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Business

Corporate Layoffs Spread Beyond High-Growth Tech Giants

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The headline-grabbing expansion of layoffs beyond high-growth technology companies stands in contrast to historically low levels of jobless claims and news that companies such as

Chipotle Mexican Grill Inc.

and

Airbus SE

are adding jobs.

This week, four companies trimmed more than 10,000 jobs, just a fraction of their total workforces. Still, the decisions mark a shift in sentiment inside executive suites, where many leaders have been holding on to workers after struggling to hire and retain them in recent years when the pandemic disrupted workplaces.

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Tech Layoffs: What Do They Mean?

The creator of the popular layoff tracker Layoffs.fyi Roger Lee and the head of talent at venture firm M13 Matt Hoffman sit down with WSJ reporter Chip Cutter, to discuss what’s behind the recent downsizing and whether it will be enough to recalibrate ahead of a possible recession.

Unlike

Microsoft Corp.

and Google parent

Alphabet Inc.,

which announced larger layoffs this month, these companies haven’t expanded their workforces dramatically during the pandemic. Instead, the leaders of these global giants said they were shrinking to adjust to slowing growth, or responding to weaker demand for their products.

“We are taking these actions to further optimize our cost structure,”

Jim Fitterling,

Dow’s chief executive, said in announcing the cuts, noting the company was navigating “macro uncertainties and challenging energy markets, particularly in Europe.”

The U.S. labor market broadly remains strong but has gradually lost steam in recent months. Employers added 223,000 jobs in December, the smallest gain in two years. The Labor Department will release January employment data next week.

Economists from Capital Economics estimate a further slowdown to an increase of 150,000 jobs in January, which would push job growth below its 2019 monthly average, the year before pandemic began.

There is “mounting evidence of weakness below the surface,”

Andrew Hunter,

senior U.S. economist at Capital Economics wrote in a note to clients Thursday.

Last month, the unemployment rate was 3.5%, matching multidecade lows. Wage growth remained strong, but had cooled from earlier in 2022. The Federal Reserve, which has been raising interest rates to combat high inflation, is looking for signs of slower wage growth and easing demand for workers.

Many CEOs say companies are beginning to scrutinize hiring more closely.

Slower hiring has already lengthened the time it takes Americans to land a new job. In December, 826,000 unemployed workers had been out of a job for about 3½ to 6 months, up from 526,000 in April 2022, according to the Labor Department.

“Employers are hovering with their feet above the brake. They’re more cautious. They’re more precise in their hiring,” said

Jonas Prising,

chief executive of

ManpowerGroup Inc.,

a provider of temporary workers. “But they’ve not stopped hiring.”

Additional signs of a cooling economy emerged on Thursday when the Commerce Department said U.S. gross domestic product growth slowed to a 2.9% annual rate in the fourth quarter, down from a 3.2% annual rate in the third quarter.

Not all companies are in layoff mode.

Walmart Inc.,

the country’s biggest private employer, said this week it was raising its starting wages for hourly U.S. workers to $14 from $12, amid a still tight job market for front line workers. Chipotle Mexican Grill Inc. said Thursday it plans to hire 15,000 new employees to work in its restaurants, while plane maker Airbus SE said it is recruiting over 13,000 new staffers this year. Airbus said 9,000 of the new jobs would be based in Europe with the rest spread among the U.S., China and elsewhere. 

General Electric Co.

, which slashed thousands of aerospace workers in 2020 and is currently laying off 2,000 workers from its wind turbine business, is hiring in other areas. “If you know any welders or machinists, send them my way,” Chief Executive

Larry Culp

said this week.

Annette Clayton,

CEO of North American operations at

Schneider Electric SE,

a Europe-headquartered energy-management and automation company, said the U.S. needs far more electricians to install electric-vehicle chargers and perform other tasks. “The shortage of electricians is very, very important for us,” she said.

Railroad CSX Corp. told investors on Wednesday that after sustained effort, it had reached its goal of about 7,000 train and engine employees around the beginning of the year, but plans to hire several hundred more people in those roles to serve as a cushion and to accommodate attrition that remains higher than the company would like.

Freeport-McMoRan Inc.

executives said Wednesday they expect U.S. labor shortages to continue to crimp production at the mining giant. The company has about 1,300 job openings in a U.S. workforce of about 10,000 to 12,000, and many of its domestic workers are new and need training and experience to match prior expertise, President

Kathleen Quirk

told analysts.

“We could have in 2022 produced more if we were fully staffed, and I believe that is the case again this year,” Ms. Quirk said.

The latest layoffs are modest relative to the size of these companies. For example, IBM’s plan to eliminate about 3,900 roles would amount to a 1.4% reduction in its head count of 280,000, according to its latest annual report.

As interest rates rise and companies tighten their belts, white-collar workers have taken the brunt of layoffs and job cuts, breaking with the usual pattern leading into a downturn. WSJ explains why many professionals are getting the pink slip first. Illustration: Adele Morgan

The planned 3,000 job cuts at SAP affect about 2.5% of the business-software maker’s global workforce. Finance chief

Luka Mucic

said the job cuts would be spread across the company’s geographic footprint, with most of them happening outside its home base in Germany. “The purpose is to further focus on strategic growth areas,” Mr. Mucic said. The company employed around 111,015 people on average last year.

Chemicals giant Dow said on Thursday it was trimming about 2,000 employees. The Midland, Mich., company said it currently employs about 37,800 people. Executives said they were targeting $1 billion in cost cuts this year and shutting down some assets to align spending with the macroeconomic environment.

Manufacturer

3M Co.

, which had about 95,000 employees at the end of 2021, cited weakening consumer demand when it announced this week plans to eliminate 2,500 manufacturing jobs. The maker of Scotch tape, Post-it Notes and thousands of other industrial and consumer products said it expects lower sales and profit in 2023.

“We’re looking at everything that we do as we manage through the challenges that we’re facing in the end markets,” 3M Chief Executive

Mike Roman

said during an earnings conference call. “We expect the demand trends we saw in December to extend through the first half of 2023.”

Hasbro Inc.

on Thursday said it would eliminate 15% of its workforce, or about 1,000 jobs, after the toy maker’s consumer-products business underperformed in the fourth quarter.

Some companies still hiring now say the job cuts across the economy are making it easier to find qualified candidates. “We’ve got the pick of the litter,” said

Bill McDermott,

CEO of business-software provider

ServiceNow Inc.

“We have so many applicants.”

At

Honeywell International Inc.,

CEO

Darius Adamczyk

said the job market remains competitive. With the layoffs in technology, though, Mr. Adamczyk said he anticipated that the labor market would likely soften, potentially also expanding the applicants Honeywell could attract.

“We’re probably going to be even more selective than we were before because we’re going to have a broader pool to draw from,” he said.

Across the corporate sphere, many of the layoffs happening now are still small relative to the size of the organizations, said

Denis Machuel,

CEO of global staffing firm Adecco Group AG.

“I would qualify it more as a recalibration of the workforce than deep cuts,” Mr. Machuel said. “They are adjusting, but they are not cutting the muscle.”

Write to Chip Cutter at chip.cutter@wsj.com and Theo Francis at theo.francis@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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World

From Russia with cash: Georgia booms as Russians flee Putin’s war

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  • At least 112,000 Russians move to neighbour Georgia
  • Georgia set to be one of fastest-growing economies
  • Some locals being priced out of housing, education
  • Economy could face hard landing if newcomers leave

TBILISI, Nov 5 (Reuters) – As war chokes Europe, a small nation wedged beneath Russia is enjoying an unexpected economic boom.

Georgia is on course to become one of the world’s fastest-growing economies this year following a dramatic influx of more than 100,000 Russians since Moscow’s invasion of Ukraine and Vladimir Putin’s mobilisation drive to drum up war recruits.

As much of the globe teeters towards recession, this country of 3.7 million people bordering the Black Sea is expected to record a vigorous 10% growth in economic output for 2022 amid a consumption-led boom, according to international institutions.

That would see the modest $19 billion economy, well known in the region for its mountains, forests and wine valleys, outpace supercharged emerging markets such as Vietnam and oil exporters such as Kuwait buoyed by high crude prices.

“On the economic side, Georgia is doing very well,” Vakhtang Butskhrikidze, CEO of the country’s largest bank TBC, told Reuters in an interview at its Tbilisi headquarters.

“There’s some kind of boom,” he added. “All industries are doing very well from micros up to corporates. I can’t think of any industry which this year has problems.”

At least 112,000 Russians have emigrated to Georgia this year, border-crossing statistics show. A first large wave of 43,000 arrived after Russia invaded Ukraine on Feb. 24 and Putin moved to quash opposition to the war at home, according to the Georgia government, with a second wave coming after Putin announced the nationwide mobilisation drive in late September.

Georgia’s economic boom – whether short-lived or not – has confounded many experts who saw dire consequences from the war for the ex-Soviet republic, whose economic fortunes are closely tied to its larger neighbour through exports and tourists.

The European Bank for Reconstruction and Development (EBRD), for example, predicted in March the Ukraine conflict would deal a major blow to the Georgian economy. Likewise the World Bank forecast in April that the country’s growth for 2022 would drop to 2.5% from an initial 5.5%.

“Despite all expectations that we had … that this war on Ukraine will have significant negative implications on the Georgian economy, so far we don’t see materialization of these risks,” said Dimitar Bogov, the EBRD’s lead economist for Eastern Europe and the Caucasus.

“On the contrary, we see the Georgian economy growing quite well this year, double digits.”

Yet the stellar growth is not benefiting everyone, with the arrival of tens of thousands of Russians, many tech professionals with plenty of cash, driving up prices and squeezing some Georgians out of parts of the economy such as the housing rental market and education.

Business leaders also worry that the country could face a hard landing should the war end and Russians return home.

TO GEORGIA WITH $1 BILLION

Georgia itself fought a short war with Russia in 2008 over South Ossetia and Abkhazia, territories controlled by Russian-backed separatists.

Now, though, Georgia’s economy is reaping the benefits of its proximity to the superpower – the two share a land border crossing – and a liberal immigration policy which lets Russians and people from many other countries live, work and set up businesses in the country without needing a visa.

Furthermore, those fleeing Russia’s war are accompanied by a wave of money.

Between April and September, Russians transferred more than $1 billion to Georgia via banks or money-transfer services, five times higher than during the same months of 2021, according to the Georgian central bank.

That inflow has helped push the Georgian Lari to its strongest level in three years.

Roughly half of the Russian arrivals are from the tech sector, according to TBC’s CEO Butskhrikidze and local media outlets, chiming with surveys and estimates from industry figures in Russia that pointed to an exodus of tens of thousands of highly-mobile IT workers after the invasion of Ukraine.

“These are high-end people, rich people … coming to Georgia with some business ideas and increasing consumption drastically,” said Davit Keshelava, senior researcher at the International School of Economics at Tbilisi State University (ISET).

“We expected the war to have a lot of negative impacts,” he added. “But it turned out quite different. It turned out to be positive.”

NO ROOMS IN TBILISI

Nowhere is the impact of the new arrivals more evident than in the capital’s housing rental market, where increased demand is aggravating tensions.

Rent in Tbilisi is up 75% this year, according to an analysis by TBC bank, and some low-earners and students are finding themselves at the centre of what activists say is a growing housing crisis.

Georgian Nana Shonia, 19, agreed a two-year deal for a city centre apartment at $150 a month, just weeks before Russia invaded. In July, her landlord kicked her out, forcing her to move to a rough neighbourhood on the edge of the city.

“It used to take me 10 minutes to get to work. Now it’s a minimum of 40, I have to take a bus and the metro and often get stuck in traffic jams,” she said, attributing the change in market dynamics to the surge of newcomers.

Helen Jose, a 21-year-old medical student from India, has been crashing at her friend’s for a month after her rent doubled over the summer break.

“Before it was very easy to find an apartment. But so many of my friends have been told to leave, because there are Russians willing to pay more than us,” she said.

University figures have also reported significant numbers of students delaying their studies in Tbilisi because they can’t afford accommodation in the city, Keshelava at ISET said.

‘THE CRISIS COULD HIT’

TBC’s Butskhrikidze said he saw potential in the new arrivals to fill skills gaps in the Georgian economy.

“They are very young, technology-educated and have knowledge – for us and for other Georgian companies this is quite a useful opportunity,” he said.

“A key challenge for us is technology. And unfortunately on that side we are competing with high-tech companies in the United States and Europe,” he added. “To have a quick win, these migrants are very helpful.”

Nonetheless, economists and businesses remain concerned about longer-term negative effects from the war, and what might happen should the Russians return home.

“We don’t build our future plans on the newcomers,” said Shio Khetsuriani, the CEO of Archi, one of Georgia’s largest real-estate development companies.

Even with rental prices surging, Khetsuriani says development companies are not keen to over-invest in the housing market, especially with prices for materials and equipment increasing. While landlords may be cashing in on surging rents, profit margins for apartment sales have barely shifted, he said.

Economists also caution the boom may not last, and are encouraging the Georgian government to use healthy tax revenues to pay down debt and build up foreign currency reserves while they can.

“We have to be aware that all these factors that are driving growth this year are temporary, and it does not guarantee sustainable growth in the following years, so therefore caution is needed,” said Bogov at the EBRD.

“Uncertainty is still there and the crisis could hit Georgia with some delay.”

Reporting by Jake Cordell; additional reporting by David Chkhikvishvili; editing by Guy Faulconbridge and Pravin Char

Our Standards: The Thomson Reuters Trust Principles.

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Business

Exclusive: Russia’s Gazprom tells Europe gas halt beyond its control

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A view shows a screen with the logo of Gazprom at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia June 17, 2022. REUTERS/Anton Vaganov/

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LONDON, July 18 (Reuters) – Russia’s Gazprom has told customers in Europe it cannot guarantee gas supplies because of ‘extraordinary’ circumstances, according to a letter seen by Reuters, upping the ante in an economic tit-for-tat with the West over Moscow’s invasion of Ukraine.

Dated July 14, the letter from the Russian state gas monopoly, said it was declaring force majeure on supplies, starting from June 14.

Known as an ‘act of God’ clause, force majeure is standard in business contracts and spells out extreme circumstances that excuse a party from their legal obligations.

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Gazprom’s (GAZP.MM) had no immediate comment.

Uniper, Germany’s biggest importer of Russian gas, was among the customers who said they had received a letter, and that it had formally rejected the claim as unjustified.

RWE (RWEG.DE), Germany’s largest power producer and another importer of Russian gas, also said it has received a force majeure notice.

“Please understand that we cannot comment on its details or our legal opinion,” the company said.

A trading source, asking not to be identified because of the sensitivity of the issue, said the force majeure concerned supplies through the Nord Stream 1 pipeline, a major supply route to Germany and beyond.

Flows through the pipeline are at zero as the link undergoes annual maintenance that began on July 11 and is meant to conclude on Thursday. read more

Europe fears Moscow could keep the pipeline mothballed in retaliation for sanctions imposed on Russia over the war in Ukraine, heightening an energy crisis that risks tipping the region in recession.

TURBINE DELAY

Already on June 14, Gazprom had cut the pipeline’s capacity to 40%, citing the delay of a turbine being maintained in Canada by equipment supplier Siemens Energy (ENR1n.DE).

Canada sent the turbine for the Nord Stream gas pipeline to Germany by plane on July 17 after repair work had been completed, Kommersant newspaper reported on Monday, citing people familiar with the situation. read more

Provided there are no problems with logistics and customs, it will take another five to seven days for the turbine to reach Russia, the report said.

Germany’s economy ministry said on Monday it could not provide details of the turbine’s whereabouts.

But a spokesperson for the ministry said it was a replacement part that was meant to be used only from September, meaning its absence could not be the real reason for the fall-off in gas flows prior to the maintenance.

“This sounds like a first hint that the gas supplies via NS1 will possibly not resume after the 10-day maintenance has ended,” said Hans van Cleef, senior energy economist at ABN Amro.

“Depending on what ‘extraordinary’ circumstances have in mind in order to declare the force majeure, and whether these issues are technical or more political, it could mean the next step in escalation between Russia and Europe/Germany,” he added.

Austrian oil and gas group OMV (OMVV.VI), however, said on Monday it expected gas deliveries from Russia through the Nord Stream 1 pipeline to resume as planned after the outage. read more

Russian gas supplies have been declining via major routes for some months, including via Ukraine and Belarus as well as through Nord Stream 1 under the Baltic Sea.

The European Union, which has imposed sanctions on Moscow, aims to stop using Russian fossil fuels by 2027 but wants supplies to continue for now as it develops alternative sources.

For Moscow and for Gazprom, the energy flows are a vital revenue stream when Western sanctions over Russia’s invasion of Ukraine, which the Kremlin terms a “special military operation”, have strained Russian finances.

According to the Russian Finance Ministry, the federal budget received 6.4 trillion roubles ($115.32 billion) from oil and gas sales in the first half of the year. This is compared to planned 9.5 trillion roubles for the whole 2022.

The grace period for payments on two of Gazprom’s international bonds expires on July 19, and if foreign creditors are not paid by then the company will technically be in default.

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Reporting by Julia Payne; additional reporting by Christoph Steitz in Frankfurt, Bozorg Sharafedin in London, writing by Nina Chestney in London; Editing by David Goodman, Edmund Blair and Barbara Lewis

Our Standards: The Thomson Reuters Trust Principles.

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World

‘This is a victory’: smiling Zelenskiy promises EU membership, Russia defeat

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June 23 (Reuters) – President Volodymyr Zelenskiy on Thursday declared the EU’s move to accept Ukraine as a candidate for accession as a victory and promised not to rest until Russia’s defeat and full membership had been secured.

European Union leaders formally accepted Ukraine as a candidate to join the 27-nation bloc, a bold geopolitical move hailed by Ukraine and the EU itself as an historic moment. read more

“This is a victory,” a smiling Zelenskiy said in a brief video posted to his Instagram channel, noting Ukraine had waited 30 years for this moment.

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Ukraine’s President Volodymyr Zelenskiy attends a meeting with local authorities during a visit to the southern city of Mykolaiv, as Russia’s attack on Ukraine continues, in Ukraine June 18, 2022. Ukrainian Presidential Press Service/Handout via REUTERS

“We can defeat the enemy, rebuild Ukraine, join the EU, and then we can rest,” he said in a low voice.

“Or perhaps we won’t rest at all – our children would take offence. But without any doubt, we will win.”

Andriy Yermak, Zelenskiy’s chief of staff, said Kyiv would quickly implement the plan needed for accession talks to begin.

“Ukraine will be in the EU,” he tweeted.

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Reporting by David Ljunggren and Ronald Popeski;
Editing by Mark Porter and Sandra Maler

Our Standards: The Thomson Reuters Trust Principles.

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Business

Kellogg Splitting Into Three Companies as It Shifts Focus to Global Snacks

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Kellogg Co.

K 1.95%

said it plans to break up its business into three companies, seeking to jump-start its larger, faster-growing snacks business while helping its namesake cereal brands regain their footing on supermarket shelves.

The move, which Kellogg said would separate snacks such as Pringles, Cheez-Its and Pop-Tarts from cereal-aisle staples including Frosted Flakes and Froot Loops, aims to create more agile, focused companies and marks a shift from the food industry’s decadeslong strategy of pursuing acquisitions and building scale.

“Bigness for bigness sake doesn’t make a lot of strategic sense,” said Kellogg’s Chief Executive Steve Cahillane, who will head the $11.4 billion snacking business, which accounted for 80% of Kellogg’s net sales last year.

The Covid-19 pandemic delivered a boost in sales for Kellogg and other food makers, as families prepared more meals in their kitchens as they stayed home from work and school. The grocery industry now is working to retain that momentum, but food makers over the past year have been battered by rising costs for fuel, labor, ingredients and packaging, creating what Mr. Cahillane called an unprecedented stretch of inflation.

Kellogg said it expects to complete the split by the end of 2023, with the North America cereal business potentially separating first, followed by its plant-based foods business as the third company. Kellogg said it also is considering selling the plant-based foods unit, which is predominantly composed of the

MorningStar

Farms brand. It has yet to name the individual companies.

Kellogg’s stock price rose about 3% on Tuesday. Shares were already up 4.8% this year as of Friday, bucking the broader market slump. The S&P 500 packaged foods and meat index on Tuesday was down about 3% so far in 2022.

Kellogg’s breakup plan follows splits announced last year by General Electric Co. and Johnson & Johnson. In the food sector, Kraft Foods orchestrated a similar split about 10 years ago, spinning off its North American grocery business to focus on its faster-growing snack brands including Oreos and Triscuits, a business it named Mondelez International Inc.

Sara Lee Corp. in 2012 split its business into two companies, one a meat-focused operation renamed Hillshire Brands Co., and an international coffee and tea business called D.E. Master Blenders NV.

Hillshire, D.E. Master Blenders and Kraft all later merged with other big food companies.

The largest of Kellogg’s three planned companies would be the global snacks business, which would include brands such as Pringles and Cheez-Its, and breakfast items including Eggo waffles and Pop-Tarts. It also would include Kellogg’s international operations—fast-growing noodle business in Africa and cereal sales overseas.

“The snacking business will have all household names with just the right level of scale,” Mr. Cahillane said. “And when you don’t have the ‘conglomerate effect,’ you can get a lot more done.”

Kellogg said it would use its international cereal supply chain and retailer connections to expand Cheez-Its and other snacks globally. In recent years, Kellogg’s Pringles brand has gained momentum in Europe and Latin America, which executives said paves the way for others in its portfolio.

Snacks have been a driver of Kellogg’s growth and an area of particular interest to Mr. Cahillane since he joined the company almost five years ago. In 2019, he sold off Kellogg’s nearly $1 billion Keebler cookies and fruit snacks business to better focus on Kellogg’s other snack brands, which were already getting more of the company’s marketing and innovation resources. Since then, Mr. Cahillane said, he has been calculating a bigger corporate split.

“The pandemic pressed pause on a lot of things,” Mr. Cahillane said. “The time is right, now.”

Mondelez, the biggest global snack company, for years has added brands through small acquisitions, and on Monday it said it would acquire Clif Bar & Co. for $2.9 billion plus the potential for more tied to earnings targets. That deal could increase competition against Mars Inc.’s KIND bar brand, which Mars bought in 2020, and Kellogg’s smaller RX Bar business, which it acquired in 2017.

Mr. Cahillane said Kellogg would continue to pursue snacking acquisitions following the split.

Other food companies have reshaped their own operations.

General Mills Inc.

took on a substantial pet-food business via acquisitions, and divested less-profitable brands such as Green Giant vegetables and Hamburger Helper.

Campbell Soup Co.

has faced investor questions about whether it would be better off splitting its snack business and soup operation in two, though executives have maintained that they are better off together.

Kellogg’s decision to spin off its North America cereal business, with about $2.4 billion in sales last year, comes as it seeks to reverse sales declines and boost profit margins.

Consumers for years have been moving away from breakfast cereals, and Kellogg’s operations more recently were disrupted by a strike among factory workers and a fire at one plant that knocked out production and cost the company market share.

Corporate titans General Electric and Johnson & Johnson both announced in late 2021 that they were splitting, two of the latest in a long string of conglomerate break ups. Here’s why big businesses divide and what it could mean for investors. Photo illustration: Tammy Lian/WSJ

Kellogg, the second biggest U.S. cereal supplier after General Mills, has regained 4 percentage points of market share this year, Mr. Cahillane said. Still, Kellogg’s North America cereal sales fell 10% in the three months ended April 2 from the prior year, largely because of to supply-chain problems, the company said.

“Frosted Flakes doesn’t have to compete with Pringles for resources,” Mr. Cahillane said. “Economists might say we can do that without splitting. But we don’t live in a textbook, we live in the real world.”

Kellogg’s plant-based foods business, with estimated 2021 net sales of $340 million, as a stand-alone company will first aim to expand in North America and eventually globally, Kellogg said.

Meat alternatives have found traction in grocery stores’ freezer aisles and meat cases, though competition has grown. Kellogg in early 2020 brought out a line of plant-based burgers and tenders called Incogmeato, part of an effort to compete against

Beyond Meat Inc.

and Impossible Foods Inc.

Mr. Cahillane said MorningStar’s Incogmeato can be more aggressive with investments in technology and its supply chain once it no longer is contributing to Kellogg’s bottom line.

Some Wall Street analysts said divvying up Kellogg could hurt each business’s ability to secure competitive prices using the larger conglomerate’s purchasing power.

Piper Sandler’s

Michael Lavery

said that it could cost some 2% of Kellogg’s current total sales for each business to take on their own sales force, distribution system and other previously-shared expenses. Analysts with investment research firm Morningstar Inc. said that Kellogg’s snacks business could thrive on its own, though the benefits for the cereal and plant-based operations were less clear.

Kellogg said the North American cereal and plant-based foods businesses would both remain based in Battle Creek, Mich. The global snacking business would be based in Chicago, Ill., with dual corporate campuses in Battle Creek and Chicago.

Moving the snack company’s headquarters to Chicago will locate it in a city that is home to other food companies as Kellogg looks to hire and expand the business.

Boeing Co.

and

Caterpillar Inc.

said in recent weeks they planned to relocate their Chicago-area headquarters to Arlington, Virginia and Irving, Texas, respectively.

—Will Feuer contributed to this article.

Write to Annie Gasparro at annie.gasparro@wsj.com

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World

Ukraine gets major boost from European Union as war rages on in the east

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  • Ukraine EU candidacy signals major shift in European geopolitics
  • Putin seeks to play down EU issue
  • Battle for Sievierodonetsk grinds on
  • Russian media say two Americans caught fighting for Ukraine

BRUSSELS/KYIV, June 18 (Reuters) – As war rages in Ukraine’s east, Kyiv received a major boost on Friday when the European Union recommended that it become a candidate to join the bloc, foreshadowing a dramatic geopolitical shift in the wake of Russia’s invasion.

At a summit next week, EU leaders are expected to endorse the recommendations by the bloc’s executive for Ukraine and neighbouring Moldova. read more

Ukrainian President Volodymyr Zelenskiy said on Twitter the bravery of Ukrainians had brought an opportunity for Europe to “create a new history of freedom, and finally remove the grey zone in Eastern Europe between the EU and Russia”.

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As diplomacy advanced with Brussels, intense fighting continued in the eastern region of Donbas, where Russia seeks to solidify and extend recent gains, while British Prime Minister Boris Johnson made a surprise visit to the capital, Kyiv.

Zelenskiy said in a nightly televised address that the decision of EU member states remains to be seen, but added: “You can only imagine truly powerful European strength, European independence and European development with Ukraine.”

European Commission President Ursula von der Leyen announced the decision while wearing the Ukrainian colours, represented by a yellow blazer over a blue blouse.

“Ukrainians are ready to die for the European perspective,” she said. “We want them to live with us the European dream.”

Russian President Vladimir Putin railed at the West, the United States in particular, in a grievance-filled speech in St Petersburg, but sought to play down the EU issue.

“We have nothing against it,” he said. “It is not a military bloc. It’s the right of any country to join economic union.”

However, Kremlin spokesperson Dmitry Peskov said Russia was closely following Ukraine’s EU bid, especially in the light of increased defence cooperation among the 27-member bloc.

Ukraine applied to join the EU four days after Russian troops poured across its border late in February. Within days it was joined by Moldova and Georgia, smaller former Soviet states also contending with separatist regions backed by Russia.

Although only the start of a process that may run for years and require extensive reforms, the move by the European Commission puts Kyiv on course to realise an aspiration seen as out of reach just months ago.

One of Putin’s stated objectives in launching what Moscow calls a “special military operation” that has killed thousands of people, destroyed cities and sent millions fleeing was to halt the West’s eastward expansion via the NATO military alliance.

But Friday’s announcement underlined how the war has had the opposite effect: convincing Finland and Sweden to join NATO, and now the EU to embark on potentially its most ambitious expansion since welcoming Eastern European states after the Cold War.

Heightening the global showdown, Russian media broadcast images of what they said were two Americans captured while fighting for Ukraine. “I am against war,” the men said in separate video clips posted on social media. read more

POST-SOVIET GENERATION

EU membership is not guaranteed – talks have been stalled for years with Turkey, a candidate since 1999. But if admitted, Ukraine would be the EU’s largest country by area and its fifth most populous.

Ukraine and Moldova are far poorer than current EU members and have recent histories of volatile politics and organised crime, in addition to their conflicts with Russian-backed separatists.

But in Zelenskiy, 44, and Maia Sandu, 50, they have pro-Western leaders who came of age outside the Soviet Union.

Johnson, the latest in a string of foreign leaders visiting Kyiv, offered training for Ukrainian forces and said Britain would stand by the Ukrainian people “until you ultimately prevail”. read more

Ukrainian Foreign Minister Dmytro Kuleba urged the West not to “suggest peace initiatives with unacceptable terms”, in an apparent reference to remarks this month by French President Emmanuel Macron that finding a diplomatic solution requires not humiliating Russia. read more

Instead, Kuleba wrote in an online article in the magazine Foreign Policy, the West should help Ukraine win, not just by providing heavy weapons but by maintaining and increasing sanctions against Moscow.

“The West cannot afford any sanctions fatigue, regardless of the broader economic costs,” he wrote. “It is clear that Putin’s path to the negotiating table lies solely through battleground defeats.”

Since Ukraine defeated Russia’s bid to storm Kyiv in March, Moscow has refocused on the eastern Donbas region, which it claims on behalf of separatist proxies, and its forces have used their artillery advantage to blast their way into cities in a punishing phase of the war.

Russia is taking a pounding too.

Its military is “suffering heavy casualties” after concentrating the vast majority of its available combat power to capture Sievierodonetsk and its sister city, Lysychansk, at the expense of other axes of advance, Washington-based think tank the Institute for the Study of War said in a note on Friday.

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Additional reporting by Abdelaziz Boumzar in Marinka and Reuters bureaux; Writing by David Brunnstrom and Clarence Fernandez; Editing by William Mallard

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US

Nursing grievances over 2020, Trump returns to Georgia seeking allies

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March 25 (Reuters) – In a test of his enduring influence over the Republican Party, former President Donald Trump returned to Georgia on Saturday to stump for allies who support his ongoing false claims that the 2020 election was stolen from him – starting with Georgia.

At a rally in Commerce, a small city northeast of Atlanta, Trump spent the first 20 minutes of his speech repeating falsehoods about the outcome, calling Governor Brian Kemp, a fellow Republican, a “turncoat” and “coward” for failing to reverse the results.

Trump has invested significant political capital in the state, endorsing a slate of statewide candidates in an effort to oust Kemp and his allies. The May 24 primary election will provide perhaps the clearest assessment yet of Trump’s ability to play kingmaker in the 2022 elections.

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It will also offer an early measure of how Republican candidates attempt to strike a balance between Trump’s obsession with the 2020 election and national Republican leaders’ preference to focus on President Joe Biden’s record in office.

“This is a really hard test for him – and a crucial one,” said Alan Abramowitz, a political science professor at Emory University in Atlanta. “Trump is still well liked by Republican voters, but that doesn’t necessarily mean that they are going to base their choice in a primary on his endorsement.”

Polls have shown Kemp holding a comfortable lead over Trump’s preferred candidate, former U.S. Senator David Perdue, despite Trump’s frequent criticisms of the incumbent governor.

In addition to Perdue, Trump has endorsed U.S. Representative Jody Hice, who is challenging Georgia Secretary of State Brad Raffensperger. Raffensperger rejected Trump’s demand that he alter the outcome and declared the 2020 election fair and accurate after a series of audits and reviews.

Trump also endorsed down-ballot challengers for attorney general, lieutenant governor and even insurance commissioner, in each case siding with candidates taking on officials he blames for not fighting harder to substantiate his fraud claims.

Biden won Georgia by less than a quarter of a percentage point, becoming the first Democrat to win the state in nearly 30 years.

“What we’re starting to see is that his endorsement does not appear so far to be giving the type of automatic bump to candidates that we’ve seen in the past,” said Amy Steigerwalt, a political science professor at Georgia State University.

A spokesperson for Perdue said his support would only grow as more voters become aware of Trump’s endorsement. A spokesperson for Trump did not respond to a request for comment.

TRUMP STILL PUSHING ELECTION FALSEHOODS

Republicans worry that a split in the ranks could open the door for Democratic gubernatorial candidate Stacey Abrams, the voting rights activist who narrowly lost to Kemp in 2018, to win November’s rematch.

Some Republicans already believe Trump’s rhetoric following the November 2020 election helped cost the party twin Senate runoff elections in Georgia in January 2021, handing Democrats control of the chamber.

A spokesperson for Kemp’s campaign, Tate Mitchell, said, “Governor Kemp is focused on winning the endorsement of Georgia Republicans on May 24th and making sure Stacey Abrams is never our governor.”

Trump remains the party’s leading figure, and Republican candidates from across the country continue to seek his support. But he has made clear he expects his allies to commit to his false assertion that Biden’s victory in 2020 was illegitimate, a claim that has been repeatedly debunked by courts, vote audits and election officials.

Earlier this week, Trump rescinded his endorsement of U.S. Representative Mo Brooks for a Senate race in Alabama after Brooks told voters it was time to move on from the 2020 election. read more

Perdue, who lost his Senate seat in 2020, echoed Trump’s claims during remarks at Saturday’s rally, telling the crowd that both their elections were “stolen” and vowing that those responsible would “go to jail.”

Some Republicans, including Senate majority leader Mitch McConnell, have urged the party to put 2020 behind it and focus on Biden’s performance. Historically, the party that occupies the White House has lost seats in Congress during a president’s first midterm election.

Georgia Lieutenant Governor Geoff Duncan, a Republican who is not running for reelection, founded a group, GOP 2.0, aimed at moving the party beyond Trump.

The organization released an advertisement this week attacking Trump and Perdue for preferring to talk about “conspiracy theories and past losses” rather than offering a vision for the future.

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Reporting by Joseph Ax; Editing by Colleen Jenkins and Daniel Wallis

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Business

GE Cuts Larry Culp’s 2022 Pay After Shareholder Protest

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General Electric Co. said Chief Executive

Larry Culp

agreed to reduce his potential compensation by about $10 million this year, responding to shareholder concerns over changes that

GE’s

GE 0.88%

board made to executives’ pay packages in 2020.

In August 2020, the GE board revised Mr. Culp’s contract, extending it until 2024 and awarding him a special stock grant during the year that was valued at more than $100 million by the end of 2020. Asset managers called the awards poorly linked to the company’s performance, which they characterized as trailing that of GE’s peers.

Nearly 58% of GE shares were voted against the board’s compensation practices at last year’s annual meeting. It is rare for shareholders to withhold their support for such say-on-pay votes at major companies.

For 2022, Mr. Culp stands to receive a $5 million equity award, instead of the $15 million set out in his revised contract, if he and the company meet performance targets. Exceeding those targets or falling short would increase or reduce the award, respectively.

GE reduced Mr. Culp’s potential 2022 pay following discussions with most of its major shareholders last year, the company said in its annual proxy statement.

“There was shareholder concern around the timing, size and structure of the 2020 retention grant made as part of the extension,” GE said in its filing, along with shareholder support for Mr. Culp’s leadership. The company also said it doesn’t plan to make similar changes to its CEO’s pay in future years.

On Thursday, GE reported paying Mr. Culp $22.7 million for 2021, including a cash bonus of $4.2 million and salary of $2.5 million as well as a $15 million equity award. The equity award was made before the 2021 annual meeting, GE said in the filing.

His 2021 pay trailed the $73.2 million that GE reported paying him in 2020, but it roughly matched the $24.6 million paid in 2019, Mr. Culp’s first full year heading the company, securities filings show.

GE said in its proxy that the board would also limit its use of discretion when determining executive bonuses, after shareholders expressed concerns that GE used discretion in 2020 to award bonuses rather than pegging them to performance measures.

The company said Mr. Culp’s bonus for 2021 paid out at 112% of target, reflecting better-than-target free-cash-flow and margin-expansion figures, and worse-than-target revenue growth, as well as a penalty based on companywide safety metrics.

A GE spokeswoman said the company spoke with investors holding about half the company’s shares, and three-quarters of those held by institutional investors, after the failed say-on-pay vote.

Write to Theo Francis at theo.francis@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the March 18, 2022, print edition as ‘GE Cuts CEO Pay After Shareholder Protest.’

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Science

NEA Scout Will Use a Solar Sail to Reach an Asteroid

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NASA wants to propel a shoebox-sized spacecraft to an asteroid using a solar sail, the first deep space mission by the agency to use such a mechanism.

The Near-Earth Asteroid Scout (NEA Scout) is a small craft called a CubeSat, and it will be one of 10 secondary payloads on the upcoming Artemis I uncrewed test flight (currently slated for March 2022). The satellite is only about the size of a shoebox, but the reflective sail that will haul it through space unfolds to 925 square feet. Gas thrusters will put the CubeSat on a trajectory for the nearby asteroid target, but the solar sail will do the propulsion work for the rest of the two-year journey.

Solar sails harness the momentum of the Sun’s photons to propel spacecraft forward. Because rocket fuel is a considerable factor in the weight of spacecraft and their lifetimes in space, it pays to need as little of it as possible. The bigger the solar sail, the more sunlight the craft can capture. By changing the position of the sail to the angle of sunlight, the NEA Scout can alter its trajectory.

The scout will be heading to an asteroid called 2020 GE, which was first seen in March 2020 (hence its name.) The asteroid is less than 60 feet across, and because asteroids its size have not been explored up close before, it’s a great research target. Smaller rocks can still have damaging impacts if they hit Earth, such as the Chelyabinsk meteor in 2013.

“Although large asteroids are of most concern from a planetary defense perspective, objects like 2020 GE are far more common and can pose a hazard to our planet, despite their smaller size,” said Julie Castillo-Rogez, the principal science investigator for the NEA Scout mission at NASA’s Jet Propulsion Laboratory, in an agency release. “2020 GE represents a class of asteroid that we currently know very little about.”

The CubeSat has a camera on board to gather information on the makeup, size, and properties of 2020 GE. It could be a solid rock, or an amalgamation of dusty and smaller rocks glommed together, like asteroid Bennu. Asteroids continue to be a point of interest for NASA; the Lucy mission to study Jupiter’s Trojan asteroids launched in October 2021 and the Psyche mission is set to launch this August.

Asteroids aside, the NEA Scout is also paving the way for two other solar sail missions: the Advanced Composite Solar Sail System, to launch no earlier than mid-2022, according to the NASA website, and the Solar Cruiser, which will head toward the Sun in 2025 with a whopping 18,000-square-foot sail. The future for sail technology in space is bright.

More: NASA Funds Interstellar Probe and Space Habitats Made From Fungi

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Business

Citigroup Sticks With Its Covid-19 Vaccine Mandate, While GE Drops Its Rules

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Citigroup Inc.

C -1.25%

is sticking with its Covid-19 vaccine mandate for its U.S. workers.

General Electric Co.

GE 0.68%

is not.

The two American companies are going in opposite directions after the Supreme Court blocked Thursday the Biden administration’s rule that big employers require their employees to get vaccines or submit to testing.

Citigroup, which has about 65,000 employees in the U.S., said it had reached 99% compliance one day before a Jan. 14 deadline the bank had set for U.S. workers to get vaccinated or request an accommodation for medical or religious reasons.

“Our goal has always been to keep everyone at Citi, and we sincerely hope all of our colleagues take action to comply,” the company’s human-resources chief Sara Wechter said in a LinkedIn post on Thursday after the high court’s decision.

The bank previously told employees anyone who was still unvaccinated would be placed on unpaid leave, according to people familiar with the matter. Their employment would terminate on Jan. 31, the people said. Saturday, after a wave of last minute vaccinations, around 150 employees were being placed on leave, one of the people said. They could keep their jobs if they comply by the end of the month.

General Electric suspended its remaining Covid-19 vaccine requirements.



Photo:

alwyn scott/Reuters

Citigroup and GE announced vaccine requirements for U.S. staff in October, after the Biden administration said large employers and government contractors would be required to enforce vaccination mandates. Both companies count the U.S. government as an important client.

At the start of 2021, GE had about 56,000 employees in the U.S. It originally told them they were required to get vaccinated or seek a religious or medical accommodation by early December. It suspended that policy in December after a court challenge temporarily blocked the rule for federal contractors.

The manufacturer still required U.S. employees to show proof of vaccination or submit to testing under the White House’s mandate for companies with more than 100 workers, until the Supreme Court blocked that policy on Thursday.

GE on Friday suspended its remaining Covid-19 vaccine requirements, a spokeswoman said. The company said most of U.S. employees are vaccinated and it was on track to comply with the federal contractor executive order before the court injunction.

Write to Thomas Gryta at thomas.gryta@wsj.com and David Benoit at david.benoit@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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