Google, Amazon, Microsoft, Meta, Twitter severance packages compared

Google headquarters is seen in Mountain View, California, United States on September 26, 2022. (Photo by Tayfun Coskun/Anadolu Agency via Getty Images)

Anadolu Agency | Anadolu Agency | Getty Images

Tech companies have laid off tens of thousands of workers in recent months as the industry grapples with a reduced risk appetite from investors and increases in borrowing costs. Laid-off employees across the tech sector enter an uncertain job market, with head count reductions taking place across all experience levels and teams. Few companies, with the possible exception of Apple, have been immune.

Laid-off workers will receive severance packages of varying size and duration, depending on where they work. Here’s what some of the biggest tech names have promised their employees.

Alphabet

Google-parent Alphabet slashes headcount by 12,000

Microsoft

Amazon

Salesforce

Meta

Mark Zuckerberg, chief executive officer of Meta Platforms Inc., center, departs from federal court in San Jose, California, US, on Tuesday, Dec. 20, 2022.

David Paul Morris | Bloomberg | Getty Images

At the time, Zuckerberg promised “every” laid-off employee 16 weeks of severance, plus two weeks for every year of service, as well as vesting of restricted share units and health insurance coverage for a predetermined amount of time.

In December, some laid-off workers from a nontraditional apprenticeship program told CNBC they were receiving substandard severance packages compared with those of other recently laid-off employees. Instead of Zuckerberg’s promised 16 weeks, they received only 8 weeks of base pay, among other material differences.

Twitter

Layoffs at Twitter began shortly after Elon Musk completed his takeover deal in October. Twitter had been expected to lay off more than 3,700 employees, or over 50% of its workforce. Ultimately, many more employees quit after Musk announced that Twitter employees would be expected to commit to a “hardcore” work environment.

Under the terms of Musk’s buyout deal, existing severance agreements were to be honored by new management. But a group of Twitter employees filed a class-action suit in November, shortly after layoffs were executed, accusing Twitter of laying them off in violation of California’s layoff-notification law.

Musk had previously said that laid-off employees would receive three months of severance pay. But some Twitter employees said that when they got their severance letters, they were offered only one month of severance in return for a non-disparagement agreement and a waiver of their right to sue the company.

The class-action suit was updated shortly after filing with allegations that Twitter was offering some laid-off employees half of what they had been promised.

Twitter also laid off more than 4,000 contract workers without giving them prior notice, CNBC previously reported.

— CNBC’s Annie Palmer, Jonathan Vanian, Jennifer Elias, Jordan Novet, Lora Kolodny, Ashley Capoot and Sofia Pitt contributed to this report.

Wayfair stock climbs after online retailer lays off 1,750 workers

Niraj Shah, CEO, Wayfair

Ashlee Espinal | CNBC

Wayfair‘s stock price jumped more than 20% Friday after the retail giant said it will let go of roughly 1,750 employees, or 10% of its global workforce, to support company-wide cost reductions.

The announcement marks Wayfair’s second round of job cuts in less than six months since the retailer let go of about 5% of its workforce in August. Executives expect the two rounds of layoffs will save $750 million a year, according to a press release.

Wayfair has already begun layoffs in Europe, and employees in North America will receive notice Friday about their employment status, Wayfair co-founder and Chief Executive Officer Niraj Shah wrote to staff in a company-wide email on Friday morning. The retailer will offer employees severance based on each individual’s circumstances, such as their country, tenure and level, Shah wrote.

The company said it expects to incur between $68 million and $78 million in costs, mostly related to employee severance and benefits, primarily within the first quarter of 2023.

Retail giants like Wayfair have been forced to reconcile with the reverse in their pandemic-era gains as consumers shift their spending priorities away from categories like home furnishings. The online furniture retailer, which was one of the pandemic’s winners as consumers spent more on home decoration and office furniture, has since struggled with supply chain issues that resulted in order delays and frustrated customers.

Wayfair reported a revenue decrease of 9% year over year and a $286 million loss in the third quarter of 2022. Sharp declines in recent quarters come after the Massachusetts-based retail giant saw a 55% jump in its revenue in 2020 to $14.1 billion.

“Unfortunately, along the way, we over complicated things, lost sight of some of our fundamentals and simply grew too big,” Shah said in the email to staff. “On an operating basis, we can see and feel that we’re not as agile as we used to be or need to be.”

Shah wrote that the company’s operating expenses relative to its revenue grew to 17% in the past year after sitting at about 10% to 11% for most of the company’s 20-year history. In addition to layoffs, he added the retailer has slimmed costs in advertising, insurance policies, janitorial services and software licenses.

The company now expects to return to adjusted EBITDA profitability earlier in 2023 as a result of these cost-cutting efforts, according to the press release.

“The changes today are largely about reducing management layers, right-sizing in certain places, and reorganizing to be more efficient,” Shah said.

Google bonus delay offers lesson in windfall spending

A pedestrian strolls on the Google campus in Mountain View, California, on Jan. 27, 2022.

David Paul Morris/Bloomberg via Getty Images

Change to bonuses addresses 2023 uncertainty

Google-parent Alphabet slashes headcount by 12,000

Across all industries, small businesses slashed 2022 bonuses by 9.7% to an average $526, down from $582 in 2021, according to Gusto, a payroll provider. They shrank most — by 10.7% — among financial companies, law firms and others in the “professional services” category.

“As companies prepare for what 2023 has in store, they handed out smaller end-of-year bonuses to close 2022,” Luke Pardue, an economist at Gusto, wrote in a recent analysis, alluding to an uncertain economic outlook for the year ahead.

Bonuses — and tax refunds — aren’t a guarantee

Fed Governor Waller backs quarter-point interest rate hike at next meeting

Christopher Waller, U.S. President Donald Trump’s nominee for governor of the Federal Reserve, listens during a Senate Banking Committee confirmation hearing in Washington, D.C., on Thursday, Feb. 13, 2020.

Andrew Harrer | Bloomberg | Getty Images

Federal Reserve Governor Christopher Waller said Friday he favors a quarter percentage point interest rate increase at the next meeting, as he waits for more evidence that inflation is heading in the right direction.

Confirming market expectations, the central bank official said during a Council on Foreign Relations event in New York that the Fed can dial down on the size of its rate hikes.

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But he also said it’s not time to declare victory on inflation, comparing monetary policy to an airplane that soared higher quickly and now is ready for a gradual descent.

“And in keeping with this logic and based on the data in hand at this moment, there appears to be little turbulence ahead, so I currently favor a 25-basis point increase at the FOMC’s next meeting at the end of this month,” Waller said in prepared remarks. “Beyond that, we still have a considerable way to go toward our 2 percent inflation goal, and I expect to support continued tightening of monetary policy.”

He did not specify how high he sees rates heading, and was scheduled to participate in a question-and-answer session following the 1 p.m. ET speech.

Other officials, such as Philadelphia Fed President Patrick Harker, have pointed to a 0.25 percentage point increase at the Jan. 31-Feb. 1 FOMC meeting, but Waller is the highest-ranking member to be that explicit.

While the market and the Fed appear to be on the same page with where rates go in the short term, there is divergence further out.

Central bankers largely have said they see rates holding at a high level through the end of the year, while markets see a peak in the summer then a reduction shortly thereafter.

Waller said the divergence is largely about perception for where inflation is going to go.

“The market has a a very optimistic view that inflation is just going to melt away. The immaculate disinflation is going to occur,” he told CNBC’s Steve Liesman during a question-and-answer session after the speech. “We have a different view. Inflation’s not just going to miraculously melt away. It’s going to be a slower, harder slog to get inflation down and therefore we have to keep rates higher for longer and not start cutting rates by the end of the year.”

Waller was generally upbeat on the economy, noting that activity has slowed in some key areas such as manufacturing, wage growth and consumer spending. He emphasized the Fed’s goal is not to “halt economic activity,” but rather to bring it back into balance so inflation can start to fall.

In recent months, inflation gauges such as the consumer price index and the Fed’s preferred core personal consumption expenditures price index have come off their peaks of last summer. But he noted that while headline CPI declined 0.1%, the index excluding food and energy still rose 0.3% and “is still too close to where it was a year ago.”

“So, while it is possible to take a month or three months of data and paint a rosy picture, I caution against doing so,” he said. “The shorter the trend, the larger the grain of salt when swallowing a story about the future.”

But Waller did say he still sees a “soft landing” as possible for the economy, scenario that would see “progress on inflation without seriously damaging the labor market.”

“So far, we have managed to do so, and I remain optimistic that this progress can continue,” he said.

Martin Shkreli faces FTC contempt demand in drug case

Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, center, pauses while speak to members of the media with his attorney Benjamin Brafman, right, outside federal court in the Brooklyn borough of New York, U.S., on Friday, Aug. 4, 2017.

Peter Foley | Bloomberg | Getty Images

The Federal Trade Commission on Friday asked that notorious “pharma bro” Martin Shkreli be held in contempt of court for forming a new drug company in violation of a judge’s ban on the convicted fraudster from working in the pharmaceuticals industry.

Shkreli, who was released from prison last year, in February was banned “for life from directly or indirectly
participating in any manner in the pharmaceutical industry” as a result of the FTC’s antitrust lawsuit against him and a prior drug company that he founded.

That order stemmed from Manhattan federal court Judge Denise Cote’s ruling that Shkreli oversaw an illegal scheme to maintain a monopoly on the life-saving drug Daraprim, which continued even as he sat in prison for his conviction in an unrelated securities fraud case.

In its court filing Friday, the FTC noted that Shkreli in July announced the formation of a new company, Druglike, “that appears to be involved in the drug industry.”

The agency said that action, as well as Shkreli’s failure to pay his nearly $25 million share of a $64.6 million judgment he owes in the lawsuit, suggest that he is violating the court’s orders in the case.

The FTC and a group of states that sued Shkreli said in the filing he has failed to comply with their requests to give them documents and submit to an interview as part of their probe into whether his involvement with Druglink violates the February 2022 court order banning him from the industry.

“Martin Shkreli’s failure to comply with the court’s order demonstrates a clear disregard for the law,” said Holly Vedova, director of the FTC’s Bureau of Competition, in a statement.

“The FTC will not hesitate to deploy the full scope of its authorities to enable a comprehensive investigation into any potential misconduct,” Vedova said.

Benjamin Brafman, a lawyer for Shkreli, did not immediately reply to a request for comment.

This is breaking news. Please check back for updates.

Virginia’s Democratic Sen. Tim Kaine announces bid for third Senate term

U.S. Senator Tim Kaine (D-VA) questions Zalmay Khalilzad, special envoy for Afghanistan Reconciliation, during a Senate Foreign Relations Committee hearing on Capitol Hill in Washington, April 27, 2021.

Susan Walsh | Pool | Reuters

Democratic Senator Tim Kaine of Virginia announced Friday that he will seek a third term in office, snuffing out speculation that the former vice presidential nominee could be retiring and opening up his prized Senate seat in a tough election cycle.

“I’m a servant, I love Virginia, I’m proud of what I’ve done, I’ve got a whole lot more to do,” Kaine, 64, said at a press event in the state’s capital of Richmond.

He made the announcement after hosting a roundtable event with city leaders.

Kaine has steadily climbed the political ladder in Virginia over nearly three decades, serving on Richmond’s city council before ascending to mayor, then lieutenant governor, governor, and finally senator.

He stepped into the national spotlight in 2016 when then-Democratic presidential nominee Hillary Clinton tapped him as her running mate. After the Clinton-Kaine ticket lost to former President Donald Trump and his vice presidential pick, Mike Pence, Kaine returned to Virginia, winning a second Senate term in 2018.

“I am happy to announce that I will seek re-election in 2024 to keep delivering results for Virginia. I’ve been honored to serve people as a missionary, civil rights lawyer, and elected official at the local, state and federal levels. I love the Commonwealth and its citizens and want to keep being your Senator,” Kaine said in a press release.

The announcement comes as Democrats could face a tough Senate map in 2024, even after they broadly outperformed expectations in last year’s midterm elections. It also comes amid some uncertainty about whether President Joe Biden, who at 80 is the oldest president in U.S. history, will run for reelection in 2024.

“Tim Kaine has proven to be an exemplary Senator that continues to deliver for Virginia and our country time and time again,” Senate Majority Leader Chuck Schumer, D-N.Y., said in a statement to NBC News.

“Tim has fought tirelessly for his home state and for working families and I’m confident his best years are yet to come,” Schumer said.

Google to lay off 12,000 people, memo from CEO Sundar Pichai says

Google-parent Alphabet slashes headcount by 12,000

Google said Friday it will lay off 12,000 people from its workforce, adding to the slew of major U.S. tech companies cutting jobs amid fears of an oncoming recession.

Sundar Pichai, Google’s CEO, said in an email sent to the company’s staff Friday that the firm will begin making layoffs in the U.S. immediately. In other countries, the process “will take longer due to local laws and practices,” he said. CNBC reported in November that Google employees had been fearing layoffs as its counterparts made cuts and as employees saw changes to the company’s performance ratings system.

The web search and video sharing giant will offer U.S.-based employees 16 weeks of severance pay plus two weeks for each additional year they’ve worked at Google, Pichai added.

Google shares were up more than 5% in early trading after the news.

Tech companies are facing a variety of challenges at the moment, not least rising interest rates and inflation over the past year that have clobbered technology shares and forced advertisers to cut back on online ad spending.

Hikes to interest rates from the U.S. Federal Reserve in particular have led to souring appetite for American tech shares. The gloomy macroeconomic climate has in turn piled pressure on those companies to make deep cuts to their workforces.

LOS ANGELES, CALIFORNIA – JUNE 09: Google CEO Sundar Pichai speaks at a panel at the CEO Summit of the Americas hosted by the U.S. Chamber of Commerce on June 09, 2022 in Los Angeles, California. The CEO Summit entered its second day of events with a formal signing for the “International Coalition to Connect Marine Protected Areas” and a speech from U.S. President Joe Biden. (Photo by Anna Moneymaker/Getty Images)

Anna Moneymaker | Getty Images News | Getty Images

On Wednesday, Amazon began a fresh wave of job cuts affecting more than 18,000 people. That same day, Microsoft announced plans to lay off 10,000 workers.

Twitter, under the leadership of Elon Musk, has also made redundancies, slashing over half of the company’s headcount since taking over as CEO in October.

The layoff move from Google on Friday comes after CNBC reported Thursday that the firm was deferring a portion of employees’ year-end bonus checks until March or April instead of paying them in full in January.

Read the full memo Pichai sent out to staff on Friday:

Googlers,

I have some difficult news to share. We’ve decided to reduce our workforce by approximately 12,000 roles. We’ve already sent a separate email to employees in the US who are affected. In other countries, this process will take longer due to local laws and practices.

This will mean saying goodbye to some incredibly talented people we worked hard to hire and have loved working with. I’m deeply sorry for that. The fact that these changes will impact the lives of Googlers weighs heavily on me, and I take full responsibility for the decisions that led us here.

Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today.

I am confident about the huge opportunity in front of us thanks to the strength of our mission, the value of our products and services, and our early investments in AI. To fully capture it, we’ll need to make tough choices. So, we’ve undertaken a rigorous review across product areas and functions to ensure that our people and roles are aligned with our highest priorities as a company. The roles we’re eliminating reflect the outcome of that review. They cut across Alphabet, product areas, functions, levels and regions.

To the Googlers who are leaving us: Thank you for working so hard to help people and businesses everywhere. Your contributions have been invaluable and we are grateful for them.

While this transition won’t be easy, we’re going to support employees as they look for their next opportunity.

In the US:

  • We’ll pay employees during the full notification period (minimum 60 days).
  • We’ll also offer a severance package starting at 16 weeks salary plus two weeks for every additional year at Google, and accelerate at least 16 weeks of GSU vesting.
  • We’ll pay 2022 bonuses and remaining vacation time.
  • We’ll be offering 6 months of healthcare, job placement services, and immigration support for those affected.
  • Outside the US, we’ll support employees in line with local practices.

As an almost 25-year-old company, we’re bound to go through difficult economic cycles. These are important moments to sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities.

Being constrained in some areas allows us to bet big on others. Pivoting the company to be AI-first years ago led to groundbreaking advances across our businesses and the whole industry.

Thanks to those early investments, Google’s products are better than ever. And we’re getting ready to share some entirely new experiences for users, developers and businesses, too. We have a substantial opportunity in front of us with AI across our products and are prepared to approach it boldly and responsibly.

All this work is a continuation of the “healthy disregard for the impossible” that’s been core to our culture from the beginning. When I look around Google today, I see that same spirit and energy driving our efforts. That’s why I remain optimistic about our ability to deliver on our mission, even on our toughest days. Today is certainly one of them.

I’m sure you have many questions about how we’ll move forward. We’ll be organizing a town hall on Monday. Check your calendar for details. Until then, please take good care of yourselves as you absorb this difficult news. As part of that, if you are just starting your work day, please feel free to work from home today.

-Sundar

Netflix, Alphabet, Nordstrom, PagerDuty, more

A sign is posted in front of a Google office on April 26, 2022 in San Francisco, California. Google parent company Alphabet will report first quarter earnings today after the closing bell.

Justin Sullivan | Getty Images News | Getty Images

Check out the companies making headlines before the bell:

Netflix — The streaming stock jumped more than 6% after Netflix reported its latest quarterly results. While Netflix missed earnings expectations, it added more subscribers than analysts were forecasting. The firm also announced that co-CEO Reed Hastings would step down from the role.

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Alphabet — The Google parent saw shares rise 3.6% after CEO Sundar Pichai announced the company will lay off 12,000 employees and explained in a memo that the company “hired for a different economic reality than the one we face today.”

Eli Lilly — Shares of the pharmaceutical company slumped more than 1% in premarket after the U.S. Food and Drug Administration rejected the drugmaker’s experimental Alzheimer’s disease treatment, as it had not provided enough trial data.

Ralph Lauren — The stock rose more than 1% after Barclays upgraded Ralph Lauren to overweight, saying investors are buying a “best-in-class” apparel brand with continued elevation. Separately, Barclays upgraded shares of PVH, which owns Tommy Hilfiger and Calvin Klein brands, to overweight.

Regeneron Pharmaceuticals — The pharmaceutical giant gained 1% in the premarket after being upgraded to overweight from neutral by JPMorgan. The Wall Street firm said its drug that treats age-related macular degeneration is “best in class therapy” and could serve as the next big catalyst for Regeneron.

PagerDuty — Shares jumped more than 4% after Morgan Stanley upgraded PagerDuty to overweight from equal weight, saying the cloud computing company is pushing toward better profitability.

Salesforce — The stock dipped more than 1% after Cowen downgraded it to market perform from outperform, saying it sees “elevated levels of disruption risk” given a tougher macro backdrop that could hurt customer spending.

Nordstrom — Shares of the retailer fell 7% in premarket trading after Nordstrom announced that its holiday sales fell 3.5% year over year. In a statement, CEO Erik Nordstrom described the retail environment as “highly promotional.” The company also lowered its earnings outlook.

Macy’s — Retail stocks such as Macy’s declined following disappointing holiday sales from Nordstrom. Shares of Macy’s fell more than 2%, while Kohl’s declined 4%. Dillard’s dipped 1.3%.

Costco — Shares rose about 1% after Costco said it would reauthorize a stock repurchase program of up to $4 billion through January 2027.

— CNBC’s Michelle Fox, Yun Li, Tanaya Macheel and Jesse Pound contributed reporting.

Correction: Nordstrom reported disappointing holiday sales numbers, not its latest quarterly figures.

France says it’s diverging with Washington on Beijing ties

French Minister for the Economy and Finances Bruno Le Maire spoke at a CNBC panel in Davos.

Ludovic Marin | Afp | Getty Images

DAVOS, Switzerland — The European Union does not see eye-to-eye with the United States when it comes to opposing China, the French finance minister told CNBC Friday.

Speaking at a panel at the World Economic Forum in Davos, Switzerland, looking at the economic outlook, France’s Bruno Le Maire said: “China cannot be out, China must be in. This is the difference of view we have between the U.S. and Europe.”

“We don’t want to oppose China, we want to engage with China, we want China to obey by the same rules,” he said, “this is our policy.”

The United States has taken a confrontational approach with China particularly when it comes to the technology sector. The European Union, however, has looked at striking a balance between its political friendship with the U.S. and its economic ties with China.

France's finance minister: Europe needs to invest in its own green technology

Though European officials have said China is a strategic rival, they also recognize they want to develop commercial ties with Beijing and work together against climate change.

France’s President Emmanuel Macron is reportedly planning a trip to China in the coming weeks to discuss energy and trade, as well as the broader consequences of Russia’s invasion of Ukraine.

Data from Europe’s statistics office showed that China was the third-largest partner for EU exports of goods in 2021, and the largest partner for imports.

France's finance minister: We have entered a 'new era of globalization'

ECB’s Lagarde says China’s reopening will be inflationary

Christine Lagarde, president of the European Central Bank spoke at a CNBC panel at the World Economic Forum

Bloomberg | Bloomberg | Getty Images

DAVOS, Switzerland — China’s decision to reopen its economy will increase inflation in Europe as they both compete for more energy, the president of the European Central Bank said Friday.

There has been extensive debate this week at the World Economic Forum in Davos, Switzerland, about whether Beijing’s decision to end its zero-Covid policy will bring more or less inflation.

On the one hand, some argue that because supply chains are being restored then the reopening might ease some of the inflationary pressures that Europe has faced in recent months.

On the other hand, others note that China will be consuming more energy and this will add to ongoing inflationary pressures.

President Christine Lagarde, chief of the euro zone’s central bank, is among the latter group.

ECB's Lagarde: China reopening will cause increased inflationary pressure

China’s reopening is “something that will be a positive for China mostly, something that will be a positive for the rest of the world, but we will have inflationary pressure on many of us, simply because the level of energy that was consumed by China last year was certainly less than what they will consume this year, the amount of LNG [liquefied natural gas] that [they] will be buying from the rest of the world will be higher than what we have seen and there is not so much spare capacity in terms of oil and gas,” Lagarde said during a Davos panel Friday led by CNBC’s Geoff Cutmore.

“So there will be constraints, there will be more inflationary pressure coming out of that added demand,” she added.

The International Energy Agency has warned that European companies might face higher costs when looking to purchase natural gas this year as there will be more competition for the commodity.

Inflation has been one of the biggest challenges for European citizens for the last year, mostly driven by higher energy bills.

The ECB raised rates four times throughout 2022, bringing its deposit rate to 2%. The central bank in December said it would be increasing rates further in 2023 to address sky-high inflation.

Recent data has shown a slowdown in headline inflation, even if it remains well above the ECB’s 2% target.

December inflation came in at 9.2% in the euro zone, according to preliminary numbers. This was the second consecutive monthly drop in price rises across the euro zone.

 

 

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