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Tag: Lay-offs/Redundancies

  • Silicon Valley Confronts the End of Growth. It’s a New Era for Tech Stocks.

    Silicon Valley Confronts the End of Growth. It’s a New Era for Tech Stocks.

    Silicon Valley could use a reboot. The biggest players aren’t growing, and more than a few are seeing sharp revenue declines. Regulators seem opposed to every proposed merger, while legislators push for new rules to crack down on the internet giants. The Justice Department just can’t stop filing antitrust suits against Google. The initial public offering market is closed. Venture-capital investments are plunging, along with valuations of prepublic companies. Maybe they should try turning the whole thing on and off.

    The only strategy that seems to be working is to lay people off. Tech CEOs suddenly are channeling Marie Kondo, tidying up and keeping only the people and projects that “spark joy,” or at least support decent operating margins. Layoffs.fyi reports that tech companies have laid off more than 122,000 people already this year.

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  • Zoom to Lay Off 15% of Staff, CEO Slashes Salary

    Zoom to Lay Off 15% of Staff, CEO Slashes Salary

    Zoom to Lay Off 15% of Staff, CEO Slashes Salary

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  • Meta stock spikes nearly 20% as cost cuts and $40 billion for investors overshadow earnings miss

    Meta stock spikes nearly 20% as cost cuts and $40 billion for investors overshadow earnings miss

    Meta Platforms Inc. shares soared in after-hours trading Wednesday despite an earnings miss, as the Facebook parent company guided for potentially more revenue than Wall Street expected in the new year and promised more share repurchases amid cost cuts.

    Meta
    META,
    +2.79%
    said it hauled in $32.17 billion in fourth-quarter revenue, down from $33.67 billion a year ago but stronger than expectations. Earnings were $4.65 billion, or $1.76 a share, compared with $10.3 billion, or $3.67 a share, last year.

    Analysts polled by FactSet expected Meta to post fourth-quarter revenue of $31.55 billion on earnings of $2.26 a share, and the beat on sales coincided with a revenue forecast that also met or exceeded expectations. Facebook Chief Financial Officer Susan Li projected first-quarter sales of $26 billion to $28.5 billion, while analysts on average were projecting first-quarter sales of $27.2 billion.

    Shares jumped more than 19% in after-hours trading immediately following the release of the results, after closing with a 2.8% gain at $153.12.

    Alphabet Inc.’s
    GOOGL,
    +1.61%

    GOOG,
    +1.56%
    Google and Pinterest Inc.
    PINS,
    +1.56%
    benefited from Meta’s results, with shares for each company rising more than 4% in extended trading Wednesday.

    “Our community continues to grow and I’m pleased with the strong engagement across our apps. Facebook just reached the milestone of 2 billion daily actives,” Meta Chief Executive Mark Zuckerberg said in a statement announcing the results. “The progress we’re making on our AI discovery engine and Reels are major drivers of this. Beyond this, our management theme for 2023 is the ‘Year of Efficiency’ and we’re focused on becoming a stronger and more nimble organization.”

    Read more: Snap suffers worst sales growth yet in holiday quarter, stock plunges after earnings miss

    Facebook’s 2 billion-user milestone was slightly better than analysts expected for user growth on Meta’s core social network. Daily active users across all of Facebook’s apps neared, but did not crest, another round number, reaching 2.96 billion, up 5% from a year ago.

    Meta has been navigating choppy ad waters as it copes with increasing competition from TikTok and fallout from changes in Apple Inc.’s
    AAPL,
    +0.79%
    ad-tracking system in 2021 that punitively harmed Meta, costing it potentially billions of dollars in advertising sales. Meta has invested heavily in artificial-intelligence tools to rev up its ad-targeting systems and making better recommendations for users of its short-video product Reels, but it laid off thousands of workers after profit and revenue shrunk in recent quarters.

    The cost cuts seemed to pay off Wednesday. While Facebook missed on its earnings, it noted that the costs of its layoffs and other restructuring totaled $4.2 billion and reduced the number by roughly $1.24 a share.

    Meta executives said they now expect operating expenses to be $89 billion to $95 billion this year based on slower salary growth, cost of revenue, and $1 billion in savings from facilities consolidation — down from previous guidance for $94 billion to $100 billion. Capital expenditures are expected to be $30 billion to $33 billion, down from previous guidance of $34 billion to $37 billion, as Meta cancels multiple data-center projects.

    In a conference call with analysts late Wednesday, Zuckerberg called 2023 the “year of efficiency” after 18 years of unbridled growth. He recommitted to Meta’s emphasis on AI and the metaverse, a platform for “better social experiences” than the phone, he said.

    “The reduced outlook reflects our updated plans for lower data-center construction spend in 2023 as we shift to a new data-center architecture that is more cost efficient and can support both AI and non-AI workloads,” Li said in her outlook commentary included in the release.

    Meta expects to increase its spending on its own stock. The company’s board approved a $40 billion increase in its share-repurchase authorization; Meta spent nearly $28 billion on its own shares in 2022, and still had nearly $11 billion available for buybacks before that increase.

    “Investors are cheering Meta’s plans to return more capital to shareholders despite worries over rising costs related to its metaverse spending,” said Jesse Cohen, senior analyst at Investing.com.

    “At first glance…Meta getting its mojo back,” Baird Equity Research analyst Colin Sebastian said in a note late Wednesday. “Results and guidance look particularly solid after Snap’s dismal report; however, further cuts to operating and capital expenditures announced this afternoon were perhaps the biggest surprise.”

    UBS analyst Lloyd Walmsley said he anticipates double-digit revenue growth exiting 2023 and strong growth in earnings and free cash flow.

    The results came a day after Snap Inc.
    SNAP,
    -10.29%
    posted fourth-quarter revenue of $1.3 billion, flat from a year ago and the worst year-over-year sales growth Snap has ever reported. But they also arrived on the same day Facebook scored a major win in a California court. The company successfully fended off the Federal Trade Commission bid to win a preliminary injunction to block Meta’s planned acquisition of VR startup Within Unlimited.

    Read more: Meta wins bid to buy VR startup Within Unlimited, beating U.S. FTC in court: report

    Meta shares have plunged 53% over the past 12 months, while the broader S&P 500 index 
    SPX,
    +1.05%
    has tumbled 10% the past year.

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  • Intel cuts pay, bonuses and other benefits while maintaining dividend

    Intel cuts pay, bonuses and other benefits while maintaining dividend

    Intel Corp. continues to cut costs for everything except payments to investors.

    Intel
    INTC,
    +3.03%    ,
    which is already in the process of cutting what is believed to be thousands of jobs amid steep declines in profit and revenue, is reducing Chief Executive Pat Gelsinger’s base salary by 25% and trimming other salaries at a descending rate based on seniority, down to 5% cuts for midlevel positions, a person familiar with the matter told MarketWatch. While nonexempt workers and junior positions face no pay cuts, Intel is trimming its 401(k) contributions to 2.5% from 5% and will suspend merit raises and quarterly performance bonuses, the person said. Annual performance bonuses and stock grants will remain.

    In an emailed statement, an Intel spokesperson confirmed “several adjustments to our 2023 employee compensation and rewards programs.”

    “As we continue to navigate macroeconomic headwinds and work to reduce costs across the company, we’ve made several adjustments to our 2023 employee compensation and rewards programs,” the statement said. “These changes are designed to impact our executive population more significantly and will help support the investments and overall workforce needed to accelerate our transformation and achieve our long-term strategy. We are grateful to our employees for their commitment to Intel and patience during this time as we know these changes are not easy.”

    Opinion: Intel just had its worst year since the dot-com bust, and it won’t get better anytime soon

    The move is similar to a 50% cut in stock compensation that Apple Inc.
    AAPL,
    +0.87%
    CEO Tim Cook requested and received, though Apple is one of the few large Silicon Valley tech companies that has not announced layoffs yet. Intel is targeting $3 billion in cost cuts in 2023 that include hundreds of layoffs that have already been disclosed in California, with many more expected.

    Intel has not touched its dividend, though, even as its free cash flow fell into the red during 2022 and is expected to be negative again this year. The chip maker paid out roughly $1.5 billion in dividends in the fourth quarter, completing $6 billion in annual payments, and maintained the same level of payments for the first quarter despite analysts questioning whether the company can afford it.

    For more: Intel stock’s dividend sticks out among chip makers

    “The board [and] management, we take a very disciplined approach to the capital allocation strategy and we’re going to remain committed to being very prudent around how we allocate capital for the owners, and we are committed to maintaining a competitive dividend,” Chief Financial Officer David Zinsner said when asked directly about the dividend during Intel’s earnings call last week.

    Intel shares have declined 42.1% in the past 12 months, as the S&P 500
    SPX,
    +1.30%
    has dropped 10.3% and the Dow Jones Industrial Average
    DJIA,
    +0.36%
    — which counts Intel as one of its 30 components — has fallen 3.7%.

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  • PayPal to lay off 7% of employees as part of cost-cutting push

    PayPal to lay off 7% of employees as part of cost-cutting push

    PayPal Holdings Inc. plans to lay off about 7% of its staff as it continues with broader efforts to reduce costs.

    Chief Executive Dan Schulman announced the layoffs, which will affect about 2,000 PayPal PYPL employees, in an email to the staff Tuesday afternoon.

    “While we have made substantial progress in right-sizing our cost structure,…

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  • Philips says it will cut 6,000 extra jobs by 2025 as it swings to a loss

    Philips says it will cut 6,000 extra jobs by 2025 as it swings to a loss

    Royal Philips NV on Monday said it will cut an extra 6,000 jobs by 2025, including around 3,000 this year, as part of a plan to improve performance and drive value creation.

    The Dutch health-technology company
    PHIA,
    +0.57%

    PHG,
    +0.59%
    –which said in October that it was cutting 4,000 jobs, or about 5% of its 80,000-strong workforce–said Monday that the simplified operating model will make it more agile and competitive, while reducing costs. The job cuts announced Monday are in addition to those outlined in October.

    Philips said that it will now focus on extracting the full value of its portfolio through a strategy of focused organic growth.

    The company made the disclosure as it reported a swing to net loss for the fourth quarter of last year amid higher costs, but said that it has seen some improvement in the period and that is taking actions to address operational challenges in an uncertain environment.

    The Dutch health-technology company–which sells products including MRI scanners and ultrasound machines–posted a net loss attributable to shareholders of 106 million euros ($170.6 million) compared with a profit of EUR157 million for the fourth quarter of 2021 and a company-compiled consensus loss of EUR16 million.

    Adjusted earnings before interest, taxes and amortization–which strips out exceptional and other one-off items–was EUR651 million compared with EUR647 million and a consensus of EUR428 million.

    The company said its performance was hit by cost inflation that was partly offset by pricing and productivity measures.

    Group sales in the period were EUR5.42 billion compared with EUR4.94 billion and a consensus of EUR5.03 billion.

    Like-for-like sales were up 3%, compared with a company-compiled forecast for a fall of 5.2%, due to improved component supplies

    Royal Philips said it now expects low-single-digit comparable sales growth and high-single-digit adjusted Ebita margin for this year.

    It has also targeted mid-single-digit comparable sales growth and a low-teens adjusted Ebita margin by 2025, and for mid-single-digit comparable sales growth and mid-to-high-teens adjusted Ebita margin beyond 2025.

    “Considering the slowing of consumer demand and a gradual improvement of the order book conversion during 2023, Philips anticipates a slow start to the year, with improvements throughout the year supported by the ongoing productivity, pricing and other actions,” it said.

    Write to Ian Walker at ian.walker@wsj.com

    The company said its performance was hit by cost inflation that was partly offset by pricing and productivity measures.

    Group sales in the period were EUR5.42 billion compared with EUR4.94 billion and a consensus of EUR5.03 billion.

    Like-for-like sales were up 3%, compared with a company-compiled forecast for a fall of 5.2%, due to improved component supplies

    Royal Philips said it now expects low-single-digit comparable sales growth and high-single-digit adjusted Ebita margin for this year.

    “Considering the slowing of consumer demand and a gradual improvement of the order book conversion during 2023, Philips anticipates a slow start to the year, with improvements throughout the year supported by the ongoing productivity, pricing and other actions,” it said.

    Write to Ian Walker at ian.walker@wsj.com

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  • Could Big Tech layoffs keep growing? Apple, Amazon, Facebook and Google may give hints in biggest week of earnings.

    Could Big Tech layoffs keep growing? Apple, Amazon, Facebook and Google may give hints in biggest week of earnings.

    In the biggest week of the holiday-earnings season, Big Tech results will receive the spotlight amid thousands of layoffs that could only be the beginning.

    After tech stocks were decimated in 2022, investors will be looking for signs of a turnaround in holiday reports and potential forecasts for the year ahead from three of 2022’s top five market-value losers: Amazon.com Inc.
    AMZN,
    -0.66%    ,
    Apple Inc.
    AAPL,
    -0.63%
    and Meta Platforms Inc.
    META,
    -0.60%    .
    The other two stocks on that list — Microsoft Corp.
    MSFT,
    -1.38%
    and Tesla Inc.
    TSLA,
    -0.15%
    — reported last week, and Microsoft’s results in the wake of a mass-layoffs announcement did not bode well for its Big Tech brethren.

    See also: Microsoft could be the cloud sector’s ‘canary in the coal mine’

    Those companies — along with Google parent Alphabet Inc.
    GOOGL,
    -1.32%
    GOOG,
    -1.49%
    — will deliver results after finding themselves in unfamiliar territory: A backdrop of layoffs amid slowing demand for core products like digital ads, electronics and e-commerce, after a two-year pandemic surge and a two-decade-plus honeymoon with investors. Some analysts say the bottom hasn’t arrived, for either their finances or their workforces.

    The one Big Tech company that hasn’t taken a sword to its payroll is Apple, which also increased its staff the least among the group during the COVID-19 pandemic. Apple shed $846 billion from its market cap last year, and now reports after its core product was part of the smartphone industry’s worst year since 2013 and worst holiday-season decline on record. The iPhone maker could also face questions from Wall Street about changing up its product sourcing, which has relied heavily on China, a nation whose COVID-19 restrictions have constrained production of some phones.

    While the tech-industry layoffs have yet to hit Apple, some analysts say the company is unlikely to be spared, despite Chief Executive Tim Cook requesting and receiving a healthy cut to his compensation.

    “Similar to other big technology companies, we expect Apple to adjust its head count to reflect an increasingly challenging global macroeconomic environment,” D.A. Davidson analyst Tom Forte said in a research note Tuesday.

    Rivals that have already cut could face more if profit continues to fall along with revenue growth. Alphabet, for instance, is cutting 12,000 employees, but an activist investor has already said that is not enough considering how much the company grew during the pandemic, and the difficulties it now faces in the online-ad sector.

    Opinion: Microsoft’s big move in AI does not mean it will challenge Google in search

    Analysts have said Meta’s “darkest days” are still ahead, as it navigates a round of more than 11,000 layoffs, competition from TikTok and its early stumbles in the metaverse. While cutting, Chief Executive Mark Zuckerberg has promised to keep spending on metaverse development, even as the efforts slash the Facebook parent company’s previously healthy bottom line.

    “In 2023, we expect Meta to remain engulfed in arduous battles inside the Octagon,” Monness Crespi Hardt analyst Brian White said in a research note on Thursday. “In the long run, we believe Meta will benefit from the secular digital ad trend and innovate in the metaverse; however, regulatory scrutiny persists, internal headwinds remain, and we believe the darkest days of this downturn are ahead of us.”

    Full Facebook earnings preview: Meta’s ‘darkest days’ are ahead, but some analysts say ad sales are still on track

    Online retailer Amazon
    AMZN,
    -0.66%
    was the first Big Tech company to publicly declare cost-cutting was in order a year ago, and still coughed up $834 billion in market value in 2022. It kicked off 2023 with plans to lay off more than 18,000 workers as struggles continued throughout last year, when inflation siphoned away more consumer dollars toward essentials.

    Amazon’s own AWS cloud-infrastructure unit has helped to drive sales in years past, as businesses built out their tech infrastructures. But remarks and the outlook from Microsoft executives — the third-biggest market-cap loser of 2022, and a big barometer for tech spending overall — weren’t exactly encouraging for cloud growth: Executives there last week warned of “moderating consumption growth” for its own cloud business.

    For more: One company could determine whether U.S. corporate profits rise to a record in 2023

    “Sentiment was already bearish on AWS, with investors looking for slowing revenue over the next three quarters, largely confirmed after Microsoft earnings and conversations with industry checks,” Oppenheimer analyst Jason Helfstein said in a note on Wednesday. “Positively, we believe e-commerce revenue has stabilized, and margins should improve from organic scale and announced head-count reductions.”

    Layoffs are also starting to spread beyond Big Tech companies that grew fast during the pandemic in response to massive demand spikes. International Business Machines Corp.
    IBM,
    +0.76%
    confirmed plans for 3,900 layoffs as it reported earnings, despite already reducing its workforce by at least 20% during the pandemic.

    One sector to watch is semiconductors, where a chip shortage has turned into a glut: Chip-equipment maker Lam Research Corp.
    LRCX,
    +0.04%
    announced layoffs in the past week as Silicon Valley semiconductor giant Intel Corp.
    INTC,
    +0.27%
    displayed “astonishingly bad” results while laying off workers. When Intel rival Advanced Micro Devices Inc.
    AMD,
    -1.64%
    reports this week, it could determine whether there is any silver lining in the semiconductor storm.

    Earnings preview: AMD faces even more scrutiny after ‘astonishingly bad’ Intel outlook

    Wedbush analyst Daniel Ives said in a Sunday note that a common theme of this week’s Big Tech earnings will be that “tech layoffs will accelerate with more pain ahead to curb expenses,” though he added that “Apple will likely cut some costs around the edges, but we do not expect mass layoffs from Cupertino this week.”

    Big Tech earnings were a salve to other problems in the market for the past decade-plus, but with layoffs already under way and doubts about the path forward, don’t expect salvation from their results this week.

    This week in earnings

    For the week ahead, 107 S&P 500
    SPX,
    -0.19%
    companies, including six members of the Dow Jones Industrial Average
    DJIA,
    +0.18%    ,
    will report results, according to FactSet. While more Dow components reported last week, this will be the busiest week for S&P 500 holiday earnings of the season, FactSet senior earnings analyst John Butters confirmed to MarketWatch.

    Appliance-maker Whirlpool Corp.
    WHR,
    +1.18%
    reports on Monday, after it forecast fourth-quarter sales that were below expectations, following what it called a “one-off supply-chain disruption” and the pandemic home-renovation boom.

    On Tuesday, package-deliverer United Parcel Service Inc.
    UPS,
    -0.26%
    reports, amid questions about holiday-season demand. So does streaming service Spotify Technology,
    SPOT,
    -0.02%
    following its own layoffs and suggestions of possible price hikes, as well as McDonald’s Corp.
    MCD,
    -0.30%    ,
    amid concerns that rising prices are keeping people from dining out. Exxon Mobil Corp.
    XOM,
    -0.99%    ,
    Caterpillar Inc.
    CAT,
    -0.12%    ,
    Snap Inc.
    SNAP,
    +0.64%
    and Pfizer Inc.
    PFE,
    +0.72%
    also report Tuesday.

    Earnings outlook: McDonald’s earnings haven’t been hit by higher prices

    On Wednesday, T-Mobile US Inc.
    TMUS,
    +0.23%
    reports, in the wake of a data breach and wobbling cellphone demand. Coffee chain Starbucks Corp.
    SBUX,
    -0.58%
    reports on Thursday, with analysts likely to be zeroed in on U.S. demand and China’s reopening, after executives said they were confident that higher prices, along with enthusiasm from younger customers and for customizable drinks, could help them navigate any potholes in the economy.

    For the Big Tech companies, Thursday is also the big day: Apple, Amazon and Alphabet will report that afternoon, after Meta reports the prior day.

    The calls to put on your calendar

    WWE upheaval: World Wrestling Entertainment Inc.
    WWE,
    +0.91%
    reports earnings on Thursday, as Vince McMahon — who returned to the professional-wrestling organization this month following allegations of sexual misconduct — seeks a buyer or some other so-called “strategic alternative” for the company.

    Analysts have speculated how the company’s wrestling events and backlog of media content might be repurposed, with some entertaining the possibility of interest from Amazon or Netflix Inc.
    NFLX,
    -0.39%    .
    But WWE has struggled to develop story lines that stick with viewers, and has thinned its ranks of wrestlers.

    The Wall Street Journal this month reported that McMahon would pay a multimillion-dollar settlement to a former referee who accused him of raping her. Among the changes since McMahon returned was the departure of his daughter, who had been promoted to co-CEO after he stepped down from the role last year.

    There isn’t much clarity on whether Vince McMahon will be on Thursday’s earnings call, which was moved from the morning to the afternoon due to a scheduling conflict. But it should offer drama no matter who attends.

    The numbers to watch

    GM and Ford auto sales: Auto makers General Motors Co.
    GM,
    -2.00%
    and Ford Motor Co.
    F,
    -0.94%
    will issue results on Tuesday and Thursday respectively, amid signs of waning demand and rising interest rates that have made car loans more expensive. Despite falling new-vehicle sales in the third quarter, GM managed to keep its own sales higher, the AP noted.

    Mary Barry, GM’s chief executive, called out the popularity of vehicles like the Escalade, the Chevrolet Bolt EV and some pickups and SUVs during the auto maker’s third-quarter earnings call in October. During that quarter, GM said it completed and shipped nearly 75% of the unfinished vehicles held in its inventory in June. She said supply-chains were opening up again, but added that “short-term disruptions will continue to happen.”

    The auto makers report as they try to put a chip shortage and other production constraints behind them. But some forecasts call for 2022 auto sales, or sales volumes, to be the weakest in roughly a decade. Electric vehicle maker Tesla’s recent price cuts could also cut into GM’s and Ford’s own EV sales.

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  • Hasbro plans to lay off 15% of workforce and warns of holiday-season loss

    Hasbro plans to lay off 15% of workforce and warns of holiday-season loss

    Hasbro Inc. late Thursday said it plans to lay off about 15% of its workforce and warned Wall Street to brace for a quarterly loss and a drop in revenue after a disappointing holiday season.

    Hasbro
    HAS,
    -0.50%
    reported preliminary losses between $1 a share and 93 cents a share for its fourth quarter, and an adjusted loss of between $1.29 a share and $1.31 a share in the period.

    That runs counter to FactSet consensus of an adjusted profit of $1.52 a share for the quarter.

    The maker of My Little Pony, Baby Alive and other toy brands also reported preliminary fourth-quarter revenue of about $1.68 billion, down 17% year-over-year. That compares with FactSet consensus for revenue of $1.92 billion for the quarter.

    Hasbro stock fell more than 8% in the extended session after ending the regular trading day down 0.5%.

    Hasbro’s “consumer-products business underperformed in the fourth quarter against the backdrop of a challenging holiday consumer environment,” despite “strong growth” for digital gaming and other areas of the company, Chief Executive Chris Cocks said in a statement.

    Several retailers have posted lower-than-expected fourth-quarter sales as concerns about the economy simmer. Layoffs have also been widespread, with International Business Machines Corp.
    IBM,
    -4.48%
    and SAP
    SAP,
    -1.77%
    among the latest announcing cuts.

    The global job cuts will start in the next few weeks, Hasbro said. The toy maker employed 6,640 people worldwide as of December 2021, according to its most recent annual filing with securities regulators.

    Hasbro said that the layoffs and “ongoing systems and supply-chain investments” will keep the company on track to hit its goal of between $250 million and $300 million in cost savings by the end of 2025.

    Until then, however, 2022 and “particularly” the fourth quarter were a “a challenging moment for Hasbro,” the company said.

    Earlier this month, analysts at BMO said they expected Hasbro’s holiday-season sales were likely among “the weakest in the North American toy industry.”

    Hasbro’s stock has fallen about 29% in the last 12 months, compared with a decline of around 7% for the S&P 500 index
    SPX,
    +1.10%    .

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  • SAP to cut nearly 3,000 Jobs, weighs Qualtrics stake sale

    SAP to cut nearly 3,000 Jobs, weighs Qualtrics stake sale

    SAP profit, revenue fall short of forecasts, plans to cut 2,800 jobs

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  • U.S. economy gets off to weak start in 2023, S&P finds

    U.S. economy gets off to weak start in 2023, S&P finds

    The numbers: The U.S. economy got off to a weak start in 2023. Business conditions contracted again in January as demand for goods and services fell for the fourth month in a row, S&P surveys showed.

    The S&P Global “flash” U.S. services sector index rose to a three-month high of 46.6 from 44.7 in December. The service side of the economy employs most Americans.

    The S&P Global U.S. manufacturing sector index, meanwhile, edged up to 46.7 from a 31-month low of 46.2 at the end of last year.

    Any number below 50 suggests a contracting economy, however.

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

    Key details: New orders, a sign of future sales, have tailed off since October.

    The decline in demand has helped to ease inflation since the fall, S&P found, but the cost of labor and supplies both rose in January. Companies tried to limit price increases of their own, however, to retain market share.

    Employment levels were basically unchanged. Manufacturers created more jobs, but service-oriented firms cut staff for the first time in two and a half years.

    In a bit of surprise, executives expressed more confidence about how the economy would perform over the next year.

    Big picture: The economy was stung in 2022 by the highest inflation in 40 years. Now it’s getting slammed by rising interest rates as the Federal Reserve aims to bring inflation back down to pre-pandemic levels.

    Many economists believe the U.S could sink into recession this year.

    Looking ahead: “The U.S. economy has started 2023 on a disappointingly soft note,” said Chris Williamson, chief business economist at S&P Global. “Companies cite concerns over the ongoing impact of high prices and rising interest rates, as well as lingering worries over supply and labor shortages.”

    Market reaction: The Dow Jones Industrial Average
    DJIA,
    +0.02%
    and S&P 500
    SPX,
    -0.11%
    fell in Tuesday trades.

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  • 3M to Cut 2,500 Manufacturing Jobs >MMM

    3M to Cut 2,500 Manufacturing Jobs >MMM

    By Colin Kellaher

    3M Co. on Tuesday said it plans to cut about 2,500 manufacturing jobs around the world, as the conglomerate braces for macroeconomic challenges this year.
    

    The St. Paul, Minn., company said the job cuts, which are based on what it is seeing in its end markets, are needed to align with adjusted production volumes.
    

    

    3M joins a raft U.S. companies that are slashing staff at the start of the year amid waning demand and weaker revenue.
    

    3M, which has about 95,000 employees according to data from FactSet, said it expects to book a pretax restructuring charge of $75 million to $100 million in the first quarter.
    

    Write to Colin Kellaher at colin.kellaher@wsj.com
    

    

    


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  • 
		
		
    
			
    Spotify to lay off nearly 600 employees
    
			
    Spotify to lay off nearly 600 employees
    
			
    

    

    After slowing its pace of hiring last year, Spotify Technology SA confirmed Monday that it was laying off employees, adding to the wave of jobs cuts sweeping across the tech industry.
    

    The streaming music service disclosed in a filing with the Securities and Exchange Commission that it was reducing its workforce by about 6%, which translates to about 588 jobs.
    

    

     Bloomberg News had originally reported over the weekend that the company was planning job cuts as soon as this week.
    

    The Luxembourg-based company said it expects to record charges of EUR35 million to EUR45 million ($38.1 million to $48.9 million) related to severance payments.
    

    Spotify’s U.S.-listed shares
    
        SPOT,
    
        +4.63%
    
      rallied 4.4% toward a four-month high in premarket trading, 
    

    In October, Spotify laid off at least 38 employees at its Gimlet and Parcast podcast units. Last June, Spotify Chief Executive Daniel Ek told employees that the company would reduce hiring by 25%, according to Bloomberg and CNBC reports.
    

    As of the end of its third quarter, Spotify had about 9,800 employees, according to its earnings report. More than 55,000 tech workers have been laid off so far in 2023, according to the website Layoffs.fyi, including 12,000 from Google parent Alphabet Inc., 10,000 from Microsoft Corp. and hundreds more from Intel Corp.
    

    Stockholm-based Spotify has been pressured by massive spending on podcasts in recent years, which have yet to deliver profits and have weighed on margins. In June, Ek predicted a meaningful ramp in profitability within the next couple of years.
    

    Separately, Spotify said Chief Content & Advertising Business Officer Dawn Ostroff will leave the company.
    

    Spotify shares have sunk about 50% over the past 12 months, compared with the S&P 500’s
    
        SPX,
    
        +1.89%
    
       10% decline over that time.
    

    

    

    


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  • 
		
		
    
			
    More than 55,000 global tech workers laid off in the first few weeks of 2023, says layoff tracking site
    
			
    More than 55,000 global tech workers laid off in the first few weeks of 2023, says layoff tracking site
    
			
    

    

    More than 55,000 global technology sector employees have been laid off in the first few weeks of 2023, according to data compiled by the Layoffs.fyi website. 
    

    The website’s tally of global tech layoffs has almost doubled from just over 25,000 on Tuesday.
    

    

    The data suggest 2023 is on pace to surpass 2022 for global tech redundancies, with 154 tech companies laying off 55,324 employees in the first few weeks of the year. Last year, 1,024 tech companies laid off 154,336 employees, according to Layoffs.fyi.
    

    Related: More than 25,000 global tech workers laid off in the first weeks of 2023, says layoff tracking site
    

    Layoffs.fyi was set up by San Francisco-based startup founder Roger Lee to track layoffs during the COVID-19 pandemic. Lee is the co-founder of Human Interest, a digital 401(k) provider for small businesses and Comprehensive, an employee compensation platform.
    

    Major U.S. tech companies are firmly in the layoffs spotlight. This week Google parent Alphabet Inc.
    
        GOOGL,
    
        +4.69%
    

            GOOG,
    
        +4.80%
    
       confirmed plans to lay off about 12,000 workers globally and Intel Corp.
    
        INTC,
    
        +1.62%
    
       said it is slashing hundreds of jobs in Silicon Valley.
    

    Microsoft Corp.
    
        MSFT,
    
        +3.19%
    
       confirmed plans to cut about 10,000 positions. The software maker’s layoffs did not come completely out of the blue. Earlier reports from Sky News and Bloomberg indicated that Microsoft was preparing to make cuts.
    

    See Now: Google joins Intel, Microsoft Amazon, Salesforce and other major companies laying off thousands of people
    

    In a blog post, Microsoft CEO Satya Nadella said that while the company is eliminating roles in some areas, the company will continue to hire in key strategic areas. The CEO did not specify which areas will see hiring but did describe advances in artificial intelligence as “the next major wave of computing.”
    

    Earlier this month Coinbase Global Inc.
    
        COIN,
    
        +8.56%
    
       announced 950 job cuts in an attempt to cut costs.
    

    

    


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    U.S. adds robust 223,000 jobs in December, but wage growth slows in sign of ebbing inflation pressures
    
			
    U.S. adds robust 223,000 jobs in December, but wage growth slows in sign of ebbing inflation pressures
    
			
    

    

    The numbers:  The U.S. generated 223,000 new jobs in December to mark the smallest increase in two years,  but the labor market still showed surprising vigor even as the economy faced rising headwinds.  
    

    The unemployment rate, meanwhile, slipped to 3.5% from 3.6%, the government said Friday.
    

    

    The jobless rate has touched 3.5% several times since 2019. That matches the lowest rate since 1969.
    

    One good sign for Wall Street and the Federal Reserve. Hourly pay rose a modest 0.3% last month, suggesting wages are coming off a boil. 
    

    The increase in wages over the past year also slowed to 4.6% from 4.8%, marking the smallest gain since the summer of 2021.
    

    U.S. stocks
    
        DJIA,
    
        -1.02%
    
       
    
        SPX,
    
        -1.16%
    
       rose in premarket trades and bond yields edged higher after the report.
    

    Economists polled by The Wall Street Journal had forecast a smaller increase in new jobs of 200,000. 
    

    The resilient labor market is a double-edged sword for the Federal Reserve.
    

    For one thing, a scarcity of workers has driven up wages and threatens to prolong a bout of high inflation. The Fed wants the labor market to cool off further to ease the upward pressure on prices.
    

    Yet the strong labor market also offers the best hope for the Fed to avert a recession as it jacks up interest rates to the highest level in years. Higher rates reduce inflation by slowing the economy.
    

    James Bullard, president of the St. Louis Federal Reserve, said on Thursday the odds of so-called soft landing have gone up in part because of the sturdy labor market. He was referring to a Goldilocks scenario in which the central bank vanquishes inflation without causing a recession.
    

    Senior Fed officials still want to see the jobs market slacken some more, however. They are likely to keep raising rates — and keep them high — until demand for labor, goods and services ease up.
    

    Big picture: The U.S. economy has shown more fragility, especially in segments like housing and manufacturing that are sensitive to high interest rates. Many economists predict a recession is likely this year due to the higher cost of borrowing.
    

    The Fed, for its part, is trying to thread the needle: Bring down high inflation and keep the economy out of recession.
    

    Whatever the outcome, one thing is virtually certain: The unemployment rate is expected to rise as U.S. growth wanes. Whether it’s enough to help the Fed achieve is far from clear. 
    

    Key details: Health care providers, hotels and restaurants accounted for most of the increase in employment last month. They added a combined 150,000-plus jobs.
    

    Hiring was weaker in most other sectors, suggesting that the labor market is likely to soften further.
    

    High-tech has been hit particularly hard and is experiencing a wave of layoffs. 
    

    Employment in so-called professional businesses, which includes some tech, fell by 6,000, largely reflecting fewer temps being hired. It was the only major category to post a decline.
    

    The share of working-age people in the labor force — known as the participation rate — rose a tick to 62.3%.. A lack of people looking for work is a chief source of the labor shortage.
    

    Hiring in November and October was little changed after government revisions. The economy added 256,000 jobs in November and 263,000 in October.
    

     Market reaction:  The Dow Jones Industrial Average DJIA and S&P 500 SPX were set to open higher in Friday trades.
    

    Investors worry a strong labor market will push the Fed to take sterner measures to slow the economy. The slowdown in hiring and wage growth is likely to be seen in a positive light.
    

    

    


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  • 
		
		
    
			
    Amazon confirms more than 18,000 layoffs, far more than originally expected
    
			
    Amazon confirms more than 18,000 layoffs, far more than originally expected
    
			
    

    

    Amazon.com Inc.’s
    
        AMZN,
    
        -0.79%
    
       layoffs will affect more than 18,000 employees, the highest reduction tally revealed in the past year at a major technology company as the industry pares back amid economic uncertainty.
    

    The Seattle-based company in November said that it was beginning layoffs among its corporate workforce, with cuts concentrated on its devices business, recruiting and retail operations. At the time, The Wall Street Journal reported the cuts would total about 10,000 people. Thousands of those cuts began last year.
    

    


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    U.S job openings stay high at 10.5 million and show labor market still very strong
    
			
    U.S job openings stay high at 10.5 million and show labor market still very strong
    
			
    

    

    The numbers: Job openings in the U.S. fell slightly to  10.46 million in November, but workers were still quitting in droves in a sign the labor market remains quite strong — too strong for the Federal Reserve.
    

    Job listings declined from 10.51 million in October, the Labor Department said Wednesday. But openings in October were also revised higher.
    

    

    The number of job openings is seen as a cue on the health of the labor market and broader U.S. economy. Job postings have slowly receded since hitting an all-time high of 11.9 million last spring.
    

    The jobs market is still too hot for the Fed, however. The Fed is worried high inflation will persist unless hiring slows and a rapid increase in wages tapers off. 
    

    There were 1.7  job openings for each unemployed worker in November,  well above pre-pandemic levels of 1.2. The Fed is watching that ratio closely and wants to see if fall back to pre-pandemic norms.
    

    Key details: The number of people hired in November dipped to 6.06 million, marking the smallest increase since February 2021. 
    

    Rising interest rates, a slowing economy and worries about recession have spurred businesses to fill fewer open jobs. 
    

    Yet the number of job quitters edged up to 4.17 million. Quits have topped 4 million for a record 18 months in a row. People quit more often when they think it’s easy to get a better job. 
    

    The so-called quits rate among private-sector workers rose to 3% from 2.9%. It peaked at 3.4% near the end of 2021.
    

    Big picture: The Fed is raising interest rates to slow the economy and reduce the demand for labor as part of a broader strategy to rein in the worst inflation in 40 years. 
    

    Fed officials say the appetite for labor is still too strong and needs to slacken. The ratio of job openings to unemployed workers has slipped from a record 2.0 last spring, but that’s still too high for the central bank. 
    

    Market reaction: The Dow Jones Industrial Average
    
        DJIA,
    
        -0.03%
    
       and S&P 500
    
        SPX,
    
        +0.13%
    
       fell after the job-openings report.
    

    

    


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  • 
		
		
    
			
    Jobless claims drop to 11-week low of 211,000 in early December
    
			
    Jobless claims drop to 11-week low of 211,000 in early December
    
			
    

    

    

    The numbers: The number of Americans who applied for unemployment benefits in early December fell to a nearly three-month low of 211,000, indicating layoffs around the holiday season remain low even as the economy softens.
    

    New unemployment filings declined by 20,000 from 231,000 in the prior week, the government said Thursday. 
    

    Economists…
    
    

    

    


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    Chrysler Parent Stellantis to Stop Operations at Jeep Cherokee Factory
    
			
    Chrysler Parent Stellantis to Stop Operations at Jeep Cherokee Factory
    
			
    

    Chrysler Parent Stellantis to Stop Operations at Jeep Cherokee Factory
    


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  • 
		
		
    
			
    Exclusive: San Francisco city attorney looking into loss of Twitter janitors’ jobs
    
			
    Exclusive: San Francisco city attorney looking into loss of Twitter janitors’ jobs
    
			
    

    

    San Francisco City Attorney David Chiu said Tuesday that he will look into the loss of Twitter janitors’ jobs, which appears to be in violation of San Francisco law.
    

    Members of the SEIU Local 87 went on strike Monday as their contract was set to expire Dec. 9. The contractor that employed them is set to be replaced by another contractor that Twitter would not disclose to the union, according to Olga Miranda, president of the union local. Twitter then moved up the janitors’ last day on the job to Monday, she said. 
    

    

    According to San Francisco law, when a company changes contractors for security or janitorial services, the contractor is supposed to rehire workers for at least 90 days after the transition.
    

    When contacted by MarketWatch on Tuesday, Chiu said: “Elon Musk has a long history of flouting labor laws. While I’m not surprised this happened, I feel for those workers as well as all Twitter employees and contractors who have been laid off. We will be looking into this further.”
    

    Miranda said 48 janitors in total are affected, 30 of whom were waiting to go back to work because many Twitter employees had been working from home and not as many janitors were needed.
    

    San Francisco-based Twitter, whose communications team was reportedly almost entirely laid off at the beginning of November after Musk bought the company, has not returned a request for comment. Musk has cut about half of the company’s pre-acquisition workforce of 7,500 since he took over.
    

    Also Tuesday, Ted Goldberg, a senior editor at KQED, San Francisco’s public radio station, tweeted that the San Francisco Department of Building Inspection is launching an investigation into news reported by Forbes that Twitter has set up bedrooms for employees at its headquarters.
    

    “We need to make sure the building is being used as intended,” a representative of the department told KQED News.
    

    

    

    


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  • 
		
		
    
			
    Inflation and credit-card debt are on the rise, despite a strong job market. Tell us how the economy is affecting you.
    
			
    Inflation and credit-card debt are on the rise, despite a strong job market. Tell us how the economy is affecting you.
    
			
    

    

    We want to hear from readers who have stories to share about the effects of increasing costs and a changing economy. If you’d like to share your experience, write to readerstories@marketwatch.com. Please include your name and the best way to reach you. A reporter may be in touch.
    

    For many people living in the U.S., these are tough — and confusing — times.
    

    On Friday, the Labor Department reported 263,000 new jobs in November, while the unemployment rate held steady at 3.7%. Layoffs remain low, despite mass job cuts in the tech sector. Average hourly wages have also risen 5.1% in the past year, but still lag behind inflation for many workers. And there were 10.3 million job openings in October — slightly down from the previous month’s 10.7 million. 
    

    

    Some people might see the latest economic data as both challenging and confusing. 
    

    After all, the cost of living rose 7.7% on the year in October. The once red-hot housing market is finally cooling, thanks to mortgage rates that have more than doubled over the last year amid the Federal Reserve’s attempts to rein in inflation, and rents, while moderating, have surged from pre-pandemic levels. Borrowing money to cover increased precarity is becoming more expensive too, with the average credit-card APR at 19.2% as of Nov. 30, according to Bankrate.
    

    

    

    
        “‘It’s just mind-boggling, the disconnect that we’ve seen.’”
      
    

    

    

    Given all the conflicting signals, economists say it can be difficult for consumers to know exactly how to feel about the economy right now. “It’s not new, this disparity between the actual facts on the ground about what’s going on in the economy and the sentiment,” said Heidi Shierholz, president of the Economic Policy Institute, a left-leaning think tank. 
    

    “I remember this summer it was just unambiguously the strongest jobs recovery we’ve had in decades,” she added. “There’s just absolutely zero chance that we were in a recession — not only were we not in a recession, we were in just an extraordinarily fast recovery — and the polling, a huge share of people actually thought we were in a recession. It’s just mind-boggling, the disconnect that we’ve seen.”
    

    Still, the fact that inflation is eating into people’s savings — and that essential goods like food, energy and housing have spiked in cost — is bound to make many people unhappy. 
    

    Struggling to pay for rent and food
    

    “Going into the pandemic, more than seven out of every 10 extremely low-income renters were already spending more than half of their income on rent. And then the pandemic hits; we saw a lot of low-wage workers lose their jobs and see an income decline,” said Andrew Aurand, vice president for research at the National Low Income Housing Coalition. “Then in 2021, we see this huge spike in prices. For a variety of reasons, they’ve struggled for a long time, and since the pandemic, it’s gotten even worse.”
    

    Moderate-income Americans are struggling too. Maybe you can’t afford your favorite family meals, as the price of grocery store and supermarket purchases has jumped by 12.4% from last year. Or maybe you’re putting off a trip to see family this holiday season thanks to the higher cost of airfare, or you’re worried about losing your job as some business leaders warn of a recession. Perhaps you’re forced to rely on credit cards and personal loans, as credit-card debt is up 15% from a year ago.
    

    MarketWatch has chronicled many of these changes, detailing renters’ frustrations, families’ tough choices at the grocery store, and the reality faced by would-be home buyers sidelined by higher rates and dwindling affordability. 
    

    But we would like your help telling an ongoing story about the American economy, centering the experiences of everyday people. Our readers know better than anyone about how today’s economic conditions have impacted their daily lives.
    

    

    


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