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Business

Here are the companies that have laid off employees this year

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New York
CNN
 — 

Just this week, Alphabet, Google’s parent company, Microsoft

(MSFT) and Vox Media announced layoffs that will affect more than 22,000 workers.

Their moves follow on the heels of job cuts earlier this month at Amazon, Goldman Sachs and Salesforce. More companies are expected to do the same as firms that aggressively hired over the last two years slam on the brakes, and in many cases shift into reverse.

The cutbacks are in sharp contrast to 2022, which had the second-highest level of job gains on record, with 4.5 million. But last year’s job numbers began falling as the year went on, with December’s job report showing the lowest monthly gains in two years.

The highest level of hiring occurred in 2021, when 6.7 million jobs were added. But that came on the heels of the first year of the pandemic, when the US effectively shut down and 9.3 million jobs were lost.

The current layoffs are across multiple industries, from media firms to Wall Street, but so far are hitting Big Tech especially hard.

That’s a contrast from job losses during the pandemic, which saw consumers’ buying habits shifting toward e-commerce and other online services during lockdown. Tech firms went on a hiring spree.

But now, workers are returning to their offices and in-person shopping is bouncing back. Add in the increasing likelihood of a recession, higher interest rates and tepid demand due to rising prices, and tech businesses are slashing their costs.

January has been filled with headlines announcing job cuts at company after company. Here is a list of layoffs this month – so far.

Google

(GOOGL)’s parent said Friday it is laying off 12,000 workers across product areas and regions, or 6% of its workforce. Alphabet added 50,000 workers over the past two years as the pandemic created greater demand for its services. But recent recession fears has advertisers pulling back from its core digital ad business.

“Over the past two years we’ve seen periods of dramatic growth,” CEO Sundar Pichai said in an email to employees. “To match and fuel that growth, we hired for a different economic reality than the one we face today.”

The tech behemoth is laying off 10,000 employees, the company said in a securities filing on Wednesday. Globally, Microsoft has 221,000 full-time employees with 122,000 of them based in the US.

CEO Satya Nadella said during a talk at Davos that “no one can defy gravity” and that Microsoft could not ignore the weaker global economy.

“We’re living through times of significant change, and as I meet with customers and partners, a few things are clear,” Nadella wrote in a memo. “First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less.”

The publisher of the news and opinion website Vox, tech website The Verge and New York Magazine, announced Friday that it’s cutting 7% of its staff, or about 130 people.

“We are experiencing and expect more of the same economic and financial pressures that others in the media and tech industries have encountered,” chief executive Jim Bankoff said in a memo.

Layoffs are also hitting Wall Street hard. The world’s largest asset manager is eliminating 500 jobs, or less than 3% of its workforce.

Today’s “unprecedented market environment” is a stark contrast from its attitude over the last three years,, when it increased its staff by about 22%. Its last major round of cutbacks was in 2019.

The bank will lay off up to 3,200 workers this month amid a slump in global dealmaking activity. More than a third of the cuts are expected to be from the firm’s trading and banking units. Goldman Sachs

(FADXX) had almost 50,000 employees at the end of last year’s third quarter.

The crypto brokerage announced in early January that it’s cutting 950 people – almost one in five employees in its workforce. The move comes just a few months after Coinbase laid off 1,100 people.

Though Bitcoin had a solid start to the new year, crypto companies were slammed by significant drops in prices of Bitcoin and other cryptocurrencies.

McDonald’s

(MCD), which thrived during the pandemic, is planning on cutting some of its corporate staff, CEO Chris Kempczinski said this month.

“We will evaluate roles and staffing levels in parts of the organization and there will be difficult discussions and decisions ahead,” Kempszinski said, outlining a plan to “break down internal barriers, grow more innovative and reduce work that doesn’t align with the company’s priorities.”

The online personalized subscription clothing retailer said it plans to lay off 20% of its salaried staff.

“We will be losing many talented team members from across the company and I am truly sorry,” Stitch Fix

(SFIX) founder and former CEO Katrina Lake wrote in a blog post.

As the new year began, Amazon

(AMZN) said it plans to lay off more than 18,000 employees. Departments from human resources to the company’s Amazon

(AMZN) Stores will be affected.

“Companies that last a long time go through different phases. They’re not in heavy people expansion mode every year,” CEO Andy Jassy said in a memo to employees.

Amazon boomed during the pandemic, and hired rapidly over the last few years. But demand has cooled as consumers return to their offline lives and battle high prices. Amazon says it has more than 800,000 employees.

At The New York Times DealBook summit In November, Jassy said he believes Amazon “made the right decision” regarding its rapid infrastructure build out but said its hiring spree is a “lesson for everyone.”

Even as he spoke, Amazon warehouse workers who helped organize the company’s first-ever US labor union at a Staten Island facility last year were picketing Jassy’s appearance outside the conference venue.

“We definitely want to take this opportunity to let him know that the workers are waiting and we are ready to negotiate our first contract,” Amazon Labor Union President Chris Smalls said, calling the protest a “welcoming party” for Jassy.

Salesforce

(CRM) will cut about 10% of its workforce from its more than 70,000 employess and reduce its real estate footprint. In a letter to employees, Salesforce

(CRM)’s chair and co-CEO Marc Benioff admitted to adding too much to the company’s headcount early in the pandemic.

– CNN’s Clare Duffy, Matt Egan, Oliver Darcy, Julia Horowitz, Catherine Thorbecke, Paul R. La Monica, Nathaniel Meyersohn, Parija Kavilanz, Danielle Wiener-Bronner and Hanna Ziady contributed to this report.

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US

Women living in states with abortion bans suffer greater economic insecurity

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New York
CNN
 — 

Women living in states that restrict or ban abortion face greater economic insecurity than those living in states where they have access, new research finds.

Since the nearly seven months since the Supreme Court overturned Roe v. Wade, half of all states – 26 in total – have implemented new abortion restrictions or all-out bans.

In nearly all 26 states, there are lower minimum wages, unionization levels, access to Medicaid and unemployment benefits, as well as higher rates of incarceration than states with more lenient abortion policies, according to new research by the Economic Policy Institute.

“These economic policies all compound on each other. And you add to that an abortion ban, it just compounds this financial stress, this economic insecurity,” said Asha Banerjee, an economic analyst with the institute and the author of the report.

Last year, Treasury Secretary Janet Yellen made a similar argument to the Financial Oversight Council.

“I believe that eliminating the right of women to make decisions about when and whether to have children would have very damaging effects on the economy and would set women back decades,” Yellen told lawmakers in May.

The lack of abortion access has the greatest economic impact on women of color, especially those already in dire financial conditions, according to Banerjee.

“In many of these states, especially the states which have banned abortion, many of the women who are facing economic challenges already are also women of color,” she said.

Raising the minimum wage is a powerful tool that has been known to have significant impact on closing racial income gaps. But nearly two-thirds of abortion restrictive states have a $7.25 minimum wage, the lowest legal hourly wage for most workers in the United States.

The average minimum wage across the 26 states is $8.17, lower than the average $11.92 for states with no restrictions. (Many of those states also have a higher cost of living, however.)

“If the person denied an abortion is also working a minimum wage job, the negative economic effect is compounded,” the report states.

Many of those low-wage jobs also do not offer benefits like health care, which is why access to Medicaid is critical.

“Medicaid is a lifeline for low-income families and low-income women when jobs might not offer adequate healthcare. Medicaid in the immediate postpartum period is especially important,” said Banerjee.

Just 12 states have not expanded Medicaid benefits since the 2010 Obamacare law, and all of them have restrictive abortion policies.

However, some states with total abortion bans, with few exceptions, have expanded Medicaid, including Missouri. And in five other abortion restrictive states (Idaho, Missouri, Nebraska, Oklahoma and South Dakota later this year) residents voted to expand the benefit.

Access to unemployment insurance is another key indicator of a state’s commitment to economic support for residents. Forty-two percent of residents have access to unemployment benefits in states that have abortion protections. Compare that to 30% in states with abortion restrictions.

Even if unemployment is accessible, the amount differs from state to state. For example, in Mississippi, a state with a total abortion ban with limited exceptions, weekly unemployment checks average $217. Meanwhile in Massachusetts, which has a more protective 24-week abortion ban – checks average $556 weekly.

“When you have unemployment insurance it helps create financial stability. These states which have abortion bans also have really terrible unemployment insurance systems with really low benefits which do not help one support oneself,” said Banerjee.

Although women make up a smaller percentage of those incarcerated than men, it is the economic category with the greatest difference between abortion protected and abortion-restricted states. The rate of incarceration in states with restrictive or total bans on abortion is more than one and a half times higher than the rate of incarceration for states with abortion protections.

“It’s very much a racial justice issue because Black and Hispanic women are very disproportionately incarcerated. And that has huge economic impacts on future earnings and the ability to get a job,” said Banerjee.

In some states with abortion restrictions and higher rates of incarceration – legislation has suggested also criminalizing women, doctors or anyone aiding a woman in seeking an abortion.

“The incarceration argument is especially important because in these states where abortion bans have come into play, there’s a huge criminalization aspect,” said Banerjee.

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Business

Twitter’s laid-off workers cannot pursue claims via class-action lawsuit, judge says

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Twitter

(TWTR) has secured a ruling allowing the social media company to force several laid-off workers suing over their termination to pursue their claims via individual arbitration rather than a class-action lawsuit.

US District Judge James Donato on Friday ruled that five former Twitter employees pursuing a proposed class action accusing the company of failing to give adequate notice before laying them off after its acquisition by Elon Musk must pursue their claims in private arbitration.

Donato granted Twitter’s request to force the five ex-employees to pursue their claims individually, citing agreements they signed with the company.

Twitter did not immediately respond to a request for comment.

The San Francisco judge left for another day “as warranted by developments in the case” whether the entire class action lawsuit must be dismissed, though, as he noted three other former Twitter employees who alleged they had opted out of the company’s arbitration agreement have joined the lawsuit after it was first filed.

The lawyer who represents the plaintiffs, Shannon Liss-Riordan, said on Monday that she had already filed 300 demands for arbitration on behalf of former Twitter employees and would likely file hundreds more.

Those workers all claim they have not received the full severance package promised by Twitter before Musk took over. Some have also alleged sex or disability discrimination.

Last year, Donato had ruled that Twitter must notify the thousands of workers who were laid off after its acquisition by Musk following a proposed class action accusing the company of failing to give adequate notice before terminating them.

The judge said that before asking workers to sign severance agreements waiving their ability to sue the company, Twitter must give them “a succinct and plainly worded notice.”

Twitter laid off roughly 3,700 employees in early November in a cost-cutting measure by Musk, and hundreds more subsequently resigned.

In December last year, Twitter was also accused by dozens of former employees of various legal violations stemming from Musk’s takeover of the company, including targeting women for layoffs and failing to pay promised severance.

Twitter is also facing at least three complaints filed with a US labor board claiming workers were fired for criticizing the company, attempting to organize a strike, and other conduct protected by federal labor law.

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Business

Nonfarm payrolls rose 223,000 in December, as strong jobs market tops expectations

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Payroll growth decelerated in December but was still better than expected, a sign that the labor market remains strong even as the Federal Reserve tries to slow economic growth.

Nonfarm payrolls increased by 223,000 for the month, above the Dow Jones estimate for 200,000, while the unemployment rate fell to 3.5%, 0.2 percentage point below the expectation. The job growth marked a small decrease from the 256,000 gain in November, which was revised down 7,000 from the initial estimate.

Wage growth was less than expected in an indication that inflation pressures could be weakening. Average hourly earnings rose 0.3% for the month and increased 4.6% from a year ago. The respective estimates were for growth of 0.4% and 5%.

By sector, leisure and hospitality led with 67,000 added jobs, followed by health care (55,000), construction (28,000) and social assistance (20,000).

Stock market futures rallied following the release as investors look for signs that the jobs picture is cooling and taking inflation lower as well.

“From the market’s perspective, the main thing they’re responding to is the softer average hourly earnings number,” said Drew Matus, chief market strategist at MetLife Investment Management. “People are turning this into a one-trick pony, and that one trick is whether this is inflationary or not inflationary. The unemployment rate doesn’t matter much if average hourly earnings continue to soften.”

The relative strength in job growth comes despite repeated efforts by the Fed to slow the economy, the labor market in particular. The central bank raised its benchmark interest rate seven times in 2022 for a total of 4.25 percentage points, with more increases likely on the way.

Primarily, the Fed is looking to bridge a gap between demand and supply. As of November, there were about 1.7 job openings for every available worker, an imbalance that has held steady despite the Fed’s rate hikes. The strong demand has pushed wages higher, though they mostly haven’t kept up with inflation.

The drop in the unemployment rate came as the labor force participation rate edged higher to 62.3%, still a full percentage point below where it was in February 2020, the month before the Covid-19 pandemic hit.

A more encompassing measure of unemployment that takes into account discouraged workers and those holding part-time jobs for economic reasons also declined, falling to 6.5%, its lowest-ever reading in a data set that goes back to 1994. The headline unemployment rate is tied for the lowest since 1969.

The household count of employment, used to calculate the unemployment rate, showed a huge gain for the month, rising 717,000. Economists have been watching the household survey, which has generally been lagging the establishment count.

The U.S. heads into 2023 with most economists expecting at least a shallow recession, the result of Fed policy tightening aimed at tamping down inflation still running near its highest level since the early 1980s. However, the economy closed 2022 on a strong note, with GDP growth tracking at a 3.8% rate, according to the Atlanta Fed.

Fed officials at their last meeting noted that they are encouraged by the latest inflation readings but will need to see continued progress before they are convinced that inflation is coming down and they can ease up on rate hikes.

As things stand, markets are largely expecting the Fed to increase rates another quarter-percentage point at its next meeting, which concludes Feb. 1.

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Business

What to expect from the jobs report

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Minneapolis
CNN
 — 

The latest monthly jobs report, set to be released at 8:30 a.m. ET, is expected to show that the US economy added 200,000 jobs in December, with the unemployment rate holding steady for the third-straight month at 3.7%.

The Labor Department’s final monthly employment tally for 2022 likely brings with it some familiar story lines.

— Job growth is expected to remain robust, although slower than the breakneck pace of historically high job gains during the early stages of economic recovery from the pandemic.

— Workers are still not returning to hard-hit sectors such as leisure and hospitality, public service and child care.

— The strong labor market, while it keeps the economy churning, is a little too consistently vigorous for the Federal Reserve’s needs to reduce inflation by tempering demand.

— The tight labor market needs more workers, and wage growth still hasn’t returned to pre-pandemic levels, which would help quell fears of a wage-price spiral, when higher wages cause price increases that in turn cause higher wages.

Lather, rinse and repeat.

“The preponderance of evidence suggests that the labor market is still nowhere near back to normal,” said Julia Pollak, senior economist with ZipRecruiter online employment marketplace.

The US labor market remains atypically tight — something that was reinforced Wednesday when the Bureau of Labor Statistics released its Job Openings and Labor Turnover Survey (JOLTS) report for November. It showed there were still north of 10.5 million job openings, or about 1.7 available positions for every unemployed person looking for work.

The survey also showed that what has been deemed the “Great Resignation” is still chugging along, Pollak said. During the Covid-19 pandemic, a record number of workers voluntarily quit their jobs in search of greener pastures — be it better working conditions, higher pay, or increased flexibility.

The number of people per month quitting their jobs has now landed above 4 million for 18 months straight. In the two decades leading up to the pandemic, the monthly average was 2.6 million.

“Companies are still battling huge retention difficulties,” Pollak said.

The latest JOLTS didn’t show that the market was loosening up as maybe some had hoped or expected. But it did provide a window into some of the divergence that’s occurring at a time when some businesses are hiring more to meet consumer demand while others scale down their operations because of bloat, the rippling effects of high interest rates, or preparation for less fruitful economic times ahead.

Industries such as accommodation and food services reported about 50% fewer layoffs in November than what was seen on average between 2000 and February 2020, Pollak said.

“I think it’s mostly just pre-pandemic recovery,” she said. “Leisure and hospitality is still short hundreds of thousands of workers and just still ramping up, because spending recovered more quickly than staffing.”

As of October 2022, the leisure and hospitality sector was still below pre-pandemic employment levels by more than 1 million jobs, or 6.3%, according to a CNN Business analysis of BLS employment data.

Technology companies have accounted for the lion’s share of job cuts announced in recent months. During the pandemic, when people were relegated to working and spending their money from home, tech and e-commerce firms bulked up to meet the demand.

During 2022, technology was the leading job-cutting industry, with 97,171 reductions announced, according to Challenger, Gray & Christmas’ latest job cut announcement report released Thursday.

Overall, job cuts trended upward in 2022 at 363,824 as compared to 321,970 the year before. There were 43,651 job cuts announced in December, a 129% jump from December 2021, according to the report.

But the job cuts announced in 2022 were the second-lowest on record, going back to 1993, Challenger, Gray & Christmas data showed. In 2019, there were 592,556 job cuts announced.

“The overall economy is still creating jobs, though employers appear to be actively planning for a downturn,” Andrew Challenger, senior vice president of Challenger, Gray & Christmas, said in the report.

If the monthly job gains come in as expected on Friday, that would mean the economy added more than 4.5 million jobs in 2022.

That would be the second-highest annual total on record, behind the massive 6.7 million gains in 2021, which of itself was a pendulum swing from a record 9.2 million job losses in 2020, BLS data shows.

“The Federal Reserve would like to see a [monthly job growth] number closer to 100,000 or below that,” said Nick Bunker, economic research director for North America at the Indeed Hiring Lab. “That’s more in line with a clearly cooling labor market.”

Economists are also expecting average hourly earnings growth to slow on a monthly and year-over-year basis, to 0.4% and 5%, respectively, according to Refinitiv.

Wage gains, although outpaced by inflation, remain well above pre-pandemic averages and beyond what the Fed wants to see in its price-busting campaign. Chair Jerome Powell, while acknowledging that the wage increases did not cause inflation to spike to the highest levels in 40 years, has repeatedly noted that persistent wage growth in such a tight labor market could keep inflation levels elevated.

“This is a set of labor market data that for workers and job seekers, [continued, strong nominal wage growth] it’s very much positive news,” Bunker said. “But for central bankers, they see this as a problem.”

Inflation has started to come down in recent months, with key gauges showing declines. But for the Fed to reach its desired target of 2% inflation, the labor market will have to take a hit, with unemployment rising to about 4.6% this year, according to the central bank’s projections released in December.

“The fact that inflation appears to be cooling down without the labor market taking a significant hit is a sign that a lot of this very high inflation was not driven by the labor market and that it is possible for inflation to be coming down from these levels without the labor market taking a hit,” Bunker said.

“But it’s unclear how far inflation can fall without the labor market deteriorating, or rather, it’s not clear what the underlying pace of inflation is with the labor market this tight.”

—CNN’s Matt Egan contributed to this report.

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Business

Biden administration overstated Q2 job growth by 1 million: Philadelphia Fed

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The Biden administration overstated the number of jobs created in the US during the second quarter by more than 1 million, according to a report issued by the Philadelphia Fed.

The Philadelphia Fed report found that just 10,500 net new jobs were created between March and June.

That finding is in stark contrast to numbers released by the Bureau of Labor Statistics, which estimated that there were 1.12 million new jobs added between March and June of 2022.

Economists at the regional central bank in Philadelphia published their own report last week that gleans data from unemployment insurance payments.

The Philadelphia Fed said that its estimates “incorporate more comprehensive, accurate job estimates released by the BLS as part of its Quarterly Census of Employment and Wages (QCEW) program to augment the sample data from the BLS’s” reports that are “issued monthly on a timely basis.”

The number of jobs created in the second quarter of 2022 may have been overstated by the Biden administration, according to the Philadelphia Fed.
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The regional central bank said that its “revised estimates” are issued “five months later with a more complete picture” than that offered up by the BLS’s “current employment survey” (CES).

The Bureau of Labor Statistics said that more than 1 million jobs were created during the second quarter of this year, but the Philadelphia Fed said the number is actually 10,500.
Getty Images

One expert told The Post that the stark contrast in numbers could be explained by “the use of different methods for collecting and analyzing the data.”

“The Bureau of Labor Statistics gathers its data through surveys of employers and households, while the Philadelphia Fed relies on data from unemployment insurance payments,” Mina Tadrus, the CEO of Tadrus Capital, told The Post. 

“It is also possible that there are variations in the definitions and categories used by the two organizations when determining what counts as a new job.”

Tadrus told The Post that “the significant difference in their findings highlights the need for caution when interpreting and using economic data to inform decision-making.”

Economists have said that the Federal Reserve’s string of sharp hikes in interest rates was based primarily on the BLS’s job growth numbers, which have complicated the central bank’s efforts to get red-hot inflation under control.

Sen. Rick Scott (R-Fla.) said the Biden administration has been “lying to the American people about our economy to prop up his failed agenda.”

“Wrong by a million jobs,” Scott tweeted last Friday.

The senator is demanding to meet with the head of the BLS.

The Philadelphia Fed said it gleaned data from unemployment insurance payment statistics.
AP

The CES surveys some 131,000 businesses and government agencies representing approximately 670,000 worksites throughout the United States, according to the BLS website.

But the QCEW is considered “more comprehensive” since it bases its findings on surveys of “more than 95% of all employers” that are conducted five months after the relevant quarter, according to the Philadelphia Fed.

“Our early benchmark process does not attempt to be as comprehensive as the BLS process as we do not have access to all the data that the BLS uses,” the Philadelphia Fed said when describing its methodology.

“Therefore, we accept the BLS’s benchmarked CES estimates as the base employment level for each state.”

“Once QCEW data are released for periods beyond the latest benchmarked CES estimates, we produce our early benchmark estimates,” the Philadelphia Fed added.

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Business

Fed rate decision, South Korea Trade, Australia Unemployment, New Zealand GDP

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China’s November retail sales see significant miss

China’s industrial production for November grew 2.2%, after seeing a growth of 5% in October, according to official data. That’s lower than expectations for growth of 3.6% in a Reuters survey.

Retail sales fell 5.9% on an annualized basis, further than expectations of a decline of 3.7% in a Reuters survey and a fall of 0.5% the previous month.

— Jihye Lee

JPMorgan expects Asian markets to end week with cautious tone after Fed hike

JPMorgan expects markets in the Asia-Pacific region to end the week on a cautious tone following the Federal Reserve’s interest rate hike of 50 basis points.

“Given the U.S. market reaction after the FOMC meeting, we expect Asian markets to end the week with more cautious tone,” Tai Hui, the firm’s Asia-Pacific chief market strategist, said in a note.

Tai added that a weaker inflation print is needed before the Fed’s hawkishness fades, while the region may have more optimism on China’s expected reopening.

“The medium term prospects of China’s economic reopening and Asia’s domestic demand resilience could be a bright spot as the U.S. and Europe face more growth challenges,” Tai said. “We would need more weak inflation data in order for the Fed to tone down its hawkishness.”

— Jihye Lee

South Korea’s revised trade data shows slightly narrower trade deficit

South Korea’s revised trade data for November was flat, official data from the Bank of Korea showed.

Imports grew by 2.7% while exports fell by 14%, in line with readings from the previous month, resulting in a trade deficit of $6.99 billion, slightly narrower than the previous month’s reading of $7.01 billion.

Prices for imports grew 14.2% compared with a year ago after seeing growth of 19.8% the previous month. Export prices grew 8.6% in November compared with a year ago, after growing 13.7% in October.

— Jihye Lee

Japan’s trade data beat estimates, reports wider-than-expected trade deficit

Japan’s exports and imports for November grew more than expected on an annualized basis, official data showed.

Exports for the month rose 20%, beating expectations of 19.8% in a Reuters survey. Imports rose 30.3%, also higher than expectations of 27% in a Reuters poll.

This resulted in a wider-than-expected trade deficit of 2.02 trillion yen ($14.91 billion) after posting 2.16 trillion yen ($15.96 billion) in the previous month.

— Jihye Lee

CNBC Pro: Missed China’s reopening rally? Bank of America names global stocks to ride the second-leg

Investors will have a second opportunity to take part in the stock market rally after China announced a relaxation of Covid-19 restrictions, according to Bank of America.

The bank named more than 10 stocks after having found “green shoots of recovery in high-frequency data” that point toward rising earnings at companies exporting to China.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Australia unemployment rate in line with expectations

Australia’s unemployment rate for November remained at 3.5% on an annualized basis, in line with expectations from a Reuters poll and flat from the prior month.

Official data from the Australia Bureau of Statistics showed the labor participation rate also remained at 66.7%, and the employment to population ratio remained at 64.4%.

Monthly hours worked increased to 1.89 billion.

— Jihye Lee

Fed announces 50 point rate hike

The Fed announced it will raise interest rates by 50 basis points, marking an end to the pattern of 75 point hikes seen in recent months.

Before this move, the Fed had raised rates by 75 basis points at the last four meetings. A basis point is equivalent to 0.01%.

The 50 basis point hike was widely expected ahead of the meeting.

It’s the final policy decision expected from the central bank in 2022.

— Alex Harring

Powell wants ‘substantially more evidence’ that inflation is cooling

Federal Reserve Chairman Jerome Powell said Wednesday the recent positive signs for inflation aren’t enough for the central bank to ease back on interest rate increases.

“It will take substantially more evidence to have confidence that inflation is on a sustained downward” path, Powell said during his post-meeting news conference.

The comments came as the Fed raised its benchmark rate another half percentage point and indicated at least another three-quarters of a point in hikes are coming. The decision also occurs a day after November’s consumer price index reading was up just 0.1%, an indication that inflation may have peaked.

However, Powell said inflation remains a problem.

“Price pressures remain evident across a broad range of goods and services,” Powell added.

—Jeff Cox

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Business

Latest weekly jobless claims jump to 240,000

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Minneapolis
CNN Business
 — 

First-time weekly claims for unemployment benefits jumped to 240,000 for the week ended November 19, according to data released Wednesday by the Bureau of Labor Statistics. That’s a sharp increase of 17,000 from the previous week’s upwardly revised tally of 222,000, and surpasses economists’ expectations of 225,000.

Continuing claims, which count people who have filed for jobless aid for at least two weeks in a row, rose to 1.55 million for the week ending November 12.

The number of unemployment claims have been hovering near historic lows due to a labor market that has remained considerably tight even as workers flooded back after the end of pandemic-era lockdowns.

But that could be changing – and in short order: Large companies, notably some of the biggest names in tech, have started conducting mass layoffs.

This is a developing story. It will be updated.

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Business

Twitter Africa employees accuse Elon Musk of discrimination over severance terms

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CNN Business
 — 

Laid-off employees at Twitter’s Africa headquarters are accusing Twitter of “deliberately and recklessly flouting the laws of Ghana” and trying to “silence and intimidate” them after they were fired.

The team has hired a lawyer and sent a letter to the company demanding it comply with the West African nation’s labor laws, provide them with additional severance pay and other relevant benefits, in line with what other Twitter employees will receive.

They have also petitioned the Ghanaian government to compel Twitter to “adhere to the laws of Ghana on redundancy and offer the employees a fair and just negotiation and redundancy pay,” according to a letter to the country’s Chief Labour Officer obtained by CNN.

“It is clear that Twitter, Inc. under Mr Elon Musk is either deliberately or recklessly flouting the laws of Ghana, is operating in bad faith and in a manner that seeks to silence and intimidate former employees into accepting any terms unilaterally thrown at them,” the letter states.

Twitter laid off all but one of the African employees just four days after the company opened a physical office in the capital Accra following Musk’s takeover. But the staff of about a dozen were not offered severance pay, which they say is required by Ghana’s labor laws, based on their employment contracts. They also claim they were not informed about the next steps — unlike employees in the United States and Europe — until a day after CNN reported on their situation.

CNN contacted Twitter for comment but received no response.

In the letter to Twitter Ghana Ltd, obtained by CNN, the African employees rejected a “Ghana Mutual Separation Agreement” from Twitter, which they say was sent to their personal emails offering final pay that the company claims to have been arrived at after a negotiation.

Several members of the team and their lawyer told CNN that there was no such negotiation on severance pay. They claim it was below what is required by law and contradicts what Musk tweeted that departing employees would receive.

“Everyone exited was offered 3 months of severance, which is 50% more than legally required,” Musk tweeted. Twitter informed the Ghana-based employees in early November that they would be paid until their last day of employment — December 4. And they will continue to receive full pay and benefits during the 30-day notice period.

“It was very vague, did not talk about outstanding leave or paid time off, and just asked us to sign if we agree. I never bothered to go back to the document because it is rubbish and is still in violation of labor laws here,” one former employee told CNN on condition of anonymity.

The Accra-based team accuses Twitter of dealing with them in bad faith, not being transparent, and discriminating against them compared to laid-off employees in other jurisdictions.

“The employees are distressed, humiliated, and intimidated by this turn of events. There are non-Ghanaian employees, some with young families, who moved here to take up jobs and have now been left unceremoniously in the lurch, with no provision for repatriation expenses and no way to communicate with Twitter, Inc. and discuss or plead their case,” the notice to Ghana’s Chief Labour Officer says.

Their attorney, Carla Olympio, says the sudden termination of almost the whole team violated Ghanaian employment law because it is considered a “redundancy” which requires three-month notice to authorities and a negotiation on redundancy pay.

“In stark contrast to internal company assurances given to Twitter employees worldwide prior to the takeover, it seems that little attempt was made to comply with Ghana’s labor laws, and the protections enshrined therein for workers in circumstances where companies are undertaking mass layoffs due to a restructuring or reorganization,” she wrote in a statement to CNN.

The employees said in their appeal to Ghana’s Chief Labour Officer that Twitter’s formal entry into the continent started with “great fanfare and with the support of the government,” and they expect similar attention to their plight now.

They are demanding 3 months’ gross salary as severance pay, repatriation expenses for non-Ghanaian staff, vesting of stock options provided in their contracts, and other benefits such as healthcare continuation that were offered to staff worldwide.

CNN has reached out to Ghana’s Employment and Labor Relations ministry for comment.

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Business

Fed’s Waller says market has overreacted to consumer inflation data: ‘We’ve got a long, long way to go’

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Federal Reserve Gov. Christopher Waller said Sunday that financial markets seem to have overreacted to the softer-than-expected October consumer price inflation data last week.

“It was just one data point,” Waller said, in a conversation in Sydney, Australia, sponsored by UBS.

“The market seems to have gotten way out in front over this one CPI report. Everybody should just take a deep breath, calm down. We’ve got a ways to go ” Waller said.

Investors cheered the soft CPI print, released Thursday, driving stocks up to their best week since June. The S&P 500 index
SPX,
+0.92%
closed 5.9% higher for the week.

The data showed that the yearly rate of consumer inflation fell to 7.7% from 8.2%, marking the lowest level since January. Inflation had peaked at a nearly 41-year high of 9.1% in June.

Waller said it was good there was some evidence that inflation was coming down, but noted that there were other times over the past year where it looked like inflation was turning lower.

“We’re going to see a continued run of this kind of behavior and inflation slowly starting to come down, before we really start thinking about taking our foot off the brakes here,” Waller said.

“We’ve got a long, long way to go to get inflation down. Rates are going keep going up and they are going to stay high for awhile until we see this inflation get down closer to our target,” he added.

The Fed is focused on how high rates need to get to bring inflation down, and that will depend solely on inflation, he said.

Waller said “the worst thing” the Fed could do was stop raising rates only to have inflation explode.

The 7.7% inflation rate seen in October “is enormous,” he added.

The Fed signaled at its last meeting earlier this month that it might slow down the pace of its rate hikes in coming meetings.

The central bank has boosted rates by almost 400 basis points since March, including four straight 0.75-percentage-point hikes that had been almost unheard of prior to this year.

“We’re looking at moving in paces of potentially 50 [basis points] at the next meeting or the next meeting after that,” Waller said.

The Fed will hold its next meeting on Dec. 13-14, and then again on Jan. 31-Feb. 1.

At the same time, Powell said the Fed was likely to raise rates above the 4.5%-4.75% terminal rate that they had previously expected.

“The signal was ‘quit paying attention to the pace and start paying attention to where the endpoint is going to be,’” Waller said.

In the wake of the CPI report, investors who trade fed funds futures contracts see the Fed’s terminal rate at 5%-5.25% next spring and then quickly falling back to 4.25%-4.5% by November. That’s well below the levels prior to the CPI data.

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