The economy is reopening. But the job cuts keep coming
Even as parts of the global economy open back up, companies are laying off tens of thousands of workers — a sign of the damage wrought by months of shutdowns and the ongoing impact of social distancing measures.
What’s happening: Automakers and air carriers announced a wave of job cuts this week, underscoring the potential for a long and tough recovery.
Renault said Friday that it’s slashing 14,600 jobs as part of a major overhaul to reduce costs and help the French carmaker survive the pandemic. Some 4,600 positions will be eliminated in France, with 10,000 more in other markets.
The move follows EasyJet’s announcement on Thursday that it plans to cut its workforce by up to 30% as it overhauls operations to reflect lower demand for air travel. That could mean the loss of as many as 4,500 jobs.
EasyJet does not expect levels of demand seen in 2019 to be reached again until 2023.
That affects plane makers, too. Boeing laid off 6,770 workers this week, part of a plan to reduce 16,000 total jobs because of the rapid decline in air traffic.
“I wish there was some other way,” CEO Dave Calhoun said in a message to employees.
The US government said Thursday that another 2.1 million people filed initial jobless claims last week, bringing the total number of Americans who have filed for first-time unemployment benefits since mid-March to more than 40 million.
Many more job losses are expected in the months to come. American Airlines and Delta Air Lines can’t enact layoffs until October since they accepted federal bailouts. But both companies announced voluntary exit programs for employees this week and indicated that involuntary cuts are inevitable.
The pandemic has created some jobs; Amazon said Thursday that it will offer full-time roles to 125,000 of the temporary employees hired to address a surge in demand for deliveries. But this isn’t sufficient to offset the tsunami of layoffs experienced in recent months.
Twitter adds warning to Trump tweet for ‘glorifying violence’
Twitter says President Donald Trump has violated its rule against glorifying violence and has affixed a warning label to one of his tweets — the first time such action has been taken against the president’s account, my CNN Business colleague Brian Stelter reports.
The social media platform is using what it calls a “public interest notice” to flag the president’s post about the protests and violence in Minneapolis, Minnesota following the death of George Floyd. The tweet suggested that protesters in the city could be shot.
The tweet is now hidden behind a notice that says “this Tweet violated the Twitter Rules about glorifying violence. However, Twitter has determined that it may be in the public’s interest for the Tweet to remain accessible.” Users can view it if they click past the notice.
The action comes as Twitter and the president clash over fact-checking of his tweets, escalating the battle between the White House and big US tech companies.
On Thursday, Trump signed an executive order targeting social media firms, days after Twitter called two of his tweets “potentially misleading.” It seeks to curb the power of platforms like Twitter and Facebook by reinterpreting a law that shields them from lawsuits about content on their websites. Legal challenges to the order are expected.
Investor insight: Twitter shares dropped 4.5% on Thursday but stabilized in premarket trading Friday.
Investors get a $2.5 billion IPO
JDE Peet’s, the owner of Peet’s Coffee, gave the depressed IPO market a shot in the arm on Friday, my CNN Business colleague Hanna Ziady reports.
The details: The company raised €2.25 billion ($2.5 billion) in an Amsterdam listing that valued the firm at €15.6 billion ($17.3 billion).
Shares in the company, which also owns the Jacobs, Douwe Egberts and L’OR brands, jumped as much as 17% above the offer price of €31.50 ($35), before settling at around €35 ($39).
JDE Peet’s announced plans for a listing just 10 days ago. The group makes most of its revenue from coffee consumed at home, a segment of the market that has grown during the coronavirus pandemic, with millions of people working from home and cafes shut.
Why it matters: Companies have largely held off on public offerings due to concerns about market volatility. Only 35 companies went public in the first quarter of 2020, according to FactSet, a 35% drop from the fourth quarter of 2019. But activity could start picking up — at least for those firms that have a solid business case in the virus economy.
US personal income and spending data for April posts at 8:30 a.m. ET.
Over the weekend: SpaceX’s next opportunity to launch two NASA astronauts into space is Saturday at 3:22 p.m. ET.