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Economic

Factbox-Corporate America sheds thousands as recession fears mount By Reuters

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1 month ago

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© Reuters. Job seekers wait before an airport-related recruitment job fair at Logan International Airport in Boston, Massachusetts, US, December 7, 2021. REUTERS/Brian Snyder

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(Reuters) – US companies, from big tech to consumer firms, are bracing for a possible economic downturn by shrinking their employee base to streamline operations.

Job cuts announced by US employers jumped 13% to 33,843 in October last year, the highest level since February 2021, according to a report.

Here are some of the major job cuts announced in recent weeks:

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Amazon.com Inc (NASDAQ:):

The e-commerce giant has laid off some employees in its hardware group, with a person familiar with the company saying it is still targeting about 10,000 jobs, including in its retail and human resources divisions.

Meta Platforms Inc (NASDAQ:)

Facebook parent company said it will cut 13% of its workforce, or more than 11,000 employees, in one of the biggest layoffs this year, as it grapples with a weak advertising market and soaring costs.

DoorDash Company:

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The food delivery company, which has enjoyed significant growth during the pandemic, said it has cut its staff by about 1,250.

AMC Networks (NASDAQ:) Inc:

The cable TV network said it would cut about 20% of its workforce in the United States, as it announced that CEO Christina Spade had resigned, after less than three months in the role.

legendary sea monster:

The cryptocurrency exchange said it will cut its global workforce by 30%, or about 1,100 employees, citing difficult market conditions that have hampered demand for digital assets this year.

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Citigroup Company (NYSE:

The bank has cut dozens of jobs in its investment banking division, Bloomberg News reported, as the deal-making slump continues to weigh on Wall Street’s biggest banks.

Morgan Stanley (NYSE:)

Reuters reported on November 3 that the Wall Street powerhouse is expected to start a new round of layoffs globally in the coming weeks, as its dealmaking business takes a hit.

Intel Corp (NASDAQ:)

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Reuters Chief Executive Pat Gelsinger said “people action” would be part of a cost-cutting plan. The chipmaker said it will cut costs by $3 billion in 2023.

Gelsinger said the adjustments will begin in the fourth quarter, but he did not specify how many employees would be affected.

Microsoft Corporation (NASDAQ:)

Axios reported, citing a source, that the software giant laid off fewer than 1,000 employees across several divisions in October.

Johnson & Johnson (NYSE:):

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The pharmaceutical giant said it may cut some jobs amid inflationary pressures and a strong dollar, with Chief Financial Officer Joseph Wolk saying the healthcare conglomerate was looking at the “right size” itself.

Twitter Inc (NYSE:)

The social media company has laid off half of its workforce across teams ranging from communications and content management to products and engineering following the $44 billion acquisition of Elon Musk.

However, Bloomberg later reported that Twitter was reaching out to dozens of employees who had lost their jobs, asking them to come back.

Lift Company (NASDAQ:):

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The airline said it would lay off 13% of its workforce, or about 683 employees, after it had already cut 60 jobs earlier this year and froze hiring in September.

Discover Warner Bros. (NASDAQ:)

Warner Bros. intends to Film subsidiary Pictures will cut a number of jobs in distribution and marketing that will reduce headcount by 5% to 10%, Bloomberg News reported.

Beyond Meat (NASDAQ:) Inc:

The plant-based meat maker said it plans to cut 200 jobs this year, with the layoffs expected to save about $39 million.

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Stripe Company:

The digital payments company has cut staff numbers by about 14% and will have about 7,000 employees after layoffs, according to an email to employees from the company’s founders.

Chime Financial Inc.:

The company has laid off 12% of its staff, or about 160 jobs, a spokesperson for the online banking company said.

Opendoor (NASDAQ:) Technologies Inc:

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The real estate selling platform is laying off about 550 employees, CEO Eric Wu said, adding that the company has already cut its workforce by more than 830 jobs.

Phillips 66 (NYSE:)

The refiner has cut staff by more than 1,100 as it seeks to meet its 2022 cost savings goal of $500 million. The cuts were communicated to employees in late October.

Chesapeake Energy Corp (NYSE:):

Sources told Reuters that the US shale gas production company has cut about 3 percent of its workforce as the company prepares to sell oil properties in south Texas.

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Seagate Technology Holdings plc:

The memory chip company announced a restructuring plan that includes cutting headcount worldwide by about 8%, or 3,000 employees.

SA Access:

The EV startup said it plans to increase the “appropriate size” of the organization, which could have a “significant impact” on its global workforce, most of which are based in the UK.

The company said in July it could cut up to 30% of its workforce in the restructuring.

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Coinbase (NASDAQ:) Global:

The cryptocurrency exchange said it plans to cut more than 60 jobs, both in its corporate recruitment and staffing teams.

The move marks a second round of job cuts at the company this year, and comes at a time when cryptocurrencies have been experiencing wild volatility as investors dump risky assets.

Walt Disney (NYSE:)

The media giant plans to freeze hiring and cut some jobs, according to a company memo seen by Reuters.

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Rocco (NASDAQ 🙂 Inc.:

The manufacturer of video streaming equipment has stated that it will cut its staff by 5%, or around 200 employees, due to “current economic conditions”.

Cisco Systems Inc (NASDAQ:)

The networking and collaboration solutions company said it will undertake a restructuring that could affect approximately 5% of its workforce. The effort will begin in the second quarter of fiscal 2023 and cost the company $600 million.

HP Inc (NYSE:

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The computing hardware maker said it expects to cut up to 6,000 jobs by the end of fiscal 2025.

CNN:

Chris Licht, president of CNN owned by Warner Bros Discovery, told employees in a memo to all employees that job cuts are underway.

Buzzfeed Company:

The online media company said it will cut about 12% of its workforce. As of December 31 of last year, the company had 1,522 employees in six countries.

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Blue Apron Holdings (NYSE: Inc):

The online meal kit company said it will cut about 10% of the company’s workforce, as it looks to cut costs and streamline operations. The company had about 1,657 full-time employees, as of September 30.

Wolverine Worldwide (NYSE: Inc):

The casual shoe and apparel retailer said it began cutting its workforce earlier this week and expects the initiative to result in savings of about $30 million in 2023.

TuSimple Holdings Inc

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The autonomous driving technology company will lay off 25% of its workforce, or approximately 350 employees, as part of a restructuring plan to curb costs.

Micron Technology Inc (NASDAQ:)

The memory chip maker will cut 10% of its workforce in 2023 and cut capital expenditure plans for fiscal 2024, citing an alarming glut in the semiconductor market.

Salesforce Inc

The software company said it will lay off about 10% of its staff and close some offices as part of a restructuring plan, citing a difficult economy.

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Economic

We need to pay more attention to skewed economic signals

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4 weeks ago

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January 11, 2023

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The writer is chair of Queen’s College, Cambridge and advisor to Allianz and Gramercy

Inflation was the dominant economic and financial issue of 2022 for most countries around the world, especially for advanced economies that have a consequential impact on the global economy and markets.

The effects have been seen in declining living standards, increasing inequality, increasing borrowing costs, stock and bond market losses, and occasional financial mishaps (fortunately small and so far contained).

In this new year, recession, both actual and feared, has joined inflation in the driving seat of the global economy and is likely to replace it. It’s a development that makes the global economy and investment portfolios subject to a wide range of possible outcomes — something that a growing number of bond investors seem to be aware of more than their equity counterparts.

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International Monetary Fund iYou will likely review soon Her economic growth forecasts again, predicting that “a third of the world will be hit by recession this year”. What is particularly notable to me about these worsening global prospects is not only that the world’s three major economic regions – China, the European Union and the United States – are slowing down together, but also that this is happening for different reasons.

In China, a chaotic exit from the wrong Covid-19 policy is undermining demand and causing more supply disruptions. Such headwinds to domestic and global economic well-being will continue as long as China fails to improve the coverage and effectiveness of its vaccination efforts. The strength and sustainability of the subsequent recovery will also require that the country more vigorously renew a growth model that can no longer rely on greater globalization.

The European Union continues to deal with energy supply disruptions as the Russian invasion of Ukraine continues. Strengthening inventory management and reorientation of energy supplies is well advanced in many countries. However, it is not yet sufficient to lift immediate constraints on growth, let alone resolve long-term structural headwinds.

The United States has the least problematic view. The headwinds to growth are due to the Fed’s struggle to contain inflation after mischaracterizing rate increases as fleeting and then initially being too timid to adjust monetary policy.

The Fed’s shift to an aggressive front-load of interest rate hikes came too late to prevent the spread of inflation in the services sector and wages. As such, inflation is likely to remain stubborn at around 4 percent, be less sensitive to interest rate policies and expose the economy to greater risk for accidents from additional policy errors that undermine growth.

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The uncertainties facing each of these three economic areas suggest that analysts should be more careful in reassuring us that recessionary pressures will be “short and shallow”. They need to be open, if only to avoid repeating the mistake of prematurely dismissing inflation as transient.

This is especially important because these diverse drivers of recessionary risk make financial fragility more threatening and policy shifts more difficult, including potentially Japan. Get out of interest rate control Policy. The range of possible outcomes is extraordinarily large.

On the one hand, a better policy response, including improving the supply response and protecting the most vulnerable populations, can counteract the global economic slowdown and, in the case of the United States, avert a recession.

On the other hand, additional policy errors and market turmoil can lead to self-reinforcing vicious cycles with rising inflation and rising interest rates, weakening credit and compressed earnings, and stressing market performance.

Judging by market prices, more bond investors are better understanding this, including by refusing to follow the Fed’s interest rate guidance this year. Instead of a sustainable path to higher rates for 2023, they believe recessionary pressures will lead to cuts later this year. If true, government bonds would provide the yield and potential for badly missed portfolio risk mitigation in 2022.

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However, parts of the stock market is still weakly bearish pricing. Reconciling these different scenarios is more important than investors. Without better alignment within markets and with policy signals, the positive economic and financial outcomes we all desire will be no less likely. They will also be challenged by the risk of more unpleasant outcomes at a time of less economic and human resilience.

Video: Divided Markets: The Great Threats to the Financial System

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Economic

Macro hedge funds end 2022 higher, investors say, while many others take big losses By Reuters

Published

4 weeks ago

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January 10, 2023

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© Reuters. FILE PHOTO: Traders work on the trading floor of the New York Stock Exchange (NYSE) in New York City, US, January 5, 2023. REUTERS/Andrew Kelly

By Svea Herbst Baylis

NEW YORK (Reuters) – Some hedge funds betting on macroeconomic trends have boasted of double and even triple-digit gains for 2022, while other high-profile companies that have long been on technology stocks have suffered heavy losses in volatile markets, investors said.

Rokos Capital, run by Chris Rokos and one of a handful of so-called global macro companies, gained 51% last year. Fund investors this week, who asked not to be identified, said Brevan Howard Asset Management, the company where Rokos once worked, posted a gain of 20.14% and Caxton Associates returned 16.73%.

Haider Capital Management’s Haider Jupiter Fund rose 193%, an investor said.

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Data from hedge fund research showed that many macro managers have avoided crumbling stock markets that have been rocked by rapid interest rate increases and geopolitical turmoil, including the war in Ukraine, to rank among the best performers in the hedge fund industry. The company’s macro index rose 14.2% while the general index of hedge funds fell 4.25%, its first loss since 2018.

Equity hedge funds, where the bulk of the industry’s roughly $3.7 trillion in assets are invested, fared worse with a loss of 10.4%, according to HFR data. And while that beat the broader stock market’s loss of 19.4%, some high-profile funds posted even bigger losses.

Tiger Global Management lost 56% while Whale Rock Capital Management ended the year with a 43% loss and Maverick Capital lost 23%. Coatue Management ended 2022 with a loss of 19%.

But not all companies that bet on technology stocks suffered. John Thaler JAT Capital finished the year with a 3.7% gain after fees after a 33% increase in 2021 and a 46% gain in 2020.

Sculptor Capital Management (NYSE::), where founder Dan Och is fighting the company’s current CEO in court over his salary increase, posted a 13% drop.

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David Einhorn’s Greenlight Capital, which bet that Elon Musk would be forced to buy Twitter, ended the year up 37% while Rick Sandler’s Eminence Capital rose 7%.

A number of so-called multi-manager companies where teams of portfolio managers bet on a variety of sectors also boast positive returns and have been able to deliver on their promise that hedge funds can deliver better returns in distressed markets.

Balyasny’s Atlas Fund (NYSE: Enhanced) gained 9.7%, while Point72 Asset Management gained 10%. Millennium Management gained 12% while Carlson Capital ended the year with a 7% gain.

Representatives for the companies either did not respond to requests for comment or declined to comment.

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Economic

German automakers point to easing supply chain problems

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4 weeks ago

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January 10, 2023

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Sales at BMW and Mercedes-Benz jumped in the final months of 2022 as the German premium auto brands indicated supply chain problems plaguing the industry were abating.

Automakers around the world have experienced parts shortages since the pandemic, especially semiconductors, leaving many of them with large fleets of incomplete vehicles that can’t be delivered to customers.

BMW and Mercedes each said their full-year vehicle deliveries fell last year by 4.8 percent and 1 percent, respectively, due to Suppliers Bottlenecks as well as lockdowns in China and the war in Ukraine.

But supply pressures eased in the last quarter of the year, as BMW recorded a 10.6 percent jump in sales, with 651,798 vehicles delivered, and Mercedes fulfilling 540,800 orders, up 17 percent from the same period in 2022.

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BMW He said the main effects of supply chain bottlenecks and continued lockdowns were felt in the first six months of the year, adding that “sales were steadily picking up in the second half.”

Mercedes boss Ula Kallenius told the Financial Times last week that the list of problems in the auto supply chain was declining, but added that long waits for cars would continue into 2023.

“One chip is enough to be vital [ . . .] Missing, and then you can’t finish the car, even if you have everything else.

Both brands recorded strong sales growth electric car. Mercedes, which last week announced a plan to build 10,000 charging docks, said EV shipments grew 124 percent to 117,800 last year compared with its predecessor.

Similarly, BMW reported strong growth in electric vehicle sales, with deliveries of fully electric vehicles doubling last year to 215,755.

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Analysts at Bank of America said that sales of electric vehicles, including hybrid cars, reached a historic peak last November, with 1.1 million units sold. They attributed this largely to the upcoming phase-out of customer subsidies in Germany.

Participate in Mercedes BMW and BMW prices held steady Tuesday morning as investors priced in an image of an improving showing.

Rolls-Royce, a subsidiary of BMW, announced Monday that sales have hit a 119-year record, driven by strong demand in the United States, its largest market.

The luxury brand has been largely unaffected by the semiconductor pressure, mainly because it makes relatively few compounds and therefore needs fewer chips.

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