 50.5 in the prior month. Most Americans are employed on the service side of the economy.

    The S&P Global U.S. manufacturing sector index, meanwhile, increased to 49.3 from 47.3. That’s a five-month high.

    Any number above 50 points to expansion. Figures below that signal contraction.

    The S&P Global surveys are among the first indicators each month to assess the health of the economy.

    Key details: New orders, a sign of future sales, rose for the first time since last September at service-oriented companies.

    Booking at manufacturers fell again, but at the slowest pace in six months. More positively, production increased for the first time since last September.

    Employment rose across the economy as both service companies and manufacturers said they added new workers.

    On the downside, the increase in demand allowed companies to raise prices at the fastest pace in five months.

    Business leaders said rising costs, especially labor, contributed to their decision to raise prices.

    That’s not good news for Federal Reserve officials who worry that rising wages could make it harder to get high inflation under control.

    Big picture: The service and industrial sides of the economies are following different trajectories.

    Americans are spending relatively more money on services such as travel and eating out and spending less on goods. As a result, service companies are still hiring and growing at a faster clip.

    Manufacturers are basically treading water due to the shift in consumer spending patterns as well as the depressive effects of higher inflation and interest rates.

    Adding it all up, though, the S&P reports paint the picture of a expanding economy that is not on the doorstep of recession.

    What remains to be seen is how much the recent stress in the banking sector hurts lending and makes it harder for businesses to borrow and invest.

    Looking ahead: “March has so far witnessed an encouraging resurgence of economic growth,” said Chris Williamson, chief business economist at S&P Global.

    “There is also some concern regarding inflation,” he said. “The inflationary upturn is now being led by stronger service sector price increases, linked largely to faster wage growth.”

    Market reaction: The Dow Jones Industrial Average
    DJIA,
    -0.17%
    and S&P 500
    SPX,
    -0.13%
    fell in Friday trades.

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  • Jobless claims dip to 3-week low of 191,000 — labor market still very strong

    Jobless claims dip to 3-week low of 191,000 — labor market still very strong

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    The numbers: The number of Americans who applied for unemployment benefits last week slipped to a three-week low of 191,000, signaling little erosion in a strong U.S. labor market even as the economy faced fresh strains.

    New U.S. applications for benefits fell by 1,000 from 192,000 in the prior week, the government said Thursday. .

    The number of people applying for jobless benefits is one of the best barometers of whether the economy is getting better or worse. New unemployment applications remain near historically low levels.

    Economists polled by The Wall Street Journal had forecast new claims to total 198,000 in the seven days ended March 18. The numbers are seasonally adjusted.

    Key details: Twenty-eight of the 53 U.S. states and territories that report jobless claims showed a decrease last week. Twenty-five posted an increase.

    Most of the changes were small except in Indiana.

    One potential red flag: The number of raw or actual claims — before seasonal adjustments — was much higher last week compared to the same week a year earlier. But so far there’s little sign of a trend.

    “Even the tens of thousands of recent [high-tech] layoffs have almost completely been absorbed by a powerful labor market that has plenty of expansion left in it,” contended Robert Frick, chief corporate economist at Navy Federal Credit Union.

    The number of people collecting unemployment benefits across the country, meanwhile, rose by 14,000 to 1.69 million in the week ended March 11. That number is reported with a one-week lag.

    These continuing claims are still low, but a gradual increase since last year suggests it’s taking longer for people who lose their jobs to find new ones.

    Big picture: Jobless benefit claims are one of the first indicators to emit danger signals when the U.S. is headed toward recession. It’s still not flashing a red-light, or even a yellow one, as the economy comes under more duress.

    The Federal Reserve, for instance, just raised interest rates to a nearly 16-year high. And the failure of Silicon Valley Bank has put more stress on the U.S. financial system.

    Both of these actions could constrain the economy in the months ahead, curb hiring and potentially boost a low unemployment rate. If so, watch the trend in new jobless claims.

    Looking ahead: “Most companies are either still hiring or are holding onto their employees and seeking other ways to cut costs,” said chief economist Joshua Shapiro of MFR Inc.

    “This is consistent with our view that layoffs will rise less dramatically than normally might occur as companies do all they can to avoid shedding workers who have been incredibly difficult to recruit and retain.”

    Market reaction: The Dow Jones Industrial Average
    DJIA,
    +0.23%
    and S&P 500
    SPX,
    +0.30%
    were set to open higher in Thursday trades. Stocks have been under pressure since the failure of SVB earlier this month.

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  • Amazon’s stock dips 1% as another 9,000 layoffs announced

    Amazon’s stock dips 1% as another 9,000 layoffs announced

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    Amazon.com Inc. is eliminating another 9,000 jobs, the company announced Monday morning.

    In a memo to staff, Amazon
    AMZN,
    -1.25%
    Chief Executive Andy Jassy said the cuts would take place over the next few weeks and primarily affect Amazon Web Services, People Experience and Technology Solutions, advertising and Twitch. [Twitch CEO Dan Clancy broke the news of 400 layoffs to employees in a blog post later Monday.]

    “This was a difficult decision, but one that we think is best for the company long term,” Jassy wrote.

    “For several years leading up to this one, most of our businesses added a significant amount of headcount,” Jassy added. “This made sense given what was happening in our businesses and the economy as a whole. However, given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount.”

    The news sent the retailer’s stock down 1% in trading Monday.

    The latest layoffs, amid a challenging macroeconomic climate that has claimed tens of thousands of jobs in the tech industry, follow an earlier round at Amazon, announced in November, that affected more than 18,000 employees. Additionally, Amazon has paused construction of its second headquarters in Virginia.

    At the same time, there are rumblings out of the Beltway that the Biden administration is preparing legal actions against Amazon stemming from investigations into its business practices, according to a report in Politico.

    Amazon is the second Big Tech company this month to announce additional job cuts. Last week, Mark Zuckerberg, CEO of Facebook parent Meta Platforms Inc.
    META,
    +1.12%    ,
    wrote in a blog post the social-networking company would slash 10,000 more employees as it focuses on a “year of efficiency.” The move drove Meta shares up 7% and helped the company top $500 billion in market value for the first time since June.

    In November, the company said it would cut 11,000 employees, or about 13% of its workforce, in the first layoffs in the company’s 18-year history.

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  • ‘We don’t ask for spring break in our city’: Miami Beach officials impose curfew after two fatal shootings amid nightly chaos

    ‘We don’t ask for spring break in our city’: Miami Beach officials impose curfew after two fatal shootings amid nightly chaos

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    MIAMI BEACH, Fla. (AP) — Miami Beach officials imposed a curfew beginning Sunday night during spring break after two fatal shootings and rowdy, chaotic crowds that police have had difficulty controlling.

    The city said in a news release the curfew would be from 11:59 p.m. Sunday until 6 a.m. Monday, with an additional curfew likely to be put in place Thursday through next Monday, March 27. The curfew mainly affects South Beach, the most popular party location for spring breakers.

    The release said the two separate shootings Friday night and early Sunday that left two people dead and “excessively large and unruly crowds” led to the decision. The city commission plans a meeting Monday to discuss potential further restrictions next week.

    Miami Beach Mayor Dan Gelber said in a video message posted Sunday that the crowds and presence of numerous firearms has “created a peril that cannot go unchecked” despite massive police presence and many city-sponsored activities meant to keep people busy.

    “We don’t ask for spring break in our city. We don’t want spring break in our city. It’s too rowdy, it’s too much disorder, and it’s too difficult to police,” Gelber said.

    The latest shooting happened about 3:30 a.m. Sunday on Ocean Drive in South Beach, according to Miami Beach police. A male was shot and died later at a hospital, and officers chased down a suspect on foot, police said on Twitter. Their identities were not released, nor were any possible charges.

    In the Friday night shooting, one male victim was killed and another seriously injured, sending crowds scrambling in fear from restaurants and clubs into the streets as gunshots rang out. Police detained one person at the scene and found four firearms, but no other details have been made available.

    Under the curfew, people must leave businesses before midnight, although hotels can operate later only in service to their guests. The city release said restaurants can stay open only for delivery and the curfew won’t apply to residents, people going to and from work, emergency services and hotel guests. Some roads will be closed off and arriving hotel guests may have to show proof of their reservations.

    Last year, the city imposed a midnight curfew following two shootings, also on Ocean Drive. The year before that, there were about 1,000 arrests and dozens of guns confiscated during a rowdy spring break that led Miami Beach officials to take steps aimed at calming the situation.

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  • Putin arrest warrant issued by International Criminal Court in the Hague

    Putin arrest warrant issued by International Criminal Court in the Hague

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    THE HAGUE (AP) — The International Criminal Court said Friday it has issued an arrest warrant for Russian President Vladimir Putin for war crimes because of his alleged involvement in abductions of children from Ukraine.

    News Pulse: Ahead of Xi’s trip to Moscow, Biden White House calls on Chinese leader to talk with Ukraine President Zelensky

    The court said in a statement that Putin “is allegedly responsible for the war crime of unlawful deportation of population (children) and that of unlawful transfer of population (children) from occupied areas of Ukraine to the Russian Federation.”

    It also issued a warrant Friday for the arrest of Maria Alekseyevna Lvova-Belova, the Commissioner for Children’s Rights in the Office of the President of the Russian Federation, on similar allegations.

    The court’s president, Piotr Hofmanski, said in a video statement that while the ICC’s judges have issued the warrants, it will be up to the international community to enforce them. The court has no police force of its own to enforce warrants.

    “The ICC is doing its part of work as a court of law. The judges issued arrest warrants. The execution depends on international cooperation.”

    A possible trial of any Russians at the ICC remains a long way off, as Moscow does recognize the court’s jurisdiction — a position reaffirmed earlier this week by Kremlin spokesman Dmitry Peskov — and does not extradite its nationals.

    Ukraine also is not a member of the court, but it has granted the ICC jurisdiction over its territory and ICC prosecutor Karim Khan has visited four times since opening an investigation a year ago.

    The ICC said that its pretrial chamber found there were “reasonable grounds to believe that each suspect bears responsibility for the war crime of unlawful deportation of population and that of unlawful transfer of population from occupied areas of Ukraine to the Russian Federation, in prejudice of Ukrainian children.”

    The court statement said that “there are reasonable grounds to believe that Mr Putin bears individual criminal responsibility” for the child abductions “for having committed the acts directly, jointly with others and/or through others [and] for his failure to exercise control properly over civilian and military subordinates who committed the acts.”

    From the archives (February 2023): Russia has committed crimes against humanity in Ukraine, U.S. Vice President Harris says

    On Thursday, a U.N.-backed inquiry cited Russian attacks against civilians in Ukraine, including systematic torture and killing in occupied regions, among potential issues that amount to war crimes and possibly crimes against humanity.

    The sweeping investigation also found crimes committed against Ukrainians on Russian territory, including deported Ukrainian children who were prevented from reuniting with their families, a “filtration” system aimed at singling out Ukrainians for detention, and torture and inhumane detention conditions.

    But on Friday, the ICC put the face of Putin on the child abduction allegations.

    Read on:

    Biden vows Russia will ‘never’ win war against Ukraine

    Mike Pence characterizes fellow Republicans challenging ongoing U.S. assistance of Ukraine as ‘apologists for Putin’

    Tucker Carlson questionnaire reveals a fault line among Republicans: U.S. support for Ukraine’s defense against Russian invasion

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