The daily business briefing: November 7, 2022
Meta reportedly plans broad layoffs, COP27 climate summit gets underway, and more
Meta expected to announce major layoffs
Facebook-parent Meta Platforms is preparing broad layoffs as soon as Wednesday, The Wall Street Journal reported Sunday, citing people familiar with the matter. The move would mark the first time the company has ever made large-scale layoffs. It would be the latest in a series of cutbacks at major technology companies that experienced rapid pandemic-era growth. Meta had more than 87,000 employees at the end of September, so its layoffs could be the biggest yet this year for a major tech company in terms of jobs lost.
U.N. kicks off COP27 climate summit in Egypt
The United Nations launched its annual climate meeting on Sunday. Delegates from nearly 200 countries kicked off the COP27 summit with an agreement to discuss compensation for poor nations that have contributed little to the pollution accelerating climate change, but are suffering increasing damage as temperatures and sea levels rise. U.N. Secretary-General Antonio Guterres, noting that a U.N. report released Sunday said the last eight years have been the hottest on record, said "our planet is sending a distress signal." COP27 gets fully underway Monday with a two-day World Leaders' Summit where heads of state will speak about what they hope to get out of the meeting. After the leaders depart, conference delegates will start their negotiations.
Inflation forces some shoppers to find substitutes for luxury goods
Shoppers struggling with high inflation are increasingly rejecting expensive clothing and buying less expensive brands instead, The Wall Street Journal reported Sunday. A survey of 2,200 U.S. adults by research company Morning Consult found that 72 percent of consumers plan to pick cheaper alternatives in the upcoming holiday shopping season, a make-or-break time for retailers. A San Francisco jewelry store owner told the Journal she was cutting back in several ways, including switching to Uniqlo leggings from Lululemon, which cost roughly double. Still, Saks found in its Saks Luxury Pulse that 76 percent of luxury shoppers planned to spend the same or more as last year, down from 79 percent in 2021, as aspirational shoppers cut back but the wealthy keep spending.
Stock futures rise as midterms, inflation data loom
U.S. stock futures rose early Monday ahead of a big week that will include Tuesday's midterm elections and a key inflation report. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.5 percent at 6:30 a.m. ET. Nasdaq futures were up 0.6 percent. Apple shares weren't benefiting from the bounce, as they fell 1 percent after the iPhone maker said production was temporarily down due to China's COVID-19 restrictions. Investors were bracing for the midterms, with Republicans expected to take control of the House and possibly the Senate. Thursday's consumer price index report will provide fresh indications of whether the Federal Reserve's aggressive interest rate hikes have been helped bring down high inflation.
Twitter delays rollout of paid verification service
Twitter on Sunday pushed back the rollout of its new $7.99-per-month Twitter Blue paid verification subscription service until after Tuesday's elections, The New York Times and other news organizations reported. The company had appeared to launch the paid blue checkmark Saturday. Twitter employees and users had expressed concerns that people could easily establish verified accounts posing as politicians, creating confusion for voters. Elon Musk, who is pushing to transform Twitter after his $44 billion deal to acquire it, vowed to crack down on impersonation accounts. Twitter is also trying to rehire dozens of the 3,700 employees it dismissed Friday (roughly half its staff) after deciding the workers were either fired in error, or are essential to Musk's plans for the company.