STOCK MARKET NEWS: Microsoft’s ChatGPT deal, Spotify cuts workers, Salesforce activist action

Sharpie markers owned by Newell Brands for sale in a store in Manhattan, New York City, Feb. 7, 2022. (Reuters/Andrew Kelly)

Newell Brands Inc said on Monday it will cut about 13% of its office positions, in a bid to save costs amid stubbornly high inflation that has pressured consumer spending.

The sharpie maker joins a growing list of companies in corporate America — from Wall Street Banks and tech companies such as Spotify Technology SA to online furniture retailer Wayfair Inc - that have reduced their workforce amid worries of an economic downturn.

ECONOMY

Sharpie, Yankee Candle parent Newell Brands reducing its office jobs by 13%

Newell Brands will soon start reducing its office staff by 13%, the corporate parent of brands such as Sharpie and Yankee Candle announced on Monday.

Newell said it will begin laying off employees in the first quarter of 2023.

The company said on Monday it expects to realize annualized pre-tax savings of $220 million to $250 million when restructuring changes are fully implemented.

It estimates the restructuring and related charges to be in the range of $100 million to $130 million.

As of Dec. 31, 2021, the company employed about 32,000 people worldwide, according to a regulatory filing.

ECONOMY

New York, California suffer biggest blow as more Americans flee to low-tax states

More Americans migrated to lower-tax, predominantly Republican-led states in 2022, with Texas and Florida seeing the biggest population growth last year.

Americans are moving south to escape high taxes, Bank of America found.

Researchers looked at data from the U.S. Census and U-Haul. They found population in the South increased far faster than the national average, jumping by about 1.1% – or roughly 1.4 million people last year – a phenomenon described as the "Sun Belt migration."

The region also benefited from about 870,000 Americans who left other parts of the country for warmer climates and lower taxes.

By state, Texas, Florida, North Carolina, Georgia, Arizona, South Carolina and Tennessee led the migration growth.

Apple logo is seen hanging at the entrance to the Apple store in Manhattan, New York, Oct. 16, 2019. (Reuters/Mike Segar)

Apple Inc was in talks with about half a dozen media partners including Walt Disney Co to develop virtual reality (VR) content for its mixed reality headset, Bloomberg News reported on Monday.

Developed with Sony Group Corp, the headset will have two ultra-high-resolution displays to handle the VR aspects and a collection of external cameras to enable an augmented reality "pass-through mode," the report said.

It added that the tech giant was working to update its own Apple TV+ material to work with the headset.

Disney, Apple and Sony did not immediately respond to Reuters requests for comment.

Earlier this month, Bloomberg reported that Apple was planning to unveil its first mixed reality (MR) headset this year.

MR is one of three types of extended reality technologies often associated with the metaverse.

An MR headset could allow the wearer to use a real world object to trigger a virtual world reaction.

The iPhone maker's MR headset is set to launch in this year's spring event and will cost around $3,000, according to the report. That would be twice as much as Meta Platforms Inc's Quest Pro virtual and MR headset, which was launched late last year for $1,500.

HomeAdvisor and Credit Karma have agreed to multimillion fines to resolved complaints with the Federal Trade Commission.

The FTC issued a proposed order requiring Denver-based HomeAdvisor, Inc. – a company affiliated with Angi, formerly known as “Angie’s List” – to pay up to $7.2 million for using a wide range of deceptive and misleading tactics in selling home improvement project leads to service providers, including small businesses operating in the “gig” economy.

Separately, the commission finalized a consent order requiring Intuit unit Credit Karma to pay $3 million that will be sent to consumers who wasted time applying for deceptive credit card offers that used dark patterns to misrepresent that consumers were “pre-approved” for credit card offers.

ECONOMY

Amazon Air officially launches in four major cities across India

Amazon Air has officially launched in India as the company seeks to expand its delivery output in one of the largest markets in the world.

Amazon.com Inc on Monday launched a dedicated air cargo service in India, Amazon Air, as it looks to expand and speed-up deliveries across one of its key markets amid fast-growing e-commerce sales, an executive said on Monday.

The company has invested in Indian cargo carrier Quikjet to exclusively transport packages for Amazon across four major Indian cities, Sarah Rhoads, vice president, Amazon Global Air told Reuters, without specifying the size of the investment.

The move to use a dedicated cargo service will give Amazon tighter control over costs and flight schedules while reducing delivery times across a wider range of products, said Rhoads.

India is the third market, after the United States and Europe, where the company has launched Amazon Air.

Quikjet, a Bengaluru-based freight carrier which is a unit of Europe's ASL Aviation, already operates one plane for Amazon and from Tuesday will begin its second across cities including Mumbai, Delhi, Bengaluru and Hyderabad. ASL operates several aircraft for Amazon in Europe, Rhoads said.

Nurse fills syringes with the coronavirus disease (COVID-19) vaccines, Waterford, Mich., April 8, 2022. (Reuters/Emily Elconin)

The U.S. health regulator on Monday proposed one dose of the latest updated COVID-19 shot annually for healthy adults, similar to the influenza immunization campaign, as it aims to simplify the country's COVID-vaccine strategy.

The U.S. Food and Drug Administration also asked its panel of external advisers to consider the usage of two COVID vaccine shots a year for some young children, older adults and persons with compromised immunity.

The regulator proposed the need for routine selection of variants for updating the vaccine, similar to the way strains for flu vaccines are changed annually, in briefing documents ahead of a meeting of its panel on Thursday.

The FDA hopes annual immunization schedules may contribute to less complicated vaccine deployment and fewer vaccine administration errors, leading to improved vaccine coverage rates.

The agency's proposal was on expected lines, following its announcement of its intention for the update last month.

The Biden administration has also been planning for a campaign of vaccine boosters every fall season.

Currently, most people in the United States need to first get two doses of the original COVID vaccine spaced at least three to four weeks apart, depending on the vaccine, followed by a booster dose a few months later.

Pfizer's primary vaccine doses for children and people involve three shots, with the third a bivalent shot given about two months later.

If the panel votes in favor of the proposal, Pfizer Inc and Moderna Inc's bivalent vaccines, which target both the Omicron and the original variants, would be used for all COVID vaccine doses, and not just as boosters.

Gemini founders Tyler and Cameron Winklevoss at the Metropolitan Museum of Art Costume Institute Gala (Met Gala) in New York, May 2, 2016. (Reuters/Lucas Jackson)

Cryptocurrency exchange Gemini is slashing 10% of its headcount in what is at least the third round of layoffs in eight months, the Information reported on Monday, citing an internal message.

The company did not immediately respond to a Reuters request for comment.

Founded by identical twins Cameron and Tyler Winklevoss, crypto pioneers and former U.S. Olympic rowers, Gemini has faced pressure in recent months due to a high-profile dispute involving crypto company Genesis, over a product that the two firms jointly offered.

Crypto firms are off to a rocky start in 2023, with major players such as Coinbase Global Inc cutting jobs and Genesis Global Capital, the lending arm of Genesis, seeking bankruptcy protection.

Genesis owes $765.9 million to Gemini, its largest creditor, according to its bankruptcy filing from last week.

Already under pressure due to rising interest rates, the crypto market was squeezed further by the collapse of FTX in November, which has soured consumer sentiment on the industry.

Bloomberg building is seen in New York, November 7, 2013. (Reuters/Eduardo Munoz)

The Securities and Exchange Commission settled charges against Bloomberg Finance (Bloomberg) for misleading disclosures relating to its paid subscription service BVAL.

BVAL provides daily price valuations for fixed-income securities to financial services entities.

The SEC’s order finds that from at least 2016 through October 2022, Bloomberg failed to disclose to its BVAL customers that the valuations for certain fixed-income securities could be based on a single data input, such as a broker quote, which did not adhere to methodologies it had previously disclosed.

The order finds that Bloomberg was aware that its customers, including mutual funds, may utilize BVAL prices to determine fund asset valuations, including for valuing fund investments in government, supranational, agency, and corporate bonds, municipal bonds and securitized products, and that BVAL prices, therefore, can have an impact on the price at which securities are offered or traded.

“Bloomberg has assumed a critical role as a pricing service to participants in the fixed-income markets and it is incumbent on Bloomberg, as well as on other pricing services, to provide accurate information to their customers about their valuation processes,” said Osman Nawaz, Chief of the Division of Enforcement’s Complex Financial Instruments Unit. “This matter underscores that we will hold service providers, such as Bloomberg, accountable for misrepresentations that impact investors.”

ECONOMY

More US companies brace for job cuts amid likely recession, survey shows

More American companies expect a decline in payrolls this year as the U.S. economy heads into a possible recession triggered by Fed interest rate hikes.

More than half the economists surveyed by the National Association of Business Economics put the possibility of a recession over the next year at 50% or higher.

Respondents report the biggest downside risks to their outlooks are higher interest rates and costs, while the biggest potential upside risks are lower interest rates and costs, as well as increased labor force participation and improved supply chains.

The survey also found that for the first time since 2020, more respondents expect falling rather than increased employment at their firms in the next three months.

Xylem Inc said on Monday it would acquire Evoqua Water Technologies Corp in an all-stock deal valued at $6.42 billion, boosting its wastewater treatment solutions and providing it access to several industrial markets.

Evoqua stockholders will receive 0.480 share of water technology company Xylem for each share held, representing a premium of about 29% based on the shares last close.

Xylem, which manufactures equipment used in water and wastewater applications, in 2016 acquired Sensus USA Inc, a provider of advanced metering technologies to utilities.

The deal, which is expected to close in mid-2023, comes amid rising demand for fresh water due to population growth, industrial expansion and increased agricultural development.

Pittsburgh, Pennsylvania-based Evoqua operates in more than 150 locations across nine countries and provides wastewater treatment solutions to industrial, municipal and recreational customers.

Sign outside Richie Bros. Auctioneers in Longmont, Colo., Feb. 21, 2017. (Reuters/Rick Wilking)

Canada's Ritchie Bros Auctioneers on Monday sweetened the cash component of its buyout offer for IAA Inc by 28%, valuing the U.S. auto retailer at $5.94 billion, and also secured the backing of a key IAA shareholder which had questioned the initial offer.

The latest cash-and-stock offer at $44.40 per share, will allow Ritchie to tap into a growing market for heavy machinery and equipment, salvaged cars, trucks and motorcycles, as well as auto parts.

The improved offer comes at a time when many companies are reducing costs and initiating layoffs in face of a potential economic downturn.

Shareholders of both the companies had initially pushed back the deal, set to be Ritchie's biggest, and raised concerns about the poor structuring of the combination.

However, on Monday, IAA's largest shareholder Ancora supported the revised bid. The activist investor had earlier questioned the sales process and the absence of a go-shop period.

Ritchie also said that Starboard Value LP chief Jeffrey Smith will join its board, with the activist investment firm making a $500 million investment.

Salesforce is seen at its exhibition space, at the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition center in Paris, France, June 16, 2022. (Reuters/Benoit Tessier)

Activist investor Elliott Management Corp has made a multi-billion dollar investment in cloud-based software firm Salesforce Inc, according to people familiar with the matter.

It is unclear what Elliott, one of the world's most prominent activist investors, is pushing for at Salesforce.

"We look forward to working constructively with Salesforce to realize the value befitting a company of its stature," Jesse Cohn, managing partner at Elliott, told Reuters.

Cohn, who has served on the boards of several technology companies including Twitter and eBay Inc, called Salesforce "one of the preeminent software companies in the world."

He added that he has "developed a deep respect for Marc Benioff and what he has built." Benioff co-founded the company and leads Salesforce jointly with Bret Taylor, who is expected to leave the company this month.

CNBC reported on Monday that activist investor Jeff Ubben's Inclusive Capital Partners also took a stake in Salesforce, however, the report did not reveal the size of the holding.

The hedge fund and Salesforce did not immediately respond to a Reuters request for comment, and Elliott declined to comment.

Western Digital office building in Irvine, Calif., Jan. 24, 2017. (Reuters/Mike Blake)

Memory chip maker Western Digital Corp and Japan's Kioxia Holdings Corp are in advanced talks for a possible merger which will involve a dual-listing, Bloomberg News reported on Friday.

A combined Kioxia-Western Digital would control a third of the NAND flash market, putting it on par with South Korea’s Samsung Electronics.

In Japan, the two companies jointly produce NAND chips, which don't need power to retain data and are used in smartphones, TVs, data center servers and public announcement display panels.

Under the plan being discussed, Western Digital would spin off its flash business and merge it with Kioxia, creating a publicly traded company in the United States, Bloomberg said citing people familiar with the matter, adding that the company would also plan a second stock listing in Japan.

Toshiba owns about 40.6% of Kioxia.

Western Digital and Kioxia did not immediately respond to a request for comment from Reuters.

The announcement of the combined company is expected in the next few months, according to the report.

Environmental, social, and governance more commonly known as ESG investing has become a lightening rod for many who argue it may not always make sense, especially when it comes to America's retirement accounts.

Here's an opinion arguing that viewpoint.

MARKETS

Biden's ESG investment rules threaten your retirement savings

Trillion-dollar investment and retirement funds such as BlackRock should not inject their own biases into the way they invest savings without people's knowledge or consent.

LIFESTYLE

Spotify to lay off 6% of workforce as number of tech job cuts grows

Spotify CEO Daniel Ek announced that the company is implementing layoffs in order to cut costs and become more efficient amid the challenging economic environment.

Online music platform Spotify became the latest tech company to cut workers joining Microsoft, Amazon and Google.

MONEY

Tax season officially begins on Monday: Here are all of your questions, answered

The IRS has selected Jan. 23 as the official start of the 2022 tax filing season, promising taxpayers an easier filing process than in previous years.

Today is the first day of the 2023 tax season when filers can begin submitting their returns. Here's a guide to get you up to speed.