Meta lays off around 13% of its employees, a major shift in the markets in the wake of US midterm elections is not expected
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Summary:
- In the most drastic layoff in company history, Meta has fired almost 11,000 workers.
- No major market shifts are expected in the wake of US midterm elections.
- Germany should think about raising taxes on the wealthiest citizens.
Meta implemented its most drastic layoff in its history
In the most drastic layoff in company history, Meta has fired almost 11,000 workers, cutting its employment by around 13% as it fights declining revenue and escalating competition. Employees were notified of the layoffs through email on Wednesday morning by CEO Mark Zuckerberg.
“I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted,” he added.
Current economic climate weighing on tech companies
In a climate of economic slump and greater competition, Zuckerberg claimed that revenue growth experienced during the epidemic had not been sustained, advertising performance was down, and e-commerce had decreased. There is no cap on the 16 weeks of basic salary and two additional weeks of compensation that US employees will receive as part of their severance package. The email also stated that overseas employees' packages would be comparable and would be announced soon.
Except for email, affected employees' access to Meta systems will be terminated on Wednesday "so everyone can say farewell," according to Zuckerberg.
On Wednesday, Meta stock increased 3% in pre-market trading. Reducing budgets and personnel benefits are two further cost-saving strategies, it was said. The company's "real estate footprint" will "shrink," presumably resulting in the closure of a few offices. The majority of the remote-working staff will be asked to desk share. In the upcoming months, more improvements, according to Zuckerberg, will be disclosed.
*META IS LAYING OFF 11,000 EMPLOYEES, ABOUT 13% OF THEIR WORKFORCE$META pic.twitter.com/Ego722RjCR
— Investing.com (@Investingcom) November 9, 2022
US midterm elections are not expected to shift the markets majorly
Wall Street experts predict that the markets won't experience a significant shift after the much anticipated completion of the midterm elections. A bullish tilt in the market is justified, according to historical evidence, in the month before the midterm elections.
According to data from US Bank, the S&P 500 has historically outpaced the market in the twelve months following a midterm election, returning an average of 16.3%. Particularly for the one and three months following midterm elections, this outperformance is present.
However, investing experts may be right to be ready for a post-election hangover in the stock market given that the economy is still coping with high levels of inflation and an unfriendly Federal Reserve rising interest rates.
"You've got to think about some of these big challenges that we have," Roland explained. "The economy is clearly decelerating right now. We're contending with inflation. I think the inflation data that we get on Thursday is probably much more important than the political backdrop right now. So we want to be careful about sort of overplaying politics and making cross-asset decisions right now."
Why the stock market may see minimal impact from the midterm elections https://t.co/hK6PJvE86V by @BrianSozzi $DJI $GSPC $IXIC
— Yahoo Finance (@YahooFinance) November 9, 2022
Germany suggested to raise taxes on wealthy citizens
As part of its €200 billion plan to restrict gas and electricity prices, Germany should think about raising taxes on the wealthiest citizens, a committee of top economic advisers to the government said on Wednesday.
One of the five members of Germany's council of economic experts, Ulrike Malmendier, stated that the nation should "look at the more uncomfortable side" of how to finance its energy assistance program because it cannot simply benefit the most vulnerable.
She stated that the council had proposed three solutions to this problem, including hiking the top tax rate, enacting a "solidarity fee" on high earnings, or delaying the government's plan to lower tax rates to protect households from skyrocketing inflation.
The council's suggestions on tax policy are likely to spark a heated discussion inside the ruling coalition, which has eight weeks to issue a formal response.
Germany should raise taxes on rich to fund €200bn energy plan, advisers say https://t.co/aMx9wS0EEP
— Financial Times (@FT) November 9, 2022
Sources: finance.yahoo.com, ft.com, twitter.com
