Layoffs in the tech sector are mounting and expanding as the industry downsizes amid macroeconomic headwinds. The first waves occurred in the middle of last year, but are only growing in strength and number. Many companies have been hiring too aggressively during the pandemic, and they’re realizing that bloated payrolls and high costs don’t hold up in today’s business environment.
The last: Selling power (RCMP) is Chopped off 10% of its workforce, and closing some offices, resulting in costs of $1.4 billion to $2.1 billion for the company and around 8,000 layoffs. Amazon (AMZN) is also cutting its workforce – more than double that figure. The retail giant has confirmed that 18,000 employees will receive the axe, with the bulk of the positions to be cut concentrated in the company’s e-commerce and human resources organizations.
“The environment remains challenging and our customers are taking a more measured approach to their buying decisions,” Salesforce co-CEO Marc Benioff wrote in a letter to employees. “Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” CEO Andy Jassy said. “These changes will help us pursue our long-term opportunities with a stronger cost structure; however, I am also optimistic that we will be inventive, resourceful and scrappy in this time when we are not hiring heavily and let’s not eliminate certain roles.”
By the numbers: According to the layoffs.fyi tracking website, more than 150,000 tech workers were laid off in 2022, and that number is set to rise this year. Among the companies in the sector that have laid off employees are Airbnb (ABNB), reservation of credit notes (BKNG), Carvana (CVNA), Cisco (CSCO), Groupon (GRPN), HP (HPQ), Lyft (LYFT), Meta (META), Netflix (NFLX), Platoon (PTON), Twitter, Uber (UBER) and Zillow (ZG).
The still-tight labor market is playing into the Fed’s decision to continue raising rates, but to a lesser extent, according to minutes from the December 13-14 FOMC meeting. Last month, the policy arm of the Fed raised its key rate by 50 basis points to 4.25%-4.50%, an increase less than the 75 basis point hikes it implemented during its four previous meetings. Officials also raised inflation expectations at their last meeting, with median projection for PCE inflation at 3.1% at the end of this year, up from September’s projection of 2.8%. .
No Pivot Sign: Fed officials agreed inflation remained “unacceptably low” and risks remained on the upside. While the October and November data were “welcome reductions in the monthly pace of price increases”, it would take “much more evidence of progress to be convinced that inflation was on a sustained downward path”. The pace of increases in the prices of basic services, excluding housing, was also notable, while this factor is likely to “remain persistently high if the labor market remains very tight”.
“Participants generally noted that the uncertainty associated with their economic outlook was elevated and that risks to the outlook for inflation remained on the upside,” according to the minutes. They cited uncertainties such as: China easing its zero COVID policy, Russia’s war on Ukraine, and the effects of policy tightening by many major central banks at the same time. Shares gave up gains on the news, but closed the session slightly higher on Wednesday in a period of volatile trading.
Outlook: With inflation risks remaining elevated, no participant expected it to be appropriate to lower the target range for the fed funds rate in 2023. This uncertainty also means the Fed will need to be flexible when adopting a more restrictive policy. There was also talk of balancing the risks of insufficient tightening, which would lead to a spike in inflation expectations, as well as the lagged cumulative effect of continued policy tightening, which could lead to unnecessary cuts in inflation. ‘economic activity. (26 comments)
From shrinking economies to undersupplied dealerships, the US auto industry just had its worst sales year in more than a decade. Only 13.7 million vehicles were sold in 2022, according to research firm Wards Intelligence, marking an 8% drop from the previous year and the lowest overall figure since 2011. Sales had even exceeded 17 million vehicles for five consecutive years before the coronavirus pandemic broke out in early 2020.
Estimate: “When we started the year, the whole industry had projections all over 16 million,” said Jack Hollis, head of sales for Toyota (NYSE:MT) North America. “It’s not all bleak,” he added, noting there were signs that supply chain issues were easing and commodity prices were falling.
However, Toyota has made lose your sales crown to General Motors (NYSE:GM) in 2022. The Michigan-based automaker delivered 2.2 million vehicles in the United States due to strong performance in its full-size pickup truck and SUV segments (the categories accounted for more than half of total sales for the full year). As 2023 approaches, the automaker expects electric vehicle sales to increase significantly and drive continued growth.
Rates up: Financing a vehicle is more expensive than ever for consumers, according to car buying experts at Edmunds. 15.7% of new car buyers had a monthly payment of more than $1,000 last quarter – marking an industry record – compared to 10.5% in Q4 2021 and 6.7% in Q4 2020. (12 comments)
Six months after the U.S. Supreme Court overturned Roe v. Wade, the FDA has implemented a regulatory change that will allow retail pharmacies to offer abortion pills. Until now, only a handful of mail-order pharmacies and board-certified doctors have been allowed to prescribe and stock the pills, but the new rules will grant greater access to states where abortion remains legal. While pharmacies will have to decide whether or not to offer the drugs, some vendors have already jumped on the bandwagon.
Estimate: “We intend to become a certified pharmacy under the program,” Walgreens (NASDAQ:WBA) said in a statement. “We are working on registration, the necessary training of our pharmacists, as well as evaluating our network of pharmacies based on where we normally distribute products that have additional FDA requirements and we distribute them in accordance with federal and state laws.”
Other companies, such as Rite Aid (NYSE:GDR), are reviewing new FDA rules, while CVS Health (NYSE:SVC) said it would seek certification where permitted by law. In addition to becoming certified, pharmacies must commit to filling prescriptions only from certified prescribers, while maintaining records and confidentiality. Before the pandemic, there was an “in person” clause that required patients to see health care providers at a physical location, but this was relaxed in April 2021 and allowed pills to be mailed.
Other details: Abortion pills containing mifepristone work with another drug called misoprostol by blocking a hormone needed to maintain pregnancy and causing uterine contractions. Mifepristone is sold under the brand name Mifeprex by Danco Laboratories, as well as generic manufacturers like GenBioPro. According to the Guttmacher Institute, the use of abortion pills has steadily increased among healthcare providers since their first approval in 2000, accounting for more than half of all abortions in the United States last year.
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