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.
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.
“‘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.”
“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.”
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.
The numbers: The U.S. created a robust 263,000 new jobs in November, a historically strong pace of hiring that’s good for workers but that also threatens to prolong a bout of high U.S. inflation.
The continued rapid gains in hiring have become a big source of angst at the Federal Reserve. Senior central bank officials worry that wage growth stemming from a tight labor market is adding upward pressure to already high U.S. inflation.
The Fed is expected to keep raising interest rates — and pushing the economy closer to recession — until hiring slows, labor shortages ease and wage growth drops off.
U.S. stocks fell in premarket trades and bond yields rose after the report. Economists polled by The Wall Street Journal had forecast a smaller increase in new jobs of 200,000.
The U.S. economy created 263,000 new jobs in November — far more than Wall Street had expected.
Justin Sullivan/Getty Images
The unemployment rate was unchanged at 3.7%, the government said Friday, remaining close to a half-century low.
Hourly pay, meanwhile, rose by a sharp 0.6% last month to an average of $32.82. That’s the biggest advance in 13 months and was far stronger than Wall Street expected.
The increase in wages over the past year climbed to 5.1%, from 4.9% in the prior month. Wages are still rising much faster than they were before the pandemic, when they rose about 2% to 3% a year.
The demand for labor is still strong,” said chief economist Steve Blitz of TS Lombard. “It’s still putting upward pressure on wages.”
The Fed has embarked on a series of increases in U.S. interest rates to try to slow the economy just enough to tame inflation without tipping it into recession.
The bank is trying to bring inflation back down to prepandemic levels of 2% from the current rate of 6%, based on the PCE price index.
“The level of [hiring] is not conducive to getting the base inflation rate back to 2%,” Blitz said.
The tough medicine, senior Fed officials figure, is likely to lift the unemployment rate to as high as 5% by 2023. Some Wall Street analysts believe the jobless rate will go even higher if a recession takes hold, as many are forecasting.
Higher borrowing costs slow growth by depressing consumer spending and business investment, the two key pillars of the economy.
Another potential pressure valve for the economy is also not offering any relief. The share of working-age people in the labor force — known as the labor-force participation rate — fell a tick to 62.1%, marking the third drop in a row.
The lack of people looking for work is another big factor contributing to the labor shortage.
Key details: The increase in employment last month was concentrated in hotels, restaurants and healthcare businesses. Americans have gone back to seeing their doctors and are spending more on travel and entertainment.
Hiring also rose in construction and manufacturing, two areas of the economy that are under more duress, while government employment increased by 42,000.
There were some signs of labor-market softness in the report. Retail employment shrank for the third month in a row, and warehouse and transportation jobs also declined.
Hiring at professional businesses, a leader in employment, rose by a meager 6,000. That’s the smallest increase since April 2021.
Hiring in October and September were little changed after government revisions. The economy added 284,000 jobs in October and 269,000 in September.
Big picture: The economy is slowing, but the labor force is still an oasis of strength.
For the Fed, it’s too much of a good thing. The central bank wants the demand and supply of labor to become more balanced to ease the pressure on wages.
The ongoing labor shortage, however, might be a saving grace for the economy. Many businesses have told the Fed they plan to hold onto more workers than usual even if the economy slows, because it’s been so hard to hire people in the first place.
If that’s the case, the economy might escape a recession altogether or only suffer a short and shallow downturn, some economists say.
Looking ahead: “Job creation continues to top expectations, holding the unemployment rate near half-century lows,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.
“The Fed may be closing in on a point that the pace of rate hikes could be stepped down, but the combination of tight labor markets and stubbornly elevated inflation leaves policymakers with a clear directive: keep tightening.”
Market reaction: The Dow Jones Industrial Average DJIA, -0.10%
and S&P 500 SPX, -0.12%
were set to decline sharply in Friday trades.
Amazon.com Inc. plans more layoffs, but employees will have to wait until 2023 to see if their jobs are affected.
Chief Executive Andy Jassy said Thursday that while Amazon AMZN, -2.34%
already confirmed that it was eliminating jobs in its devices and books businesses, an unknown number of layoffs impacting other teams are still to follow.
“Our annual planning process extends into the new year, which means there will be more role reductions as leaders continue to make adjustments,” he said in a blog post on the company’s corporate site. “Those decisions will be shared with impacted employees and organizations early in 2023.”
While Jassy doesn’t know “exactly how many other roles will be impacted,” he does know “that there will be reductions in our Stores and PXT organizations.” The company already announced a “voluntary reduction offer for some employees” working in PXT, or People Experience and Technology Solutions.
Jassy took over as Amazon’s CEO in July 2021 and said Thursday that “without a doubt,” the move to cut staff is “the most difficult decision we’ve made” since he’s been in the role.
“It’s not lost on me or any of the leaders who make these decisions that these aren’t just roles we’re eliminating, but rather, people with emotions, ambitions and responsibilities whose lives will be impacted,” Jassy said.
He added that Amazon “has weathered uncertainty and difficult economies in the past, and we will continue to do so.” Jassy emphasized that Amazon will continue to plug away on more established areas like stores, advertising and cloud computing, as well as newer initiatives like Prime Video, the Alexa voice assistant and healthcare.
Billionaire Jeff Bezos, who founded the e-retail behemoth Amazon, has some spending tips as Americans gear up for a holiday shopping season — amid four-decade high inflation and recession worries.
Here’s what he said:
“‘If you’re an individual and you’re thinking about buying a large-screen TV, maybe slow that down, keep that cash, see what happens. Same thing with a refrigerator, a new car, whatever. Just take some risk off the table.’”
Why did Bezos offer the tip for consumers and small business to go easy on big-ticket items? He gave one big reason.
“If we’re not in a recession right now, we’re likely to be in one very soon,” he said in the interview, picking up on his cautionary tweet last month that “the probabilities in this economy tell you to batten down the hatches.”
Bezos is currently executive chair at Amazon AMZN, -2.34%,
transitioning to the role last year as Andy Jassy took the reins as CEO.
“Critics have taken aim at these words of thrift coming from a man — now worth approximately $120 billion — who built Amazon into the online shopping bonanza.”
To be sure, Bezos is not alone is his worries about a potential recession as the Federal Reserve and other central banks fight higher costs by hiking interest rates.
But his advice prompted some guffaws on social media. In a nutshell, critics say these are words of thrift coming from a man — now worth approximately $120 billion — who built Amazon into the online shopping bonanza that lets consumers seamlessly spend money.
As Joshua Becker, a proponent of minimalism wrote on Twitter: “I didn’t hear him mention refraining from Amazon’s Prime Day deals or Black Friday offers, but I recommend adding those items to your list as well.”
Regardless of how anyone feels about hearing spending advice, particularly from one of the world’s richest people, there are some things to consider as events like Black Friday and Cyber Monday approach.
For one thing, maybe there are discretionary expenses where people can cut back. Many Americans are still spending briskly, as Walmart WMT, -0.34%
third-quarter earnings and October’s retail-sales numbers recently affirmed. Holiday-spending projections paint the same picture.
Americans will spend between $942.6 billion and $960.4 billion on holiday-season sales this year, according to projections from the National Retail Federation. Last year’s holiday sales totaled $889.3 billion, the trade association said.
“During the third quarter, Americans’ credit-card balances climbed to $930 billion, the biggest annual increase in more than 20 years, according to the National Retail Federation.”
But Americans are planning for the holidays while credit-card balances are increasing — likely because credit cards are helping them keep up with rising costs.
During the third quarter, Americans’ credit-card balances climbed to $930 billion, the biggest annual increase in more than 20 years, according to Federal Reserve Bank of New York data.
While balances grow, so do credit-card interest rates. The annual percentage rate (APR) on new credit-card offers averaged 19.14% in mid-November, according to Bankrate.com. That beats the old record on APRs for new cards, set at 19% three decades ago.
The holiday shopping season is typically when Americans accumulate credit-card debt, pay the debts in the early part of the coming year and repeat the holiday-season debt the following year.
This year, the stakes could be higher if high credit-card bills arrive and a recession-induced job loss follows.
“It’s not the time to overspend and have a problem with paying your bills later,” Michele Raneri, vice president of financial services research and consulting at TransUnion TRU, -4.94%,
one of the country’s three major credit bureaus, previously told MarketWatch. “We know the economy is sending mixed messages.”
Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images.
SOPA Images/LightRocket via Getty Images
The news that a reported 3,700 Twitter TWTR employees were let go via email, was no surprise. However, it does call into question how badly advertising revenue will be hit as ad agencies try and figure out what the new Twitter will look like sans almost half of their employees.
Employees likely didn’t sleep well after getting an email on Thursday night telling them they would be notified what their future employment status was by 9:00 a.m. PST on Friday by email with the header “Your Role At Twitter.” It would be sent to their personal accounts if they are being let go, or to their work accounts if they would be staying, they were notified in an unsigned email.
The company shut all offices on Friday “to help ensure the safety of each employee as well as Twitter systems and customer data.” Some employees who had been sleeping in their offices due to heavy time demands from Musk were shocked as they were escorted out of the building.
Many employees got early warnings as their access to work platforms was shut off at about 8:00 p.m. and their email accounts were turned off at 11:00 p.m. “It’s a break-up by text,” a person affected by the layoffs said.
“My entire team is gone,” one person impacted by the layoffs in New York told a reporter. They worked on a team of more than 30. Another employee estimated that 90% of their team was gone.
Most of the management of the ad sales team, including Chief Marketing Officer Leslie Berland, VP of Global Client Solutions Jean-Phillipe Maheu and Chief Customer Officer Sarah Personette, had already been let go by Chief Twit Elon Musk, who has been trying to placate advertisers by doing in-person and video meetings.
Three of the worst hit teams were product and engineering for advertising, Redbird (the infrastructure team that runs data centers), and corporate communications.
Musk’s strategy to butter up advertisers has clearly not worked. General Mills GIS Inc., snack food manufacturer Mondalez International Inc., Pfizer PFE Inc. and Volkswagen AG’s Audi are joining a growing list of companies “pausing” campaigns on Twitter, according to The Wall Street Journal.
One ad agency executive told The Journal that about 20 of its clients are no longer advertising on Twitter, and that’s just one agency. Musk himself gave a clue as to how bad things are when he tweeted that the company has had a massive drop in ad revenue since he acquired it a week ago. He said it was “due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists.” He added, “Extremely messed up! They’re trying to destroy free speech in America.”
What he failed to consider is the fact that, like stock market investors, the thing that advertisers like the least is uncertainty. If they don’t know exactly where and when their ad is being placed, and more importantly, what the demographic will be, they will simply stop their campaigns.
Another issue is the mood of the remaining employees given Musk has no hesitancy in quickly letting people go if they don’t carry out his vision. Many employees being laid off under the plan which has been dubbed “Project Tundra,” are being given only 60 days of severance pay. Twitter Chief Accounting Officer Robert Kaiden left the company after the list of layoffs was solidified, one of the last remaining Twitter execs to leave the company.
Musk may in fact be losing even more employees than those he has laid off. Morale is likely to plummet with the massive layoffs paired with the fact that everyone working at home is being required to return to the office. Axios reports that employees are being given as little as 60 days to relocate to a Twitter office.
Surprisingly, Twitter did not take down a flurry of tweets from prominent California Attorney Lisa Bloom (@LisaBloom) late Thursday night including:
· Hey Twitter employees getting laid off tomorrow! IMPORTANT INFO from a CA employment attorney (me): CA’s “WARN” law requires Twitter to give you 60 days notice of a massive layoffs. A layoff of 50+ employees within a 30 day period qualifies. I know you didn’t get that notice;
· This WARN law applies to all California employers of 75+ employees, which obviously includes Twitter with its thousands of employees. Purpose of the law is to give laid off employee’s time to figure out how to handle this disruption. And Elon completely ignores it;
· Twitter will be liable for all of these (civil penalties, lost compensation, lost medical and other benefits) & attorney’s fees for 60 days it failed to give workers notice. This flagrant violation of worker’s rights is outrageous. Who’s in for a class action? LET’S DO THIS;
· Also, CA’s strong antidiscrimination laws apply to Twitter’s big layoff tomorrow. Are people of color, women and/or older workers disproportionately chosen for example? This was done so hastily, so slapdash, so that the world’s richest man gen get even richer faster;
· Employees laid off in violation of the WARN Act receive back pay at the employee’s final rate or a 3 year average of compensation, whichever is higher. Twitter would also be liable for workers’ medical expenses that would have been covered under an employee benefit plan;
· Twitter employees, DO NOT SIGN IGN ANYTHING when you’re laid off. Consult with an attorney first. Buried in the fine print may be a waiver of your rights under CA and Federal law. Those employers like Twitter who violate the WARN Act face civil penalties of $500/day for each violation. With thousands of employees this could be significant, though maybe not to Elon; and
· We’ll see how long Twitter lets my posts stay up. If they take them down tonight, before the layoffs, that means they were on notice of the law I cite and chose to punish me rather than follow it. That’s consciousness of guilt and I’d use it as the basis for punitive damages.
A class action lawsuit was indeed filed against Twitter for not giving enough notice to employees prior to the layoffs by Shannon Liss-Riordan, who unsuccessfully sued Tesla in June of 2022 when the company cut about 10% of their workforce.
However, Musk apparently has already thought this through by keeping people on the payroll who are laid off. The New York Times received an email from a worker who was notified that her job had been “impacted” but that they would stay employed through a separation date in February.
The numbers: The economy gained surprisingly strong 261,000 new jobs in October, underscoring the persistent strength of a labor market that the Federal Reserve worries will exacerbate high inflation.
Economists polled by The Wall Street Journal had forecast 205,000 new jobs.
The unemployment rate, meanwhile, rose to 3.7% from 3.5%, the government said Friday, as more people lost jobs and the size of the labor force shrank a little bit.
Fed Chairman Jerome Powell said on Wednesday the labor market is “out of balance” because there’s too many job openings and too few people to fill them.
Fed officials worry the labor shortage is driving up wages and making it harder for them to reduce inflation back to precrisis levels of 2% or so. The cost of living has risen 8.2% in the past year, one of the highest increases since the early 1980s.
Layoffs and unemployment are likely to increase, however, if the Fed keeps raising U.S. interest rates as expected. The central bank could push a key short-term rate to as high as 5% by next year from near zero just nine months ago.
Rising interest rates slow the economy and sometimes trigger recessions. Many economists predict a downturn is likely by next year. Powell himself admitted the odds of avoiding a recession have fallen due to persistently high inflation.
In October, wages grew 0.4%. Average hourly pay rose slightly in September to $32.58, lowering the increase over the past year to 4.7% from 5%.
It’s the first time in almost a year that the rate of wage growth has dropped below 5%. Before the pandemic, they were rising around 3% a year.
Another potential pressure valve for the economy showed little progress, however. The so-called participation rate — or share of working-age people in the labor force — dipped to 62.2% from 62.3%.
Big picture: The economy is slowing — almost every major indicator is much softer compared to earlier in the year.
The labor market is one of the few exceptions.
Normally that’s a good thing, but the Fed thinks the the labor market is too strong for its own good. The series of rate hikes undertaken by the central bank is bound to slow hiring even further and cause unemployment to rise in the months ahead.
The potential saving grace, Powell and some other economists say? Businesses have struggled so hard to hire people amid a labor shortage that they might not lay off as many people as they usually do when the economy goes sour.
Market reaction: The Dow Jones Industrial Average DJIA, -0.46%
and S&P 500 SPX, -1.06%
were set to open lower in Friday trades. The yield on the 10-year Treasury note TMUBMUSD10Y, 4.158%
rose to 4.19%.
International Distribution Services PLC said Friday that its U.K. division Royal Mail swung to an adjusted operating loss for the first half of fiscal 2023, mostly due to the effect of three days of industrial action.
The company IDS, -13.14%
said that Royal Mail’s adjusted operating loss for the six month period ended in September was 219 million pounds ($248.1 million) compared with an adjusted operating profit of GBP235 million for the first half of fiscal 2022. This included a GBP70 million of direct negative impacts stemming from three days of industrial action, it said.
Royal Mail might require between 5,000 to 6,000 redundancies by the end of August, 2023, IDS said.
The company said that it expects Royal Mail to post full-year adjusted operating loss–a metric which strips out exceptional and other one-off items–to be around GBP350 million. The company said this estimate includes the direct and immediate effect of eight days of industrial action which have taken place or been notified to Royal Mail, but excluding any charges for voluntary redundancy costs.
“This may increase to around a GBP450 million loss if customers move volume away for longer periods following the initial disruption,” it said.
The company said that the loss for the full year would materially increase and it might require “further operational restructuring and headcount reduction” if the Communication Workers Union proceeds with the 16 days of industrial action announced.
Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com
The U.S. is at risk of prolonging the COVID pandemic if it fails to back an initiative that aims to get vaccines, diagnostics and treatments to lower-income countries, a congressional group has told President Joe Biden.
In a letter to Biden from the group led by Earl Blumenauer, a Democrat from Oregon, the group urged him to back the World Trade Organization’s agreement in June to ease exports of lifesaving therapies.
“With more than 600 million shots in arms, 21,500 free testing sites, the ability to order at-home tests for free, and more treatments available now than at any point in the pandemic, the outlook in the United States is better than ever. Unfortunately, however, the prospect for many low-income countries is not so positive — putting the United States’ own success in jeopardy,” the lawmakers wrote.
The letter was sent ahead of a meeting of the WTO council for trade-related aspects of IP rights that is due to kick off Thursday.
The group noted that lower-income countries are facing a higher risk of severe illness, hospitalization and death as only a small percentage of their populations are vaccinated. Just 19% of people in those countries are vaccinated, compared with about 75% in high-income countries, according to the Multilateral Leaders Taskforce on COVID-19, a joint initiative of the International Monetary Fund, the World Bank, the World Health Organization and the WTO.
U.S. known cases of COVID are continuing to ease and now stand at their lowest level since late April, although the true tally is likely higher given how many people are testing at home, where the data are not being collected.
The daily average for new cases stood at 43,149 on Wednesday, according to a New York Times tracker, down 23% from two weeks ago. Cases are rising in most northeastern states by 10% of more, while cases in the western states Montana, Washington and Oregon are rising.
The daily average for hospitalizations was down 11% at 27,184, while the daily average for deaths is down 8% to 391.
The new bivalent vaccine might be the first step in developing annual Covid shots, which could follow a similar process to the one used to update flu vaccines every year. Here’s what that process looks like, and why applying it to Covid could be challenging. Illustration: Ryan Trefes
• China’s huge Xinjiang region has been hit with sweeping COVID travel restrictions ahead of a key Communist Party congress later this month, the Associated Press reported. Trains and buses in and out of the region of 22 million people have been suspended, and passenger numbers on flights have been reduced to 75% of capacity in recent days, according to Chinese media reports. The region is home to minorities who have been forced into prison-like re-education centers to force them to renounce their religion, typically Islam, and allegedly subjected to human-rights abuses.
• Five current or former Internal Revenue Service workers have been charged with fraud for illegally getting money from federal COVID-19 relief programs and using a total of $1 million for luxury items and personal trips, prosecutors said, the AP reported. The U.S. attorney’s office in Memphis said Tuesday that the five have been charged with wire fraud after they filed fake applications for the Paycheck Protection Program and the Economic Injury Disaster Loan Program, which were part of a federal stimulus package tied to the pandemic response in 2020.
• Peloton Interactive Inc. PTON, +3.84%
said it plans to cut about 500 jobs, roughly 12% of its remaining workforce, in the company’s fourth round of layoffs this year as the connected fitness-equipment maker tries to reverse mounting losses, the Wall Street Journal reported. After enjoying a strong run early on in the pandemic, Peloton has struggled since the start of the U.S. recovery, and CEO Barry McCarthy, who took over in February, said he is giving the unprofitable company another six months or so to significantly turn itself around and, if it fails, Peloton likely isn’t viable as a stand-alone company.
The U.S. leads the world with 96.6 million cases and 1,061,490 fatalities.
The Centers for Disease Control and Prevention’s tracker shows that 225.3 million people living in the U.S., equal to 67.9% of the total population, are fully vaccinated, meaning they have had their primary shots. Just 109.9 million have had a booster, equal to 48.8% of the vaccinated population, and 23.9 million of those who are eligible for a second booster have had one, equal to 36.6% of those who received a first booster.
Some 7.6 million people have had a shot of one of the new bivalent boosters that target the new omicron subvariants that have become dominant around the world.
