Amazon Layoffs
Amazon Set to Lay Off Thousands of Corporate Workers
The layoffs come as Amazon is undertaking a broad review of costs, The Wall Street Journal reported last week. That review has focused on the devices unit, which the Journal reported has lost $5 billion annually in some recent years.
The layoffs could affect about 10,000 employees, though that number could change, the person said. The cuts are being made as team by team decisions, they said. The cuts would represent less than 1% of Amazon’s global workforce, which exceeded 1.5 million people at the end of September, including hundreds of thousands of workers at its warehouses.
Facebook Layoffs
Facebook Parent Meta Announces Layoffs of 11,000 Staff
Meta Platforms Inc. said it would cut more than 11,000 workers, or 13% of staff, embarking on the company’s first broad restructuring as it copes with a slumping digital-ad market and plunging stock price.
Redfin Layoffs
Redfin Shuts Home-Flipping Business, Lays Off 13% of Staff in Slumping Housing Market
Real-estate company Redfin Corp. laid off 13% of its staff on Wednesday and closed its home-flipping unit, saying the operation was both too expensive and too risky to continue.
The Seattle-based company, which operates a real-estate brokerage and home-listings website, said the decisions were made because it is predicting that the real-estate market is going to be smaller next year and its home-flipping business is losing money. It previously laid off 8% of its workforce in June of this year.
Saleforce Layoffs
Saleforce Confirms it has Laid Off Hundreds of Employees
Salesforce laid off hundreds of people this week as the onslaught of tech cutbacks continued unabated. The company would not share an exact number, but said it was less than a thousand, and the people involved were informed yesterday, according to a person close to the company.
Stripe Layoffs
Consider Stripe’s CEO Patrick Collison’s Email to Stripe Employees on November 3.
Today we’re announcing the hardest change we have had to make at Stripe to date. We’re reducing the size of our team by around 14% and saying goodbye to many talented Stripes in the process. If you are among those impacted, you will receive a notification email within the next 15 minutes. For those of you leaving: we’re very sorry to be taking this step and John and I are fully responsible for the decisions leading up to it.
FedEx Layoffs
Please note FedEx Freight Enacts Furloughs as it Faces Volume Decline
FedEx Freight confirmed Saturday it is enacting furloughs in some U.S. markets. The move is due “to current business conditions impacting volumes,” the LTL said in an emailed statement.
Other carriers like Werner, J.B. Hunt and Knight-Swift are also adjusting in the face of economic uncertainty and what is expected to be softer holiday demand.
“While peak season this year is underwhelming thus far, it will only hasten the capacity correction that is already underway,” Werner CEO, President and Chairman Derek Leathers said on a Nov. 3 earnings call.
Bell Ringer
https://twitter.com/FreightAlley/status/1591515924661940224
“When was the last time that FedEx furloughed workers in the middle of peak season?” asks Craig Fuller, founder/CEO of FreightWaves, American Shipper, and CEO of FLYING Magazine.
Trucking Weakens
https://twitter.com/FreightAlley/status/1588896011019513856
“The trucking market continues to weaken, with the first part of November having one of the biggest volume drops of any non-holiday period all cycle.”
Far more than any tech layoffs, those Tweets should ring a bell about holiday shopping this season.
A Net 17 Percent Say They Will Spend Less This Holiday Season
Also recall my November 7 post A Net 17 Percent Say They Will Spend Less This Holiday Season
Record Surge in Small Business Delinquencies
On November 6 I noted Record 7 Percent Surge Small Business Rent Delinquency In October
Small businesses are struggling to pay rent due to higher rent inflation and fewer customers. The struggles vary by type of business.
Let’s check in on reports of strong employment.
Full Time Employment is Down 572,000 Since May
Finally please recall my take on the October jobs report: Lost in the Strong Jobs Meme, Full Time Employment is Down 572,000 Since May
Payrolls vs Employment Since March 2022
- Nonfarm Payrolls: +2,452,000
- Employment Level: +150,000
- Full Time Employment: -490,000
Not to worry, Biden says there is no recession and the economy is strong.
This post originated at MishTalk.Com
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Mish
monetary lags. Contrary to Nobel
Prize–winning economist Milton Friedman and Anna J. Schwartz’s “A Monetary
History of the United States, 1867–1960 “monetary lags are not “long and
variable”. The distributed lag effects
for both real output and inflation have been mathematical constants for over
100 years. Thus, we can precisely calculate any “output gap”, any “sweet spot”.
The second was due to Volcker’s operating procedure. Volcker targeted non-borrowed reserves (@$18.174b
4/1/1980) when at times over 200 percent of total reserves (@$44.88b) were
borrowed (i.e., absolutely no change from what Paul Meek, FRB-NY assistant V.P.
of OMOs and Treasury issues, described in his 3rd edition of “Open Market
Operations” published in 1974). That was
back when the money multiplier was 8.6 (m1/required reserves).
Volcker advised the congressmen to watch the non-borrowed
reserves—“What we do on our own initiative.” The Chairman further added — “Relatively large borrowing (by the banks
form the Fed) exerts a lot of restraint.”
for the expansion of money as one dollar of non-borrowed reserves. The fact that advances had to be repaid in 15
days is immaterial. A new advance could
be obtained, or the borrowing bank replaced by other borrowing banks. The importance of controlling borrowed
reserves is indicated by the fact that at times nearly 200% of all legal
reserves were borrowed (used for profit).
The Federal Open Market Committee (FMOC)
controlled the money supply through legal reserve management—the only method
available in a free capitalistic society. If the Manager of the Open Market
Account who operates from an office in the Federal Reserve Bank of New York,
and who is in charge of all open market purchases and sales for all 12 Federal
Reserve Banks, decides to tighten monetary policy (sale securities), the impact
(contrary to the experts) is immediate, i.e., without a lag. As noted
above, the initial and immediate market response to a decline in reserves is
deflationary.
Why
Money Matters and Interest Rates Don’t”
Thornton:
“the interest rate is the price of credit, not the price of money”
Thornton: “However, on March 26, 2020, the Board of Governors reduced the
reserve requirement on checkable deposits to zero. This action ended the Fed’s
ability to control M1. In February 2021 the Board redefined M1 so that M1 and
M2 are very nearly identical. Consequently, it makes little sense to
distinguish between them. In any event, the checkable deposit portion of M2
cannot be controlled now because there are no longer reserve requirements on
these deposits. Here is the reason the Fed cannot control these deposits.”
Interest Rates Matter?
I am familiar with the arguments about diversification, and obviously Buffett is on the side of those who think diversification gets in the way of superior returns. This is certainly true, so long as the portfolio holds the right assets — which in BK’s case has definitely been true. Even so, there’s plenty of risk embedded in having 40% of your eggs in one basket.