com Inc.’s layoffs will affect more than 17,000 employees, according to people familiar with the matter, the highest reduction tally revealed in the past year at a major technology company as the industry pares back amid economic uncertainty.
The Seattle-based company in November said that it was beginning layoffs among its corporate workforce, with cuts concentrated on its devices business, recruiting and retail operations. At the time, The Wall Street Journal reported the cuts would total about 10,000 people. Thousands of those cuts began last year.
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The rest of the cuts will bring the total number of layoffs to more than 17,000 and will be made over the coming weeks, some of the people said. As of September,
Amazon
AMZN -0.79%
employed 1.5 million people, with a large percentage of them in its warehouses. The layoffs are concentrated in the company’s corporate ranks, some of the people said.
Amazon
was one of the biggest beneficiaries of the Covid-19 pandemic as customers flocked to online shopping. The rush to Amazon’s various businesses, from e-commerce to groceries and cloud computing, pushed forward years of growth for the company. To keep up with demand, Amazon doubled its logistics network and added hundreds of thousands of employees.
When demand started to wane with customers moving back to shopping in stores, Amazon initiated a broad cost-cutting review to pare back on units that were unprofitable, the Journal reported. In the spring and summer, the company made targeted cuts to bring down costs, shutting physical stores and business units such as Amazon Care. Amazon later announced a companywide hiring freeze before deciding to let employees go.
Many tech companies have cut jobs as the economy sours. Amazon’s layoffs of more than 17,000 employees would represent the highest number of people let go by a tech company in the past few months, according to tallies released on Layoffs.fyi, a website that tracks the events as they surface in media reports and company releases.
The trend has affected companies such as Amazon and others that have acknowledged they grew too quickly in many cases.
Facebook
parent
Meta Platforms Inc.
said it would cut more than 11,000 workers, or 13% of its staff, adding to layoffs at
Lyft Inc.,
HP Inc.
and other tech companies. On Wednesday,
Salesforce Inc.
said that it was laying off 10% of its workforce. Co-Chief Executive
Marc Benioff
said the business-software provider hired too many people as revenue surged earlier in the pandemic. “I take responsibility for that,” he said.
Write to Dana Mattioli at dana.mattioli@wsj.com and Jessica Toonkel at jessica.toonkel@wsj.com
lamented he wasn’t finding much out there that was worth buying.
That is no longer the case.
After a yearslong deal drought, Mr. Buffett’s
Berkshire Hathaway Inc.
BRK.B -2.55%
is opening up the spending spigot again. It forged an $11.6 billion deal to buy insurer
Alleghany Corp.
Y -0.62%
, poised to be Berkshire’s biggest acquisition in six years. It bought millions of shares of
HP Inc.
HPQ -2.53%
and
Occidental Petroleum Corp.
OXY -3.40%
And it dramatically ramped up its stake in
Chevron Corp.
CVX -3.16%
, making the energy company one of Berkshire’s top four stock investments.
The big question: Why?
“It’s a gambling parlor,” Mr. Buffett said Saturday of the markets over the past few years. He added that he blamed the financial industry for motivating risky behavior among investors. While he finds speculative bets “obscene,” the pickup in volatility across the markets has had one good effect, he said: It has allowed Berkshire to find undervalued businesses to invest in again following a period of relative quiet.
“We depend on mispriced businesses through a mechanism where we’re not responsible for the mispricing,” Mr. Buffett said.
Mr. Buffett, 91 years old, shared his thoughts on the state of the markets, Berkshire’s insurance business and recent investments at the company’s annual shareholder meeting in downtown Omaha.
Berkshire also held votes on shareholder proposals, with investors ultimately striking down measures that asked Berkshire to make its board chairman independent and called for the company to disclose climate risk across its businesses.
Shareholders eager to score prime seats lined up for hours before the doors opened in the arena where Mr. Buffett; right-hand-man
Charlie Munger,
98; and Vice Chairmen
Greg Abel,
59, and
Ajit Jain,
70, took the stage. As Mr. Buffett entered, a lone audience member took the opportunity to send a message. “We love you,” the person shouted.
Mr. Buffett appeared equally enthused to see the thousands of shareholders sitting before him.
It was a lot better being able to be with everyone in person, he said.
Up until recently, Berkshire had largely been sitting on its cash pile. Its business thrived; a recovering economy and roaring stock market helped push net earnings to a record in 2021. But it didn’t announce any major deals, something that led many analysts and investors to wonder about its next moves. Berkshire ended the year with a near record amount of cash on hand. (After Berkshire’s buying spree, the size of the company’s war chest shrank to $106.26 billion at the end of the first quarter, from $146.72 billion three months earlier.)
Mr. Buffett’s feeling that there were no appealing investment opportunities for Berkshire quickly gave way to excitement in late February, he said Saturday, when he got a copy of Alleghany Chief Executive
Joseph Brandon’s
annual report.
The report piqued his interest. He decided to follow up with Mr. Brandon, flying to New York City to talk about a potential deal over dinner.
Warren Buffett headed in to speak to shareholders at Berkshire Hathaway’s annual meeting in Omaha, Neb., on Saturday.
Photo:
SCOTT MORGAN/REUTERS
If the chief executive hadn’t reached out, “it wouldn’t have occurred to me to write to him and say, ‘Let’s get together,’” Mr. Buffett said.
Berkshire’s decision to build up a 14% stake in Occidental also came about with a report. Mr. Buffett said he had read an analyst note on the company, whose stock is still trading below its 2011 high, and decided the casino-like market conditions made it a good time to buy the stock.
Over the course of just two weeks, Berkshire scooped up millions of shares of the company.
“I don’t think we ever had anything quite like we have now in terms of the volumes of pure gambling activity going on daily,” Mr. Munger said. “It’s not pretty.”
But the amount of speculation in the markets has given Berkshire a chance to spot undervalued businesses, Mr. Munger said, allowing the company to put its $106 billion cash reserve to work.
“I think we’ve made more because of the crazy gambling,” Mr. Munger said.
Another business that caught Berkshire’s eye? Chevron. Berkshire’s stake in the company was worth $25.9 billion as of March 31, up from $4.5 billion at the end of 2021, according to the company’s filing. That makes Chevron one of Berkshire’s four biggest stockholdings, alongside
Apple,
American Express Co. and Bank of America Corp.
Neither Mr. Buffett nor Mr. Munger specifically addressed Berkshire’s decision to increase its Chevron stake.
But the two men offered a defense of the oil industry. It is a good thing for the U.S. to be producing more of its own oil, Mr. Buffett said. Mr. Munger went further, saying he could hardly think of a more useful industry.
At the meeting, Mr. Buffett also revealed that Berkshire has increased its stake in
Activision Blizzard Inc.
The company now holds a 9.5% position in Activision, a merger-arbitrage bet from which Berkshire stands to profit if
Microsoft Corp.’s
proposal to acquire the videogame maker goes through.
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At the end of the day, Berkshire doesn’t try to make its investments based on what it believes the stock market will do when it opens each Monday, Mr. Buffett said.
“I can’t predict what [a] stock will do…We don’t know what the economy will do,” he said.
What Berkshire focuses on is doing what it can to keep generating returns for its shareholders, Mr. Buffett said. Berkshire produced 20% compounded annualized gains between 1965 and 2020, compared with the S&P 500, which returned 10% including dividends over the same period.
“The idea of losing permanently other people’s money…that’s just a future I don’t want to have,” Mr. Buffett said.
Get out your popcorn, and get your trading apps open — after months in the waiting, Federal Reserve Chair Jerome Powell is set to deliver remarks on the economic outlook at the Kansas City Fed’s Jackson Hole economic symposium.
Expect him to inch up to the line, but not quite announce, that the Fed will end its bond-buying program. The delta variant has supressed progress on a number of economic indicators, ranging from airline travel to purchasing manager gauges of activity, so Powell will have reason to say, let’s wait for another month or two of data before committing to a taper.
But there’s another reason why the Fed should wait — the framework that Powell himself introduced at last year’s Jackson Hole, called average inflation targeting. “We will seek to achieve inflation that averages 2% over time. Therefore, following periods when inflation has been running below 2%, appropriate monetary policy will likely aim to achieve inflation moderately above 2% for some time,” he said in 2020.
Now Powell didn’t actually define the “time” element. If time means three years, inflation is still below target, as the chart shows. “It is needless to say that the hurdle rate for rate hikes due to inflation is extremely high under the new Fed framework and that this year’s US treasury rates move was unwarranted,” said Mondher Bettaieb-Loriot, head of corporate bonds at Vontobel Asset Management.
Bettaieb-Loriot may not be correct in his call that tapering’s unlikely before well into 2022; after all, during the July meeting in which “most” Fed officials said it would make sense to start reducing purchases, the 3-year rolling average of inflation was below target. Put another way, the Fed’s commitment to its new framework has been shaky. It will be interesting to see whether Powell makes a fresh commitment to it, or not.
The buzz
The Powell speech is due at 10 a.m. Eastern, and a gaggle of other policymakers will be interviewed on the major business news networks through the day. Ahead of that, there’s data on the PCE price index for July, as well as trade in goods data from July.
There were a number of corporate earnings releases delivered late Thursday. Gap
GPS,
-4.11%
surged as the retailer’s earnings came in well ahead of estimates, with online sales now representing a third of total revenue. Peloton Interactive
PTON,
-1.86%
shares slumped on the exercise bike company’s outlook and price cuts. Enterprise software provider VMware
VMW,
+0.20%
also slumped after its latest results.
The two U.S. major makers of personal computers, HP
HPQ,
-0.99%
and Dell
DELL,
-0.50%,
also reported results, with HP missing estimates on sales. Read: The PC boom is wobbly as the most important time of year approaches
Apple
AAPL,
-0.55%
will allow app makers to direct consumer payments outside of its App Store, a response to a number of antitrust lawsuits against it.
Microsoft
MSFT,
-0.97%
has warned thousands of its cloud customers that their databases may have been exposed to intruders, according to an email obtained by Reuters.
Tesla
TSLA,
-1.41%
is trying to sell electricity directly to consumers in Texas, according to Texas Monthly.
China plans to ban U.S. initial public offerings for data-heavy tech firms, The Wall Street Journal reported.
Evacuations resumed in Afghanistan after the deadly bombings in Kabul.
The markets
U.S. stock futures
ES00,
+0.26%
YM00,
+0.20%
nudged higher ahead of the Powell speech. The yield on the 10-year Treasury
TMUBMUSD10Y,
1.345%
slipped to 1.34%.
Random reads
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