The daily business briefing: January 4, 2023
Sam Bankman-Fried pleads not guilty to FTX fraud charges, Salesforce to cut staff by 10 percent, and more
Sam Bankman-Fried pleads not guilty to FTX charges
Disgraced FTX founder Sam Bankman-Fried pleaded not guilty to charges of fraud and other financial crimes at the collapsed cryptocurrency exchange. Bankman-Fried, 30, returned to New York to enter the plea two weeks after being released on $250 million bond and ordered to stay at his parents' home in Palo Alto, California. U.S. District Judge Lewis Kaplan set Bankman-Fried's trial date for Oct. 2. Bankman-Fried was arrested on Dec. 12 in the Bahamas, where FTX was based before filing for bankruptcy protection in November. He was extradited days later to face an indictment accusing him of defrauding lenders and using billions in customers' money to buy Bahamas real estate and cryptocurrencies, and make campaign donations.
Salesforce to cut staff by 10 percent
Salesforce announced Wednesday it planned to lay off about 10 percent of its workers, making it the latest tech company cutting back in a tough economy. The cloud-based software company also said it would close some offices to reduce costs. "The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions," Co-Chief Executive Officer Marc Benioff said in a letter to employees. "As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we're now facing, and I take responsibility for that." Salesforce gained 2 percent in pre-market trading on Wednesday, after plunging in 2022 along with other tech stocks.
Germany receives U.S. gas shipment under push to replace Russian supplies
Germany on Tuesday received its first regular shipment of liquefied natural gas from the United States, a milestone in the leading European economy's push to replace Russian energy supplies after Russia invaded Ukraine. Germany also has restarted some oil- and coal-fueled power plants, and postponed the retirement of its last three nuclear plants until after winter. Germany has caught a break as unseasonably warm temperatures reduced heating demand, allowing it to fill gas reserves above 90 percent capacity in the new year. Falling demand has contributed to falling European natural gas prices, which have dropped below levels recorded before Russia invaded Ukraine in February 2021.
Southwest adds frequent-flier points to compensation for travelers affected by holiday meltdown
Southwest Airlines on Tuesday started giving travelers whose trips were disrupted by last week's holiday operational meltdown 25,000 frequent-flier points on top of ticket refunds and expense money to compensate them for the disruptions. "I know that no amount of apologies can undo your experience," Southwest CEO Bob Jordan wrote in a letter to affected customers. The airline hasn't said how many passengers' travel plans were ruined by the nearly 16,000 flight cancellations. Jordan said the Rapid Rewards points were a "gesture of goodwill." The company said the bonus points were more than $300.
U.S. stocks struggle in first day of 2023 trading
U.S. stocks got a bumpy start in the first day of trading in 2023 on Tuesday. Futures surged before the market opened but the S&P 500 closed down 0.4 percent and the Dow Jones Industrial Average was essentially flat. The tech-heavy Nasdaq fell 0.8 percent. "U.S. stocks were unable to hold onto earlier gains as restrictive policy and recession fears remained front and center for investors," Oanda's senior market analyst Ed Moya wrote in a note to clients. "Discount buying triggered another bear market rebound that didn't last long at all." Futures tied to the Dow and the S&P 500 were up 0.3 percent and 0.4 percent, respectively, at 6:30 a.m. Wednesday. Nasdaq futures were up 0.6 percent.