SE agreed to revive orders for close to 75 aircraft from Qatar Airways after reaching a settlement with the Middle East airline over a long-running dispute about chipping paint on its A350 wide-body models.
A spokesman for Airbus said it would now go ahead with delivering 50 A321 narrow-bodies and 23 remaining A350 twin-aisles previously ordered by Qatar.
The orders had been scrapped as part of an escalating, multibillion-dollar legal battle over the paint issue, which the airline had claimed could pose a safety concern. Airbus repeatedly denied the claims.
Airbus and Qatar Airways earlier Wednesday said in a joint statement that they had reached an “amicable and mutually agreeable settlement” in relation to the legal dispute. The companies didn’t disclose the details of the settlement other than to say the agreement didn’t amount to an admission of liability from either party. A program to repair the degradation on Qatar’s current fleet is under way, the companies added.
Qatar Airways had previously grounded 29 of its A350 jets and refused new deliveries over the issue, reducing its capacity amid a surge in travel to Doha for the 2022 FIFA World Cup. The airline has said the peeling paint was exposing the meshed copper foil that is designed to protect the aircraft from lightning strikes.
That led Qatar Airways to initiate legal proceedings against Airbus in London, in which the carrier had sought damages partly based on the impact on its operations from not being able to use the aircraft. A possible trial had been scheduled for later this year.
While the paint issue has also affected other A350s in service at other Airbus customers, only Qatar Airways had taken the step to unilaterally ground the aircraft. Airbus and the European Union Aviation Safety Agency, which oversees the Toulouse, France-based plane maker, have insisted that the issue is only cosmetic.
The situation had led to a broad fallout between Airbus and one of its biggest customers. In August, Airbus ended all new business with Qatar Airways, canceling contracts valued at more than $13 billion according to the latest available list prices and before the hefty discounts plane makers typically give to customers.
After Airbus canceled a deal to sell Qatar Airways 50 of its A321 jets, the Gulf carrier ordered up to 50 of rival
Boeing Co.
’s 737 MAX 10 single-aisle jets within two weeks. Qatar Airways had previously canceled most of an existing MAX order in 2020 after receiving five of the planes.
Airbus lawyers alleged that Qatar Airways had exaggerated concerns about the issue in an attempt to claim compensation and refuse delivery of aircraft that it didn’t need as the pandemic hit demand for air travel. The plane maker complained in court that the airline and its regulator, the Qatar Civil Aviation Authority, had failed to provide documentation that showed the technical justifications behind grounding the aircraft.
Qatar Airways has said it provided images of the damage, which it purported showed the scale of the issue and the potential safety risk.
Qatar Airways Chief Executive
Akbar Al Baker
has long had a reputation as a tough customer, publicly lashing out at both Airbus and Boeing when he perceives delivery or quality issues.
CVS, the largest U.S. drugstore chain by revenue, plans in March to cut or shift hours at about two-thirds of its roughly 9,000 U.S. locations. Walmart plans to reduce pharmacy hours by closing at 7 p.m. instead of 9 p.m. at most of its roughly 4,600 stores by March.
Walgreens Boots Alliance Inc.
previously said it was operating thousands of stores on reduced hours because of staffing shortages. Combined, the three chains operate some 24,000 retail pharmacies across the U.S.
Walmart last year raised pay for pharmacy technicians.
Photo:
Ryan David Brown for The Wall Street Journal
Earlier in the pandemic, CVS and Walgreens struggled to meet demand for Covid shots and vaccines. The chains cut hours and, in some cases, closed pharmacies for entire weekends. Walmart, which sells a wider variety of goods, cut overall store hours, in part, to cope with Covid-related labor shortages and make time to restock empty shelves as demand for basics such as toilet paper surged.
CVS, in a recent notice to field leaders, said most of its reduced hours will be during times when there is low patient demand or when a store has only one pharmacist on site, which the company said is a “top pain point,” for its pharmacists.
CVS said in a statement it periodically reviews pharmacy operating hours as part of the normal course of business to ensure stores are open during high-demand times. “By adjusting hours in select stores this spring, we ensure our pharmacy teams are available to serve patients when they’re most needed,” the company said, adding that customers who encounter a closed pharmacy can seek help at a nearby location.
At Walmart, the shorter hours offer pharmacy workers a better work-life balance and best serve customers in the hours they are most likely to visit the pharmacy, said a company spokeswoman. “This change is a direct result of feedback from our pharmacy associates and listening to our customers,” she said. Some Walmart pharmacies already close before 9 p.m., which will become standard across the country after the change.
An online community message board for Holliston, Mass., a small town about 30 miles outside Boston, was populated with messages last month from locals venting about the unpredictable hours of the CVS in town, said resident Audra Friend, who does digital communications for a nonprofit. Ms. Friend said she struggled for a week in November to refill a prescription for a rescue inhaler at the store because the pharmacy was sporadically closed.
“I would go in, and there was a note on the door saying, ‘Sorry, pharmacy closed,’” said Ms. Friend, who switched her prescriptions to a 24-hour CVS about 5 miles away. She said it would be better to have consistently shorter hours if that meant fewer unexpected closures. “At least that way we’re not just showing up at CVS to find out the pharmacist isn’t there,” she said.
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A CVS spokeswoman said that in recent weeks the Holliston store has had no unexpected closures.
The drugstore chains have been working to stop an exodus of pharmacy staff by offering such perks as bonuses, higher pay and guaranteed lunch breaks. Pharmacists were already in short supply before the pandemic, and consumer demand for Covid-19 shots and tests put additional strains on pharmacy operations. Walgreens recently said staffing problems persist and remain a drag on revenue.
Retail pharmacies, which benefited from a bump in sales and profits during the pandemic, are now reworking their business models as demand for Covid tests and vaccines decline and generic-drug sales generate smaller profits.
CVS and Walgreens are closing hundreds of U.S. stores and launching new healthcare offerings as they try to transform themselves into providers of a range of medical services, from diagnostic testing to primary care.
This past summer, Walgreens was offering bonuses up to $75,000 to attract pharmacists, while CVS is working to develop a system in which pharmacists could perform more tasks remotely. The median annual pay for pharmacists was nearly $129,000 in 2021, according to Labor Department data, which also projected slower-than-average employment growth in the profession through 2031.
In the past year, the chains have poured hundreds of millions of dollars into recruiting more pharmacists and technicians but staffing up has proven difficult. Pharmacists remain overworked, pharmacy-chain executives have acknowledged, and fewer people are attending pharmacy schools. The number of pharmacy-school applicants has dropped by more than one-third from its peak a decade ago, according to the Pharmacy College Application Service, a centralized pharmacy-school application service.
Meanwhile, many pharmacists who aren’t quitting the field are leaving drugstores to work in hospitals or with other employers.
Walmart raised wages for U.S. pharmacy technicians in the past year, bringing average pay to more than $20 an hour. Walmart said it planned to raise the minimum wage for all U.S. hourly workers in its stores and warehouses to $14 next month, from $12.
CVS and Walgreens last year raised their minimum wages to $15 an hour.
Write to Sharon Terlep at sharon.terlep@wsj.com and Sarah Nassauer at Sarah.Nassauer@wsj.com
‘s team has been exploring using as much as $3 billion in potential new fundraising to help repay some of the $13 billion in debt tacked onto Twitter Inc. for his buyout of the company, people familiar with the matter said.
In December, Mr. Musk’s representatives discussed selling up to $3 billion in new Twitter shares, people familiar with the matter said.
Mr. Musk’s team has said to people familiar with the finances of the company that an equity raise, if successful, could be used to pay down an unsecured portion of the debt that carries the highest interest rate within the $13 billion Twitter loan package, people familiar with the matter said.
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Paying off the debt would provide welcome financial relief to Twitter, which has struggled to keep advertisers on the platform. In November, Mr. Musk said Twitter had suffered “a massive drop in revenue” and was losing over $4 million a day. He also said that month that bankruptcy was a possibility for the company, although Mr. Musk later shared more upbeat prospects for the company, saying he expects Twitter to be roughly cash-flow break-even in 2023 as he has slashed some 6,000 jobs.
The state of the fundraising talks couldn’t be learned. In mid-December, Mr. Musk’s team reached out to new and existing backers about raising new equity capital at the original Twitter takeover price.
Mr. Musk’s advisers had hoped to reach a deal to raise cash at the initial takeover price by the end of 2022, according to an email sent to prospective investors at the time. However, some prospective backers said they balked at the terms, given concerns about Twitter’s financial performance. The Musk team didn’t specify a funding amount or purpose for the fundraise in the email.
Fidelity, one of the co-investors that backed Mr. Musk’s takeover of Twitter, wrote down its stake in Twitter by 56% in November, public filings show, suggesting Mr. Musk would face an uphill battle raising funds at the original valuation from outside investors. The banks holding the $13 billion in debt that backed his takeover of the company haven’t yet received any formal notice of any repayments, people familiar with the matter said.
Layoffs Across the Tech Industry
Representatives for Mr. Musk didn’t respond to requests for comment.
Twitter’s unsecured bridge loans, which total $3 billion, are the most expensive portion of the $13 billion debt package Mr. Musk incurred as part of his $44 billion acquisition of the social-media company. They carry an interest rate of 10% plus the secured overnight financing rate, a benchmark interest rate that has shot up in recent months and currently sits at 4.3%.
With every quarter that passes without Twitter refinancing the debt, the interest rate goes up by an additional 0.50 percentage point, according to regulatory filings. Twitter’s first quarterly interest payment is due at the end of the month, the filings show.
Twitter’s annual interest burden has increased by over $100 million since he announced the takeover deal last April, as the overnight rate has increased. At the time of the announcement, the overnight rate was 0.3%.
Elon Musk has said that Twitter is losing over than $4 million a day.
Photo:
Marlena Sloss/Bloomberg News
Twitter’s total interest expense has been estimated to be roughly $1.25 billion a year, according to a December analysis by
Jeffrey Davies,
a former credit analyst and founder of data provider Enersection LLC. By that estimate, Twitter is incurring roughly $3.4 million every day in interest-payment obligations.
On Dec. 13, Mr. Musk tweeted “beware of debt in turbulent macroeconomic conditions, especially when Fed keeps raising rates.”
Repaying the unsecured bridge loans would leave Twitter with a debt burden that has much more manageable interest rates. Twitter’s $6.5 billion in term loans and $3 billion in secured bridge loans carry an annual interest burden of 4.75% and 6.75%, respectively, plus the overnight rate, according to public filings.
Tesla CEO Elon Musk is set to testify in a federal trial over tweets from 2018 in which he floated the possibility of taking the company private. WSJ’s Rebecca Elliott explains what to know about the trial. Illustration: Adele Morgan
A potential deal would also provide a degree of relief for the banks that backed Mr. Musk’s takeover of the social-media company and that intended to sell the debt to third-party investors but changed course after deteriorating market conditions sank Wall Street’s appetite for exposure to risky bonds and loans.
The $13 billion of Twitter debt on bank balance sheets, one of the biggest “hung deals” of all time, has helped contribute to a drag in the number of mergers and acquisitions as banks’ firepower to back deals is tied up.
Morgan Stanley,
the lead bank on Twitter’s debt deal, has approximately $807 million in unsecured bridge debt on its balance sheet, while
Bank of America Corp.
,
Barclays
PLC and MUFG Bank Ltd. each have approximately $623 million of exposure, according to public documents and calculations by The Wall Street Journal.
Each of the four banks have more than $2 billion in other Twitter debt commitments on their balance sheets separate from the unsecured bridge facility, including term loans and other secured debt, the documents show.
Representatives of those banks declined to comment.
—Corrie Driebusch, Alexa Corse and Laura Cooper contributed to this article.
Write to Berber Jin at berber.jin@wsj.com and Alexander Saeedy at alexander.saeedy@wsj.com
WASHINGTON—The Biden administration is poised to send a significant number of Abrams M1 tanks to Ukraine, settling a rift that threatened the unity of the alliance supporting Ukraine at a pivotal moment in the war, U.S. officials said.
The move, which could be announced as soon as Wednesday, would be part of a broader diplomatic understanding with Germany in which Berlin would agree to send a smaller number of its own Leopard 2 tanks and would approve the delivery of more of the German-made tanks by Poland and other nations.
The shift in the U.S. position follows a Jan. 17 call between President Biden and German Chancellor
Olaf Scholz
in which Mr. Biden agreed to look into providing the Abrams tanks against the judgment of the Pentagon, which thought the tanks would be too difficult for Ukraine to field and maintain.
A German-built Leopard tank was used in a military exercise in May in Nowogard, Poland.
A senior German official said that the issue had been the subject of intense negotiation between Washington and Berlin for more than a week, which included discussions between National Security Jake Sullivan and his German counterpart.
The White House declined to comment on the deliberations or say when the first Abrams might be delivered. But some U.S. officials said it might take 12 months.
Germany’s defense minister, Boris Pistorius, told German television last week that German and U.S. tanks don’t need to be provided at the same time, leaving an opening for the U.S. to provide the Abrams at a later point.
A senior German politician said Tuesday that Germany’s government would pledge to provide around 14 Leopard 2 tanks to Kyiv from its stocks and approve third-party requests from other European countries to donate German-made tanks to Ukraine as soon as the agreement with the U.S. is announced.
Since the Russian invasion of Ukraine, the U.S. and Europe have sent Kyiv tens of billions of dollars in military aid, including heavy artillery, missile launchers, millions of munitions, air defenses and infantry fighting vehicles, but the infusion of new armor would come at a critical moment in the war.
Ukrainian officials have been planning a counteroffensive in the coming months to regain territory, including to the south where Russia has established a land bridge from Rostov to the Crimean Peninsula. Russia, which has been mobilizing hundreds of thousands of additional troops, is planning its own operations.
In a contentious meeting last week at Ramstein Air Base in Germany, the U.S. and its allies failed to persuade Germany to provide the tanks and allow other nations to send their German-made tanks. That exposed the first serious division in the alliance that has supported Kyiv, a coalition of nations assembled since Russia invaded Ukraine last February and that has been more or less defined by consensus.
German officials had initially said that they wouldn’t be the first to send tanks to Ukraine and wouldn’t do so unless the U.S. provided its own Abrams tanks. That put pressure on Germany but also the U.S. to contribute its tanks.
Poland’s defense minister said Tuesday that Poland had asked Germany for permission to send some of its German-made tanks to Ukraine. “The Germans have already received our request for consent to transfer Leopard 2 tanks to Ukraine,” Defense Minister
Mariusz Błaszczak
said. “I also appeal to the German side to join the coalition of countries supporting Ukraine with Leopard 2 tanks.”
Publicly, U.S. officials have praised Germany for weapons contributions it has made to Ukraine, including the IRIS-T air defense system and the promise to send a Patriot antimissile battery to supplement the ones pledged by the U.S. and the Netherlands, as well as Marder infantry-fighting vehicles.
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Privately, U.S. officials were frustrated by Germany’s refusal to approve the provision of German-made tanks and have debated how to persuade Berlin to change its stance.
Pentagon officials want Leopard tanks for Ukraine, but didn’t want to send the Abrams there now, arguing that the gas-guzzling tanks with their gas turbine engines, fuel requirements and substantial amount of training and logistics makes them less-than-desirable for this moment in the nearly yearlong conflict.
Some State Department and White House officials, however, had been open to meeting the German demands on the Abrams to avoid a diplomatic rupture among Ukraine’s backers and to expedite the delivery of more armor. Some Democratic lawmakers close to the White House, such as Democratic Sen. Chris Coons of Delaware, have also urged that some Abrams be provided.
The British promised earlier this month to send 14 Challenger 2 main battle tanks to Ukraine, but that wasn’t enough to persuade the Germans to release their hold on the Leopards.
A Ukrainian fighter fired a grenade launcher in Ukraine’s Zaporizhzhia region on Monday.
Photo:
STRINGER/REUTERS
Mr. Pistorius, who was sworn into office as German defense minister last week, has said several times that the ultimate decision about sending German tanks to Ukraine lay with Mr. Scholz.
Under German law, the Economy Ministry is responsible for such requests, which need to be coordinated with the Defense Ministry and ultimately be approved by the Chancellery.
Economy Minister
Robert Habeck,
whose Green Party rules in a coalition with Mr. Scholz’s Social Democrats, has come out in favor of sending German-made tanks to Ukraine, as has the Green foreign minister. Mr. Habeck would make sure the request is expedited, said officials familiar with his thinking.
U.S. and other NATO officials have suggested that the Leopard tank is most appropriate for Ukraine because of its availability in several countries and the possibility of quickly building supply and maintenance chains.
But German officials said that Mr. Scholz was concerned about ending up with a fleet of almost exclusively German-made tanks being used to fight the Russians in Ukraine, a scenario that could single his country out as a party to the conflict.
“We absolutely want to have German tanks in Ukraine but they need to be part of a broad coalition that would provide a mix of hardware, including the Abrams,” one official said.
The Engels air base, a key aviation hub, was one of the targets of strikes inside Russian territory. WSJ explains what images and videos of the incidents can tell us about Kyiv’s tactics to destabilize Moscow far from the front lines. Photo composite: Eve Hartley via Planet Labs/Maxar
Ukrainian officials said Western tanks were needed urgently and voiced hope that it would be a matter of time before the country receives them.
“The question of time is a question of life for us,”
Oleksiy Danilov,
the secretary of Ukraine’s Security and Defense Council, said in an interview with The Wall Street Journal.
In Moscow, chief of staff Gen.
Valery Gerasimov,
who led the initial invasion and was recently named commander of the Kremlin’s troops in Ukraine, said Russia was facing the entire “collective West” in the war and hadn’t faced such intensive fighting in its modern history.
In his first interview since the invasion, Gen. Gerasimov told government newspaper Argumenty i Fakty that Russia was forced to mobilize 300,000 reservists last year because of the West’s support for Ukraine. He said the draft, which exposed many of the problems of the Russian military including inadequate training and equipment, had faced snags but that the army had since addressed them.
Though President
Vladimir Putin
has said he doesn’t see a need for another mobilization, Russians are girding for a new round. After Russia suffered a string of losses in the early fall, the draft stabilized the front lines and has since appeared to tilt the calculus of attrition in Moscow’s favor, as Russia claimed a series of gains in Ukraine’s east and south this month.
—Evan Gershkovich contributed to this article.
Write to Michael R. Gordon at michael.gordon@wsj.com, Gordon Lubold at gordon.lubold@wsj.com and Bojan Pancevski at bojan.pancevski@wsj.com
The Biden administration is preparing to seek congressional approval for a $20 billion sale of new F-16 jet fighters to Turkey along with a separate sale of next-generation F-35 warplanes to Greece, in what would be among the largest foreign weapons sales in recent years, according to U.S. officials.
Administration officials intend the prospect of the sale to prod Turkey to sign off on Finland and Sweden’s accession to the North Atlantic Treaty Organization, which Ankara has blocked over objections to their ties to Kurdish separatist groups. Congress’s approval of the sale is contingent on Turkey’s acquiescence, administration officials said. The two countries ended decades of neutrality when they decided to join NATO last year in reaction to Russia’s invasion of Ukraine.
The sale to Turkey, which the administration has been considering for more than a year, is larger than expected. It includes 40 new aircraft and kits to overhaul 79 of Turkey’s existing F-16 fleet, according to officials familiar with the proposals.
Congressional notification of the deal will roughly coincide with a visit to Washington next week by Turkey’s Foreign Minister
Mevlut Cavusoglu.
The sale to Turkey also includes more than 900 air-to-air missiles and 800 bombs, one of the officials said.
Turkish President Recep Tayyip Erdogan has faced U.S. pressure to approve NATO expansion.
Photo:
adem altan/Agence France-Presse/Getty Images
The separate sale to Greece, which was requested by the Greek government in June 2022, includes at least 30 new F-35s. The F-35 Joint Strike Fighter is the U.S.’s most advanced jet fighter. While officials described the timing of the notifications for both Turkey and Greece as coincidental, it could quell protests from Athens over the F-16 sale if its request is also granted. Greece and Turkey are historic regional rivals and a sale to Turkey alone would likely draw swift condemnation from Athens.
The potential sale of the aircraft could have far-reaching implications for Washington’s efforts to shore up ties with a pair of NATO allies amid the Western response to Russia’s assault on Ukraine.
A State Department spokesman declined to comment on potential arms transfers as a matter of policy until and unless they are formally notified to Congress. Congress has never successfully blocked a foreign arms sale requested by the White House.
The proposed deal with Turkey comes at a moment of tension in U.S.-Turkish relations, with Washington also attempting to convince President Recep
Tayyip Erdogan
to do more to enforce sanctions on Russia and to approve the entry of Finland and Sweden into NATO.
The proposal also sets up a possible showdown with some congressional leaders who have vowed to oppose weapons sales to Turkey. Sen.
Bob Menendez,
a Democrat from New Jersey who is the chairman of the Senate Foreign Relations Committee, has said he wouldn’t approve any F-16 sale to Turkey, citing human-rights concerns.
In recent months, Mr. Erdogan has also threatened to launch a new military incursion against Kurdish militants in Syria. Last month a Turkish court also convicted the mayor of Istanbul, a popular opponent of Mr. Erdogan, of insulting public officials in what human rights groups said was part of a crackdown on the Turkish opposition. The Turkish government says its courts are independent.
Under U.S. arms-export laws, Congress will have 30 days to review the deal. If Congress wants to block the deal it must pass a joint resolution of disapproval. Congress can also pass legislation to block or modify a sale at any time until the delivery.
The Biden administration is looking to sell at least 30 new F-35 jet fighters to Greece.
Photo:
robert atanasovski/Agence France-Presse/Getty Images
U.S. officials say they are encouraging Mr. Erdogan to drop his opposition to Finland and Sweden joining NATO. One official characterized the F-16s as the “carrot on a stick” to get Turkey to agree.
This, officials said, could ease opposition to the sale among some members of Congress. Officials within the State Department have argued for months that the expansion was imperative to NATO’s collective security. However, officials expect that while the Greece package could sail through Congress, the F-16s may be delayed over some members’ reluctance to embolden Ankara with the additional firepower.
Mr. Erdogan first threatened to veto the two countries’ entrance over their ties to Kurdish militant groups in Iraq and Syria. Turkey has fought a slow-burning war with Kurdish armed groups for decades in a conflict that has left tens of thousands dead.
NATO leaders say that Finland and Sweden have addressed Turkey’s concerns, upholding an agreement signed last year that called for both countries to evaluate Turkish extradition requests and drop restrictions on arms sales to Ankara.
Turkish officials say that Sweden hasn’t done enough to uphold its obligations to Turkey, citing what they say is continuing activity by the militant Kurdistan Workers’ Party in Sweden. The Turkish government this week summoned Sweden’s ambassador over a demonstration in Stockholm in which protesters hung a puppet of Mr. Erdogan by its feet. The Turkish president’s hard line against Sweden has broad support within Turkey, including among opposition parties, who have long opposed what they see as a permissive approach to Kurdish militant groups in Europe.
The timing of a vote on NATO expansion in the Turkish parliament will also depend on Turkey’s national election this year, in which Mr. Erdogan faces a close race amid public discontent over the country’s struggling economy.
The Turkish Ministry of Foreign Affairs didn’t respond to a request for comment.
The Biden administration remains cautiously optimistic that Turkey will eventually come around on Finland and Sweden. U.S. officials said last year that there would be no quid pro quo for Turkey’s approval of the NATO expansion, and said that the timing of the F-16 sale was dependent on the administration’s own internal process to complete the deal.
The proposed sales also come amid heightened tensions between Turkey and Greece, two longtime adversaries who have traded threats over the past year in the eastern Mediterranean.
Turkey was originally a participant in the U.S.’s cutting-edge F-35 program but was expelled after Mr. Erdogan approved the purchase of Russia’s S-400 air defense system. The U.S. government said the Russian weapons system could potentially hack the F-35.
Biden administration officials have argued that selling F-16s to Turkey could help restore ties with the country, which maintains the second-largest army in NATO.
Under Mr. Erdogan, Turkey has played an important role in the Ukraine crisis, facilitating negotiations over prisoner exchanges and helping to broker an agreement that allowed Ukraine to resume its exports of grain through Black Sea ports. Mr. Erdogan’s close relationship with Russia’s President
Vladimir Putin
has also raised concerns in Washington, with scrutiny of inflows of Russian money to Turkey, including oligarch assets.
Finland and Sweden have formally applied to join NATO, but Turkey has threatened to block them from joining. WSJ’s Shelby Holliday explains why Turkish President Recep Tayyip Erdogan sees the expansion as a threat to Turkey’s national security. (Video first published in May 2022). Photo composite: Sebastian Vega
—William Mauldin contributed to this article.
Write to Jared Malsin at jared.malsin@wsj.com and Vivian Salama at vivian.salama@wsj.com
is laying off more than 200 employees as part of a broader reorganization, the first major staff reductions to hit Google’s parent following a wave of layoffs at other technology companies.
The cuts will affect about 15% of roles at Verily, which will discontinue work on a medical software program called Verily Value Suite and several early-stage products, CEO Stephen Gillett said in an email to employees Wednesday. Verily has more than 1,600 employees.
Verily oversees a portfolio of healthcare projects largely focused on applying data and technology to patient treatments, including a virtual diabetes clinic and an online program for connecting research participants to clinical studies.
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“We are making changes that refine our strategy, prioritize our product portfolio and simplify our operating model,” Mr. Gillett wrote in the email. “We will advance fewer initiatives with greater resources.”
Originally known as Google Life Sciences, Verily is one of the largest businesses other than Google under the Alphabet umbrella, part of a group of companies known as “Other Bets.” Alphabet had 186,779 employees at the end of September last year, according to company filings.
The robotics software company Intrinsic, another unit in Alphabet’s Other Bets, also said on Wednesday it would let go of 40 employees. A spokesman said the “decision was made in light of shifts in prioritization and our longer-term strategic direction.”
Verily has recently looked to pare back a once-sprawling collection of projects spanning insurance to mosquito breeding. Last year, the company hired McKinsey & Co. and Innosight to do consulting work, The Wall Street Journal reported.
After a period of aggressive hiring to meet heightened demand for online services during the pandemic, tech companies are now laying off many of those workers. And tech bosses are saying “mea culpa” for the miscalculation. WSJ reporter Dana Mattioli joins host Zoe Thomas to talk through the shift and what it all means for the tech sector going forward.
The reorganization is a sign of the continued difficulties facing big tech companies trying to crack the healthcare industry.
David Feinberg,
the head of an ambitious health-focused group at Google, left the company in 2021 to become CEO of the healthcare technology company Cerner Corp.
In the email to employees, Mr. Gillett said Verily would largely focus on products related to research and care, while concentrating more decisions in a central leadership team rather than individual groups.
Mr. Gillett took over as Verily CEO this month, succeeding the well-known geneticist
Andy Conrad,
who moved to executive chairman.
“As we move into Verily’s next chapter, we are doubling down on our purpose, with the goal to ultimatelybe operating in all areas of precision health,” Mr. Gillett wrote to employees on Wednesday. “We will do this by building the data and evidence backbone that closes the gap between research and care.”
Google’s peers have cut jobs recently in response to worsening economic conditions and a decline in online advertising. Last week,
Amazon.com Inc.
announced layoffs that will affect more than 18,000 employees, the most of any tech company in the past year.
Tech Layoffs Across the Industry: Amazon, Salesforce and More Cut Staff
At a companywide meeting in December, Google CEO
Sundar Pichai
said he couldn’t make any forward looking commitments in response to questions about layoffs. Google has tried to “rationalize where we can so that we are set up to better weather the storm regardless of what’s ahead,” he added.
Activist investor TCI Fund Management called on Alphabet in November to reduce losses in Other Bets such as Verily, writing in a letter to Mr. Pichai that the company had too many employees.
Alphabet’s Other Bets recorded $1.6 billion in operating losses from $209 million in revenue during the third quarter last year, mostly from the sale of health technology and internet services.
Verily said in September it received $1 billion in funding from Alphabet and other investors, without naming the backers. The private-equity firm Silver Lake, Singaporean fund Temasek Holdings and Ontario Teachers’ Pension Plan previously invested in the company.
including the vice president overseeing body engineering and its head of supply chain, have left the EV startup in recent months, as the company exits a year in which it fell short of its production targets.
The departures, confirmed by a Rivian spokeswoman, are the latest developments in what has been a challenging period for Rivian, which has been rolling out its first all-electric models but last year missed a critical milestone of manufacturing 25,000 vehicles. The company said it was off its goal by about 700 vehicles in part because of difficulty getting parts.
Rivian’s stock has also tumbled since its blockbuster initial public offering in November 2021, down roughly 79% through Tuesday’s close.
The executives who have left were some of Rivian’s longer-tenured employees. Among them is Randy Frank, vice president of body and interior engineering, and Steve Gawronski, the vice president in charge of parts purchasing. Both had departed around the beginning of this year.
Mr. Frank joined Rivian in 2019 from
Ford Motor Co.
Mr. Gawronski joined in 2018 from the autonomous vehicle startup Zoox.
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Another early employee, Patrick Hunt, a senior director in the strategy team, left the company late last year. Mr. Hunt joined Rivian in 2015.
Rivian’s general counsel, Neil Sitron, departed in September after 4½ years with the company, which was founded in 2009.
The Rivian spokeswoman said the company wants to ensure the startup has the talent and staff it needs to ramp up production. The company declined to comment on the individual circumstances of the departures. Efforts to reach the former employees weren’t immediately successful.
“We continue to attract world class talent to our company as our business needs change,” she said.
The departures mark the latest shake-up at the top of Rivian, which has brought in new executives to oversee the company’s manufacturing operations. The company’s first full year of factory production was marred by supply-chain troubles and difficulties getting the assembly line to run at full speed.
Tim Fallon, former head of
Nissan Motor Co.
’s factory in Canton, Miss., was hired in early 2022 to run Rivian’s sole factory in Normal, Ill.
In June, Rivian hired Frank Klein as chief operating officer, from contract manufacturer
Magna Steyr.
In a November email to employees reviewed by the Journal, Mr. Klein wrote that with Mr. Gawronski’s exit, the company was taking the opportunity to make some organizational changes to ensure it can support the increased complexity that the group will handle in coming years.
Mr. Klein added Rivian was reorganizing its supply-chain management, putting one vice president in charge of the supply chain and logistics, and another in charge of parts procurement.
He also announced that Rivian had hired Andreas Reutter from tool maker
Stanley Black & Decker Inc.
to oversee Rivian’s supply-chain logistics.
The changes at the top of Rivian come as it attempts to transform from an upstart looking to raise capital to a mass manufacturer with ambitions to become one of the world’s largest auto makers.
Rivian is under pressure to prove it can build its electric trucks at scale without having ramped up production before, as competition heats up from legacy auto makers. WSJ toured Rivian’s and Ford’s EV factories to see how they are pushing to meet demand. Illustration: Adam Falk/The Wall Street Journal
Its first all-electric models, the R1T pickup truck and R1S sport-utility vehicle, are relatively new. The company has only been building cars at its Illinois factory since late 2021. Before then, it had never built or sold a single vehicle for retail.
As part of its expansion, Rivian went on a hiring spree, growing rapidly from about 1,200 workers in 2019 to around 14,000 employees by the summer of last year and has only recently begun creating positions that exist at many companies.
In April, Anisa Kamadoli Costa was hired as chief sustainability officer from jewelry maker Tiffany Inc. In October, Rivian hired a former Capital One Financial Corp. executive, Diane Lye, as its first chief information officer.
As Rivian has struggled to increase factory output, it has come under pressure to trim spending. Last summer, the company laid off around 6% of its workforce and cut spending on many of its programs.
The company became focused on bringing production of its current set of vehicles up to speed. It also makes an electric delivery van that it sells to Amazon.com Inc.
In an example of the young car maker’s shifting priorities, Rivian suspended negotiations with Mercedes-Benz AG over a proposed van partnership in Europe, which had been an expansion target for Chief Executive RJ Scaringe. Rivian said the decision came after re-evaluating its opportunities for growth.
The company reported a net loss of $5 billion for the first nine months of 2022, and its cash pile fell to $13.8 billion at the end of September, down from $15.46 billion in June. Rivian is scheduled to report its full-year results on Feb. 28.
Write to Sean McLain at sean.mclain@wsj.com and Nora Eckert at nora.eckert@wsj.com
plans to return to the company following his retirement last year amid a sexual-harassment scandal to pursue a sale of the business, according to people familiar with the matter.
Mr. McMahon, who has majority voting power through his ownership of WWE’s Class-B stock, has told the company that he is electing himself and two former co-presidents and directors, Michelle Wilson and
George Barrios,
to the board, the people said. The move to reinstate Mr. McMahon, which the board previously rebuffed, and the others will require three current directors to vacate their positions.
Mr. McMahon, whose abrupt departure in July 2022 followed disclosures by The Wall Street Journal of multiple payouts to women who had alleged sexual misconduct and infidelity, expects he will be able to assume the role of executive chairman, though he would need board approval for that, the people said.
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It isn’t clear where that would leave his daughter, Stephanie McMahon. After his departure, she took over as chairwoman and co-CEO alongside
Nick Khan,
the company’s former president.
The 77-year-old sent a letter to WWE’s board in late December detailing his desire to return to the company he ran for four decades, to help spearhead a strategic-review process, the people said. Mr. McMahon believes there is a narrow window to kick off a sales process because WWE’s media rights—including for its flagship programs “Raw” and “SmackDown”—are about to be renegotiated, according to the people.
Mr. McMahon believes the media landscape is evolving quickly and more companies are looking to own the intellectual property they use on their streaming platforms, making WWE an attractive takeover target, the people said. WWE, which generates most of its revenue from selling content rights, posted its first year of over $1 billion in revenue in 2021. The company currently has a market value of just over $5 billion.
The board responded last month in a letter to Mr. McMahon that it was prepared to initiate a review process and would welcome working with him on it. However, it said it unanimously agreed that Mr. McMahon’s return to the business wouldn’t be in shareholders’ best interest, according to people familiar with the letters.
The board also asked Mr. McMahon to confirm his commitment to repay expenses incurred by WWE related to an investigation of the allegations and requested that he agree not to return to the company during government probes of the matter, the people said. Mr. McMahon said in response that he remains willing to continue working to complete any reimbursement for reasonable expenses related to the investigation, to the extent they aren’t covered by insurance, but he declined to agree to not return to the company.
He has communicated to the board that unless he has direct involvement as executive chairman from the outset of a strategic review, he won’t support or approve any media-rights deal or sale, the people said.
Mr. McMahon retired as WWE chief executive and chairman in July amid a board investigation of sexual-misconduct claims against him. The Journal reported that he had agreed to pay more than $12 million in secret settlements since 2006 to his accusers.
The Securities and Exchange Commission and federal prosecutors launched inquiries into the payments. WWE later disclosed additional payments in 2007 and 2009 totaling $5 million that it said were unrelated to the allegations of misconduct that led to its internal investigation.
WWE’s board ultimately found that the payments, though made by Mr. McMahon personally, should have been booked as WWE expenses because they benefited the company.
Mr. McMahon had told people that he intended to make a comeback at WWE, the Journal reported last month. He said that he received bad advice from people close to him last year to step down, according to the people familiar with his comments.
—Joe Palazzolo and Ted Mann contributed to this article.
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
is likely to plead not guilty to fraud and other charges at his arraignment next week, according to people familiar with the matter.
The U.S. attorney’s office for the Southern District of New York earlier this month charged Mr. Bankman-Fried with engaging in criminal conduct that contributed to the cryptocurrency exchange’s collapse, alleging that he oversaw one of the biggest financial frauds in American history. Mr. Bankman-Fried is likely to appear in person in New York to enter his plea on Jan. 3, one of the people said.
Before his arrest, Mr. Bankman-Fried blamed the loss of customer funds on sloppy record-keeping and a bank-account issue that allowed Alameda Research, an affiliated trading firm, to cover large losses with money destined for FTX. His not guilty plea was widely expected.
The collapse of FTX has set off the largest crypto-related bankruptcy ever, and court filings are already shedding light on what went wrong and how complicated things could get. Here are three things to know about the company’s bankruptcy process. Photo: Lam Yik/Bloomberg News
Mr. Bankman-Fried stands at odds with his associates—
Caroline Ellison,
the former chief executive of Alameda Research, and
Gary Wang,
FTX’s former chief technology officer—who both pleaded guilty to criminal offenses similar to those Mr. Bankman-Fried was charged with. Both are cooperating with federal investigators.
The collapse of FTX and its sister trading firm Alameda have rattled the nascent world of crypto. Prosecutors allege that Mr. Bankman-Fried took billions of dollars of FTX.com customer money to pay the expenses and debts of his trading firm Alameda Research. Both companies filed for bankruptcy last month. Individual traders who entrusted FTX with their crypto are likely facing lengthy bankruptcy proceedings before they have a chance at seeing any of their funds back.
Mr. Bankman-Fried was released on a $250 million bond last week and has been ordered to stay in his parent’s Palo Alto, Calif., home after his appearance in a New York federal court following his extradition from the Bahamas.
Prosecutors say that from 2019 through November, Mr. Bankman-Fried conspired with unnamed individuals to defraud customers and lenders. He provided false and misleading information to lenders on the financial condition of Alameda, according to the indictment by the U.S. attorney’s office.
Mr. Bankman-Fried is also accused of defrauding the Federal Election Commission starting in 2020 by conspiring with others to make illegal contributions to candidates and political committees in the names of other people.
He and his associates contributed more than $70 million to election campaigns in recent years, The Wall Street Journal previously reported. He personally made $40 million in donations ahead of the 2022 midterm elections.
Mr. Bankman-Fried also faces allegations from the Securities and Exchange Commission and the Commodity Futures Trading Commission.
The SEC alleged in a civil lawsuit that Mr. Bankman-Fried diverted customer funds from the start of FTX to support Alameda and to make venture investments, real-estate purchases and political donations. The CFTC filed a lawsuit linking his allegedly fraudulent conduct at Alameda and FTX to markets that the CFTC regulates.
On Friday afternoon, Mr. Bankman-Fried returned to Twitter for the first time since Dec. 12 to defend himself against rumors that he has been moving funds out of several crypto wallet addresses associated with Alameda.
Cryptocurrency prices have cratered this year amid rising central bank rates and the collapses of a once-prominent hedge fund and crypto lenders, with bitcoin and ether plunging 64% and 67%, respectively, according to CoinDesk data. The total market cap of all digital tokens fell to $795 billion, compared with $2.2 trillion at the start of year, per CoinMarketCap data.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Vicky Ge Huang at vicky.huang@wsj.com
