The daily business briefing: February 9, 2023

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1. Disney to slash 7,000 jobs
2. Alphabet shares drop after AI chatbot mistake in promo video
3. Stock futures rise, Pepsi earnings beat expectations
4. Florida overhaul of Disney tax district advances toward vote
5. Twitter outage follows launch of longer, 4,000-character limit for paying users

published 9 February 2023

1. Disney to slash 7,000 jobs

Walt Disney Co. CEO Robert Iger announced Wednesday that the entertainment giant would cut 7,000 jobs and $5.5 billion in costs under a reorganization giving more authority to people responsible for creating content. The shuffling also will increase the company's focus on sports media. Iger outlined the plans in his first earnings call since returning as chief executive after Disney's board dismissed Bob Chapek in November. Iger also said Disney would change its TV and movie offerings, reinstate its dividend, and possibly adjust the prices of its streaming services, The Wall Street Journal reported. "It's time for another transformation," Iger said. Disney shares rose 5.7 percent in after-hours trading.

Alphabet shares fell as much as 9 percent on Wednesday, wiping out $100 billion in market value after the internet search giant's new chatbot, Bard, flubbed a search query about the James Webb Space Telescope in a promotional video. Google is in an escalating race with Microsoft to incorporate new artificial-intelligence technology into search engines. Microsoft appears to have an edge through its $10 billion backing of OpenAI, creator of the popular ChatGPT software. Microsoft this week unveiled a version of its Bing search engine with OpenAI technology built into it. Microsoft shares gained about 3 percent on Wednesday, but were flat in overnight trading.

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U.S. stock futures rose early Thursday ahead of more corporate earnings reports. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.6 percent and 0.7 percent, respectively, at 6:45 a.m. ET. Nasdaq futures were up 1.1 percent. The three major U.S. indexes fell on Wednesday. The Dow and the S&P 500 dropped 0.6 percent and 1.1 percent, respectively. The tech-heavy Nasdaq fell 1.7 percent. PepsiCo, one of the major companies releasing quarterly earnings Thursday, reported earnings and revenue that exceeded analysts' expectations, with a bump from higher prices for its snacks and soft drinks, according to CNBC. Pepsi shares rose more than 1 percent in pre-market trading.

Florida lawmakers on Wednesday advanced a proposed state takeover of Disney World's Reedy Creek Improvement District, which has given the theme park special status since 1967. Under the overhaul plan, Gov. Ron DeSantis (R) would appoint a new five-member board to replace the existing one, and Reedy Creek would be renamed the Central Florida Tourism Oversight District within two years. Under the bill, which is expected to pass the state House on Thursday and the Senate on Friday, Disney gets to keep the tax benefits it had before. The legislation revises a bill DeSantis signed last year after he targeted Disney over the entertainment giant's opposition to the state's Parental Rights in Education legislation, which critics call the "don't say gay" law.

Some Twitter users were blocked from posting on Wednesday due to a glitch on the social media platform after it launched a 4,000-character limit earlier in the day for Twitter Blue subscribers, much longer than the normal 280-character limit imposed on non-paying users. When affected users tried to publish tweets, they received a message saying, "You are over the daily limit for sending Tweets," or simply got an error message. Scheduling their posts through the web app allowed them to bypass the problem. The outage was soon fixed. Twitter has sharply cut its staff to about 2,300 from 8,000 since Tesla CEO Elon Musk bought it in October.

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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.