Facebook’s plan for large scale layoffs, the US dollar rally halted on Monday, Corporate America under investigation
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Summary:
- Meta plans to start mass layoffs this week that will affect thousands of employees.
- The pound and euro increased as a result of the dollar's decline.
- After the midterm elections, Republicans have promised to pursue investigations into corporate America.
Meta To implement layoffs this week
The Wall Street Journal reported on Sunday, citing people familiar with the situation, that Meta Platforms Inc. plans to start mass layoffs this week that will affect thousands of employees. An announcement is expected as early as Wednesday. Meta, the parent company of Facebook (META), predicted in October that a dismal Christmas quarter and much higher costs in 2019 would reduce Meta's stock market value by around $67 billion, adding to the more than half a trillion dollars in value that has already been lost this year.
The gloomy news comes as Meta struggles to deal with the declining global economy, TikTok's rivalry, Apple's (AAPL) privacy improvements, worries about large spending on the metaverse, and the constant danger of legislation.
The social media business had reduced its ambitions to hire engineers by at least 30% in June, and Mark Zuckerberg had advised staff to prepare for a slowdown in the economy.
In a previous open letter to Mark Zuckerberg, Meta's shareholder Altimeter Capital Management stated that the company needed to streamline by eliminating positions and capital expenditures. They also stated that investors had lost faith in Meta as a result of its increased spending and pivot to the metaverse.
*FACEBOOK PARENT META IS PREPARING LARGE-SCALE LAYOFFS THIS WEEK - https://t.co/ktT04bvkcH $META pic.twitter.com/OEeSsaTsoj
— Investing.com (@Investingcom) November 7, 2022
US dollar’s decline
Despite Beijing's denial that it would contemplate loosening its zero COVID-19 policy, which had stopped safe-haven dollar flows ahead of this week's potentially crucial consumer inflation data, global stocks moved higher on Monday. However, over the weekend, health officials reaffirmed their commitment to the "dynamic-clearing" approach to COVID cases as soon as they arise. Risk assets had gained on Friday amid rumors China was getting ready to lift its pandemic restrictions.
As traders clung to the notion that China will ease some of its restrictions after the government on Monday hinted it will make it easier for individuals to enter and exit the city, an overnight rise in the dollar had faded out by mid-morning in Europe. The pound increased by over 0.8% to $1.1453 as a result of the dollar's decline against other major currencies, and the euro increased by 0.4% to close to parity at $0.99975.
Economic events in this week's spotlight
The October consumer price index (CPI) will be the biggest macroeconomic risk event this week and might play a significant role in influencing investor expectations for the future direction of Federal Reserve monetary policy.
Last week, Fed Chair Jerome Powell dispelled rumors that the central bank may halt the rate of rate increases by asserting that rates would probably stay higher, for a longer period of time. The October employment report, which was released on Friday, revealed considerably greater job growth than anticipated but slower pay growth and an increase in the unemployment rate, suggesting that some of the labor market's tightness may be easing.
*U.S. STOCK FUTURES RISE TO START THE WEEK AS INVESTORS LOOK AHEAD TO U.S. CPI, MIDTERM ELECTIONS - https://t.co/lkfZcXR6Xb
— Investing.com (@Investingcom) November 7, 2022
🇺🇸 🇺🇸 pic.twitter.com/ZE0YdNisWF
Investigations in corporate America
After the midterm elections, Republicans have promised to pursue investigations into the social and environmental policies of big business, so the biggest US companies are preparing for a flood of congressional hearings.
After the midterm elections on Tuesday, control of both houses of Congress could go to the Republicans as polls suggest the Democrats are trailing in a number of crucial contests. Republicans would take control of the committees with the authority to subpoena people and records if they gained a majority in the House or Senate.
According to people familiar with the situation, attorneys representing financial institutions and technological companies have recently been educating executives on how to respond to a televised grilling from lawmakers. Additionally, with only a few days until the midterm elections, Republican senators—among them Arkansas' Tom Cotton—have written to law firms requesting them to store records pertaining to environmental, social, and governance efforts "in anticipation" of investigations.
Corporate America gears up for a new wave of investigations by Congress https://t.co/22IlpMI881
— Financial Times (@FT) November 7, 2022
Sources: ft.com, twitter.com, investing.com
