The daily business briefing: January 23, 2023
Activist investor Elliott Management invests in Salesforce, Spotify reportedly starts layoffs, and more
Activist investor Elliott Management invests in Salesforce
Elliott Management Corp., one of the most prolific activist investors, has taken a multibillion-dollar stake in Salesforce, The Wall Street Journal reported Sunday, citing people familiar with the investment. Elliott often seeks representation on the boards of companies it invests in, and presses for "operational improvements and other changes," the Journal said. That could increase pressure Salesforce faces as the business-software provider sheds office space and lays off 10 percent of its workforce to cut costs. "We look forward to working constructively with Salesforce to realize the value befitting a company of its stature," said Jesse Cohn, managing partner at Elliott.
Spotify reportedly planning to reduce staff
Spotify plans to announce layoffs as soon as this week, Bloomberg reported Sunday, citing people familiar with the matter. The streaming audio company would be the latest in a series of technology powerhouses to cut staff to reduce costs as the threat of a recession looms. Many tech firms that went on hiring binges to handle a surge of business early in the pandemic now find themselves with too many workers. It was not immediately clear how many employees Spotify would cut. It let go 38 workers at podcast studios Gimlet Media and Parcast in October. Spotify has roughly 9,800 employees. On Friday, Google-parent Alphabet said it was laying off 12,000 people, about 6 percent of its global staff.
Stock futures flat ahead of more earnings
U.S. stock futures were little changed early Monday ahead of a busy week of corporate earnings reports, as investors await further signals of the Federal Reserve's next moves on interest rates. Futures tied to the Dow Jones Industrial Average were nearly flat at 6:30 a.m. ET. S&P and Nasdaq futures were down 0.1 percent. The major averages closed higher on Friday, but have lost momentum after a strong start to 2023. Investors have been encouraged by data showing that high inflation is slowing down, suggesting the Fed's aggressive interest-rate hikes are working to fight rising prices. Markets expect the central bank to raise rates by a quarter point at its Jan. 31-Feb. 1 meeting after months of bigger increases.
Former McDonald's restaurants reopen in Kazakhstan offering generic burgers
Several former McDonald's restaurants reopened Monday in Kazakhstan, offering generic menu items including "Cheeseburger" several weeks after the U.S. fast-food giant dropped out of the market due to supply problems. The former licensee, Food Solutions KZ, said it would stick to its previous standards and soon introduce its new brand name. McDonald's left the market after it halted supply purchases from Russia and had trouble finding new sources. McDonald's closed its restaurants in Russia after Moscow invaded Ukraine last February. It sold its Russia operations to its former local licensee, Alexander Govor, who in June reopened the restaurants under the Vkusno & tochka ("Tasty & that's it") brand.
'Avatar: The Way of Water' surpasses $2 billion in global ticket sales
Avatar: The Way of Water crossed the $2 billion mark at the worldwide box office on Sunday, becoming just the sixth film in history to reach the milestone. Although the figure isn't adjusted for inflation, it marks a significant sign of success for director James Cameron, the only filmmaker to reach the $2 billion mark with three movies. The first Avatar is still the top-grossing film ever, with $2.9 billion in ticket sales since its release 13 years ago. Cameron's Titanic has brought in nearly $2.2 billion. Avengers: Endgame is the No. 2 top-grossing film of all time, at nearly $2.8 billion. Within days, The Way of Water is expected to surpass Star Wars: The Force Awakens and Avengers: Infinity War, which are No. 3 and No. 4, respectively, at just under $2.1 billion.