Here is a rundown of Cheddar News' top market stories of the day.
TECH LAYOFFS
Multiple outlets are reporting that Microsoft will begin a series of planned layoffs on Wednesday that could cut around 5 percent of its workforce, or 10,000 employees. CEO Satya Nadella warned the cuts were coming, and said the next couple of years were likely to be challenging, as the tech sector contracts after a decade plus of rapid growth. Amazon is also set to move ahead with plans to cut 6 percent of its 350,000 corporate employees.
ADOBE'S DATA DEBACLE
Adobe is facing backlash from customers who are concerned the software company is using personal images and video to train artificial intelligence models such as OpenAI’s Dall-E. Chief Product Officer Scott Belsky denied the accusations in an interview with Bloomberg, saying: "We have never, ever used anything in our storage to train a generative AI model."
UNITED AIRLINES EARNINGS
United Airlines' fourth quarter earnings beat Wall Street estimates on the heels of a rebound in travel demand. The company reported a 31 percent increase from the same period before the pandemic. The gains were made despite the airline flying 9 percent fewer trips and a litany of other challenges, from winter storms to labor shortages to supply chain disruptions.
UNIVERSITY BANS TIKTOK
The University of Texas at Austin is blocking access to TikTok on its Wi-Fi and wired networks. The move is a response to Gov. Greg Abbott's requirement that all state agencies delete the app from government-issued devices. The administration said it is also seeking to eliminate risks to information on the university's networks. University of Texas at Dallas and Texas A&M University System have since implemented similar restrictions.
trivago reported its last earnings of 2021 yesterday, marking the end of a rollercoaster year. The online hotel search site was forced to cut costs during the pandemic as the travel industry shut down entirely, instead pivoting its strategy to meet customer demand in other ways. Matthias Tillmann, CFO of trivago, joined Cheddar's Opening Bell to discuss the company's results and why he's optimistic about the future of the travel industry in 2022.
PLAY, a low-cost airline headquartered in Iceland, is expanding service to New York Stewart International Airport, marking its third destination in the United States. PLAY is the latest affordable carrier to fly onto the scene, debuting its first flights a little more than six months ago. Birgir Jonsson, CEO of PLAY, joined Cheddar to discuss what this expansion means for the airline and what it's been like to lead a new airline during a pandemic. "For us to get into the market now, have the availability of great, brand new aircraft at historically low prices, and basically being able to secure a low operating cost base for the future is a completely rare opportunity," Jonsson said. "We can get into the market now when our competitors are also weak."
On Monday, Peloton CEO John Foley stepped down, 2,800 layoffs were announced, and its stock price skyrocketed. Lydia Moynihan, business reporter for the New York Post joined Cheddar News to talk about why investors are excited about this shift in power, while thousands of its workers were let go in a less than ideal manner. "One of the headlines that emerged was that even as they were being fired, Foley sort of couched it as, 'well, you know what, you're still gonna get a year's login to a Peloton subscription', as if somehow if that would make things better," Moynihan said of the soon-to-be ex-CEO. "So, even in that, it was seen as a very sort of tone-deaf move as people were being axed."
Low-cost airlines Frontier and Spirit have agreed to merge in a deal worth $6.6 billion. The new company name and other terms of the deal have not been disclosed. If approved, the merger would be the fifth-largest airline in the United States. Jonathan Root, senior vice president at Moody's, joins Closing Bell to discuss the impact this deal could have on the broader airline industry, as well as why it makes sense for both discount airlines to combine.
