Biggest 4th quarter news that rocked the world of business
This is an article ‘Biggest 4th quarter news that rocked the world of business’ by Marc Primo
There were some major news stories in the business world during the 4th quarter of 2022. From the sudden exodus of employees across big tech firms to live shooters dealing a giant retail supermarket chain with a considerable news-breaking crisis, this year's 4th quarter in business is heralding new issues that companies might find quite alarming. Since the global economy is undergoing a new regime shift with a series of economic inflection points and fiscal policy shifts, many economists are left more perplexed than usual.
A constant stream of information points to the U.S. The real economy is starting to feel the effects of Federal Reserve rate increases. Investors are asking crucial questions as the economy struggles with a late-cycle slowdown, such as how long inflation will remain high or how much higher can the interest rate go. But the most crucial question is: Is the U.S. labor market getting deeper into dire straits?
To somehow foreshadow hints of what could happen to the U.S. economy in 2023, let's recap some of the biggest stories that hogged the business headlines this 4th quarter.
Massive Tech lay-offs
Large IT corporations like Netflix have cut staff this year, with some citing the health crisis' consequences while others blamed excessive hiring throughout periods of accelerated expansion. During the 4th quarter of 2022, several internet companies, including Adobe, BuzzFeed, and Airtable, significantly reduced their personnel.
In 2022, most open markets were also severely impacted, which flowed into the private sector. The stock market's wild swings were mainly attributed to concerns surrounding inflation, higher interest rates, and geopolitical issues. Startups are also experiencing the strain, particularly those that experienced a boost from the COVID-19 boom. Unfortunately, that boost is now beginning to slow down. Affected startups had reported that it is much harder to attract new venture capital investments in this climate because valuations, notably at the later phase, have begun to decline.
However, not everything in the digital space seems terrible. Long-term employment opportunities in the I.T. sectors are still promising due to its increasing interconnectedness in terms of how employees can fuse their private and professional lives. As per the Labor Statistics Bureau, the volume of open positions in tech will likely increase in the next decade.
The Elon Musk saga continues
Last November, we all saw how Elon Musk seized control of Twitter and disrupted the firm and its staff like a trainwreck. Reports from individuals close to Musk's situation tell a story about how the Twitter CEO admitted that bankruptcy would be an option if the cash flow continues to dwindle. According to insiders, Musk reiterated this during his first speech to the remaining workforce after buying the social media platform for $44 billion.
The warning occurred amid a turbulent beginning to Musk's leadership of the platform, which spanned two weeks highlighted by the dismissal of at least half of Twitter's personnel, including several senior officials.
Meanwhile, in other Musk news, LVMH chairman and CEO Bernard Arnault takes the ‘wealthiest person in the world’ title from the embattled Tesla, SpaceX, and Twitter magnate, as reported by Forbes. Arnault holds nearly 60% of the governing share class of LVMH through holding companies and inheritances. He has a $190.9 billion net worth over Musk's $175.4 billion.
FTX crumbles, and its domino effect
Also in early November, things all pointed to how cryptocurrency trading company FTX was in danger of bankruptcy. It initiated the procedures, joining the ranks of defunct crypto entities like Mt. Gox, Celsius, and Three Arrows Capital. Binance CEO Changpeng Zhao previously announced via Twitter that a bailout agreement had been reached, giving the ailing FTX a transitory lifeline. Eventually, Binance withdrew the offer due to its discovery of corporate due diligence and several media stories surrounding the embattled company's gross negligence of user cash.
FTX's collapse and the entailing economic effects further affect more crypto traders besides its immediate customer base. The shocking news soon caused prices of other cryptocurrencies to plummet, with ether and bitcoin dropping by more than 10% and wiping out more than $60 billion from the market.
Embattled billionaire and FTX founder Sam Bankman-Fried hinted that he still hoped to assist clients in getting their money back despite the bankruptcy. However, most FTX users have already lost faith and resorted to dropping their balances at lower prices to salvage even a portion of their investments.
The Walmart tragedy and rebound
At the Walmart Supercenter in Chesapeake, Virginia, on a Tuesday night in late November, a Walmart night crew supervisor suddenly opened fire, killing six people before turning the gun on himself, according to police. The shooting occurred while customers purchased last-minute Thanksgiving necessities at discounted rates as the business was getting ready for Black Friday.
This incident was not the first time the multinational retail corporation experienced a live shooter situation, and it certainly won’t be the last. More than 20 casualties were reported in an attack on a Walmart in El Paso, Texas, in 2019, while just a few days after the Chesapeake tragedy, two more Walmart employees in Southaven, Mississippi, were killed by a live shooter.
However, Walmart closed the year on a bittersweet note regarding last quarter's sales after experiencing below-par Wall Street expectations in the midyear. Previously, Walmart officials stated that it foresees a 1% drop in operating profits year on year.
However, the retail chain recently declared a significant sales increase of 8.2% during the third quarter and a $20 billion stock buyback, which raises its full-year revenue and profit forecast. During the last quarter, it had amassed a revenue of $153 billion, highlighted by one of the most significant one-day surges in the corporation's shares in the past two years.
Such consumer confidence is also evident in Amazon and Target stores nationwide, with both experiencing boosts in sales. Looking back at all the business stories of 2022 proves that the people's purchasing power remains robust despite rising inflation and other recent economic hurdles, including massive lay-offs and crypto trading crashes.
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