PayPal Holdings said Tuesday it is planning to cut 7% of its workforce, or about 2,000 employees, the latest fintech firm to blame mass layoffs on the economic slowdown.
The payments firm also joins Big Tech firms and Wall Street titans, which are executing layoffs across corporate America as companies look to rein in costs to ride out the downturn.
PayPal’s move to keep a tight lid on costs comes against the backdrop of decades-high inflation hitting the purchasing power of consumers who also have to contend with the threat of a looming recession.
“While we have made substantial progress in right-sizing our cost structure, and focused our resources on our core strategic priorities, we have more work to do,” said PayPal’s Chief Executive Dan Schulman in a statement.
Shares of the payments firm, which lost about 60% of their value last year, closed up 2.3% at $81.49.
“Similar to other tech companies, PayPal is seeking to position itself financially and strategically, bracing for an economic slowdown,” said Moshe Katri, analyst at Wedbush.
Thomas Hayes, chairman and managing member at investment firm Great Hill Capital told Reuters that “tech over-hired during the pandemic and rationalizing staff during a soft period will help them to retain margins as conditions recover.”
In November, PayPal had cut its annual revenue growth forecast in anticipation of a broader economic downturn and said it did not expect much growth in its US e-commerce business in the holiday quarter.
Executives at the company said at the time that a challenging macro environment, and slowing e-commerce trends were pushing it to be prudent with its forecast.
The world’s tallest Holiday Inn has won a judge’s approval to become a shelter for migrants in downtown Manhattan — clearing the way for a deal with the city that will pay the hotel’s owner $190 a room per night.
Earlier this month, the 50-story, 492-room Holiday Inn Manhattan Financial District – which filed for bankruptcy in November after getting slammed by the pandemic — inked an agreement with New York City Health and Hospitals, the agency charged with housing the Big Apple’s ballooning migrant population, according to court documents.
The nightly room rate the city will pay — which, with the hotel at full capacity, amounts to a daily tab of $93,500 and a monthly tab of $2.8 million — is at the high end of a range between $115 and $190 the city has allotted for a migrant hotel housing program that now reportedly spans dozens of hotels citywide, according to hotel consultant Geoffrey Mills.
It’s also well above an average daily room rate of $102 the hotel was getting in January with an occupancy rate of 60%, according to court filings. On Tuesday, the hotel’s website was advertising rooms at $145 to $149 per night.
A federal bankruptcy judge in Manhattan approved the plan on Monday submitted by the hotel’s owner, Chinese developer Jubao Xie. The hotel estimates that it would earn $10.5 million through the end of the contract on May 1, 2024, which would help pay down its debts, which include $11 million in interest on its loans.
Under the agreement, the city will provide 24-hour security and be responsible for removing “guests that may be unruly or otherwise pose a danger or nuisance to the other guests, the employees and contractors,” according to court papers. The hotel will provide housekeeping services at least three times a week.
The filings provide a rare glimpse into the partnerships the city is forging with some 70 local hotels, including The Row, The Watson, The Stewart, The Paramount and Night Hotels that have agreed to temporarily house migrants.
“It pulls back the curtain on these agreements, which are otherwise not public,” said distressed-debt expert Adam Stein-Sapir.
Under the agreement, the hotel’s franchisor IHG Hotels and Resorts is requiring that it not be advertised as a Holiday Inn during the contract period and that “exterior branded signage be covered and it otherwise be made clear to the public that the Hotel is not available for public use,” according to court documents.
If any migrants stayed in the hotel past the contract, the city would be obligated to pay the hotel $750 per room per day as incentive to clear the hotel out, according to the filings.
Mayor Eric Adams said this month that the cost to house and care for asylum seekers coming across the Mexican border, mainly from Central America, has already exceeded the city’s estimates and is approaching $2 billion or double what the city had forecasted. Some 40,000 migrants have come here since last year, the city said this month.
According to the agreement, microwaves will be removed from the rooms, with a few moved to common areas to prevent safety hazards that have stemmed from migrants using hot plates in their rooms — an issue that arose at the Row NYC hotel in Times Square, as exclusively reported by The Post. The city will also provide all food but might use the hotel’s restaurants and employees to prepare meals, according to the filing.
A conflict between the Holiday Inn and its lender, Wilmington Trust National Association, came to a head last week when the bank asked the judge to block the plan, objecting to among other things the terms of the agreement that allow the city to determine whether to repair “excess wear and tear” to the hotel.
“Operating the hotel as an asylum seekers’ residence is not consistent with the Hotel’s brand, how it is marketed or how it may be impaired from being marketed after the proposed contract ends,” the lender said in a Jan. 24 filing.
The property’s owners countered in a Jan. 17 filing that the bank’s claims were “outrageous,” alleging that the lender’s “ultimate goal is getting rid of the [hotel’s] favorable loan.”
The hotel, which first opened in 2014, defaulted on its $137 million mortgage in 2020 with the onset of the pandemic. The hotel’s loan rate is 5.25%, which equals about $612,000 in monthly interest payments.
“The hotel has to be performing pretty well for it to keep its existing loan in place,” Stein-Sapir said. The irony is that “if the hotel is performing well, it’s not great for the lender, which doesn’t want to get stuck with a low market loan on its books,” Stein-Sapir added.
An attorney for Wilmington Trust didn’t respond to requests for comment.
The famed plane — nicknamed the whale for its distinctive hump and formally known as the Queen of the Skies — has been in service since 1970.
It has logged tens of millions of miles carrying passengers around the world and will even been modified to fly the president on Air Force One.
The 747 was taken out of service by US carriers in 2017, though some remain in use abroad.
It has remained in service as a cargo plane, with the last and 1,574th, a model 747-8 Freighter, delivered to Atlas Air in Boeing’s hometown of Everett, Wash.
Thousands of current and former Boeing employees, customers and suppliers were in attendance to celebrate the final delivery.
“It’s a very emotional experience, I know, for so many of the current team and so many that have lineage in the program over the many decades,” Kim Smith, Boeing’s vice president and general manager for the 747 and 767 programs, told Reuters.
Developed in the late 1960s, the first 747 made its debut for the now-defunct Pan Am in 1970. The wide-body jet was designed to facilitate larger passenger flights during a boom in air travel at the time.
Boeing took just 28 months to design and build the 747, which was the world’s first twin-aisle plane at the time of its debut. The model has long been produced out of the same Boeing plant in Everett.
Newer plane models produced by Boeing and its competitor, Netherlands-based Airbus, are more fuel efficient than the 747 and utilize two engines instead of four.
“If you love this business, you’ve been dreading this moment,” aviation analyst Richard Aboulafia told The Associated Press. “Nobody wants a four-engine airliner anymore, but that doesn’t erase the tremendous contribution the aircraft made to the development of the industry or its remarkable legacy.”
Production of the 747 had slowed in recent years due to sagging demand. Boeing delivered just five of the planes last year, far less than its peak of 70 aircraft in 1990.
Smith said that Boeing employees who worked on production were either reassigned to other roles or voluntarily retired.
Nevertheless, Boeing 747-9 planes are expected to remain in service as cargo freighters for the next several years.
CNN boss Chris Licht has reportedly approached old CBS pal Gayle King to help juice the prime time ratings of his struggling network.
Licht has pitched the “CBS Mornings” anchor to host or co-host a weekly show at night on CNN in a deal that would allow her to retain her day job at CBS, according to a report from Puck News.
The move would reunite the former Tiffany Network executive with King, who has rose to prominence at CBS News for buzzy interviews with the likes of R&B singer R. Kelly, President Joe Biden, actor Will Smith and the family of slain Memphis man Tyre Nicols.
“Chris has talked to dozens and dozens of people to gauge interest in potential projects at CNN,” a rep for CNN told The Post on Tuesday.
King and CBS News did not respond to requests for comment.
During his time at CBS, Licht helped successfully reboot “CBS This Morning,” (recently rebranded “CBS Mornings”) in 2012, bringing on co-hosts Charlie Rose, Norah O’Donnell and King.
While a CNN deal would translate into long hours for King, it is not unheard of for an anchor to moonlight for rival networks. Anderson Cooper hosts a nightly show on CNN and also serves as a correspondent for CBS’ “60 Minutes.”
Since decamping for CNN last year, Licht has struggled to remaking the ratings-challenged network, and is now looking for big talent to help boost viewership.
Licht told the Los Angeles Times this week that he is “in conversations with relevant individuals from the worlds of entertainment, sports and comedy who can bring fresh and unique perspectives to the news” to fill the network’s coveted 9 pm slot.
But part of CNN’s dilemma is budgetary under parent company Warner Bros. Discovery, which needs to cut at least $3.5 billion by the end of 2023. Staffers at CNN have seen the impact of that mandate already.
The exec’s biggest programming move to date has been to launch “CNN This Morning,” a new morning show co-hosted by Don Lemon, Poppy Harlow and Kaitlan Collins. While the show has had some wins, its ratings have generally been lackluster.
According to Nielsen data, the show had its lowest-rated week earlier this month since it launched last November, averaging just 331,000 viewers—less than a third of Fox News’ “Fox & Friends” and less than half of MSNBC’s “Morning Joe”—and just 65,000 in the 25-to-54-year-old demo.
Colossal Biosciences unveiled Tuesday its “Jurassic Park”-like goal to bring back the dodo, adding to previous pledges to resurrect two other long-extinct species — the woolly mammoth and the Tasmanian tiger.
The firm’s newly formed Avian Genomics Group will lead the effort to reproduce the dodo, which Colossal said died out “as a direct result of human settlement and ecosystem competition in 1662.”
“The dodo is a prime example of a species that became extinct because we — people — made it impossible for them to survive in their native habitat,” said Beth Shapiro, Colossal Biosciences’ lead paleontologist and advisory board member.
Colossal’s founders say the company aims to reverse damage to the dodo’s environment and ecosystem — but its mission could have broader implications for gene editing and other fledgling technology of interest to investors.
“Having focused on genetic advancements in ancient DNA for my entire career and as the first to fully sequence the dodo’s genome, I am thrilled to collaborate with Colossal and the people of Mauritius on the de-extinction and eventual re-wilding of the dodo,” Shapiro added.
The firm’s goal, while unusual, has drawn a roster of notable investors that includes “Thor” star Chris Hemsworth, “Succession” actor Nicholas Braun, Paris Hilton, the CIA’s venture capital firm In-Q-Tel, and other entities.
The firm is valued at $1.5 billion after a recently closed $150 million Series B fundraising round. Participants in its most recent funding round included tech investor and “Jurassic World” producer Thomas Tull’s United States Innovative Technology Fund and Breyer Capital. Colossal has raised $225 million since its debut in September 2021.
Ultimately, Colossal aims to successfully reproduce the dodo and recreate a sustainable habitat for the bird in Mauritius, where it was once found.
Critics of the firm have expressed skepticism about the achievability of its goals, as well as the unknown variables associated with recreating a long-extinct species.
For investors, the “de-extinction” effort is only part of the appeal.
In an interview with Bloomberg, Tull touted the possibility of scientific discoveries as Colossal works through the process.
“Along the lines of being able to bring a species back, we’re going to learn things we can’t learn in a wet lab,” Tull told the outlet. “When you’re doing big things like this, who knows what you’re going to discover along the way.”
Colossal said the latest infusion of cash will help the firm to “continue to advance genetic engineering and pioneer new revolutionary software, wetware and hardware solutions, all of which have applications to de-extinction, conservation and human healthcare.”
The startup has more than 40 scientists and three labs working on its woolly mammoth project and claims it will be able to produce calves by 2028, the firm said. The team working on the Tasmanian tiger, or thylacine, consists of “30 dedicated scientists” who have “already achieved great progress,” according to a release.
“A society embracing endangered and extinct gene variants is one poised to address many practical obstacles and opportunities in carbon sequestration, nutrition, and new materials,” Colossal geneticist and co-founder George Church said in a statement. I am pleased with our company’s progress across multiple vertebrate species.”
Colossal Biosciences co-founder Ben Lamm told Bloomberg that his firm has a recruiting advantage over rival genetic engineering firms due to its eye-catching goals.
“You can work on yeast or you can work on bringing back an extinct species,” Lamm told the outlet.
More than half of Americans earning six-figure salaries admitted they were living paycheck to paycheck last year as high inflation slammed households, according to an alarming study released this week.
As of the end of December, 51% of Americans with $100,000 or more in annual income said they lived paycheck to paycheck, according to the survey conducted by LendingClub and Pymnts.com. The share rose 9% compared to one year earlier, when 42% of six-figure earners made the same admission.
Overall, a whopping 64% of US consumers — the equivalent of 166 million Americans — said they were living on razor-thin budgets each month. That was up from 61%, or about 9.3 million, compared to the previous year’s findings.
Of the 9.3 million Americans who joined the ranks of monthly struggle, 8 million earn more than $100,000.
“The effects of inflation are eating into every American’s wallet and as the Fed’s efforts to curb inflation drive up the cost of debt, we are seeing near-record numbers of Americans living paycheck to paycheck,” said Anuj Nayar, financial health officer at LendingClub.
“While the number of Americans living paycheck to paycheck is close to the height we saw in the middle of the pandemic, the causes appear to be very different, as the economy is not sheltering in place like it was back in 2020,” Nayar added.
Inflation has cooled slightly in recent months, but it still remains a major source of pressure on US households. Overall, prices rose 6.5% in December, while the cost of groceries jumped nearly 12%, according to the Consumer Price Index.
The services index, which includes housing, transportation and medical care, rose 7% compared to last year.
The share of Americans who said they were having trouble covering their bills jumped to 24% in December, up 2% compared to the same month one year earlier, according to the survey.
Within the six-figure income bracket, 16% said they were struggling to pay their bills.
Despite some improvements in inflation, many Americans are still taking a pessimistic view of the economy. Just four out of 10 Americans who admitted living paycheck to paycheck expect their incomes to keep pace with inflation this year.
Additionally, 90% said their pay increases were effectively wiped out by higher prices last year.
“We can expect more and more Americans of all incomes identifying themselves as living paycheck to paycheck until we see the economy recover,” Nayar added. “Now more than ever, it is crucial for consumers to examine spending and build a cushion of savings to prepare for the unexpected.”
The survey based its findings on responses from nearly 4,000 US adults between Dec. 8 and Dec. 22.
Americans will be watching closely this week as the Federal Reserve makes its decision on another interest rate hike. Fed officials have signaled rate hikes will continue until inflation is addressed — despite concerns of a slowing economy.
Pfizer on Tuesday forecast a bigger-than-expected drop in sales of its COVID-19 vaccine and treatment for 2023, intensifying investor concerns over demand for the products as governments cut orders and work through inventories.
Chief Executive Albert Bourla said that 2023 should be a “transition year” for Pfizer’s COVID products, before potentially returning to growth in 2024.
Pfizer’s total annual sales crossed the $100 billion mark for the first time in 2022, driven by the more than $56 billion in sales of its COVID-19 vaccine and Paxlovid antiviral treatment. It expects total 2023 revenue of $67 billion to $71 billion.
“We are building on a significant capital position that we know how to deploy to create growth,” Bourla told analysts and investors on conference call. “We are building an R&D engine that is more productive than ever.”
The company launched five new products last year and hopes to introduce as many as 14 more over the next year and a half, including a vaccine for respiratory syncytial virus (RSV) and an mRNA flu vaccine.
Pfizer shares were down slightly at $43.53. The stock had tumbled 15% this month, through Monday’s close.
Citi analyst Andrew Baum said the company is struggling to escape its dependence on COVID drugs.
“We see little here to change our cautious view on Pfizer’s ex-COVID business,” Baum said in a research note.
The decline in COVID-related revenue is not the only headwind Pfizer is facing.
The US drugmaker will lose patent protections for some big-selling drugs after 2025, including cancer treatment Ibrance and arthritis drug Xeljanz, and has said it expects to lose $17 billion in annual sales between 2025 and 2030 due to patent expirations.
Pfizer has turned to acquisitions such as its $5.4 billion buyout of Global Blood Therapeutics and its $11.6 billion purchase of migraine drugmaker Biohaven to bolster its pipeline of future products.
Citi’s Baum said he expects Pfizer will use the spike in revenue from its COVID products to “intensify and upscale” its efforts to buy other companies or new products to fill its pipeline.
Excluding COVID-related sales, Pfizer expects 2023 revenue to grow 7% to 9%.
Pfizer developed its COVID-19 vaccine with German partner BioNTech, and the companies split the profits. Pfizer forecast 2023 sales of $13.5 billion for their vaccine, below analysts’ estimates of $14.4 billion, and projected $8 billion in Paxlovid sales, short of Wall Street’s expectation of $10.33 billion.
Bourla said the company expects to start selling its COVID vaccine Comirnaty through commercial channels in the United States in the second half of 2023, rather than selling the shots directly to the government. After that transition, the company hopes to roughly quadruple the US price of the vaccine.
Analysts and investors have been looking for clarity on China demand for Paxlovid, where the drug is only covered by the country’s broad healthcare insurance plan until late March.
Pfizer said its current 2023 forecast for sales does not assume any revenue from China after April 1, but Bourla said the company expects to offer Paxlovid in the private market there thereafter.
“There is still an opportunity for a market in China which could be meaningful” outside of the country’s main insurance channels, said BMO Analyst Evan Seigerman.
Chief Executive Officer Chief Executive Officer Elon Musk has championed the systems as innovations that will both improve road safety and position the company as a technology leader.
Musk said at a recent Tesla conference call that “full self-driving is obviously getting better very rapidly.”
A 2016 video that Musk promoted on Twitter as evidence that “Tesla drives itself” was staged to show capabilities like stopping at a red light that the system did not have, according to testimony by a senior engineer first reported by Reuters earlier this month.
Regulators are examining if Autopilot’s design and claims about its capabilities provide users a false sense of security, leading to complacency behind the wheel with possibly fatal results.
Acting National Highway Traffic Safety Administration chief Ann Carlson said this month the agency is “working really fast” on the Tesla Autopilot investigation it opened in August 2021 that she termed “very extensive.” In June, NHTSA upgraded to an engineering analysis its defect probe into 830,000 Tesla vehicles with Autopilot, a step that was necessary before the agency could demand a recall.
Autopilot is designed to assist with steering, braking, speed and lane changes. The function currently requires active driver supervision and does not make the vehicle autonomous. Tesla separately sells the $15,000 full self-driving (FSD) software as an add-on that enables its vehicles to change lanes and park autonomously.
The automaker’s shares rose 2% in early trading.
The Wall Street Journal reported in October that the Securities and Exchange Commission is conducting a civil investigation into Tesla’s Autopilot statements, citing sources.
Tesla also forecast Tuesday capital expenditure between $7 billion and $9 billion in 2024 and 2025. The midpoint of that expectation is $1 billion higher than the $6.00 billion to $8.00 billion range provided for this year.
Some of the spending will go toward a $3.6 billion expansion of its Nevada Gigafactory complex, where Tesla will mass produce its long-delayed Semi truck and build a plant for the 4680 cell that would be able to make enough batteries for 2 million light-duty vehicles annually.
Tesla said it recorded an impairment loss of $204 million on the bitcoin it holds, while booking a gain of $64 million from converting the token into fiat currency.
Cryptocurrencies such as bitcoin were hammered last year as rising interest rates and the collapse of major industry players such as crypto exchange FTX shook investor confidence.
McDonald’s on Tuesday beat Wall Street estimates for quarterly profit on higher menu prices, even as it warned short-term inflationary pressures would persist in 2023.
Shares of the burger chain fell about 2.3% to $264.55, after gaining about 6% in the last 12 months.
Investors are watching bellwethers like McDonald’s for any sign consumers are cutting spending to help determine whether the Federal Reserve’s monetary tightening will help cool the US economy without causing a recession.
The Big Mac maker also expects its accelerated plan to build more new restaurants will boost business, contributing nearly 1.5% to its 2023 systemwide sales growth in constant currencies.
Like other fast-food chains, Chicago-based McDonald’s raised prices of its burgers and fries last year to keep up with surging commodity and labor costs and it forecast margin growth this year.
Chief Executive Chris Kempczinski told investors those short-term inflationary pressures will persist in 2023.
Even so, traffic rose 5% for full-year 2022, McDonald’s disclosed on Tuesday, as its meals remained less expensive than many competitors, drawing low-income consumers.
A Big Mac in New York City now costs about $5.39 – less than a $5.65 Venti Cappuccino at a nearby Starbucks.
McDonald’s fourth-quarter global same-store sales also beat estimates with a 12.6% rise, compared with the average analyst estimate of an 8.6% increase, according to IBES data from Refinitiv.
McDonald’s benefited from higher menu prices, increased restaurant traffic and sales in the UK, Germany and France rose despite fears of a recession in Europe.
The company reported profit of $2.59 per share, an increase of 16%. Analysts on an average expected profit of $2.45.
McDonald’s also said it expect its 2023 operating margin to be about 45%, versus 40.4% in 2022.
In October, Chief Financial Officer Ian Borden said the company was “gaining share right now among low-income consumers” in the United States because of McDonald’s “affordability.”
He did not define “low income” but data provider the NPD Group defines annual household incomes of $75,000 or less as “lower income.”
The company launched its Cactus Plant Flea Market Box – an adult version of its Happy Meal for kids – with core menu items including its Big Mac and Chicken McNuggets, helping it post better-than-expected US sales.
Visits to McDonald’s US locations rose 26% in the fourth quarter versus 2019 and were up nearly 30% compared with the previous year, according to data from location analytics firm Placer.ai. That is compared to a 0.6% decline for fast food overall in the fourth quarter over the previous year.
Visits to some other fast-food chains started to fall last summer as they hiked menu prices, he said.
McDonald’s US comparable sales rose 10.3% in the quarter ended Dec. 31. Global revenue dropped 1% to $5.93 billion because of the impact of the stronger US dollar against foreign currencies while in constant currencies, revenue rose 5%.
One of Goldman Sachs’ most senior traders has landed a new gig with the Super Bowl-bound Philadelphia Eagles.
Adam Berry, the 35-year-old head of US bank loan trading at Goldman, has accepted an executive position with the NFC champions and will be learning all facets of the team’s football operations, an NFL source confirmed to The Post on Tuesday.
His exact job title with the Eagles is unclear.
Berry has strong ties to the football world. His twin brother, Andrew, is the general manager and executive vice president of football operations for the Cleveland Browns.
Andrew was the youngest in NFL history when he took the role in 2020 after a stint as vice president of football operations for the Eagles.
Adam Berry joined Goldman Sachs in 2009. His most recent job title was managing director, according to his LinkedIn account.
Prior to beginning his career on Wall Street, Berry attended Princeton University, where he played wide receiver for the Ivy League school.
“I am a strong believer in the value of athletics,” Berry is quoted as saying in a post on the Princeton Varsity Club’s website. “I often tell people that I have learned more on the athletic field, the weight room, and the track than I have in any classroom.”
The Post reached out to Berry for comment.
The Eagles advanced to the Super Bowl after trouncing the San Francisco 49ers 31-7 last Sunday. Philadelphia faces the Kansas City Chiefs in Super Bowl LVII on Feb. 12.