No discount in technical layoffs
Justin Tallis | AFP via Getty Images
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open gives investors access to everything they need to know, wherever they are. Like what you see? You can subscribe here.
What you need to know today
US stocks gained ground on Tuesday as Wall Street tried to bounce back from the previous session. The S&P 500 went up 0.23%, and the Nasdaq Composite 0.07% higher than normal. The 30-stock Ink it jumped 0.37% as markets continued to digest the latest batch of corporate earnings.
a silver lining
Money is set for a “great year” with prices potentially reaching ten-year highs. As with gold, there is an inverse relationship between silver prices and interest rates. With expectations that the Federal Reserve may begin cutting rates this year, silver may get a boost.
Snap Shares fell 30% in after-hours trading after it reported earnings that missed analysts’ estimates. The company blamed the war in the Middle East for some of the earnings weakness, saying the conflict created a headwind for year-over-year growth despite advances in advertising.
Stream fun together
ESPN, fox and Warner Bros. found plans to launch a joint sports streaming platform later this year. Users can subscribe directly using a new app. The service is “a huge win for sports fans, and an important step forward for the media industry,” Disney CEO Bob Iger said in a statement.
[PRO] Bet on BYD
Jason Hsu, chairman and chief investment officer of Rayliant Global Advisors, expects Hong Kong to be on the list BYD to get ahead in the electric vehicle race. BYD is “definitely going to emerge a winner,” Hsu said, adding that “in three to five years, I could easily see BYD at twice its current price.”
The bottom line
There seems to be no movement in Silicon Valley’s march to downsizing, or rather “right-sizing.”
Since the beginning of 2024, technical layoffs have been increasing. DocuSign is the latest company to cut about 6% of its workforce – that’s about 440 jobs.
Amazon is also cutting “a few hundred positions” across its One Medical and Pharmacy units, the company confirmed to CNBC.
This comes a day later Snap it said it will cut about 10% of its global workforce, or about 500 workers. Okta and Zoom have already announced job cuts this month.
The rapid pace of layoffs is Silicon Valley’s attempt to slim down after overexpanding at the height of the pandemic.
High interest rates and pressure from inflation have also prompted companies to tighten their belts as costs rise.
In addition, some tech companies want to jump on the AI bandwagon and are shaving heads to invest more in developing these products. This was obviously true for Big Tech as Meta, Alphabet and Microsoft has recently decreased at an accelerating clip.
But Wall Street seems to see the layoffs as a good thing. Investors have rewarded companies, especially the megatech companies, for their cost control.
As long as investors continue to support technology, the blow of job cuts will only continue to gather steam.