The daily business briefing: March 15, 2023
Meta announces a second round of layoffs, regulators investigate Silicon Valley Bank collapse, and more
Meta announces second round of layoffs
Meta Platforms, which owns Facebook and Instagram, said Tuesday it would cut 10,000 jobs in 2023, which CEO Mark Zuckerberg last month said would be a "year of efficiency" for the social media giant. Meta is the first Big Tech company to announce a second round of layoffs as the industry cuts costs to shore up its finances in preparation for an expected economic downturn. Meta eliminated more than 11,000 jobs, or 13 percent of its workforce at the time, in its first round of layoffs last fall. Like other tech companies, Meta went on a hiring binge as online services boomed earlier in the pandemic, doubling the staff it had going into 2020.
Regulators investigate Silicon Valley Bank collapse
The Justice Department and the Securities and Exchange Commission are investigating the sudden failure of Silicon Valley Bank, The Wall Street Journal reported Tuesday, citing people familiar with the matter. Few specifics were immediately available, but one thing prosecutors reportedly are examining is stock sales by executives at the bank shortly before it collapsed after a run on its deposits. Customers tried to withdraw $42 billion — a quarter of SVB's deposits — last Thursday alone. SVB Financial CEO Greg Becker and Chief Financial Officer Daniel Beck didn't respond to the Journal's requests for comment. The SEC and DOJ declined to comment.
Turmoil resumes for regional-bank stocks
Stock futures fell sharply early Wednesday as regional-bank stocks slipped again on continuing concerns fueled by two bank failures. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down 1.2 percent at 6:30 a.m. ET. Nasdaq futures were down 1.0 percent. The SPDR S&P Regional Banking ETF was down about 1.3 percent, weighed down by losses in Old National Bancorp, Zions Bancorp, and Fifth Third Bancorp. The declines came after midsize-bank stocks rebounded Tuesday from a Monday dive. Shares of First Republic had fallen by two-thirds over the five previous trading days, but closed up 27 percent on Tuesday. First Republic shares rose 6 percent in pre-market trading Wednesday.
Novo Nordisk announces insulin price cut
Novo Nordisk said Tuesday it would slash U.S. prices for insulin by as much as 75 percent. Novo, the latest major insulin maker to sharply reduce costs for the diabetes treatment, said it would reduce the price of NovoLog insulin by 75 percent, and of Novolin and Levemir by 65 percent, starting next January. The drug maker also plans to make similar cuts for its unbranded insulins. "We have been working to develop a sustainable path forward that balances patient affordability, market dynamics, and evolving policy changes," said Steve Albers, a Novo senior vice president. Eli Lilly & Co. announced earlier this month it would reduce prices on its best-selling insulin by 70 percent later this year, and cap patients' out-of-pocket costs at $35.
Credit Suisse shares plunge to record low
Credit Suisse shares fell as much as 18 percent on Wednesday, hitting a record low as its biggest lender, Saudi National Bank, said it couldn't provide more financial assistance to Switzerland's second biggest bank. The Saudi lender acquired a nearly 10 percent stake last year as Credit Suisse raised much-needed capital. The investment has lost a third of its value in the last three months. Saudi National Bank Chairman Ammar Al Khudairy said Wednesday regulatory barriers prevented the bank from investing more. "The answer is absolutely not," Khudairy told Bloomberg TV. Credit Suisse is struggling to recover from scandals that have eroded investor and client confidence, contributing to fourth-quarter customer outflows of $120 billion.