Snap Cuts 20% of Staff Amid Major Restructuring

MARKET MOVERS

• Snap will cut 20% of the workforce and slash investments. CEO Evan Spiegel said in an internal memo sent to staff Tuesday. The change was necessary because revenue growth of 8% in the current quarter fell short of the company’s initial assumptions. Snap, which makes a social app popular with young people, has never reported single-digit quarterly revenue growth as a public company.

• Bed Bath & Beyond is cutting 20% of jobs and closing 150 stores. In a bid to cut its costs, the troubled retailer Bed Bath plans to reduce its workforce by 20% across corporate and supply chain operations. The company will close approximately 150 lower-producing stores and exit a third of its owned brands in a bid to pivot toward national brands.

• Russia halts Nord Stream Gas pipeline, ratcheting up pressure on Europe. The halt comes as European nations race to fill gas storage facilities to prevent a shortage in the midst of winter. Shortages would trigger rationing, likely kneecapping industry and tipping the continent’s already struggling economy into a recession. The pipeline is due to come back online early on Saturday.

• HP warns of slowing business spending as PC sales sag. The computer-and-printer maker on Tuesday said revenue for its fiscal third quarter shrank 4.1% to $14.66 billion, weighed down by a 20% decline in consumer spending, while its commercial business grew 7%. Chief Executive Enrique Lores said that worsening consumer demand is expected to continue and that the company is seeing business appetite softening in the current quarter. Read more here.

• Netflix appoints two Snap executives to lead its advertising push. Jeremi Gorman, Snap’s chief business officer, is joining Netflix as president of worldwide advertising in September, while Peter Naylor, vice president of sales for the Americas at Snap, will serve as Netflix’s vice president of ad sales. Netflix declined to comment beyond confirming the appointments.

• Private employment increased by 132,000 in August. Annual pay was up 7.6% according to the August ADP® National Employment ReportTM produced by the ADP Research Institute® in collaboration with the Stanford Digital Economy Lab. The data suggest a shift toward a more conservative pace of hiring, possibly as companies try to decipher the economy's conflicting signals. Read more here.
  

WHAT TO WATCH

• Toyota pledges up to $5.6 billion for EV battery production. Toyota Battery Manufacturing North Carolina is set to start operations in 2025, with the firm stating that total investment in the plant will now amount to $3.8 billion. The additional investment in the U.S. is part of a wider investment of up to $5.6 billion in battery production, with Toyota noting that demand for battery electric vehicles was growing.

• Bosch will invest $200 million to build fuel cells for electric trucks in South Carolina. Bosch plans to expand an existing factory in Anderson, South Carolina, to build the fuel cell “stacks” starting in 2026. The investment is expected to create at least 350 new jobs at the factory, the company said. The fuel cells built by Bosch in South Carolina will be used to power electric heavy trucks, including forthcoming models from Nikola.

• Economist predicts a ‘whopper’ of recession in 2023. Inflation will remain high through 2024 because of ‘unprecedented growth in the money supply since the pandemic, says economist Steve Hanke. He believes we will have a recession because we’ve had five months of zero M2 growth–money supply growth, and the Fed isn’t even looking at it. The impacts of this major monetary tightening haven’t kicked in at all right now. Read more here.

• AMD is launching its Ryzen 7000 desktop CPUs next month. AMD's Ryzen 7000 series chips are based on the new Zen 4 architecture, and they're built on TSMC's advanced 5nm process node. This potent combination should deliver exceptional gains in performance and efficiency. The four initial chips in AMD's Ryzen 7000 series won't be available until Sept. 27, giving retailers plenty of time to amass inventory.