Tech layoffs continue to hit


FAANG stocks displayed at the Nasdaq.

Adam Jeffery | CNBC

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Stocks mostly up
Asia markets
largely rose on Wednesday tracking Wall Street’s advance as investors digested corporate earnings. Shares of DBS Group, Southeast Asia’s largest bank, spiked 2% after posting quarterly net profit that beat estimates. Overnight, U.S. stocks gained ground as the major indexes rebounded from the previous session. The S&P 500 was up 0.23%, while the Nasdaq Composite closed 0.07% higher. The 30-stock Dow jumped 0.37%.

Debt crisis
Developed countries as well as emerging markets face a debt crisis that will span the next decade, said economist Arthur Laffer, as global borrowings reached a record $307.4 trillion last September. Some bigger nations that aren’t tackling their debt issues “will die a slow fiscal death,” Laffer further noted.

Silver lining
Silver is set for a “terrific year” with prices potentially reaching a decade-high. Like gold, silver prices tend to have an inverse relationship with interest rates. With expectations that the Federal Reserve could start cutting rates this year, silver may get a boost.

Joint sports streaming
ESPN, Fox and Warner Bros. Discovery plan to launch a joint sports streaming platform later this year. Consumers can subscribe directly using a new app. The service is “a major win for sports fans, and an important step forward for the media business,” Disney CEO Bob Iger said in a statement. 

[PRO] Betting on BYD
Jason Hsu, chairman and chief investment officer of Rayliant Global Advisors, expects Hong Kong-listed BYD to get ahead in the electric vehicle race. BYD is “for sure going to emerge a winner,” Hsu said, adding that “in three to five years, I could easily see BYD at twice the current price.”

The bottom line

There appears to be no letup in Silicon Valley’s march to downsize, or rather to “right-size.”   

Since the start of 2024, tech layoffs have continued to mount. DocuSign, is the latest company to cut about 6% of its workforce — that’s about 440 jobs.

Amazon is also slashing “a few hundred roles” across its One Medical and Pharmacy units, the company confirmed to CNBC.

This comes a day after Snap said it will trim about 10% of its global workforce, or around 500 employees. Okta and Zoom have already announced job cuts this month.     

The frantic pace of layoffs is Silicon Valley’s attempt to become leaner after over expanding during the pandemic’s peak.

High interest rates and inflation pressures have also prompted companies to tighten their belts as costs rise.

On top of that, some tech firms want to jump on the AI bandwagon and are trimming headcount to invest more heavily in developing those products. This was evidently the case for Big Tech as Meta, Alphabet and Microsoft have downsized recently at an accelerating clip.

But Wall Street seems to view the layoffs as a good thing. Investors have rewarded companies, especially the mega tech firms, for their cost discipline.   

So long as investors remain bullish on tech, the drumbeat of job cuts will only continue to gather steam.


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